COMMON STOCK PURCHASE AGREEMENT
by and among
ON STAGE ENTERTAINMENT, INC.
(a Nevada corporation),
INTERACTIVE EVENTS, INC.
(a Georgia corporation)
and
XXXXXXX X. XXXXXX
(an individual)
TABLE OF CONTENTS
Page:
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ARTICLE I. DEFINITIONS................................................1
ARTICLE II. SALE AND PURCHASE OF INTERACTIVE SHARES....................4
2.01 Sale and Purchase of Interactive Shares....................4
2.02 Issuance and Transfer of Shares............................5
2.03 Closing....................................................5
2.04 Delivery to On Stage.......................................5
2.05 Delivery to Kanfer.........................................5
2.06 Further Assurances.........................................5
ARTICLE III. DELETED ..................................................5
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF INTERACTIVE..............6
4.01 Corporate Status...........................................6
4.02 Authorization..............................................6
4.03 Consents and Approvals.....................................6
4.04 Capitalization and Stock Ownership.........................6
4.05 Financial Statements.......................................6
4.06 Title to Interactive Assets and Related Matters............7
4.07 Real Property..............................................7
4.08 Certain Personal Property..................................7
4.09 Non-Real Estate Leases.....................................7
4.10 Sales Deposits.............................................8
4.11 Inventory..................................................8
4.12 Absence of Undisclosed Liabilities.........................8
4.13 Taxes......................................................8
4.14 Subsidiaries...............................................8
4.15 Legal Proceedings and Compliance with Law..................8
4.16 Contracts..................................................9
4.17 Patents and Other Intellectual Property...................10
4.18 Employee Relations........................................10
4.19 Benefit Plans.............................................10
4.20 Corporate Records.........................................10
4.21 Absence of Certain Changes................................10
4.22 Previous Sales; Warranties................................11
4.23 Customers and Actors......................................11
i
4.24 Finder's Fees..............................................12
4.25 Purchase Entirely for Own Account..........................12
4.26 Qualified Investor.........................................12
4.27 Restricted Securities......................................12
4.28 Kanfer's Products or Events................................12
4.29 Accuracy of Information....................................12
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF ON STAGE.................13
5.01 Corporate Status...........................................13
5.02 Authorization..............................................13
5.03 Consents and Approvals.....................................13
5.04 Capitalization and Stock Ownership.........................13
5.05 Finder's Fees..............................................14
5.06 Goodwill...................................................14
5.07 Purchase Entirely for Own Account..........................14
5.08 Restricted Securities......................................14
ARTICLE VI. COVENANTS OF INTERACTIVE...................................14
6.01 Operation of the Interactive Business......................14
6.02 Agreement Not To Compete...................................15
6.03 Stockholder Meeting........................................15
6.04 Access.....................................................15
6.05 No Other Negotiations......................................15
6.06 Maintenance of the Interactive Assets......................15
6.07 Employees and Business Relations...........................16
6.08 Confidentiality............................................16
6.09 Fulfillment of Conditions..................................16
6.10 Disclosure of Certain Matters..............................16
6.11 Satisfaction of Liabilities................................17
6.12 No Violation of Securities Laws............................17
6.13 Expenses...................................................17
6.14 Lock-up....................................................17
6.15 Right of First Refusal.....................................17
ARTICLE VII. COVENANTS OF ON STAGE......................................18
7.01 Confidentiality............................................18
7.02 Expenses...................................................18
7.03 Fulfillment of Conditions..................................18
7.04 Board of Directors Meeting.................................18
7.05 Disclosure of Certain Matters..............................19
ii
7.06 No Violation of Securities Laws............................19
ARTICLE VIII. CONDITIONS PRECEDENT TO THE TRANSACTIONS...................19
8.01 Conditions to Obligations of On Stage......................19
8.02 Conditions to Obligations of Interactive and Kanfer........20
ARTICLE IX. INDEMNIFICATION............................................21
9.01 By Kanfer..................................................21
9.02 By On Stage................................................21
9.03 Procedure for Claims.......................................22
9.04 Third Party Claims.........................................22
ARTICLE X. TERMINATION................................................22
10.01 Grounds for Termination....................................22
10.02 Effect of Termination......................................23
ARTICLE XI. CONTENTS OF AGREEMENT, AMENDMENT, PARTIES IN
INTEREST, ASSIGNMENT, ETC..................................23
ARTICLE XII. INTERPRETATION.............................................24
ARTICLE XIII. NOTICES....................................................24
ARTICLE XIV. GOVERNING LAW..............................................25
ARTICLE XV. COUNTERPARTS...............................................25
ARTICLE XVI. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................25
ARTICLE XVII. REMEDIES CUMULATIVE........................................26
ARTICLE XVIII. SEVERABILITY...............................................26
ARTICLE XIX. BULK TRANSFER..............................................26
ARTICLE XX. ARBITRATION................................................26
ARTICLE XXI. TAX FREE EXCHANGE..........................................26
iii
EXHIBITS:
A Form of Agreement to Issue Additional Shares
B Form of Stock Option Agreement
C Assignment of Shows
D Kanfer Employment Agreement
SCHEDULES:
Interactive:
4.03 Consents
4.04 Capitalization and Stock Ownership
4.06 Assignment of Leases
4.07 Real Property
4.08 Personal Property
4.10 Sales Deposits
4.12 Liabilities
4.13 Taxes
4.15 Litigation
4.16 Contracts
4.16(b) Defaults
4.17 Intellectual Property
4.18 Employee Relations
4.20 Benefit Plans
4.21 Compensation
4.23 Customer and Cast Contracts and Lists
iv
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT is made as of November 1, 1996, by
and among ON STAGE ENTERTAINMENT, INC., a Nevada corporation ("On Stage"),
INTERACTIVE EVENTS, INC., a Georgia corporation ("Interactive") and XXXXXXX X.
XXXXXX, an individual ("Kanfer"). Certain terms are used herein as defined below
in Article I or elsewhere in this Agreement.
Background
Interactive is engaged in business activities that include the creation
and implementation of interactive events.
Kanfer owns all of the outstanding shares of Common Stock of
Interactive (the "Interactive Shares") and is the President of Interactive.
Kanfer desires to sell, and On Stage desires to purchase, the
Interactive Shares.
Witnesseth
NOW, THEREFORE, in consideration of the respective covenants contained
herein and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
For convenience, certain terms used in more than one part of this
Agreement are listed in alphabetical order and defined or referred to below
(such terms as well as any other terms defined elsewhere in this Agreement shall
be equally applicable to both the singular and plural forms of the terms
defined).
"Affiliates" means, with respect to a particular party, persons or
entities controlling, controlled by or under common control with that party,
including but not limited to any officers, directors of that party and of its
other Affiliates and any entity in which that party owns more than 5% of the
voting securities on a fully diluted basis.
"Agreement" means this Agreement and the exhibits and schedules hereto.
"Benefit Plans" means all employee benefit plans of a party within the
meaning of Section 3(3) of ERISA and any related or separate Contracts, plans,
trusts, programs, policies,
arrangements, practices, customs and understandings, in each case whether formal
or informal, that provide benefits of economic value to any present or former
employee of a party, or present or former beneficiary, dependent or assignee of
any such employee or former employee.
"Charter Documents" means an entity's certificate or articles of
incorporation, certificate defining the rights and preferences of securities,
articles of organization, general or limited partnership agreement, certificate
of limited partnership, joint venture agreement or similar document governing
the entity.
"Closing" means the Closing on the Transactions.
"Closing Date" is defined in Section 2.03.
"Code" means the Internal Revenue Code of 1986, as amended, and the
Regulations promulgated thereunder.
"Contract" means any written or oral contract, agreement, lease,
instrument or other commitment that is binding on any Person or its property
under applicable law.
