Option Agreement.
This Agreement made as of the 30 day of June, 1995 by and among Beachport
Entertainment Corporation, a Utah corporation (the "Purchaser"), Xxxxx Xxxxxxxxx
(the "Seller"), and On Ice, Inc., a Delaware corporation (the "Company").
WHEREAS, the Purchaser desires to acquire the outstanding shares of capital
stock of the Company; and
WHEREAS, the Seller, the sole shareholder of the Company desires to sell
his shares of capital stock to the Purchaser and hereby grants Purchaser an
option to acquire the Shares;
NOW, THEREFORE, in consideration of the agreements hereinafter contained,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound, the parties hereto
agree as follows:
ARTICLE I
THE TRANSACTION
1.1. Grant of Option. The Seller hereby grants Purchaser an option (the
"Option") to acquire all of the issued and outstanding shares of Common Stock of
the Company (the "Shares") at an exercise
price of Five Hundred Thousand ($500,000) Dollars (the "Exercise Price"). In
consideration of Seller granting Purchaser the Option, Purchaser agrees to issue
to Seller 800,000 shares of Purchaser's common stock (the "Beachport Shares").
1.2 Term of Option. Unless further extended by the Seller, the Option shall
expire six months from the date of the Offering Memorandum pursuant to which the
Company is offering up to 3,150,000 shares of its common stock pursuant to Rule
504 of Regulation D of the Securities Act of 1933, as amended (the "Securities
Act").
1.3 Purchase and Sale of Stock. Upon exercise of the Option, and payment of
the "Exercise Price", Seller shall sell, transfer and deliver to the Purchaser
and the Purchaser shall acquire the Shares, free and clear of all liens,
pledges, encumbrances, charges and claims thereon.
1.4 Expense Reimbursement. Upon exercise of the Option and payment of the
Exercise Price, Purchaser further agrees to reimburse Seller for all monies
advanced for the Company's 1995 operating expenses which are estimated to
aggregate $360,000 for the months January 1995 through and including July 1995;
$82,500 in August 1995; and $110,000 per month from September 1995 through
December 1995. All such reimbursements are to be funded out of the operational
profits of the Company.
1.5. Employment Agreement. Upon the execution of this Agreement, the
Purchaser agrees to enter into an employment agreement with Seller for a salary
of $200,000 per year plus fifty (50%) percent of the fees generated by him as
producer for Company related projects. Seller shall be employed, as of the date
hereof as the President and Chief Operating Officer of the Purchaser and named a
Director of the Purchaser. In the event that the Purchaser does not exercise the
Option, or the right of Purchaser to exercise the option is not extended by the
Seller, Seller shall have the right to resign his position with the Purchaser.
In such event, Seller agrees to surrender to Purchaser the Beachport Shares.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLER
The Company and the Seller represent and warrant to the Purchaser as
follows:
2.1 Corporate Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to carry on its business as
it is now being conducted.
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2.2 Capitalization. The authorized capital stock of the Company consists of
1,000 shares of common stock, no par value and there is no other capital stock
authorized for issuance. As of the date hereof 100 shares of common stock were
validly issued and outstanding, fully paid and non assessable and no shares were
reserved for issuance nor were there outstanding any options, warrants,
convertible instruments of other rights, agreements, or commitments (contingent
or otherwise) obligating the Company to issue shares of capital stock.
2.3 Authority Relative to This Agreement. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a valid and
binding Agreement of the Company and is enforceable in accordance with its
terms. The Company has all requisite corporate power and authority to enter into
this Agreement and its doing so has been duly and sufficiently authorized.
