Exhibit 10.1
PUT AND SALE AGREEMENT
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THIS PUT AND SALE AGREEMENT (this "Agreement"), dated as of August 17,
2005, is made and entered into by and between KNIGHT XXXXXX, INC., a Delaware
corporation ("KF"), and OPUS INTERNATIONAL, LLC, a Maryland limited liability
company ("Opus"), with reference to the following facts:
RECITALS:
WHEREAS, KF and Opus are parties to the Agreement and Plan of Merger,
dated as of August 17, 2005, among KF, Opus, CenterStaging Musical Productions,
Inc. ("CMPI") and the other parties identified therein (the "Merger Agreement");
and
WHEREAS, KF owns all of the outstanding shares of capital stock (the
"Stock") of PayCell, Inc., a California corporation ("PayCell"); and
WHEREAS, KF is indebted to Opus and its affiliates and associates; and
WHEREAS, KF and Opus agreed in the Merger Agreement to enter into an
agreement under which KF, at its election, could sell to Opus, and cause Opus to
purchase and acquire, all of the Stock in exchange for all indebtedness and
other amounts owed by KF to Opus; and
WHEREAS, CMPI's obligations under the Merger Agreement are conditional
upon KF and Opus entering into this Agreement.
NOW, THEREFORE, in consideration of the parties' entering into the Merger
Agreement, and as a condition to CMPI's obligations thereunder, and the mutual
covenants set forth herein, KF and Opus hereby agree as follows:
1. Option to Put the Stock
(a) Opus hereby grants to KF the right and option, at KF's election (the
"Put Option"), to sell and assign to Opus, and to require Opus to purchase and
acquire all (but not less than all) of the Stock, free and clear of all liens,
claims and encumbrances, in consideration and in exchange for all (but not less
than all) of the Debt of KF or any subsidiary of KF to Opus as of the Closing
Date, including without limitation the amounts described in Schedule A to this
Agreement, and all interest, fees and charges accruing on such amounts through
the Closing Date (the "Opus Indebtedness"). For purposes of this Agreement,
"Debt" shall mean: (i) indebtedness or liability for borrowed money, or for the
deferred purchase price of property or services (including trade obligations);
(ii) obligations as lessee under capital leases; (iii) obligations under letters
of credit issued; (iv) all obligations evidenced by bonds, debentures, notes or
other similar instruments; (v) all guarantees, endorsements (other than for
collection or deposit in the ordinary course of business), and other contingent
obligations to purchase any item included in this definition, to provide funds
for payment, to supply funds to invest in any Person, or otherwise to assure a
creditor against loss; and (vi) all interest, fees, charges and other amounts
accruing with respect to any of the foregoing.
(b) The Put Option may be exercised by notice to Opus at any time on or
before the first annual anniversary of the date of this Agreement, which notice
shall set forth the date (the "Closing Date"), time and place, which shall be
mutually convenient to the parties, of the closing of the sale and purchase of
the Stock. At the closing, KF shall deliver to Opus one or more certificates
evidencing the Stock, along with duly executed stock powers, against the
delivery by Opus of: (a) all evidences of the Opus Indebtedness, marked
cancelled, and (b) duly executed instruments of assignment, cancellation or
termination respecting the Opus Indebtedness as KF shall reasonably request in
order to fully effectuate the exchange and cancellation of the Indebtedness.
(c) Each party shall bear and pay its own expenses incurred in
connection with this Agreement and the transactions contemplated hereby. Should
either party fail to purchase or sell, as the case may be, the Stock as provided
herein, time being of the essence, in addition to all other rights and remedies
that may be available to the other party in such event, the defaulting party
shall be liable for all loss, liability, and expense incurred by the other
party, including, without limitation, attorneys' fees and expenses, in
connection with the proposed purchase and sale of the Stock. In addition, the
parties acknowledge and agree that, in view of the reliance and change of
position which must necessarily result from KF's notice of exercise of the Put
Option hereunder and the fact that the damages which would result from a default
by Opus in its obligation to consummate such a purchase or sale are uncertain in
amount and cannot be determined with certainty, the provisions of this Agreement
shall be specifically enforceable by each party.
2. Representations and Warranties of KF
KF hereby represents and warrants to Opus that the following are true and
correct as of the date hereof and will be true and correct as of the Closing
Date, if any, hereunder:
(a) KF is, and will be, the sole legal and beneficial owner of the
Stock.
(b) Except for restrictions imposed under federal or state securities
laws applicable to securities generally, there are, and will be, no restrictions
on the transfer of the Stock, and KF has, and will have, the right to transfer
the Stock to Opus in the event of KF's exercise of the Put Option as
contemplated herein, without the consent, permission, waiver or any other act of
any other person.
(c) This Agreement constitutes, and will constitute, the legal, valid
and binding obligation of KF, enforceable against KF in accordance with its
terms.
(d) The Stock is not, and will not be, subject to any liens, security
interests, claims or encumbrances whatsoever.
(e) The execution, delivery and performance of this Agreement by KF are
not, and will not be, in violation of any indenture, agreement or undertaking to
which KF is a party or by which KF or the Stock is bound or otherwise affected.
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Except for the foregoing, KF makes no representation or warranty regarding
the Stock, the sale of the Stock, or the business, operations, financial
condition, results of operations, assets, liabilities, rights, properties or
prospects of PayCell. Without limiting the generality of the foregoing, KF makes
no representation that the value equals or exceeds the amount of the Opus
Indebtedness. Opus acknowledges that it is willing to enter into this Agreement,
and acquire the Stock, to facilitate the closing of the transactions
contemplated by the Merger Agreement and irrespective of the financial
condition, results of operations and value of PayCell.
