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
September 23, 2003
(Date of Report)
(Date of Earliest Event Reported)
Clixtix, Inc..
(Exact name of Registrant as Specified in its Charter)
1501 Broadway
Suite 1807
New York, New York 10036
(Address of Principal Executive Offices)
(212) 768-2383
(Registrant's Telephone Number)
Not Applicable
(Former name and former address)
New York 333-85006 13-3526402
--------- --------- ---------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
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Item 2. Acquisition or Disposition of Assets.
Pursuant to an Asset Purchase Agreement dated as of September 23, 2003
(the "Asset Purchase Agreement") by and among Clixtix, Inc., a New York
corporation ("Clixtix"), Vic Cantor Theatre Party Services, Inc. , a New York
corporation ("VCT")and Harold Fishkin, the sole shareholder of VCT, Clixtix
acquired certain of the assets of VCT in consideration of the payment of an
aggregate purchase price of $164,000 (the "Purchase Price"). The Purchase Price
was paid (a) $54,000 by certified check and (b) the balance by delivery of a
three year promissory note payable in equal monthly installments commencing on
December 23,2003. Based upon certain threshold ticket sales being achieved over
the next 12 months, VCT has the ability to "earn" and additional $36,000, which
if paid would increase the aggregate Purchase Price to $200,000.
VCT has been engaged in the business of group and individual ticket
sales for theatrical and other events in the New York City area. In accordance
with the terms of the Asset Purchase Agreement, each of VCT and Harold Fishkin
have agreed not to compete with Clixtix for a period of five years.
ITEM 7. Financial Statements and Exhibits.
(a) Financial Statements shall be provided within 60 days of the date of this
report.
(b) 2.1 Asset Purchase Agreement Dated September 23, 2003 by and among Clixtix,
VCT and Harold Fishkin, the sole shareholder of VCT.
SIGNATURES
-----------------------
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.
CLIXTIX, INC.
By: /s/ "Phyllis Maxwell"
----------------------------
President
Date: September 29, 2003
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Clixtix, Inc.
Exhibits
To
Form 8-K
Dated September 29, 2003
2.1 Asset Purchase Agreement Dated September 24, 2003 by and among Clixtix,
Inc., a New York corporation, Vic Cantor Theatre Party Services, Inc.,
a New York corporation ("VCT")and Harold Fishkin, the sole shareholder of VCT.
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ASSET PURCHASE AGREEMENT, dated September 23, 2003 (the
"Agreement") by and among Vic Cantor Theatre Party Services, Inc. a New York
corporation, (the "Seller"), Harold Fishkin, the sole stockholder of the Seller
and (the "Stockholder"), and Maxwell Group Entertainment, Inc., a New York
corporation (the "Buyer"). Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in Section 12 hereof.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Seller has engaged in, among other things, the
business of providing entertainment and theatre ticket sales services (the
"Theatre Ticket Business") to its customers (the "Cantor Customers"); and
WHEREAS, Seller wishes to sell, and Buyer wishes to purchase,
certain of Seller's assets, properties (real and personal), capabilities,
experience and, rights in and relating to the Theatre Ticket Business on the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
SECTION 1. PURCHASE AND SALE OF ASSETS.
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1.1 Assets to be Transferred. On the terms and subject to the
conditions of this Agreement, and in reliance upon the representations,
warranties and covenants hereinafter set forth except for the Excluded Assets,
at the Closing, Seller shall, sell, assign, transfer, convey and deliver to
Buyer, free and clear of any and all Encumbrances,and Buyer shall purchase from
Seller, all Seller's right, title and interest in and to all assets and
properties, set forth on Schedule 1.1 hereto, and without limiting the
generality of the foregoing the names,phone numbers and addresses of all of the
Cantor Customers, including, but not limited to those names and addresses shall
be set forth on Schedule 5.15 hereto, and suppliers, all other data basis and
software used in connection with the Theatre Ticket Business, Post Closing
Receivables, the Cantor Intellectual Property, Other Assets, and the telephone
numbers used by the Seller in conducting its business.
1.2 Excluded Assets. Buyer and Seller expressly understand
and agree that there shall be excluded from the Purchased Assets those assets
set forth on Schedule 1.2 (collectively, the "Excluded Assets"). The Excluded
Assets shall remain the property of Seller, and Buyer shall have no liability
or other responsibility with respect to the Excluded Assets.
SECTION 2. PURCHASE PRICE.
2.1 Payment of the Purchase Price.
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(a) In consideration of and simultaneously with the transfer
of the Purchased Assets by Seller to Buyer, at the Closing, Buyer shall deliver
to Seller the purchase price (the "Purchase Price") to Seller as follows:
(i) pay Seller the amount of $54,000 in cash (the
"Cash Payment"); and (ii) deliver to Seller, Buyer's
non negotiable promissory note in the principal
amount of $110,000, due three years following the
Closing Date, substantially in the form of Exhibit
2.1(a)(ii) hereto (the "Promissory Note"). The
Promissory Note shall be made payable to "Fishkin
Enterprises, Inc."
(b) All other cash payments made pursuant to this Agreement
(other than payments made under the terms of the Promissory Note) shall be made
by wire transfer or by bank cashier's or certified check to be drawn on New
York Clearing House Funds, such form of payment (and account information, if
applicable) to be designated by Seller in writing at least two Business Days
prior to the date such payment is to be made.
2.2 Purchase Price Adjustments.
(a) If within the 12 months following the Closing Date (the "Earn-out
Period"), the Net Revenues have not exceeded an aggregate of $150,000, then the
Purchase Price shall be reduced by an amount equal to the difference between
$150,000 and the Net Revenues (the "Purchase Price Adjustment"). The Purchase
Price Adjustment shall be effected through a direct offset against and
reduction of any amounts due Seller under the Promissory Note.
(b) Within 30 days of the end of the Earn-out Period (the "Notice
Period"), the Buyer shall notify, in writing, the Seller of any proposed
Purchase Price Adjustment (the "Adjustment Notice") and setting forth the basis
for its calculation. The Seller shall then have 30 days following the date of
the Adjustment Notice (the "Confirmation Period") to confirm the amount of the
proposed Purchase Price Adjustment. The Buyer will make its auditor and such
records and documentation as Seller may reasonably request to inspect,available
for inspection and review at Buyer's offices during normal business hours and
upon reasonable notice, for the purpose of confirming the Buyer's calculations.
Prior to the termination of the confirmation Period,the Seller shall advise the
Buyer as to whether it agrees or disagrees with the Buyer's calculation. If the
Seller disagrees with the Buyer's calculations, the matter will be resolved in
accordance with Section 11.5 hereof. Pending such resolution, all payments
required to be made under the terms of the Promissory Note shall be suspended.
(c) For purposes hereof, "Net Revenues" shall mean (1) the
amounts paid to the Buyer during the period commencing on the Closing Date and
terminating on the day immediately preceding the first anniversary of the
Closing Dated (i) as commissions, by the Theatres in connection with theatre
ticket sales effected through Cantor Customers (other than Group Dining
Services, Inc., also known as "Trautmann," and herein collectively referred to
as "GDS") and (ii) as add on commission for theatrical and sporting events
ticket sales effected through Cantor Customers (other than GDS) (collectively,
the "Commissions"), less (2) any amounts to be paid by the Buyer to Patricia
Scotto, Yvette Consor, GDS and any other person
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claiming to be entitled to and paid a portion of the Commissions based upon
such person's agreement with Seller and/or Stockholder.