2.4 Absence of Breach; No consents. The execution, delivery and performance
of this Agreement, and the performance by the Company of its obligations
hereunder, do not (1) conflict with or result in a breach of any of the
provisions of the Articles of Incorporation or Bylaws of the Company; (2) to its
knowledge contravene any law, ordinance, rule or regulation of any State or
Commonwealth or political subdivision of either, or of the United States, or of
any applicable foreign jurisdiction, or contravene
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any order, writ, judgment, injunction, decree, determination, or award of any
court or other authority having jurisdiction, or cause the suspension or
revocation of any authorization, consent, approval, or license, presently in
effect, which affects or binds the Company or any of its material properties,
except in any such case where such contravention will not have a material
adverse effect on the business condition (financial or otherwise), operations,
or prospects of the Company, taken as a whole, and will not have a material
adverse effect on the validity of this Agreement; (3) conflict with or result in
a material breach of or default under any material indenture or loan or credit
agreement or any other material agreement or instrument to which the Company is
a party or by which it or any of its material properties may be affected or
bound; (4) to its knowledge, requires the authorization, consent, approval or
license of any third party; or (5) to its knowledge, constitutes grounds for the
loss or suspension of any permits, licenses or other authorizations used in the
business of the Company.
2.5 Taxes. The Company has duly filed or caused to be filed all federal,
state, county and municipal tax returns, reports and declarations which are
required to be filed and have paid or have made full and adequate provision of
payment of all federal, state, local and foreign income and other taxes properly
due for the periods covered by such returns, reports, and declarations.
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2.6 Proprietary Rights. The Company possesses full ownership of, or
adequate and enforceable long term licenses or other rights to use, all
trade secrets, copyrights, patents, trademarks, service marks, and all similar
types of intangible property developed, created or owned by the Company
or used in connection with its business (the "Proprietary Rights"); the Company
has not received any notice of conflict which asserts the rights of others
with respect thereto; and the Company has in all material respects performed
all of the obligations required to be performed by it, and is not in default in
any material respect, under any agreement relating to any Proprietary Rights.
2.7 Ownership of Assets. To its knowledge the Company has good, marketable
and insurable title, or valid effective and continuing leasehold rights in the
case of leased property, to all real property (as to which, in the case of owned
property, such title is fee simple) and all personal property owned or leased by
it or used by it in the conduct of its business in such a manner as to create
the appearance or reasonable expectation that the same is owned or leased by it;
such ownership is free and clear of all liens, claims, encumbrances and charges,
except liens for taxes not yet due and minor imperfections of title and
encumbrances, if any, which, singly and in the aggregate, are not substantial in
amount and do not materially detract from the value of the property subject
thereto or materially impair the use thereof; no other person has any ownership
or similar right in, or contractual or
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other right to acquire any such right in, any of such assets. The Company does
not know of any potential action by any party, governmental or other and no
proceedings with respect thereto have been instituted of which the Company has
notice that would materially effect the Company's ability to use and to utilize
each of such assets in its business. The Company has received no notices from
any mortgagee regarding any leased properties of the Company or the leasehold
interest.
2.8 Litigation. (a) No material investigation or review by any governmental
entity with respect to the Company is pending or, to the best knowledge of the
Company, threatened (other than inspections and review customarily made of
businesses such as that of the Company) nor has any governmental entity
indicated to the Company an intention to conduct the same; and (b) there is no
action, suit, or proceeding pending or, to the Company's knowledge, threatened
against the Company which would or could affect the Company's obligations under
this Agreement, its business, the assets, the Proprietary Rights, or the
interest of the Company therein. The Company is not aware of any fact,
condition, event or circumstance upon which any claim, judgment, order,
proceeding or governmental investigation against and adversely affecting it, its
business, assets or Proprietary Rights might reasonably be based.
2.9 Compliance with Laws. To its best knowledge, the Company is operating
its business in compliance with all laws, regulations
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and orders and has obtained all governmental permits, licenses or
authorizations, if any, required for the conduct of its business.
ARTICLE III
REPRESENTATION AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Seller:
3.1 Corporate Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Utah and
has the corporate power to carry on its business as now conducted.
3.2 Capitalization. The authorized capital stock of the Purchaser consists
of 50,000,000 shares of common stock, $.002 par value and there is no other
capital stock authorized for issuance. As of the date hereof, including
the Beachport Shares to be issued to Seller herewith, 2,993,000 shares of common
stock were validly issued and outstanding, fully paid and non assessable. With
the exception of up to 3,150,000 shares of common stock reserved for issuance in
connection with an offering of Purchaser's securities pursuant to Rule 504 of
Regulation D of the Securities Act and 230,000 shares of common stock reserved
for issuance upon the exercise of outstanding warrants, no other shares are
reserved for issuance nor are there any outstanding options, warrants,
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convertible instruments or other rights, agreements, or commitments (contingent
or otherwise) obligating the Purchaser to issue shares of capital stock.