"Court Order" means any judgment, decree, injunction, order or ruling
of any federal, state, local or foreign court or governmental or regulatory body
or authority that is binding on any Person or its property under applicable law.
"Default" means (i) a breach, default or violation or (ii) the
occurrence of an event that with the passage of time or the giving of notice, or
both, would constitute a breach, default or violation.
"Encumbrances" means any lien, mortgage, security interest, pledge,
restriction on transferability, defect of title or other claim, charge or
encumbrance of any nature whatsoever on any property or property interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"GAAP" means United States generally accepted accounting principles.
"GGCL" means the Georgia General Corporations Law.
"Governmental Permits" means all governmental permits, licenses,
registrations, certificates of occupancy, approvals and other authorizations.
"Intellectual Property" is defined in Section 4.17.
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"Interactive Assets" means all of the assets, properties, claims,
contracts, goodwill and rights of every kind and description, real and personal,
tangible and intangible, wherever situated, whether or not reflected in the most
recent financial statements, that Interactive has a right, title or interest to
or in and whether or not used by Interactive in the Interactive Business.
"Interactive Balance Sheet" is defined in Section 4.05.
"Interactive Balance Sheet Date" is defined in Section 4.05.
"Interactive Business" means the entire business, operations and
facilities of Interactive unless otherwise specified.
"Interactive Common Stock" means the Common Stock, no par value per
share, of Interactive.
"Interactive Disclosure" means the Disclosure Schedule provided by
Interactive in connection with this Agreement.
"Interactive Financial Statements" is defined in Section 4.05.
"Interactive's knowledge" or "On Stage's knowledge" means the actual
knowledge of Interactive or On Stage, as the case may be, or of any director,
officer or other employee of Interactive or On Stage, respectively, and such
knowledge as any of the foregoing should have obtained upon reasonable inquiry.
"Interactive Shares" means all of the outstanding shares of Interactive
Common Stock.
"Interactive Stockholder Meeting" is defined in Section 6.03.
"IRS" means the Internal Revenue Service.
"Liability" means any direct or indirect liability, indebtedness,
obligation, expense, claim, loss, damage, deficiency, guaranty or endorsement of
or by any Person, absolute or contingent, accrued or unaccrued, due or to become
due, liquidated or unliquidated.
"Litigation" means any lawsuit, action, arbitration, administrative or
other proceeding, criminal prosecution or governmental investigation or inquiry.
"Material Adverse Effect" means a material adverse effect on the
financial condition, results of operations, liquidity, products, competitive
position, customers and customer relations of any Representing Party.
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"Minor Contracts" is defined in Section 4.16(a).
"Non-Real Estate Leases" is defined in Section 4.09.
"On Stage Common Stock" means the Common Stock, no par value per share,
of On Stage.
"On Stage Shares" means the shares of On Stage Common Stock to be
provided in connection with the Transactions.
"Ordinary Course" or "ordinary course of business" means the ordinary
course of business that is consistent with past practices.
"Person" means any natural person, corporation, partnership,
proprietorship, association, trust or other legal entity.
"Real Property" is defined in Section 4.07.
"Regulation" means any statute, law, ordinance, regulation, order or
rule of any federal, state, local, foreign or other governmental agency or body
or of any other type of regulatory body, including those covering food and drug,
environmental, energy, safety, health, transportation, bribery, recordkeeping,
zoning, antidiscrimination, antitrust, wage and hour, and price and wage control
matters.
"Required Consents" is defined in Section 4.03.
"Securities Act" means the Securities Act of 1933, as amended, and the
Regulations promulgated thereunder.
"Termination Date" is defined in Section 10.01(b).
"Transaction Documents" means this Agreement and the other agreements
and documents contemplated hereby and thereby.
"Transactions" means the transactions contemplated by the Transaction
Documents.
ARTICLE II.
SALE AND PURCHASE OF INTERACTIVE SHARES
II.1 Sale and Purchase of Interactive Shares. Subject to the terms and
conditions of this Agreement, at the Closing, Kanfer shall sell, transfer,
convey, assign and deliver to On Stage, and On Stage shall purchase, acquire and
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accept from Interactive, all the Interactive Shares free and clear of all liens,
claims, charges, restrictions, equities and encumbrances of any kind.
II.2 Issuance and Transfer of Shares. In consideration for the
Interactive Shares On Stage shall (a) issue and deliver to Kanfer, thirty-five
thousand (35,000) On Stage Shares; (b) deliver an agreement, substantially in
the form of Exhibit A, to issue to Kanfer Twenty Thousand (20,000) On Stage
Shares on the date of the first anniversary of the Closing Date; and (c) an
option to acquire 27,225 On Stage Shares, substantially in the form of Exhibit
B.
II.3 Closing. Unless this Agreement shall have been terminated and the
Transactions abandoned pursuant to Article X, subject to satisfaction or waiver
of the conditions to the Transactions set forth in Article VIII, the Closing
shall take place as promptly as practicable (and in any event within five
business days) after satisfaction or waiver of the conditions to the
Transactions set forth in Article VIII, at the offices of On Stage, Las Vegas,
Nevada, unless the parties hereto agree in writing to another date or place. The
date on which the Closing occurs is referred to herein as the "Closing Date."
II.4 Delivery to On Stage. At the Closing, Kanfer or Interactive will
deliver to On Stage (i) certificates representing the Interactive Shares,
together with stock power duly endorsed, (ii) all such other endorsements,
assignments and other instruments as are necessary to vest in On Stage title to
the Interactive Shares free and clear of any adverse claims; and (iii) all other
previously undelivered documents required to be delivered by Kanfer or
Interactive to On Stage at or prior to the Closing in connection with the
Transactions, including those contemplated by Article VIII.
II.5 Delivery to Kanfer. At the Closing, On Stage shall deliver to
Kanfer the number of On Stage Shares referred to in Section 2.02. On Stage shall
also deliver to Kanfer all previously undelivered documents required hereunder
to be delivered by On Stage to Kanfer at or prior to the Closing, including
those contemplated by Article VIII.
II.6 Further Assurances. After the Closing, Kanfer, Interactive and On
Stage shall each from time to time, at the request of a party hereto and without
further cost or expense to the requesting party, execute and deliver such other
instruments of conveyance and transfer and take such other actions as the
requesting party may reasonably request, in order to more effectively consummate
the Transactions and to vest in On Stage or Kanfer, as the case may be, title to
the Interactive Shares or On Stage Shares, as the case may be, being transferred
hereunder.
ARTICLE III.
DELETED
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF INTERACTIVE
Interactive and Kanfer each hereby represents and warrants to On Stage
as follows:
IV.1 Corporate Status. Interactive is a corporation duly organized,
validly existing and in good standing under the laws under which it was
incorporated. Interactive is qualified to do business as a foreign corporation
in any jurisdiction where it is required to be so qualified, except where the
failure to so qualify would not have a Material Adverse Effect. The Charter
Documents and bylaws of Interactive that have been delivered to On Stage have
been duly adopted and are current, correct and complete.
IV.2 Authorization. Interactive has the requisite power and authority
to execute and deliver the Transaction Documents to which it is or will be a
party and to perform the Transactions to be performed by it. Such execution,
delivery and performance by Interactive has been duly authorized by all
necessary corporate action. The Transaction Documents executed on or before the
date hereof constitute, and the Transaction Documents to be executed after the
date hereof will constitute, valid and binding obligations of Interactive and
Kanfer, enforceable in accordance with their terms.