2.3 Allocation of Purchase Price. The Purchase Price for the
Purchased Assets shall be allocated for United States federal, state, local and
foreign tax purposes by each party among the Purchased Assets sold, transferred
and assigned hereunder and the covenant contained in Section 7.6 hereof, as
determined by Buyer and approved by Seller(such approval not to be unreasonably
withheld or delayed), not later than 90 days after the Closing Date. For all
pertinent tax purposes each party hereto shall report the purchase and sale
provided for, and with the characterization given these transactions in this
Agreement to taxing authorities on a basis consistent with such allocation, and
each party agrees not to take a position inconsistent with such allocation. To
the extent required by law the allocation shall be made in accordance with
Section 960 of the Code, and after the Closing, Seller and Buyer each shall
timely file form 8594 with the IRS detailing this allocation. In the event that
Buyer determines, subject to Seller's reasonable approval, that any adjustments
to such allocation are necessary, Seller shall make such modifications as are
necessary reporting the same on Seller's form 8594 (if required) or any tax
report or return filed or to be filed by Seller in order to conform to Buyer's
allocation as adjusted.
SECTION 3. NO ASSUMPTION OF LIABILITIES.
----------------------------
Buyer shall not purchase or take title to the Purchased
Assets subject to,or in any way agree to pay, perform, discharge or indemnify
Seller against or otherwise be liable or responsible for, any liabilities or
obligations of Seller, whether or not referred to in any Exhibit or Schedule
hereto and whether claims in respect of any such liabilities or obligations
arise or are instituted before, on or after the Closing Date, including,
without limitation any liabilities related to the Assumed Contracts prior to
Closing (collectively, the "Retained Liabilities").
SECTION 4. CLOSING AND CLOSING DATE.
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4.1. Time and Place of Closing.The Closing shall take place
at the offices of Eiseman Levine Lehrhaupt & Kakoyiannis, P.C., 845 Third
Avenue, 8th Floor, New York, New York 10022 at 11:00 A.M. New York City
simultaneously with the execution and delivery of this Agreement or such other
time and place as Buyer and Seller shall mutually agree in writing. The date
upon which the Closing occurs is hereinafter referred to as the "Closing
Date."
4.2 Obligations of Seller at Closing. At the Closing
(or prior thereto, as indicated below), Seller shall deliver to Buyer the
following:
(a) Duly executed bills of sale and assignments, substantially
in the form of Exhibit 4.2(a) hereto
(b) Copies, certified by a principal executive officer of
Seller, of all consents required under the Assumed Contracts.
(c) The Financial Statements, certified by the chief financial
officer of Seller.
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(d) A duly executed copy of the GDS Agreement substantially in
the form of Exhibit 4.2(d) hereto.
(e) Evidence satisfactory to the Buyer that the Seller has paid (i)all
obligations to theaters regarding paid ticket orders and (ii) current
liabilities.
(f) All material approvals, consents, assignments and permits from
parties to any Leases, contracts or other agreements with Seller which shall be
necessary to vest or more effectively vest in Buyer, full and marketable title
to the Purchased Assets free and clear of any and all claims, liabilities,
obligations, liens, pledges, mortgages, encumbrances, charges and restrictions
of every kind, nature and description, shall have been obtained.
(g) Any and all Authorizations from any Governmental Authority
currently used in or related to the Theatre Ticket Business, which Buyer
requires for the lawful consummation of the Closing and the continued operation
of the Theatre Ticket Business by Buyer shall have been obtained and
transferred to Buyer
(h) All other documents, instruments and writings required to be
delivered by Seller at or prior to the Closing pursuant to this Agreement or
otherwise reasonably required in connection herewith.
4.3 Obligations of Buyer at Closing.
At the Closing (or prior thereto, as indicated below), Buyer
shall deliver to Seller the following:
(a) The Cash Closing Payment.
(b) The Promissory Note.
(c) A duly executed copy of the GDS Agreement.
(d) The guaranty of Phyllis Maxwell (the "Guarantor") substantially in
the form of Exhibit 4.3(d) hereto (the "Guaranty").
(e) All other documents, instruments and writings required to be
delivered by Buyer at or prior to the Closing pursuant to this Agreement or
otherwise reasonably required in connection herewith
4.4 Effectiveness. The consummation of the transactions
contemplated by this Agreement shall be deemed to have occurred immediately
after all, but not less than all,of the matters specified in this Section shall
have occurred or been waived in writing by the relevant party. All documents
required to be delivered at the Closing shall be in form and substance
reasonably satisfactory to Buyer and Seller.
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SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDER.
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The Stockholder and Seller, jointly and severally,
represent and warrant to Buyer as follows:
5.1 Due Incorporation and Qualification. Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of New York, and has the corporate power and authority to
own, lease and operate its assets and properties,and to carry on its business
as now being conducted. Seller is duly qualified as a foreign corporation and
is in good standing under the laws of (i) each jurisdiction in which it owns
or leases real property and (ii) each other jurisdiction in which the conduct
of its business or the ownership of its assets requires such qualification,
except where a failure to be so qualified would not have a Material Adverse
Effect on the business, prospects, earnings, condition (financial or
otherwise), Purchased Assets or the Theatre Ticket Business. A list of such
jurisdictions is set forth on Schedule 5.1 hereto.
5.2 Certificate of Incorporation and By-Laws. The copies of
the Certificate of Incorporation (certified by the Secretary of State of the
State of Delaware) and By-Laws (certified by Seller's Secretary or Assistant
Secretary) of Seller, and all amendments to and restatements of each, which
have been heretofore delivered or made available to Buyer are true, complete
and correct.
5.3 Corporate Power of Seller, Consents. Seller has the
requisite corporate power and authority to execute and deliver this Agreement,
and to perform its obligations hereunder. The execution, delivery and
performance of this Agreement by Seller and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Seller and no other authorization or consent
of the Seller or its shareholders is necessary. This Agreement has been duly
and validly executed and delivered by Seller and constitutes the legal, valid
and binding obligation of Seller, enforceable against it in accordance with
its terms. Except as set forth on Schedule 5.3, no consent, approval, waiver,
license or authorization, or other action by or filing with any foreign,
federal, state, county, local or other governmental or regulatory body or
agency, and no approval or consent of any other person is required in
connection with the execution and delivery by Seller of this Agreement or for
the sale and delivery of the Purchased Assets and the consummation and
performance by Seller of the transactions contemplated hereby.
5.4 No Default. Except as set forth on Schedule 5.4, neither
the execution or delivery of this Agreement nor the consummation of the
transactions contemplated herein, will conflict with or result in a breach of,
or give rise to a right of termination of, or accelerate the performance
required by, any terms of any indenture, mortgage, deed of trust, lease,
agreement, insurance policy or other instrument to which Seller is a party, or
constitute a default thereunder, or result in the creation or imposition of
any lien, claim or encumbrance upon any of the Purchased Assets, nor will it
violate any of the provisions of Seller's Certificate of Incorporation or
By-Laws. Except as set forth on Schedule 5.4, Seller is not named in any
judgment, order, writ, award, injunction or decree, which materially and
adversely affects or reasonably might affect, the Purchased Assets, or the
business, prospects, earnings, or condition (financial or otherwise), of the
Theatre Ticket Business.