3.3 Authority Relative to This Agreement. The Purchaser has the requisite
corporate power and authority to enter into this Agreement and to carry out
their obligations hereunder. The execution and delivery of this Agreement have
been duly authorized and approved by the requisite level of corporate authority
of Purchaser and no other corporate proceedings on its part is necessary to
approve and adopt this Agreement.
3.4 Absence of Breach; No consents. The execution, delivery and performance
of this Agreement, and the performance by the Purchaser of its obligations
hereunder, do not (1) conflict with or result in a breach of any of the
provisions of the Articles of Incorporation or Bylaws of the Purchaser; (2) to
its knowledge contravene any law, ordinance, rule or regulation of any State or
Commonwealth or political subdivision of either or of the United States, or of
any applicable foreign jurisdiction, or contravene any order, writ, judgment,
injunction, decree, determination, or award of any court or other authority
having jurisdiction, or cause the suspension or revocation of any authorization,
consent, approval, or license, presently in effect, which affects or binds the
Purchaser or any of its material properties, except in any such case where such
contravention will not have a material adverse
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effect on the business condition (financial or otherwise), operations, or
prospects of the Purchaser, taken as a whole, and will not have a material
adverse effect on the validity of this Agreement; (3) conflict with or result in
a material breach of or default under any material indenture or loan or credit
agreement or any other material agreement or instrument to which the Purchaser
is a party or by which it or any of their material properties may be affected or
bound; (4) to its knowledge require the authorization, consent, approval or
license of any third party; or (5) to its knowledge constitute grounds for the
loss or suspension of any permits, licenses or other authorizations used in the
business of the Purchaser.
ARTICLE IV
MISCELLANEOUS
4.1 Brokers and Expenses. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on directly by the
Purchaser with Seller, without the intervention of any broker, finder,
investment banker or other third party. Seller agrees that he will indemnify the
Purchaser against and in respect to any and all damages, losses, liabilities and
expenses, including attorneys' fees, which may be incurred by the Purchaser as a
result of any claims asserted against the Purchaser by any broker or other
person on the basis of any arrangements or agreements made or alleged to have
been made by
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Seller; and the Purchaser agrees that it will indemnify Seller in respect of any
and all damages, losses, liabilities and expenses, including attorneys's fees,
which may be incurred by Seller as a result of any claims against Seller by any
broker or other person on the basis of any arrangements or agreements made or
alleged to have been made by Purchaser.
Each party hereto shall pay its own expenses and costs incident to the
preparation of this Agreement and to the consummation of the transactions
contemplated herein.
4.2 Notices. All notices, requests, instructions, or other documents to be
given hereunder shall be in writing and sent by registered mail:
If to Seller: Xxxxx Xxxxxxxxx
000 Xxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
If to the Purchaser: Beachport Entertainment
Corporation
Suite 200
517 North Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
with copies to Xxxxxx X. Xxxxx, Esg.
Xxxxxxx Xxxxxxxxxx
Xxxxxx Xxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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4.3 Jurisdiction. This Agreement shall be controlled, construed and
enforced in accordance with the laws of the State of California.
4.4 Assignment. This Agreement shall not be assignable by either party
without the prior written consent of the other.
4.5 Headings. All paragraph headings herein are inserted for convenience
only. This Agreement may be executed in several counterparts, each of which
shall be deemed an original, which together shall constitute one and the same
instrument.
4.6 Entire Agreement. This Agreement sets forth the entire understanding
between the parties, there being no terms, conditions, warranties or
representations other than those contained herein and no amendments hereto shall
be valid unless made in writing and signed by the parties hereto.
4.7 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the heirs, executors, administrators and assigns of Xxxx
and upon the successors and assigns of the Purchaser.
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IN WITNESS WHEREOF, each of the parties hereto has duly executed this
agreement as of the date and year first written above.
Beachport Entertainment Corporation
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx, Vice President
On Ice, Inc.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxx, President
/s/ Xxxxx Xxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxx
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