IV.3 Consents and Approvals. Except for the consents specified in
Schedule 4.03 (the "Required Consents"), neither the execution and delivery by
Interactive of the Transaction Documents to which it is or will be a party, nor
the performance of the Transactions to be performed by Interactive, will require
any filing, consent or approval or constitute a Default under (a) any Regulation
or Court Order to which Interactive or Kanfer is subject, (b) the Charter
Documents or bylaws of Interactive or (c) any Contract, Governmental Permit or
other document to which Interactive or Kanfer is a party.
IV.4 Capitalization and Stock Ownership. The total authorized capital
stock of Interactive consists of 1,000,000 shares of Interactive Common Stock,
1,000 shares of which are issued and outstanding on the date hereof and no
shares of which are issued and held by Interactive as treasury stock. There are
no issued shares of Preferred Stock. Except as specified
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in Schedule 4.04, there are no existing options, warrants, calls, commitments or
other rights of any character (including conversion or preemptive rights)
relating to the acquisition of any issued or unissued capital stock or other
securities of Interactive ("Interactive Options"). All of the Interactive Shares
are duly and validly authorized and issued, fully paid and non-assessable.
Schedule 4.04 correctly lists the record owners of all of the Interactive Shares
and of all of the Interactive Options. Interactive complied with all applicable
Regulations in connection with the issuance of all of the Interactive Shares and
all of the Interactive Options.
IV.5 Financial Statements. Interactive has delivered to On Stage
correct and complete copies of Interactive's unaudited financial statements
consisting of (i) Balance Sheets of Interactive as of December 31, 1995, 1994
and 1993, and (ii) Income Statements for the Years Ended December 31, 1995,
1994, and 1993. In addition, Interactive has delivered to On Stage correct and
complete copies of Interactive's unaudited financial statements consisting of
the Balance Sheet as of June 30, 1996. All such unaudited financial statements
are referred to herein collectively as the "Interactive Financial Statements."
The balance sheet as of June 30, 1996, is referred to herein as the "Interactive
Balance Sheet," and the date thereof is referred to herein as the "Interactive
Balance Sheet Date."
IV.6 Title to Interactive Assets and Related Matters. To the best
knowledge of Interactive and Kanfer, Interactive has good and marketable title
to, or valid leasehold interests in, all of the Interactive Assets, free from
any Encumbrances except those specified in Schedule 4.06. The use of the
Interactive Assets is not subject to any Encumbrances (other than those
specified in the preceding sentence), and such use does not materially encroach
on the property or rights of anyone else. All Real Property and tangible
personal property of Interactive are suitable for the purposes for which they
are used, in good working condition and reasonable repair, free from any known
defects, except such minor defects that would not in the aggregate exceed
$1,000.
IV.7 Real Property. Schedule 4.07 describes all real estate used in the
operation of the Interactive Business as well as any other real estate that is
in the possession of or leased by Interactive and the improvements (including
buildings and other structures) located on such real estate (collectively, the
"Real Property"), and lists any leases under which any such Real Property is
possessed (the "Real Estate Leases"). Interactive is not currently in Default
under any of the Real Estate Leases, and Interactive is not aware of any Default
by any of the lessors thereunder. Excepted as listed on Schedule 4.07,
Interactive does not have an ownership interest in any Real Property. Schedule
4.07 also describes any real estate previously owned, leased or otherwise
operated by Interactive during the five years immediately preceding the date of
execution of this Agreement and the time periods of any such ownership, lease or
operation.
IV.8 Certain Personal Property. Schedule 4.08 is an asset schedule,
describing and specifying the location of all items of tangible personal
property that were included in the Interactive Balance Sheet. Since the
Interactive Balance Sheet Date, Interactive has not acquired or disposed of any
items of tangible personal property that have, in each case, a carrying value in
excess of $1,000. All of Interactive's tangible personal property is in good
operating condition, reasonable wear and tear excepted.
IV.9 Non-Real Estate Leases. Interactive is not currently in Default
under any of the Non-Real Estate Leases, and Interactive is not aware of any
Default by any of the lessors thereunder. There are no existing Non-Real Estate
Leases under which the obligations of Interactive exceed $1,000 with respect to
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any individual Non-Real Estate Lease. "Non-Real Estate Leases" refers to any and
all leases that relate to an asset or property (other than Real Property) used
in the operation of the Interactive Business or otherwise possessed by
Interactive, including but not limited to all trucks, automobiles, machinery,
equipment, furniture and computers.
IV.10 Sales Deposits. Schedule 4.10 lists all events to be performed
after the date hereof for which sales deposits have been received as of November
1, 1996.
IV.11 Inventory. All inventory of Interactive consists of items of
quality and quantity saleable in the ordinary course of business at regular
sales prices of Interactive in the ordinary course of its business. The
inventory records for Interactive that has been delivered to On Stage are
accurate with respect to the data contained therein.
IV.12 Absence of Undisclosed Liabilities. Except as specified in
Schedule 4.12, Interactive does not have any Liabilities, and none of the
Interactive Assets is subject to any Liabilities.
IV.13 Taxes. Except as disclosed in Schedule 4.13, Interactive has duly
filed all foreign, federal, state, local and other tax returns that are required
to be filed and that were due, and has paid all material taxes and assessments
that have become due pursuant to such returns or pursuant to any assessment
received. Except as disclosed in Schedule 4.13, all taxes and other assessments
and levies that Interactive has been required by law to withhold or to collect
have been duly withheld and collected and have been paid over to the proper
governmental authorities or are properly held by Interactive for such payment.
Except as disclosed in Schedule 4.13, there are no proceedings or other actions,
nor is there any basis for any proceedings or other actions, for the assessment
and collection of additional taxes of any kind for any period for which returns
have or should have been filed. To the best knowledge of Kanfer and Interactive,
Interactive is not being audited nor has any audit in the past five years
resulted in the claim or imposition of any penalty or additional tax on
Interactive.
IV.14 Subsidiaries. Interactive does not own, directly or indirectly,
any interest or investment (whether equity or debt) in any corporation,
partnership, business, trust, joint venture or other legal entity. Kanfer does
not own, directly or indirectly, any interest or investment (whether equity or
debt) in any corporation, partnership, business, trust, joint venture or other
legal entity, other than shares in a publicly traded company not exceeding 2% of
the voting securities of that company.
IV.15 Legal Proceedings and Compliance with Law. Except as disclosed in
Schedule 4.15, there is no Litigation that is pending or threatened against or
related to Interactive. There has been no Default under any Regulations
applicable to Interactive. There has been no Default with respect to any Court
Order applicable to Interactive.
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IV.16 Contracts.
(a) Schedule 4.16 lists each Contract of the following types to
which Interactive is a party, or by which it is bound, except for any Contract
under which the executory obligation of Interactive involves an amount of less
than $1,000 (such excepted Contracts are referred to collectively as "Minor
Contracts"):
(i) Contracts with any present or former stockholder,
director, officer, employee, partner or consultant of
Interactive or Affiliate thereof;
(ii) Contracts for the future purchase of, or payment for,
supplies or products, or for the lease of any Asset
from or the performance of services by a third party,
in excess of $1,000 in any individual case, or any
Contracts for the sale of inventory or products that
involve an amount in excess of $1,000 with respect to
any one supplier or other party;
(iii) Contracts to sell or supply products or to perform
services that involve an amount in excess of $1,000 in
any individual case;
(iv) Contracts to lease to or to operate for any other party
any Asset that involve an amount in excess of $1,000 in
any individual case;
(v) Any notes, debentures, bonds, conditional sale
agreements, equipment trust agreements, letter of
credit agreements, reimbursement agreements, loan
agreements or other Contracts for the borrowing or
lending of money (including loans to or from officers,
directors, partners, stockholders or Affiliates of
Interactive or any members of their immediate
families), agreements or arrangements for a line of
credit or for a guarantee of, or other undertaking in
connection with, the indebtedness of any other Person;
(vi) Any Contracts under which any Encumbrances exist with
respect to any Interactive Assets; and
(vii) Any other Contracts (other than Minor Contracts and
those described in any of (i) through (vi) above) not
made in the ordinary course of business.