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5.5 Ownership of The Purchased Assets. Seller is
the sole owner of, legally and beneficially, and has good and marketable
title to, all of the Purchased Assets in each case free and clear of any
Encumbrance.
5.6 Financial Statements.
(a) The financial statements, which shall include the
unaudited balance sheet, statements of earnings and statements of changes in
financial position of Seller for the twelve unaudited period ended December
31, 2002 and the unaudited financial statements which shall include the
[unaudited] balance sheet, statement of earnings and statement of
changes in financial position of Sellers' for the six month period ended April
30, 2003, (collectively, the "Financial Statements"), furnished by Seller to
Buyer and set forth on Schedule 5.6 hereto, are true, complete and correct,
are in accordance with the books and records of Seller as of the dates and for
the periods indicated, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, and accurately
and completely represent the financial position of Seller and the Theatre
Ticket Business as at such dates.
(b) As at the Balance Sheet Date (as hereinafter defined)
Seller did not have any material obligation, indebtedness or liability of any
nature (whether known or unknown and whether accrued, absolute, contingent or
otherwise, and whether due or to become due) which is not shown on the Balance
Sheet (as hereinafter defined) or the notes thereto or disclosed herein or in
any document delivered to Buyer hereunder or as set forth on Schedule 5.6. The
balance sheet as at April 30, 2003 is hereinafter referred to as the "Balance
Sheet;" and April 30, 2003, is hereinafter referred to as the "Balance Sheet
Date.")
5.7 No Material Adverse Change. Since the Balance Sheet
Date, there has not been any material adverse change in the Theatre Ticket
Business, its prospects, earnings, condition (financial or otherwise), assets
or properties, or of , and Seller does not know of any such change which is
threatened, nor has there been any damage, destruction or loss materially
affecting the business, prospects, earnings, condition (financial or
otherwise), Purchased Assets or the Theatre Ticket Business, whether or not
covered by insurance.
5.8 Compliance with Laws. Except as set forth on Schedule
5.8.1, Seller has complied with all Laws applicable to Seller, the Theatre
Ticket Business and/or the Purchased Assets. Except as set forth on Schedule
5.8.2, no license, permit, order or approval of any governmental or regulatory
body (collectively "Permits") is material to or necessary for the conduct of
the Theatre Ticket Business as now conducted and Seller has all permits needed
to the conduct of the Theatre Ticket Business. All Permits of Seller are set
forth on Schedule 5.8.2 and are in full force and effect; no material
violations are or have been recorded in respect of any Permit and no
proceeding is pending, or to the knowledge of Seller threatened, to revoke or
limit any Permit.
5.9 Tax Matters.
(a) Except as set forth on Schedule 5.9, all federal, state,
local and foreign Tax Returns, reports and statements required to be filed by
Seller and any corporation with which it files consolidated, combined or
unitary returns have been filed with the appropriate governmental agencies in
all jurisdictions in which such returns, reports and statements are
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requiredto be filed, and all taxes and other impositions shown due and payable
thereon have been timely paid prior to the date on which any fine, penalty,
interest, late charge or loss may be added thereto for non-payment thereof;
(b) Proper and accurate amounts have been withheld by Seller
from its employees for all periods in full and complete compliance with the
tax, social security and unemployment withholding provisions of applicable
federal, state, local and foreign law. True, complete and correct federal,
state, local and foreign returns have been filed by Seller for all periods for
which returns were due with respect to employee income tax withholding, social
security and unemployment taxes, and the amounts shown thereon to be due and
payable have been paid in full;
(c) Timely payments of sales and use taxes required by
applicable state, local and foreign law have been made by Seller;
(d) None of the property of Seller is property which Seller is
required to treat as being owned by another person under any applicable law or
is "tax-exempt use property" within the meaning of the Code. No consent has
been or will be filed to have Section 341(f) of the Code apply to the
disposition of any of the Purchased Assets by Seller; and
(e) Seller is not a foreign person within the meaning of
Section 1345(b)(2) of the Code.
(f) To Seller's knowledge, no written claim has ever been made
by any Tax Authority in a jurisdiction where either Seller, or the Theatre
Ticket Business does not file Tax Returns that either Seller, or the Theatre
Ticket Business is or may be subject to taxation by that jurisdiction.Except as
set forth on Schedule 5.9 hereto,neither the Theatre Ticket Business nor Seller
in connection with the results or operations of the Theatre Ticket Business is
subject to any joint venture, partnership, or other arrangement or contract
which is treated as a partnership for United States federal income tax
purposes.
5.10 Litigation. Except as set forth on Schedule 5.10,
Seller is not a party to, nor is Seller threatened with, any dispute,
litigation or judicial, administrative or arbitration proceeding which if
decided adversely to Seller, could have a material adverse effect upon the
transactions contemplated by this Agreement or upon the Purchased Assets, the
Theatre Ticket Business or or which could create a material liability of
Seller with respect to the Purchased Assets, the Theatre Ticket Business
5.11 Contracts and Agreements.
(a) Schedule 5.11 (a) sets forth all material contracts and
other agreements relating to the Theatre Ticket Business to which Seller is a
party, or by or to which it or any of the Purchased Assets is or may become
subject or bound, including, without limitation (collectively, "Contracts"):
(i) Contracts with any current or former officer, director,
employee, consultant, agent or other representative or with any entity in
which any of the foregoing has an interest;
(ii) Contracts with any labor union or association
representing any employee;
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(iii) Contracts for the supply to any person of
such person's requirements of a product sold by Seller;
(iv) Contracts for the sale of any assets or properties of
Seller other than in the ordinary course of business or for the grant to any
person of any preferential rights to purchase any of such assets or properties;
(v) Contracts with customers or suppliers including,
without limitation, Contracts for the sharing of fees, the rebating of charges
or other similar arrangements;
(vi) Contracts and other agreements pertaining to the
Purchased Assets calling for an aggregate purchase price or payment in any one
year of more than $1,000 in any one case (or in the aggregate, in the case of
any related series of Contracts), excluding purchase orders entered into by
Seller as a purchaser or a seller in the ordinary course of business;
(vii) Contracts relating to joint ventures,
partnerships or other similar investment agreements;
(viii) Contracts containing covenants not to compete with the
Theatre Ticket Business or with any person in any geographic area or covenants
of any other person not to compete with the Theatre Ticket Business or in any
geographic area;
(ix) Contracts requiring the payment to any person
of a royalty, override or similar commission or fee;
(x) Contracts under which Seller agrees to indemnify
any person including, without limitation, agreements to share the tax
liability of any person;
(xi) Contracts which cannot be terminated on 30 days prior
written notice without penaltyor damages; and
(xii) Contracts relating to the transfer, licensing or
sharing of technology.