3. Representations and Warranties of Opus
Opus hereby represents and warrants to KF that the following are true and
correct as of the date hereof and will be true and correct as of the Closing
Date, if any, hereunder:
(a) Opus is, and will be, the sole legal and beneficial holder of the
Indebtedness and has not, and will not have, sold, transferred, assigned,
conveyed, pledged or hypothecated any of the Indebtedness, or any interest
therein, directly or indirectly, to any person.
(b) This Agreement constitutes, and will constitute, the legal, valid
and binding obligation of Opus, enforceable against Opus in accordance with its
terms.
(c) The execution, delivery and performance of this Agreement by Opus
are not, and will not be, in violation of any indenture, agreement or
undertaking to which Opus is a party or by which Opus or any of the Indebtedness
is bound or affected.
(d) Schedule A truly and accurately describes all Debt of KF or any
subsidiary of KF to Opus or any of Opus's affiliates as of the date of this
Agreement, including without limitation the principal amount, the rate of
interest, the maturity date, payment requirements, other fees and charges that
may become payable, and other material terms of such indebtedness. Except as set
forth in Schedule A, neither KF nor any subsidiary of KF has any Debt to Opus or
any affiliate of Opus, whether absolute or contingent, liquidated or
unliquidated, or matured or unmatured.
4. Release. Opus, on behalf of itself and its affiliates, successors and
assigns (collectively, the "Opus Parties"), hereby releases, remises, acquits
and forever discharges, and agrees to indemnify and hold harmless, KF and its
subsidiaries and their successors and assigns, (collectively, "KF Parties"),
from and against any and all claims, demands, obligations, causes of action,
debts, expenses, damages, judgments, orders and liabilities of whatever kind or
nature, in law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, matured or unmatured, and whether concealed or hidden, which the
Opus Parties now own or hold or have at any time heretofore owned or held or
had, or may at any time own or hold or have, relating to Debt of any KF Party.
5. Survival of Representations and Warranties
(a) The representations and warranties of the parties contained in this
Agreement shall survive the Closing Date.
(b) Each party shall indemnify, reimburse, defend and hold harmless the
other party and its affiliates, successors or assigns for any and all direct or
indirect claims, losses, liabilities, damages (including special and
consequential damages), costs (including court costs) and expenses, including
all reasonable attorneys' fees and expenses arising from or in connection with
(i) any breach or inaccuracy of any representation or warranty of such party,
whether such breach or inaccuracy exists or is made on the date of this
Agreement or as of the Closing Date, or (ii) any breach of or noncompliance by
such party of or with any covenant or agreement contained in this Agreement or
in any other agreement or instrument delivered in connection herewith.
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6. Miscellaneous
(a) All notices or communications hereunder shall be in writing
(including facsimile or similar writing) addressed as follows:
To Opus: Opus International, LLC
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Managing Member
Facsimile No: (000) 000-0000
with a copy (which shall not Xxxxxxx X. Xxxx, Esq.
constitute notice hereunder) to: 000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile No: (000) 000-0000
To KF: c/o CenterStaging Musical Productions, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Facsimile No.: (000) 000-0000
with a copy (which shall not Xxxx & Xxxxx Professional Corporation
constitute notice hereunder) to: 0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile No: (000) 000-0000
Any such notice or communication shall be deemed given (i) when made, if made by
hand delivery, and upon confirmation of receipt, if made by facsimile, (ii) one
business day after being deposited with a next-day courier, postage prepaid, or
(iii) three business days after being sent certified or registered mail, return
receipt requested, postage prepaid, in each case addressed as above (or to such
other address as such party may designate in writing from time to time).
(b) If any provision of this Agreement shall be declared to be invalid
or unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof which shall remain in full force and
effect.
(c) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, legal representatives, successors and
assigns; provided, however, that neither this Agreement nor any rights hereunder
shall be assignable or otherwise subject to hypothecation and any assignment in
violation hereof shall be null and void.
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(d) The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(e) This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same Agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to each party.
(f) This Agreement represents the entire agreement of the parties with
respect to the subject matter hereof and shall supersede any and all previous
contracts, arrangements or understandings between the parties hereto with
respect to the subject matter hereof.
(g) This Agreement shall be construed, interpreted and governed in
accordance with the laws of California, without reference to rules relating to
conflicts of law. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the County of Los
Angeles, California, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that is not personally subject to the
jurisdiction of any such court, or that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
(h) If any action or proceeding, including an action for declaratory
relief, is brought to enforce or interpret any provision of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
expenses from the other party, which fees and expenses shall be in addition to
any other relief, which may be awarded.
(i) No person or entity other than the parties hereto is an intended
beneficiary of this Agreement or any portion hereof.
(j) This Agreement may be amended or supplemented only in a writing
signed by KF and Opus.
(k) No failure or delay by any party hereto in exercising any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right hereunder. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
KNIGHT XXXXXX, INC.
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: President
OPUS INTERNATIONAL, LLC
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Managing Member
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GUARANTEE
The undersigned hereby unconditionally guarantees to Knight Xxxxxx, Inc.
and its successors and assigns the due and punctual payment and performance of
each and every obligation of Opus International, LLC evidenced by the foregoing
Agreement and any other document executed thereby pursuant thereto.
/s/ ZIRK XXXXXXXXXXX
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ZIRK XXXXXXXXXXX
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Schedule A
Description of Indebtedness
KF is indebted to Opus in the principal amount of $857,601.18. The loan is
payable on demand and bears no interest.
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