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(b) Except as disclosed in Schedule 4.16(b), Interactive is
not in Default under any Contract, which Default could result in a Liability on
the part of Interactive in excess of $1,000 in any individual case, and the
aggregate Liabilities that could result from all such Defaults do not exceed
$1,000. Except as disclosed in Schedule 4.16(b), Interactive has not received
any communication from, or given any communication to, any other party
indicating that Interactive or such other party, as the case may be, is in
Default under any Contract where such Default could have a Material Adverse
Effect.
(c) The aggregate amount of all Minor Contracts does not
exceed $5,000.
IV.17 Patents and Other Intellectual Property. To the best knowledge of
Interactive and Kanfer, Interactive neither currently uses nor has used in the
operation of the Interactive Business during the three years immediately
preceding the execution of this Agreement (including in the development or
marketing of products and services) any patent, trademark, trade name, service
xxxx, copyright, trade secret or know-how, except for those listed in Schedule
4.17. Such items listed on the Interactive Disclosure Schedule are referred to
herein as the "Intellectual Property." All of the Intellectual Property, as
specified in the Interactive Disclosure Schedule, to the best knowledge of
Kanfer, are owned or otherwise lawfully used by Interactive, and, to the best
knowledge of Kanfer, Interactive is not infringing upon or unlawfully or
wrongfully using any patent, trademark, trade name, service xxxx, copyright or
trade secret owned or claimed by another Person. Interactive has not received
any notice of any claim of infringement or any other claim or proceeding, with
respect to any such patent, trademark, trade name, service xxxx, copyright or
trade secret. No current or former employee of Interactive and no other Person
owns or has any proprietary, financial or other interest, direct or indirect, in
whole or in part, in any of the Intellectual Property, or in any application
therefor.
IV.18 Employee Relations. Except as disclosed on Schedule 4.18,
Interactive is not (a) a party to, involved in or threatened by, any labor
dispute or unfair labor practice charge or (b) currently negotiating any
collective bargaining agreement, and Interactive has not experienced any work
stoppage during the three years immediately preceding the execution of this
Agreement. Schedule 4.18 is a complete and correct list of the names and
salaries, bonus and other cash compensation of all employees (including
officers) of Interactive whose total cash compensation for 1994 exceeded, or
whose total compensation for 1995 is expected to exceed, $20,000.
IV.19 Benefit Plans. Except as disclosed on Schedule 4.19, there are no
Benefit Plans sponsored or maintained by Interactive or under which Interactive
may be obligated.
IV.20 Corporate Records. The minute books of Interactive contain
complete, correct and current copies of its Charter Documents and bylaws and of
all minutes of meetings, resolutions and other proceedings of its Board of
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Directors or committees thereof and stockholders. The stock record book of
Interactive is complete, correct and current.
IV.21 Absence of Certain Changes. Since the Interactive Balance Sheet
Date, Interactive has conducted the Interactive Business in the ordinary course
and there has not been:
(a) any material adverse change in the Interactive Business or
its Liabilities;
(b) any distribution or payment declared or made in respect of
its capital stock by way of dividends, purchase or redemption of shares or
otherwise;
(c) except as disclosed in Schedule 4.21, any increase in the
compensation payable or to become payable to any director, officer, employee or
agent, except for merit and seniority increases for non-officer employees made
in the ordinary course of business, nor any other change in any employment or
consulting arrangement;
(d) any sale, assignment or transfer of the Interactive
Assets, or any additions to or transactions involving any Interactive Assets,
other than those made in the ordinary course of business;
(e) other than in the ordinary course of business, any waiver
or release of any claim or right or cancellation of any debt held; or
(f) any payments to any Affiliate of Interactive, except as
specified in Schedule 4.21.
IV.22 Previous Sales; Warranties. To the best knowledge of Interactive
and Kanfer, all goods sold or distributed and services performed by Interactive
were of merchantable and satisfactory quality, and Interactive has not breached
any express or implied warranties in connection with the sale or distribution of
such goods and performances of such services. Interactive has provided On Stage
with true and correct copies of all written warranties (a) made by all Persons
from whom Interactive has obtained any goods that have been resold or
distributed by Interactive, including any goods that constituted parts included
in other goods sold or distributed by Interactive and (b) made by Interactive
with respect to any goods that have been sold or distributed or services that
have been performed by Interactive. No oral guaranties were made by Interactive
with respect to any goods that have been sold or distributed or services that
have been performed by Interactive.
IV.23 Customers and Actors. Interactive has used commercially
reasonable efforts to maintain, and currently maintains, good working
relationships with all of its customers and actors. Schedule 4.23 lists any
Contracts with customers or former customers of Interactive that have been
terminated or canceled during the two years period prior to the date hereof.
Schedule 4.23 also contains a list of the names of each of Interactive's
customers during the past two years involving a Contract of $1,000 or more.
Except as disclosed in Schedule 4.23, none of such customers has given
Interactive notice terminating, canceling or threatening to terminate or cancel
any Contract or relationship with Interactive, and none of such customers is, or
has been during the two year period immediately preceding the execution of this
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Agreement, a related party to Interactive. Schedule 4.23 also contains a list of
the names of Interactive's actors used in its productions during the two years
preceding the date hereof. None of such actors has given Interactive notice
terminating, canceling or threatening to terminate or cancel any Contract or
relationship with Interactive. Schedule 4.23 lists any complaints or disputes
that resulted in the payment of any monetary amount by Interactive or Kanfer
during the three years preceding the date hereof.
IV.24 Finder's Fees. No Person retained by Interactive is or will be
entitled to any com mission or finder's or similar fee in connection with the
Transactions.
IV.25 Purchase Entirely for Own Account. This Agreement is made in
reliance upon Kanfer's representation to On Stage, which by Kanfer's execution
of this Agreement Kanfer hereby confirms, that the On Stage Shares will be
acquired for investment for Kanfer's own account, not as a nominee or agent, and
not with a view to distribution (as such term is defined under the Securities
Act of 1933, as amended (the "Act")) of any part thereof. Kanfer represents that
he has full power and authority to enter into this Agreement.
IV.26 Qualified Investor. Kanfer represents and warrants that he is an
"Accredited Investor" as such term is defined in Rule 501 under the Act. Kanfer
also represents and warrants that he could be reasonably assumed to have the
capacity to evaluate the merits and risks of an investment in the Company and to
protect his own interests in connection with these transactions.
IV.27 Restricted Securities. Kanfer understands that the On Stage
Shares are characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from On Stage in a transaction not
involving a public offering and that under such laws and applicable regulations
such shares may be resold without registration under the Act, only in certain
limited circumstances. It is understood that the On Stage Shares shall bear a
legend to such effect.
IV.28 Kanfer's Products or Events. Kanfer does not own or have any
rights to any product or event that is related to the business of Interactive
other than the shows entitled "Xxxxxxx and Xxxxx Get Married" and "Wake-Up
Xxxxxx X'Xxxxxx."
IV.29 Accuracy of Information. No representation or warranty by
Interactive or Kanfer in any Transaction Document, and no information contained
therein or otherwise delivered to On Stage in connection with the Transactions,
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contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements contained herein or therein not
misleading. There is no fact known to Interactive or Kanfer that may materially
adversely affect the Interactive Assets or the Interactive Business that has not
been set forth in this Agreement or the other documents furnished to On Stage on
or prior to the date hereof in connection with the Transactions.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF ON STAGE
On Stage hereby represents and warrants to Interactive as follows:
V.1 Corporate Status. On Stage is a corporation duly organized, validly
existing and in good standing under the laws under which it was incorporated. On
Stage is qualified to do business as a foreign corporation in any jurisdiction
where it is required to be so qualified, except where the failure to so qualify
would not have a Material Adverse Effect. The Charter Documents and bylaws of On
Stage that have been delivered to Interactive have been duly adopted and are
current, correct and complete.