(b) There have been delivered or made available to Buyer true,
complete and correct copies of all Contracts (including all amendments thereto)
set forth on Schedule 5.11(a) or on any other Schedule hereto. All Contracts
referred to in Schedule 5.11(a) and elsewhere referred to in this Agreement are
in full force and effect and except as set forth on Schedule 5.11 (a), have not
been amended or modified. Except as set forth on Schedule 5.11 (a), Seller is
not in default under any of such Contracts, nor is any other party to any such
Contract or other agreement in default thereunder, nor does any condition exist
which with or without notice or lapse of time or both would violate, breach or
constitute a default or an event of default thereunder. All Contracts which
shall be assigned, transferred and delivered to, and assumed by Buyer pursuant
to this Agreement are set forth on Schedule 5.11 (b) (the "Assumed Contracts").
Except as set forth on Schedule 5.11 (b), no approval or consent of any person
is needed in order that the Contracts set forth on Schedule 5.11(b) continue in
full force and effect following the assignment thereof to Buyer pursuant to
this Agreement.
5.12 Absence of Certain Events.
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Except as set forth on Schedule 5.12 there has not been since the Balance
Sheet Date:
(a) any change or agreement to change the character of
the Purchased Assets or the Theatre Ticket Business;
(b) any purchase, sale, transfer, assignment, conveyance
or pledge of the Purchased Assets;
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(c) any waiver or modification by Seller of any
right or rights of substantial value or any payment, direct or indirect,
in satisfaction of any liability adversely affecting the Purchased Assets,
or the Theatre Ticket Business
(d) any liability, contract or other agreement,
license or other commitment entered into or assumed by or on behalf of Seller
relating to the Purchased Assets, or the Theatre Ticket Business;
(e) except for loans and advances made in the ordinary and
usual course of business or which will have been repaid in full prior to the
Closing Date, any loan or advance by Seller affecting the Purchased Assets, or
the Theatre Ticket Business;
(f) any change in the accounting methods or practices followed
by Seller in connection with the Purchased Assets, the Theatre Ticket Business,
or any change in depreciation or amortization policies or rates theretofore
adopted by Seller in connection with the Purchased Assets, the Theatre Ticket
Business; and
(g) any transaction of business by Seller relating to the
Purchased Assets, or the Theatre Ticket Business other than in the ordinary and
usual course of business.
5.13 Intellectual Property. (a) Schedule 5.13 hereto lists (i)
all Intellectual Property which is used in the Theatre Ticket Business and (ii)
all licenses of Cantor Intellectual Property to or from Seller with respect to
the Theatre Ticket Business. All annuities due with respect to the patents
listed on Schedule 5.13 have been paid. No currently outstanding claims have
been asserted either orally or in writing to Seller, or the Theatre Ticket
Business,by any Person challenging the validity of or alleging infringement by,
or misuse of, any Cantor Intellectual Property used by Seller or the Theatre
Ticket Business,or challenging or questioning the validity or enforceability of
any license, trade-name, trademark or agreement referred to on Schedule 5.13,
and no such claims have been asserted during the last five years, and there is
no valid basis for any such claim. Except as set forth on Schedule 5.13, Seller
has not been alleged to have,infringed upon or violated any Cantor Intellectual
Property right or misappropriated or misused any invention, trade secret or
other proprietary information entitled to legal protection.
(b) With respect to each trade secret
included in the Cantor IntellectualProperty, such trade secret's
documentation (which is a Purchased Asset) is current, accurate and sufficient
in detail and content to identify and explain it, and to allow its full and
proper use without reliance on the special knowledge or memory of others.
The Seller has taken all reasonable security measures to protect the secrecy,
confidentiality, value and protectiblity (as a "trade secret") of its trade
secrets. All trade secrets of Seller or the Theatre Ticket Business are
presently valid and protectible, and are not part of the public knowledge or
literature, and to the best knowledge of Seller they havenot been used,
divulged, or appropriated for the benefit of any Person other than Seller or
the Theatre Ticket Business to the detriment of Seller or the Business.
(c) Without limiting the foregoing, Seller
has all rights necessary to allow it and, upon consummation of the Closing,
Buyer to use the name "Vic Cantor Theatrical Sales" and "Group Theatre Sales"
and variations thereof (including in combination with other words)
in exclusively free of any Encumbrance or other obligations of any kind to
any Person.
(d) The Seller has not asserted any currently
outstanding claim of infringement, misappropriation or misuse of any
of the Cantor Intellectual Property and Seller knows of no basis for
such a claim, nor has Seller or the Theatre Ticket Business asserted any
such claims during the last five years. Seller is not subject to any
lien, judgment, order or decree which
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may adversely affect its ability to own and use the Cantor Intellectual
Property shown on Schedule 5.13 of this Agreement. Except as set forth on
Schedule 5.13 , none of the Theatre Ticket Intellectual Property is subject
to any license from any third party to Seller or any Affiliate and Seller does
not know of any basis for any such charge or claim.
5.14 Accounts and Notes Receivable. All accounts and notes
receivable reflected on the Balance Sheet, and all accounts and notes
receivable arising subsequent to the Balance Sheet Date, have arisen in the
ordinary course of business of Seller, represent valid obligations due to
Seller, have been collected or are collectible in the ordinary course of
business of Seller in the aggregate recorded amounts thereof.
5.15 Suppliers and Customers. The relationship of Seller with
the customers and suppliers of the Theatre Ticket Business represent normal
commercial relationships. Schedule 5.15 sets forth (a) all customers of Seller
with respect to the Theatre Ticket Business and (b)all suppliers of Seller with
respect to the Theatre Ticket Business. To the best of Seller's knowledge, with
respect to the Theatre Ticket Business, the relationships of Seller with its
material suppliers and customers are good and, except as set forth on Schedule
5.15,no such supplier or customer has or made any written threat to Seller that
it intends to cancel or otherwise terminate, its relationship with Seller, or
has at any time on or after January 1, 2003 decreased materially, or intends to
decrease materially, its services or supplies to Seller in the case of any
supplier, or,its usage of Seller's services or products, made any written claim
that any services provided by Seller failed to meet any specification with
respect thereto or were otherwise defective, in the case of any customer.To the
best of Seller's knowledge, except as set forth on Schedule 5.15, neither this
Agreement nor the transactions contemplated hereby will materially adversely
affect the business relationship of Seller or the Theatre Ticket Business with
any such major supplier or customer.
5.16 Employee Benefit Plans and Compliance with ERISA.
-------------------------------------------------
The Seller does not have "employee benefit plans", within the meaning of
Section 3(3) of ERISA, or any other bonus, profit sharing, compensation,
pension, severance,deferred compensation, fringe benefit, insurance, welfare,
medical, post-retirement health or welfare benefit, medical reimbursement,
health, life, stock option, stock purchase, tuition refund, service award,
company car, scholarship, relocation, disability, accident, sick pay, sick
leave, vacation, termination, individual employment, executive compensation,
incentive, bonus,commission, payroll practices, retention or other plan,
agreement, policy, trustfund or arrangement, whether written or unwritten,
and whether United States, or foreign, maintained, sponsored or contributed to
by Seller or any entity that would be deemed a "single employer"
with Seller under Section 414(b), (c), (m)or (o) of the Code
or Section 4001(a)(14) of ERISA (an "ERISA Affiliate") on behalf of
any of the current, former or retired employees of Seller or their
beneficiaries or with respect to which Seller or any ERISA Affiliate has or has
had any obligation on behalf of any such employee or beneficiary (each, an
"Employee Benefit Plan") or is or can be deemed a "single employer" under any
Canadian or foreign law, rule or regulation.