V.2 Authorization. On Stage has the requisite power and authority to
execute and deliver the Transaction Documents to which it is or will be a party
and to perform the Transactions to be performed by it. Such execution, delivery
and performance by On Stage has been duly authorized by all necessary corporate
action. The Transaction Documents executed on or before the date hereof
constitute, and the Transaction Documents to be executed after the date hereof
will constitute, valid and binding obligations of On Stage, enforceable against
On Stage in accordance with their terms.
V.3 Consents and Approvals. Neither the execution and delivery by On
Stage of the Transaction Documents to which it is or will be a party, nor the
performance of the Transactions to be performed by On Stage, will require any
filing, consent or approval or constitute a Default under (a) any Regulation or
Court Order to which On Stage is subject, (b) the Charter Documents or bylaws of
On Stage or (c) any Contract, Government Permit or other document to which On
Stage is a party or by which the properties or other assets of On Stage may be
subject.
V.4 Capitalization and Stock Ownership. The total authorized capital
stock of On Stage consists of 25,000,000 shares of On Stage Common Stock,
7,300,900 shares of which are issued and outstanding on the date hereof and
1,000,000 shares of Preferred Stock, no shares of which are issued and
outstanding as of the date hereof; however, On Stage is currently attempting to
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raise approximately $11,000,000 through the sale of its securities to the public
("IPO") and is contemplating undertaking a $750,000 bridge loan which will be
repaid from the proceeds of the IPO. On Stage does not have any shares of
capital stock that are issued and held by On Stage as treasury stock. All of the
outstanding shares of On Stage Common Stock are duly and validly authorized and
issued, fully paid and non-assessable. On Stage complied with all applicable
Regulations in connection with the issuance of all of the outstanding shares of
On Stage Common Stock. There are (i) options to acquire 787,092 shares of On
Stage Common Stock pursuant to the Company's 1996 Stock Option Plan, (ii) issued
and outstanding warrants to acquire 1,765,000 shares of On Stage Common Stock,
(iii) issued and outstanding debentures convertible into 829,607 shares of On
Stage Common Stock, and (iv) an additional 90,000 shares of On Stage Common
Stock reserved for issuance to an employee.
V.5 Finder's Fees. No Person retained by On Stage is or will be
entitled to any commission or finder's or similar fee in connection with the
Transactions.
V.6 Goodwill. On Stage represents and warrants that it was formerly
"Legends In Concert, Inc.", that the current "Legends In Concert, Inc." is a
subsidiary of On Stage and that On Stage is the owner of all goodwill associated
with Legends In Concert productions.
V.7 Purchase Entirely for Own Account. This Agreement is made in
reliance upon On Stage's representation to Kanfer and Interactive, which by On
Stage's execution of this Agreement On Stage hereby confirms, that the
Interactive Shares will be acquired for investment for On Stage's own account,
not as a nominee or agent, and not with a view to distribution (as such term is
defined under the Securities Act of 1933, as amended (the "Act")) of any part
thereof. On Stage represents that it has full power and authority to enter into
this Agreement.
V.8 Restricted Securities. On Stage understands that the Interactive
Shares are characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from Kanfer in a transaction not
involving a public offering and that under such laws and applicable regulations
such shares may be resold without registration under the Act, only in certain
limited circumstances. It is understood that the Interactive Shares shall bear a
legend to such effect.
ARTICLE VI.
COVENANTS OF INTERACTIVE
VI.1 Operation of the Interactive Business.
(a) From the date hereof to the Closing, Interactive and Kanfer
shall conduct the Interactive Business solely in the ordinary course, and shall
refrain from the following actions in furtherance of and in addition to such
restriction (except as contemplated by this Agreement): amending its Charter
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Documents or bylaws; merging or consolidating with, or acquiring all or
substantially all of, or otherwise acquiring any business operations of, any
Person; selling or otherwise disposing of any Interactive Assets other than in
the ordinary course; entering into any Contract or otherwise incurring any
Liability, even if in the ordinary course, if Interactive's executory obligation
in any such individual case, or series of related cases, exceeds $1,000, except
that entering into contracts to provide events is permitted without restriction;
discharging or satisfying any Encumbrance or paying or satisfying any material
Liability except pursuant to the terms thereof or compromising, settling or
otherwise modifying any material claim or litigation; or making any capital
expenditure involving in any individual case, or series of related cases, more
than $1,000.
(b) From and after the Closing, Interactive shall cease to
conduct any business in the field of producing and/or creating live production
shows except as a wholly owned subsidiary of On Stage.
VI.2 Agreement Not To Compete. Kanfer agrees that for a period of two
(2) years after termination of his employment with On Stage he will not directly
compete with On Stage in the field of producing and/or creating live production
shows. It is understood and agreed upon that direct competition means the
design, development, production, promotion, presentation, or sale of products or
services which are or could be considered a derivative of On Stage's shows
"Legends in Concert", "Xxxxxxx & Xxxxx Get Married" or "Wake Up Xxxxxx X'Xxxxxx"
and any shows within the gaming casino market. Kanfer further agrees that he
will not directly or indirectly disclose to any third person any confidential
information or trade secrets, including, but not limited to, customer lists, as
to which he gained knowledge during his term of employment.
VI.3 Stockholder Meeting. Interactive shall cause a meeting of its
stockholders (the "Interactive Stockholder Meeting") to be duly called and held
as soon as reasonably practicable for the purpose of voting on the approval of
this Agreement and the Transactions. The directors of Interactive shall
unanimously recommend to Interactive's stockholders that they vote in favor of
the approval of such two matters. In connection with such meeting, Interactive
(a) will use all reasonable efforts to obtain the necessary approvals by its
stockholders of this Agreement and the Transactions and (b) will otherwise
comply with all legal requirements applicable to such meeting.
VI.4 Access. Interactive shall give On Stage and its accountants,
counsel and other representatives full access, without unreasonably interfering
with business operations, to all properties, books, Contracts and records of
Interactive and shall furnish to On Stage all such documents, records and
information as On Stage shall from time to time reasonably request.
VI.5 No Other Negotiations. Until the earlier of the Closing or the
termination of this Agreement, Interactive shall not (a) solicit, encourage,
directly or indirectly, any inquiries, discussions or proposals for, (b)
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continue, propose or enter into any negotiations or discussions looking toward
or (c) enter into any agreement or understanding providing for any acquisition
of any capital stock of Interactive or of any part of the Interactive Assets or
the Interactive Business, other than as contemplated or authorized hereby, nor
shall Interactive provide any information to any Person (other than as
contemplated by Section 6.04) for the purpose of evaluating or determining
whether to make or pursue any such inquiries or proposals with respect to any
such acquisition. Interactive shall immediately notify On Stage of any such
inquiries or proposals or requests for information for such purpose. Interactive
shall use commercially reasonable efforts to cause the directors, officers,
employees, agents and other representatives of Interactive to comply, with the
provisions of this Section 6.05.
VI.6 Maintenance of the Interactive Assets. Interactive and Kanfer
shall continue to maintain and service the Interactive Assets consistent with
past practice. Interactive and Kanfer shall not, directly or indirectly, sell or
encumber all or any part of the Interactive Assets, other than sales in the
ordinary course of business, or initiate or participate in any discussions or
negotiations or enter into any agreement to do any of the foregoing.
VI.7 Employees and Business Relations. Interactive and Kanfer shall use
commercially reasonable efforts to keep available the services of its current
employees, actors, independent contractors and agents and to maintain its
relations and goodwill with its suppliers, customers, distributors and any
others having business relations with it.