5.17 Related Party Transactions. Except as set forth on
Schedule 5.17 hereto, there are no Contracts, between (i) the Business, on one
hand, and Seller or any stockholder, director, officer or Affiliate of Seller
(each, a "Related Party"), on the other, or (ii) Seller with respect to the
Theatre Ticket Business, on one hand, and any Related Party, on the other; in
each case, other than routine employment agreements in the ordinary course of
business.No amounts are
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owed by or to Seller with respect to the Business to or by any Related Party,
and no amount is owed by or to the Theatre Ticket Business to or by Seller or
any Related Party.
5.18 Potential Conflicts of Interest. To the best of Seller's
knowledge, after making all reasonable inquiries, and except as set forth on
Schedule 5.18, no officer or director of Seller or key employee of (i) is an
officer, director, employee or consultant of, or owns or otherwise controls or
is an affiliate or associate of any person which is a competitor, lessor,
lessee, licensee, customer or supplier of Seller in connection with the Theatre
Ticket Business; (ii) owns, directly or indirectly, in whole or in part, any
trademark, trade name, service mark, copyright, franchise, patent, invention,
permit, license or secret or confidential information which Seller is using in
connection with the Theatre Ticket Business or the use of which is necessary
for the Theatre Ticket Business; or (iii) has any cause of action or other
claim whatsoever against, or owes any amount to, Seller, except for claims
in the ordinary course of business.
5.19 Full Disclosure. All agreements, documents and
instruments delivered by or on behalf of Seller in connection with this
Agreement and the transactions contemplated hereby are true, complete and
correct. The information furnished by or on behalf of Seller to Buyer in
connection with this Agreement and the transactions contemplated hereby does
not contain any untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. There is no fact which Seller has not disclosed to Buyer in
writing which materially adversely affects, or so far as Seller can now
foresee, will materially adversely affect, the Purchased Assets, the Theatre
Ticket Business or the ability of Seller to perform this Agreement.
5.20 No Broker. No broker, finder, agent or similar
intermediary has acted for or on behalf of Seller in connection with this
Agreement or the transactions contemplated hereby, and no broker, finder,
agent or similar intermediary is entitled to any broker's,finder's or similar
fee or other commission in connection therewith based on any contract,
arrangement or understanding with Seller or any action taken by Seller.
5.21 Authorization by the Board of Directors. At least a
majority of the members of the Board of Directors of Seller and the
Stockholder has approved the transactions contemplated by this Agreement and
has duly authorized Seller to execute and deliver this Agreement and all
necessary Bankruptcy Court approvals and consents for the execution and
delivery of this Agreement and the consummation of the transactions
contemplated thereby has been obtained.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller as follows:
6.1 Due Incorporation and Qualification. Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of New York, and has the corporate power and authority to
own, lease and operate its assets and properties,and to carry on its business
as now being conducted.
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6.2 Corporate Power of Buyer, Consents. Except for the
approval of Buyer's stockholders with respect to those certain matters
contemplated by the transactions described in this Agreement, Buyer has the
requisite corporate power and authority to execute and deliver this Agreement,
and to perform its obligations hereunder. The execution, delivery and
performance of this Agreement by Buyer and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Buyer or its shareholders. This Agreement has
been duly and validly executed and delivered by Buyer and constitutes the
legal, valid and binding obligation of Buyer, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors rights generally.
6.3 No Default. Neither the execution or delivery of this
Agreement nor the consummation of the transactions contemplated herein, will
conflict with or result in a breach of, or give rise to a right of termination
of, or accelerate the performance required by, any terms of any indenture,
mortgage, deed of trust, lease, agreement, insurance policy or other
instrument to which Buyer is a party, or constitute a default thereunder, or
result in the creation or imposition of any lien, claim or encumbrance upon
any of Buyer's assets, nor will it violate any of the provisions of Buyer's
Certificate of Incorporation or By-Laws.
6.4 Certificate of Incorporation and By-Laws. The
Certificate of Incorporation and By-laws of Buyer, and all amendments to and
restatements of each, which have been heretofore delivered to Seller are
true,complete and correct.
6.5 No Broker. No broker, finder, agent or similar
intermediary has acted on behalf of Buyer in connection with this Agreement or
the transactions contemplated hereby, and no broker, finder, agent or similar
intermediary is entitled to any broker's, finder's, or similar fees or
commissions in connection therewith based on any contract, arrangement or
understanding with Buyer or any action taken by Buyer.
SECTION 7. REPRESENTATIONS OF THE GUARANTOR.
--------------------------------
7.1 Net Worth. The Guarantor hereby represents
and warrants to the Seller that her net worth is equal to at least $228,000.
SECTION 8. COVENANTS AND AGREEMENTS OF STOCKHOLDER AND SELLER.
------------------------------------------------
The Stockholder and Seller, jointly and severally, covenant
and agree as follows:
8.1 Discharge of Liabilities. In addition to its obligations
under Section 4 hereof, from the date hereof through the Closing Date, Seller
shall, in accordance with its normal accounts payable practices with respect to
unaffiliated third parties, pay or otherwise discharge, or cause to be paid or
otherwise discharged, all liabilities of Seller or any of its affiliates
relating to the Theatre Ticket Business that are due or may become due (in
accordance with such practices) during such period and make all other deposits
and payments and other cash disbursements in accordance with its past
practices.
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8.2 Restriction on Competition. Stockholder has
represented to the Buyer that hewill be retiring from the theatre ticket
business; accordingly, in order to induce the Buyer to enter into this
Agreement, Seller and Stockholder agree that, for a period of 5 years following
the Closing Date, neither of them willnot engage, either directly or
indirectly, in the entertainment ticket salesbusiness, and shall not, directly
or indirectly,own, manage, operate, join,control, participate in, invest in
or otherwise be connected with, in any manner, any person, partnership,
corporation or other entity that is engaged,in any manner, in the Theatre
Ticket Business. Stockholder and Seller acknowledge that the scope of this
covenant is reasonable and that Buyer's remedy at law for breach of this
covenant will be inadequate and agrees that, in addition to any other remedy
Buyer may have, Buyer will be entitled to an injunction restraining
such breach or threatened breach,without bond or other security being required.
If any court finds that the restrictions stated herein are unreasonable, this
Section 7.2 will be interpreted to include the restrictions contained herein to
the fullest extent such restrictions are allowable under law, giving effect to
the agreement and the intent of the parties that the restrictions contained
herein shall be effective to the fullest extent permissible.
8.3 Bulk Sales Laws. Seller agrees to comply with or perform
any actions in connection with the provisions of the Uniform Commercial Code or
other bulk sales or similar laws of any of the states in which any of the
Purchased Assets are situated or of any other state which may be asserted to be
applicable to the transaction hereunder.