VI.8 Confidentiality. Prior to and after the Closing, Interactive and
Kanfer will hold, and will use commercially reasonable efforts to cause the
officers, directors, employees, accountants, counsel, consultants, advisors and
agents of Interactive and Kanfer to hold, in confidence, unless compelled to
disclose by judicial or administrative process or by other requirements of law,
all confidential documents and information concerning On Stage furnished to
Interactive in connection with the Transactions, except to the extent that such
information can be shown to have been (a) previously known on a nonconfidential
basis by Interactive or Kanfer, (b) in the public domain through no fault of
Interactive or Kanfer or (c) later acquired by Interactive or Kanfer from
sources other than On Stage so long as, to the knowledge of Interactive or
Kanfer, such sources are not subject to a contractual or fiduciary duty of
confidentiality with respect to such information; provided that Interactive may
disclose such information to its officers, directors, employees, accountants,
counsel, consultants, advisors and agents in connection with the Transactions so
long as such Persons are informed by Interactive of the confidential nature of
such information and are directed by Interactive to treat such information
confidentially. The obligation of Interactive and Kanfer to hold any such
information in confidence shall be satisfied if it exercises the same care with
respect to such information as it would take to preserve the confidentiality of
its own similar information. If this Agreement is terminated, Interactive will,
and will use commercially reasonable efforts to cause the officers, directors,
employees, accountants, counsel, consultants, advisors and agents of Interactive
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to, destroy or deliver to On Stage all documents and other materials, and all
copies thereof, obtained by Interactive or on its behalf from On Stage in
connection with this Agreement that are subject to such confidence.
VI.9 Fulfillment of Conditions. Interactive and Kanfer shall use
commercially reasonable efforts to fulfill the conditions specified in Article
VIII to the extent that the fulfillment of such conditions is within its
control. The foregoing obligation includes (a) the execution and delivery of the
Transaction Documents and (b) taking or refraining from such actions as may be
necessary to fulfill such conditions (including conducting the Interactive
Business in such manner that on the Closing Date the representations and
warranties of Interactive contained herein shall be accurate as though then
made, except as contemplated by the terms hereof).
VI.10 Disclosure of Certain Matters. During the period from the date
hereof through the Closing Date, Interactive and Kanfer shall give On Stage
prompt written notice of any event or development that occurs that (a) had it
existed or been known on the date hereof would have been required to be
disclosed under this Agreement, (b) would cause any of the representations and
warranties of Interactive contained herein to be inaccurate or otherwise
misleading, (c) gives Interactive any reason to believe that any of the
conditions set forth in Article VIII will not be satisfied prior to the
Termination Date, or (d) is of a nature that is or may be materially adverse to
the operations, prospects or condition (financial or otherwise) of Interactive.
VI.11 Satisfaction of Liabilities. Except as otherwise prohibited
herein, prior to and after the Closing, Interactive and Kanfer will perform all
of its obligations, contractual or otherwise, and discharge all of its
Liabilities in accordance with the terms thereof.
VI.12 No Violation of Securities Laws. Kanfer will not sell, transfer
or otherwise dispose of any of the On Stage Shares in violation of the
Securities Act.
VI.13 Expenses. Kanfer shall pay all of the legal, accounting and other
expenses incurred by Interactive or Kanfer in connection with the Transactions.
VI.14 Lock-up. Kanfer will not sell or otherwise transfer any On Stage
Shares for a period of six months (or such other period of time as is determined
in the discretion of the lead underwriter) after the closing of an initial
public offering of On Stage Common Stock.
VI.15 Right of First Refusal. Until the earlier of On Stage Shares
being registered with the Securities and Exchange Commission or two years from
the Closing Date, if Kanfer desires to transfer any On Stage Shares to any
prospective purchaser, Kanfer shall give On Stage a Notice of any offer by such
prospective purchaser.
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The offer by the prospective purchaser must be in writing and must be
enforceable against the prospective purchaser. The Notice must have attached to
it a copy of the offer by the prospective purchaser that states the name and
address, the number of Shares to be purchased, the price per share, and the
other terms of the offer (the "Offer"). The price per share shall not include
any value attributable to any employment, consulting, noncompetition or other
agreement, contract or arrangement between the prospective purchaser and Kanfer.
Within 20 days after On Stage receives the Offer, On Stage will call a
special shareholders' meeting, to be held not more than 40 days after the call,
to decide whether On Stage should purchase some or all the offered Shares.
A Notice of acceptance of the Offer for the offered Shares by On Stage
shall be delivered to Kanfer within 75 days after the date of the Notice of the
Offer. Kanfer shall deliver to On Stage certificates for the Shares either duly
endorsed in blank for transfer, or with duly executed stock powers attached,
together with any applicable documentary tax stamps within 20 days after the
effective date of the Notice of acceptance.
If the Offer to purchase Shares pursuant to this Section 6.15 is not
accepted for all offered Shares, Kanfer may sell the remaining Shares pursuant
to the terms of the Offer during a period of 120 days after the end of the
period provided for acceptance of the offer by On Stage.
ARTICLE VII.
COVENANTS OF ON STAGE
VII.1 Confidentiality. Prior to the Closing, On Stage will hold, and
will use commercially reasonable efforts to cause the officers, directors,
employees, accountants, counsel, consultants, advisors and agents of On Stage to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning Interactive furnished to On Stage in connection with the
Transactions, except to the extent that such information can be shown to have
been (a) previously known on a nonconfidential basis by On Stage, (b) in the
public domain through no fault of On Stage or (c) later acquired by On Stage
from sources other than Interactive so long as, to the knowledge of On Stage,
such sources are not subject to a contractual or fiduciary duty of
confidentiality with respect to such information; provided that On Stage may
disclose such information to its officers, directors, employees, accountants,
counsel, consultants, advisors and agents in connection with the Transactions so
long as such Persons are informed by On Stage of the confidential nature of such
information and are directed by On Stage to treat such information
confidentially. The obligation of On Stage to hold any such information in
confidence shall be satisfied if it exercises the same care with respect to such
information as it would take to preserve the confidentiality of its own similar
information. If this Agreement is terminated, On Stage will, and will use
commercially reasonable efforts to cause the officers, directors, employees,
accountants, counsel, consultants, advisors and agents of On Stage to, destroy
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or deliver to Interactive all documents and other materials, and all copies
thereof, obtained by On Stage or on its behalf from Interactive in connection
with this Agreement that are subject to such confidence.
VII.2 Expenses. On Stage shall pay all of the legal, accounting and
other expenses incurred by On Stage in connection with the Transactions.
VII.3 Fulfillment of Conditions. From the date hereof to the Closing,
On Stage shall use commercially reasonable efforts to fulfill the conditions
specified in Article VIII to the extent that the fulfillment of such conditions
is within its control. The foregoing obligation includes (a) the execution and
delivery of the Transaction Documents and (b) taking or refraining from such
actions as may be necessary to fulfill such conditions (including conducting the
business of On Stage in such manner that on the Closing Date the representations
and warranties of On Stage contained herein shall be accurate as though then
made).
VII.4 Board of Directors Meeting. On Stage shall cause a meeting of its
Board of Directors (the "On Stage Directors Meeting") to be duly called and held
as soon as reasonably practicable for the purpose of voting on the approval of
this Agreement and the Transactions.
VII.5 Disclosure of Certain Matters. During the period from the date
hereof through the Closing Date, On Stage shall give Interactive and Kanfer
prompt written notice of any event or development that occurs that (a) had it
existed or been known on the date hereof would have been required to be
disclosed under this Agreement, (b) would cause any of the representations and
warranties of On Stage contained herein to be inaccurate or otherwise misleading
or (c) gives On Stage any reason to believe that any of the conditions set forth
in Article VIII will not be satisfied prior to the Termination Date.