8.4 Notice of Sale. Seller agrees that Buyer (at Buyer's
option) may, or that Seller (as reasonably requested by Buyer) will, from time
to time, prepare and mail notices to the other party(including the customers of
the Theatre Ticket Business) under any of the accounts or notes receivable or
other agreements assigned by Seller advising such other party that such
accounts or notes receivable or other agreement and the Theatre Ticket
Business have been sold and assigned to Buyer and directing such other party
to send to Buyer all future payments on such accounts or notes, notices and
correspondence relating to such agreements.
8.5 Transition Assistance.
(a) Following the Closing Date, the Seller will, and
Stockholder will cause the Seller to, arrange for telephone service, with
existing numbers, operational at the Buyer's office and to have the the
Purchased Assets delivered, at the Buyer's expense, to the Buyer's offices, so
as to permit the Buyer to commence business operations immediately following
the closing.
(b) For a period of four months Stockholder agrees that he
will make himself available, upon the reasonable request of Buyer, for
consultation regarding the Theatre Ticket Business
8.6 Name Change. On the Closing Date, the Seller shall file
and the Stockholder shall cause each of the Seller and Group Ticket Sales, Inc
to file, certificates of amendment to their respective certificates of
incorporation changing their respective names and shall cease conducting any
business under the names "Vic Cantor Theatre Sales Services, Inc." to "Fishkin
Enterprises, Inc.," and "Group Ticket Sales, Inc." The Seller shall assign and
the Stockholder shall cause each of the Seller and Group Theatre Sales, Inc
assign to the Buyer any and all rights they may have to the use of the names
Vic Cantor Theatre Sales Services, Inc" and "Group Ticket Sales, Inc."
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8.6 Letters to Customers and Suppliers. The Seller shall
forward letters notifying the Cantor Customers listed on Schedule 8.6 hereto
andTheatres of the transactions contemplated hereby, substantially in the form
attached hereto as Exhibit 8.6.
SECTION 9. Covenants and Agreements of Both Buyer and Seller.
--------------------------------------------------
9.1 Further Assurances. Each of the parties shall execute such
agreements,instruments and other documents and perform such further acts as may
be reasonably required or desirable to carry out the provisions hereof and the
transactions contemplated hereby, including using all reasonable efforts:(a) to
effect all necessary filings; (b) to defend any lawsuits or other legal
proceedings, whether judicial or administrative,whether brought derivatively or
on behalf of third parties (including governmental agencies or officials),
challenging this Agreement or the consummation of the transactions contemplated
hereby, (c) to furnish to each other such information and assistance as
reasonably may be requested in connection with the foregoing, and (d) to obtain
all necessary approvals, consents and assignments and to execute such other
documents and to take any and all such other actions as may be necessary or
reasonably requested by Buyer to vest or more effectively vest in Buyer, full
and marketable title to the Purchased Assets free and clear of any and all
claims, liabilities, obligations, liens, pledges, mortgages, encumbrances,
charges and restrictions of every kind, nature and description.
9.2 Expenses of Sale. Seller and Buyer agree that each of them
shall bear its own direct and indirect expenses incurred in connection with the
negotiation, preparation and performance of this Agreement and,unless otherwise
provided for herein, the consummation and performance of the transactions
contemplated hereby. Without limiting the generality of the preceding sentence,
all transfer, documentary, gross receipts, sales and use taxes, recording and
filing fees, survey costs, title insurance premiums and similar liabilities, if
any, resulting from the sale, assignment,transfer and delivery hereunder of the
Purchased Assets shall be paid for in full by Seller.
9.3 Confidentiality. (a) Each party hereto recognizes and
acknowledges that secret or confidential information, knowledge or data of
various kinds may exist, from time to time, with respect to the business of the
other party. Accordingly, each party covenants that, except with the prior
written permission of the other party, it shall at all times keep confidential
and not divulge, furnish or make accessible to any one, any secret or
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the other party or any affiliate of such party
to which the first party has been or shall become privy by reason of this
Agreement, discussions or negotiations relating to this Agreement, the
arrangement between the parties created hereby, or a party's performance of its
obligations under this Agreement.
(b) Neither the Seller nor the Stockholder shall directly or indirectly
divulge furnish or make accessible to any one, any secret or confidential
information, knowledge or data concerning or relating to the Theatre Ticket
Business or the Purchased Assets.
(c) The provisions of this Section 8.3 shall not apply to any
information, knowledge or data to the extent, and only to the extent, that (i)
the disclosure of the same by a party to a
17
particular third party is reasonably required in connection with the
fulfillment of such party's obligations hereunder and such third party shall
enter into an agreement to keep such information, knowledge or data
confidential, (ii) such information, knowledge or data shall become generally
known to the public or the trade through no violation of this Section 8.3by the
disclosing party or (iii) such information, knowledge or data was known to the
party prior to disclosure.
SECTION 10. INDEMNIFICATION
10.1 Survival of Representations and Warranties. All
representations and warranties contained in Sections 5 and 6 of this Agreement
shall survive the Closing.
10.2 Indemnification by Seller. From and after the Closing,
Seller shall indemnify and save Buyer and its Affiliates, their respective
directors, officers, employees, agents and representatives and all of their
successors and assigns (collectively "Buyer Claimants" and individually "Buyer
Claimant") harmless from and defend each of them from and against any and all
demands, claims, actions, liabilities, losses, costs, damages or expenses
whatsoever (including any reasonable attorneys' fees) (collectively, "Losses")
asserted against,imposed upon or incurred by the Buyer Claimants resulting from
or arising out of, without limitation, (a) any inaccuracy or breach of any
representation or warranty of Seller contained herein; (b) any breach of any
covenant or obligation of Seller contained herein; (c)Seller's ownership of its
retained assets and operation of its business from and after the Closing Date;
(d)any liability of Seller or the Theatre Ticket Business arising out of events
occurring, conditions existing, products sold or activities of Seller prior to
the Closing; (e) noncompliance with any applicable bulk sales or similar laws
(including laws which may impose transferee liability on Buyer or an Affiliate
or create Encumbrances on the Assumed Assets relating to Seller's liability for
sales, use, or other taxes or withholdings arising out of the operations of the
Theatre Ticket Business by Seller); (f) any personal injuries,death or property
damage arising from services provided by Seller prior to the Closing Date or
any of the Purchased Assets sold by Seller to Buyer pursuant to this Agreement
and utilized or resold by Buyer; and (g) any liability arising out of or
related to the Theatre Ticket Business prior to Closing, or the assertion
against a Buyer Claimant of a claim which,if valid, would constitute a
liability arising out of or related to the Theatre Ticket Business prior to
Closing.
10.3 Indemnification by Buyer. From and after the Closing,
Buyer shall indemnify and save Seller and its Affiliates and their respective
directors, officers, employees, agents and representatives(collectively "Seller
Claimants" and individually "Seller Claimant") harmless from and defend each of
them from and against any and all Losses asserted against, imposed upon or
incurred by the Seller Claimants resulting from or arising out of(a) any
inaccuracy or breach of any representation or warranty of Buyer contained
herein; (b) any breach of any covenant or obligation of Buyer contained herein;
and(c) any Assumed Liability or the assertion against a Seller Claimant of a
claim which, if valid, would constitute an Assumed Liability.
10.4 Right of Set-Off. Subject to Section 11. 5
hereof, Buyer Claimant may set off and deduct any Losses directly against
any amounts due Seller under the Promissory Note.
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SECTION 11. Miscellaneous.
-------------
11.1 Severability. If at any time subsequent to the date
hereof,any term or provision of this Agreement shall be determined by a court
of competent jurisdiction to be illegal, void or otherwise unenforceable,such
term or provision shall be of no force and effect, but the illegality or
unenforceability of such term or provision shall have no effect upon and
shall not impair the enforceability of any other term or provision of this
Agreement.
11.2 Notices. Any notice or other communication required or
which may be given hereunder shall be in writing and shall be delivered
personally, by private courier, telegraphed or telexed, or sent by certified,
registered or express mail (including, but not limited to, federal express),
postage prepaid, and shall be deemed given when so delivered personally,
entrusted to such private courier, telegraphed or telexed, as follows:
(i) if to Buyer, to: Maxwell Group Entertainment, Inc.
1501 Broadway
Suite 1807
New York, New York 10036
Attention: Phyllis Maxwell
with a copy to:
Eiseman Levine Lehrhaupt &
Kakoyiannis, P.C.
845 Third Avenue, 8th Floor
New York, New York 10022
Attention: Peter Kakoyiannis, Esq.
(ii) if to Seller or Stockholder to: Fishkin Enterprises, Inc.
21 Orange Drive
Marlboro, New Jersey07746
Attention Harold Fishkin
with a copy to: Richard I. Janvey, Esq.
Janvey, Gordon, Herlands, Randolph & Cox LLP
355 Lexington Avenue
10th Floor
New York, New York 10017
11.3 Entire Agreement. This Agreement contains the entire
agreement between Buyer and Seller with respect to the purchase of the
Purchased Assets and the related transactions described herein and supersedes
any and all prior and contemporaneous contracts, arrangements or
understandings, written or oral, with respect thereto.
11.4 Waivers and Amendments. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended, and the terms and
conditions hereof may be waived only by a written instrument signed by Buyer
and Seller or, in the case of a
19
waiver, the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver or modification thereof, nor shall any waiver or
modification on the part of any party of any right, power or privilege
hereunder, nor any single or partial exercise of any right, power or privilege
hereunder, preclude any other or further exercise thereof or the exercise of
any other right, power or privilege hereunder. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies which
any party may otherwise have at law or in equity. The rights and remedies of
any party arising out of or otherwise in respect of any inaccuracy in or
breach of any representation, warranty, covenant or agreement contained in
this Agreement shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement contained in this Agreement (or in any other
agreement between the parties) as to which there is no inaccuracy or breach.
11.5 Disputes.
(a) Subject to paragraph (b) of this Section 10.5, any dispute arising
out of or in connection with this Agreement which cannot first be settled
amicably by mutual consultation between the parties, shall be referred to and
finally resolved by arbitration under the auspices of JAMS, in accordance with
its rules ("Rules"). The arbitration shall take place in New York, New York,
unless the parties otherwise mutually agree. The rules of procedures not
expressly provided by the Rules shall be determined in accordance with the laws
of the State of New York, whether mandatory or not. An award may be confirmed
and judgment on the award entered in the Supreme Court of the Stateof New York.
Proceedings to confirm or enforce any final arbitral award hereunder, or to
modify, alter, vacate any such arbitral award, shall be brought exclusively in
the Supreme Court of the State of New York. The parties hereto consent to the
jurisdiction of the courts of the State of New York in any action to enforce an
arbitration award hereunder.
(b) Nothing in this Section 10.5 shall be deemed to preclude any Party
from commencing an action for equitable or injunctive relief in any court
having jurisdiction over the matter.
(c) If a proceeding under either paragraphs (a) or (b) is commenced by
the Buyer, or pursuant to Section 2.2 hereof, any payments required to be made
under the terms of the Promissory Note shall be suspended until completion of
such proceedings.
11.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.
11.7 No Assignment. This Agreement is not assignable
except by operation of law.
11.8 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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11.9 Exhibits and Schedules. The Exhibits and Schedules to
this Agreement are incorporated herein and made hereby a part of this
Agreement as if set forth in full herein.
11.10 Rules of Construction. This Agreement shall be
construed in accordance with the following rules of construction:
(a) Calculation of Time Period. When calculating
the period of time before which, within which or following which any act is to
be done or step taken pursuant to this Agreement, the date that is the
reference date in calculating such period shall be excluded. If the last
day of such period is a non-Business Day, the period in question shall end on
the next succeeding Business Day.
(b) Commercially Reasonable Best Efforts. The
obligation of a party to use commercially reasonable best efforts to
accomplish an objective does not require an unreasonable expenditure of funds
or the incurrence of an unreasonable liability on the part of the obligated
party.
(c) Gender and Number. Any reference in this Agreement to
gender shall include all genders, and words imparting the singular number only
shall include the plural and vice versa.
(d) Headings. The provision of a Table of Contents, of this
Agreement into Articles, Sections and other subDivisions and the insertion of
headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement. All references in this
Agreement to any "Section" are to the corresponding Section of this Agreement
unless otherwise specified.
(e) Herein. The words such as "herein," "hereinafter,"
"hereof," and "hereunder"refer to this Agreement as a whole and not merely to a
subDivision in which such words appear unless the context otherwise requires.
(f) Including. The word "including" or any variation thereof
means "including, without limitation" and shall not be construed to limit any
general statement that it follows to the specific or similar items or matters
immediately following it.
(g) Knowledge. The word "knowledge" or any similar
term shall mean the actual knowledge of any of the senior management of
Seller or of the Business.
(h) Payments and Computations. Except for the payment of the
Purchase Price (which shall be paid at the Closing), each party shall make each
payment due to another party to this Agreement not later than 2:00 p.m.New York
time on the day when due. All payments shall be measured and paid in U.S.
dollars by wire transfer in immediately available funds to the account or
accounts designated by the party receiving such payment. All computations of
interest shall be made on the basis of a year of 365 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable.Whenever any payment
under this Agreement shall be due on a day other that a Business Day, such
payment shall be made on the next succeeding Business Day,and such extension of
time shall be included in the computation of payment of interest.
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(i) Schedules and Exhibits. Any matter disclosed by Seller on
any one Schedule shall be deemed disclosed for purposes of all other Schedules
to the extent that the relevance of such matters to other Sections of this
Agreement or other applicable Schedules is reasonably apparent to a reader.
SECTION 12. DEFINITIONS.
-----------
The terms defined in this Section 12, whenever used herein
(including the Exhibits and Schedules hereto),shall have the following meanings
for all purposes of this Agreement, and such meanings are equally applicable to
both the singular and the plural forms of the terms defined. References to any
gender include, unless the context otherwise requires, references to all
genders, and references to the singular include, unless the context otherwise
requires, references to the plural and vice versa.
"Affiliate" shall mean any Person which directly or indirectly
controls, is controlled by, or is under common control with, another Person,
provided that, in any event, any Person that owns directly or indirectly
securities having 10% or more of the voting power for the election of directors
or other governing body of a corporation or 10% or more of the partnership or
other ownership interests of any other Person (other than as a limited partner
of such other Person) will be deemed to control such corporation or other
Person.