VII.6 No Violation of Securities Laws. On Stage will not sell, transfer
or otherwise dispose of any of the Interactive Shares in violation of the
Securities Act.
ARTICLE VIII.
CONDITIONS PRECEDENT TO THE TRANSACTIONS
VIII.1 Conditions to Obligations of On Stage. The obligations of On
Stage to consummate the Transactions shall be subject to the satisfaction or
waiver, on or before the Closing, of each of the following conditions:
(a) Interactive Stockholder Approval. The Transactions shall
have been approved and adopted by the stockholders of Interactive in accordance
with Interactive's Articles of Incorporation and the GGCL.
(b) Representations and Warranties True. The representations
and warranties of Interactive contained herein shall be true and correct in all
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material respects at and as of the date hereof and at and as of the Closing as
though such representations and warranties were made again at and as of the
Closing, except for changes contemplated by this Agreement.
(c) Performance. Interactive shall have performed and complied
in all material respects with the agreements contained in this Agreement
required to be performed or complied with by it on or prior to the Closing.
(d) Consents and Approvals. Interactive shall have obtained all
governmental and third party consents and approvals necessary, proper or
advisable to consummate the Transactions, except for those which would not have
a Material Adverse Effect. Such third party consents shall include the Required
Consents.
(e) No Governmental Order or Regulation. There shall not be in
effect any order, decree or injunction (whether preliminary, final or
appealable) of a United States federal or state court of competent jurisdiction,
and no Regulation shall have been enacted or promulgated by any governmental
authority or agency, that prohibits consummation of the Transactions.
(f) Other Documents. On Stage shall have received executed
copies of all Transaction Documents to which Interactive or any Interactive
stockholder is a party to the extent that they shall not have been received
prior to the Closing. On Stage shall have received all other documents required
under the terms of any of the Transaction Documents and any other documents
reasonably requested on or prior to the Closing Date.
(g) Certificates. Interactive shall have furnished to On Stage
a certificate of the chief executive officer and/or president of Interactive,
dated the Closing, certifying to the best of such officer's knowledge compliance
as of the Closing with the conditions set forth in paragraphs (a), (b) and (c)
of the Section 8.01 in all material respects.
(h) Tax Clearance. On Stage shall have received a Certificate
of Good Standing from the tax authorities of the State of Georgia.
(i) Assignment of Shows. Kanfer shall have executed the
Assignment regarding "Xxxxxxx and Xxxxx Get Married" and "Wake-Up Xxxxxx
X'Xxxxxx" and other shows substantially in the form attached hereto as Exhibit C
and delivered the same to On Stage.
(j) Kanfer Employment Agreement. Kanfer shall have executed an
Employment Agreement with On Stage substantially in the form attached hereto as
Exhibit D and delivered the same to On Stage.
VIII.2 Conditions to Obligations of Interactive and Kanfer. The
obligations of Interactive and Kanfer to consummate the Transactions shall be
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subject to the satisfaction or waiver, on or before the Closing, of each of the
following conditions:
(a) Representations and Warranties True. The representations
and warranties of On Stage contained herein shall be true and correct in all
material respects at and as of the date when made and at and as of the Closing
as though such representations and warranties were made again at and as of the
Closing, except for changes contemplated by this Agreement.
(b) Performance. On Stage shall have performed and complied in
all material respects with the agreements contained in this Agreement required
to be performed or complied with by them on or prior to the Closing.
(c) No Governmental Order or Regulation. There shall not be in
effect any order, decree or injunction (whether preliminary, final or
appealable) of a United States federal or state court of competent jurisdiction,
and no Regulation shall have been enacted or promulgated by any governmental
authority or agency, that prohibits consummation of the Transactions.
(d) Other Documents. Interactive shall have received executed
copies of all Transaction Documents to which On Stage is a party to the extent
that they shall not have been received prior to the Closing. Interactive shall
have received all other documents required under the terms of any of the
Transaction Documents and any other documents reasonably requested on or prior
to the Closing Date.
(e) Certificates. On Stage shall have furnished to Interactive
a certificate of the chief executive officer of On Stage, dated the Closing,
certifying to the best of such officer's knowledge compliance as of the Closing
with the conditions set forth in paragraphs (a) and (b) of this Section 8.02 in
all material respects.
(f) Assignment of Shows. On Stage shall have executed the
Assignment regarding "Xxxxxxx and Xxxxx Get Married" and "Wake-Up Xxxxxx
X'Xxxxxx" in the form attached hereto as Exhibit C and delivered the same to
Kanfer.
(g) Kanfer Employment Agreement. On Stage shall have executed
an Employment Agreement with On Stage substantially in the form attached hereto
as Exhibit D and delivered the same to On Stage.
(h) Director Approval. The Transactions shall have been
approved and adopted by the Board of Directors of On Stage in accordance with On
Stage's Bylaws.
ARTICLE IX.
INDEMNIFICATION
IX.1 By Kanfer. From and after the Closing Date, to the extent provided
in this Section 9, Kanfer shall indemnify and hold harmless On Stage and each
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Affiliate and Agent of On Stage from and against any liabilities, claims,
demands, judgments, losses, costs or damages whatsoever (collectively,
"Damages") that any such indemnified party may sustain, suffer or incur and that
result from, arise out of or relate to the operation of the business of
Interactive prior to the Closing; provided, however, that no claim for
indemnification shall be made unless and until the aggregate amount of Damages
sought under this Section 9.01 exceeds $5,000, in which case a claim for
indemnification can be made for the entire amount of Damages suffered; provided,
further, that indemnification for attorneys', consultants' and other
professional fees and disbursements of every kind, nature and description
incurred by them in connection therewith shall not exceed $5,001.
IX.2 By On Stage. From and after the Closing Date, to the extent
provided in this Section 9, On Stage shall indemnify and hold harmless
Interactive and each Affiliate and Agent of Interactive from and against any
Damages that any such indemnified party may sustain, suffer or incur and that
result from, arise out of or relate to any breach of any representation,
warranty, covenant or agreement of On Stage contained in this Agreement;
provided, however, that no claim for indemnification shall be made unless and
until the aggregate amount of Damages sought under this Section 9.02 exceeds
$5,000, in which case a claim for indemnification can be made for the entire
amount of Damages suffered.
IX.3 Procedure for Claims. A party seeking indemnification under this
Section 9 (an "Indemnified Party") shall give notice of the claim for Damages
and a brief explanation of the basis thereof to the party alleged to be
responsible for indemnification hereunder (an "Indemnitor").
IX.4 Third Party Claims. An Indemnified Party shall give any Indemnitor
prompt notice of the institution by a third party of any actions, suits or other
administrative or judicial proceedings at any time on or before the date one
year from the Closing Date if the Indemnified Party would be entitled to claim
indemnification under this Section 9 in connection with any such action, suit or
other proceeding. After such notice, any Indemnitor may, or if so requested by
the Indemnified Party, any Indemnitor shall, participate in any such action,
suit or other proceeding or assume the defense thereof, with counsel
satisfactory to the Indemnified Party; provided, however, that the Indemnified
Party shall have the right to participate at its own expense in the defense of
any such action, suit or other proceeding; and provided, further, that the
Indemnitor shall not consent to the entry of any judgment or enter into any
settlement, except with the written consent of the Indemnified Party, that (a)
fails to include as an unconditional term thereof the giving by the claimant or
plaintiff to the Indemnified Party of a release from all liability in respect of
any such action, suit or other proceeding or (b) grants the claimant or
plaintiff any injunctive relief against the Indemnified Party. Any failure to
give prompt notice under this Section 9.04 shall not bar an Indemnified Party's
right to claim indemnification under this Section 9, except to the extent that
an Indemnified Party shall have been harmed by such failure.