"Authorizations" shall mean all licenses, Permits,
Environmental Permits, approvals, authorizations, qualifications,concessions or
the like, issued by any United States federal, state, local or foreign
regulatory or governmental authorities, relating to the Purchased Assets,
Assumed Liabilities or the Theatre Ticket Business.
" Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banks are closed or are authorized to be closed in
New York, New York.
"Claim" means claims, demands, charges, complaints, actions,
causes of action, suits, proceedings, hearings and administrative proceedings.
"Closing" means the closing of the transactions contemplated
in this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
"Consent" means any consent, approval, authorization,
qualification, waiver or notification of a Governmental Authority or any other
Person.
"Encumbrance" means any charge, claim, conditional sale
agreement, easement restrictions, liability, pledge, obligation, security
interest, , or other title retention agreement, lease, mortgage, security
agreement, third party rights of any kind, including,options and right of first
refusal, restriction, license, covenant, or other lien (including title defects
of any kind whatsoever, or the filing of, or agreement to give any financing
statement under the Uniform Commercial Code or statute or law of any
jurisdiction of any kind whatsoever).
22
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and the regulations thereunder.
"ERISA Affiliate" shall have the meaning set forth in Section
5.19 of this Agreement.
"GAAP" means U.S. generally accepted accounting principles
and procedures in effect on the date of this Agreement, consistently applied.
"Governmental Authority" means a governmental authority with
jurisdiction over Seller, or its properties, in connection with the matters
described in this Agreement, including any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any governmental authority, agency, department, board,
commission or instrumentality of the United States,or any political subdivision
thereof (including any state or any political subdivision thereof), and any
tribunal or arbitrator of competent jurisdiction.
"Cantor Intellectual Property " means any and all of the
Seller's (i) United States and foreign patents and patent applications
(including without limitation docketed patent disclosures awaiting filing,
reissues, continuations, continuations-in-part and extensions), patent
disclosures awaiting filing determination, inventions and improvements thereto,
(ii) trademarks, service marks, certification marks, trade names, corporate
names and all variations thereof, trade dress, logos, business and product
names, slogans, and registrations and applications for registration thereof,
(iii) copyrights and registrations thereof, (iv) inventions, processes,designs,
formulae, trade secrets, know-how, industrial models, confidential, technical
and business information, manufacturing, engineering and technical drawings,and
product specifications, (v) intellectual property rights similar to any of the
foregoing, (vi) computer software, and (vii) copies and tangible embodiments
thereof (in whatever form or medium, including without limitation electronic
media), in each case that are necessary to conduct the Theatre Ticket Business
as conducted on the date hereof.
"IRS" shall have the meaning set forth in Section of this
Agreement.
"Law" means any law, statute, code, ordinance, rule,
regulation or other legally enforceable requirement of any Governmental
Authority.
"Material Adverse Effect" means a material adverse effect on
the condition of the Purchased Assets or the results of operations of the
Theatre Ticket Business,except to the extent that the same results from actions
taken by Buyer in connection with the transactions contemplated hereby, the
announcement of the transactions contemplated hereby, changes in general
economic conditions, acts of terrorism or the commencement of war or armed
hostilities directly or indirectly involving the United States, or changes
affecting the industry generally in which Seller operates the Theatre Ticket
Business.
"Cantor Intellectual Property Rights" means all Intellectual
Property Rights that are owned by Seller and used in , licensed, exercised, or
exploited, or otherwise necessary for, the Theatre Ticket Business, including
but not limited to the name "as currently conducted or as currently proposed to
be conducted, but excluding any Intellectual Property Rights associated
with the Excluded Assets.
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"Other Assets" shall mean, but shall not be limited to, all
books and records (or true and correct copies thereof), including all
computerized books and records and all Contracts, files, documents, lists,
plats, correspondence, architectural plans, drawings and specifications,
invoices, forms, customer records, promotional and advertising materials,
technical data, operating records, operating manuals, instructional documents,
employee files (to the extent permitted under applicable Law) and other printed
or written materials, in each case, to the extent related to the Theatre Ticket
Business; all rights under or pursuant to all warranties, representations and
guarantees, whether express or implied, made by suppliers, manufacturers,
contractors and other third parties with respect to any of the Purchased
Assets;all claims, defenses, causes of action, choses in action, rights of
recovery,rights of set off, and rights of recoupment related to the Theatre
Ticket Business or the Purchased Assets; all computers, office supplies and
furniture; and all customer lists, supplier lists, catalogues, sales brochures
and other marketing data.
"Party" shall mean any Person who is a Party to this
Agreement.
"Person" shall mean any natural person, corporation, limited
or limited liability partnership, general partnership, joint venture,
association, joint-stock company, limited liability company, company, trust,
bank, trust company, land trust, Theatre Ticket Business,and any "group" within
, trust or other organization, whether or not a legal entity, and any
governmental unit or agency or political subdivision thereof.
Post Closing Receivable shall mean all commissions due with
respect to theatre tickets sold prior to the Closing Date with scheduled
performances after the Closing Date.
"Tax Authority" shall mean any United States or Canadian
federal, state, provincial, county, municipal or other local government or any
foreign government, any sub-division, agency, commission or authority thereof,
or any quasi-governmental body or other authority exercising any taxing or tax
regulatory authority.
"Tax Return" shall mean each and every report, return,
declaration, information return, statement or other information required to be
supplied to a taxing or governmental authority in connection with the
determination, assessment, collection or administration of any Tax or Taxes on
the Theatre Ticket Business or filed by or including the Theatre Ticket
Business, including without limitation, any combined or consolidated return for
any group of entities including the Theatre Ticket Business which includes
income from or relating to the Theatre Ticket Business.
"Taxes" (or "Tax" where the context requires) shall mean all
United States or Canadian federal, state, provincial, county, local, foreign or
other taxes, duties, or similar charges (including, without limitation, income
(whether net or gross), profits, premium, estimated, excise, sales, use,
environmental (including taxes under Code Section 59A), occupancy, franchise,
license, value added stamp, windfall profits, social security, gross receipts,
franchise, ad valorem, severance, capital levy, production, transfer, gains,
withholding, occupation, employment and payroll related and property taxes,
alternative or add-on, minimum or estimated, import and export duties and other
governmental charges and assessments) imposed by any taxing or governmental
authority on or payable by Seller, the Theatre Ticket Business or any other
party with respect to the income, operations, products, assets or properties of
the Theatre Ticket Business, whether attributable to statutory or non-statutory
rules and whether or not measured in whole or in part by net income, and
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including interest, additions to tax or interest, and penalties with respect
thereto, and including expenses associated with contesting any proposed
adjustment related to any of the foregoing.
"Theatre(s)" shall mean a live theatrical performance space
or venue.
IN WITNESS WHEREOF, the parties have duly executed and
delivered this agreement on the date first above written.
Maxwell Group Entertainment, Inc., Buyer
By: /s/ "Phyllis Maxwell"
Name: Phyllis Maxwell
Title: President
Vic Cantor Theatrical Services Inc., Seller
By:/s/ "Harold Fishkin
Name: Harold Fishkin
Title: President
/s/ "Harold Fishkin"
Harold Fishkin as Sole Stockholder of
Vic Cantor Theatrical Services, Inc.