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ARTICLE X.
TERMINATION
X.1 Grounds for Termination. This Agreement may be terminated at any
time prior to the Closing Date:
(a) by mutual written consent of On Stage, Interactive and
Kanfer;
(b) by either On Stage, Interactive or Kanfer, if the Closing
has not occurred by November 30, 1996 (such date, as it may be extended from
time to time by the written agreement of On Stage, Interactive and Kanfer, is
referred to herein as the "Termination Date"); provided, however, that the right
to terminate this Agreement under this paragraph (b) of Section 10.01 shall not
be available to any party that has breached any of its covenants,
representations or warranties in this Agreement;
(c) by Interactive or Kanfer, if On Stage shall have breached
any of its covenants hereunder in any material respect or if the representations
and warranties of On Stage contained in this Agreement shall not be true and
correct, except for such changes as are contemplated by this Agreement, in all
material respects, and in either event, if such breach is subject to cure, On
Stage has not cured such breach within 10 business days of Interactive's notice
of an intent to terminate;
(d) by On Stage, if Interactive or Kanfer shall have breached
any of its covenants hereunder in any material respect or if the representations
and warranties of Interactive contained in this Agreement shall not be true and
correct, except for such changes as are contemplated by this Agreement, in all
material respects, and in either event, if such breach is subject to cure,
Interactive has not cured such breach within 10 business days of On Stage's
notice of an intent to terminate; or
(e) by On Stage, if at the Interactive Stockholder Meeting
(including any adjournments thereof), this Agreement and the Transactions shall
fail to be approved and adopted by the affirmative vote of the holders of
Interactive Common Stock required under the GGCL.
X.2 Effect of Termination.
(a) If this Agreement is terminated pursuant to Section 10.01,
the agreements contained in Sections 6.08 and 7.01 shall survive the termination
hereof. In addition, any party may pursue any legal or equitable remedies that
may be available if such termination is based on a breach of another party.
(b) If the closing that is the subject of this Agreement has
not, for any reason, taken place on or before the 30th day of November, 1996,
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then On Stage and Kanfer shall each have the right to terminate this Agreement
or the employment agreement between On Stage and Kanfer (attached hereto as
Exhibit D) and none of the provisions of that Agreement shall apply to Kanfer
except that Kanfer shall be entitled to compensation as if terminated early
because of failure to meet budget requirements. Any termination of the
Employment Agreement under this Section must be made by written notice to the
other on or before the 30th day of November or such right shall be waived. In
the event the Employment Agreement is terminated under this Section, then all
rights to the Assignment of Shows pursuant to Exhibit C shall be assigned back
to Kanfer.
ARTICLE XI.
CONTENTS OF AGREEMENT, AMENDMENT,
PARTIES IN INTEREST, ASSIGNMENT, ETC.
This Agreement sets forth the entire understanding of the parties
hereto with respect to the subject matter hereof. This Agreement may be amended,
modified or supplemented only by a written instrument duly executed by each of
the parties hereto. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective heirs, legal representatives,
successors and permitted assigns of the parties hereto. No party hereto shall
assign this Agreement or any right, benefit or obligation hereunder. Any term or
provision of this Agreement may be waived at any time by the party entitled to
the benefit thereof by a written instrument duly executed by such party. The
parties hereto shall execute and deliver any and all documents and take any and
all other actions that may be deemed reasonably necessary by their respective
counsel to complete the Transactions.
ARTICLE XII.
INTERPRETATION
Unless the context of this Agreement clearly requires otherwise, (a)
references to the plural include the singular, the singular the plural, the part
the whole, (b) "or" has the inclusive meaning frequently identified with the
phrase "and/or" and (c) "including" has the inclusive meaning frequently
identified with the phrase "but not limited to." The section and other headings
contained in this Agreement are for reference purposes only and shall not
control or affect the construction of this Agreement or the interpretation
thereof in any respect. Section, subsection, schedule and exhibit references are
to this Agreement unless otherwise specified. Each accounting term used herein
that is not specifically defined herein shall have the meaning given to it under
GAAP.
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ARTICLE XIII.
NOTICES
All notices that are required or permitted hereunder shall be in
writing and shall be sufficient if personally delivered or sent by mail,
facsimile message or Federal Express or other delivery service. Any notices
shall be deemed given upon the earlier of the date when received at, or the
third day after the date when sent by registered or certified mail or the day
after the date when sent by Federal Express to, the address or fax number set
forth below, unless such address or fax number is changed by notice to the other
party hereto:
If to On Stage:
c/o Legends In Concert, Inc.
0000 X. Xxxxx Xxxxx, Xxxxx 00
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxxxxxxxx Xxxxx, General Counsel
If to Interactive:
Hassett, Cohen, Beitchman and Xxxxxxxxx
One Lakeside Commons
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
If to Kanfer:
Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx #0000-00
Xxx Xxxxx, Xxxxxx 00000
ARTICLE XIV.
GOVERNING LAW
This Agreement shall be construed and interpreted in accordance with
the laws of the State of Nevada, without regard to its provisions concerning
conflict of laws.
ARTICLE XV.
COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be binding as of the date first written above, and all of which
shall constitute one and the same instrument. Each such copy shall be deemed an
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original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
ARTICLE XVI.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties made by any party in this Agreement
or pursuant hereto shall survive the Closing hereunder and any investigation at
any time made by or on behalf of the other party and for a period of one year
following the Closing.
ARTICLE XVII.
REMEDIES CUMULATIVE
The remedies provided herein shall be cumulative and shall not preclude
a party from asserting any other rights or seeking any other remedies against
the other party or its successors or assigns.
ARTICLE XVIII.
SEVERABILITY
The invalidity of any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part thereof,
all of which are inserted conditionally on their being valid in law, and, in the
event that any one or more of the words, phrases, sentences, clause or sections
contained in this Agreement shall be declared invalid, this Agreement shall be
construed as if such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses, or section or sections had not been inserted. If
such invalidity is caused by length of time or size of area, or both, the
otherwise invalid provision will be considered to be reduced to a period or area
which would cure such invalidity.
ARTICLE XIX.
BULK TRANSFER
The parties hereto waive compliance with the requirements of the bulk
sales law of any jurisdiction in connection with the sale of the Interactive
Shares. Interactive and Kanfer shall indemnify and hold harmless On Stage
against all liabilities which may be asserted by third parties with respect to
assets sold by Interactive as a result of noncompliance with any such bulk sales
laws.
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ARTICLE XX.
ARBITRATION
The parties agree that all disputes, claims, and controversies between
or among them arising from or relating to this Agreement shall be arbitrated in
Xxxxx County, Nevada, pursuant to the Rules of the American Arbitration
Association, upon the request of any party.
ARTICLE XXI.
TAX FREE EXCHANGE
It is understood that the parties intend that this transaction
represents a tax free exchange under the Internal Revenue Code. However, this
Agreement is not contingent upon a ruling from the Internal Revenue Service (the
"IRS") that the transactions contemplated herein constitute a tax free exchange
and the parties' agreements herein are effective and binding on them
irrespective of any favorable or negative ruling from the IRS.
(Signature page follows.)
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first written above.
ON STAGE ENTERTAINMENT, INC.
a Nevada corporation
By:/s/ Xxxxx Xxxx
-----------------------
Name: Xxxxx Xxxx
Title: President
INTERACTIVE EVENTS, INC.
a Georgia corporation
By: /s/ Xxxxxxx Xxxxxx
-----------------------
Name: Xxxxxxx Xxxxxx
Title: President
XXXXXXX X. XXXXXX,
an individual
/s/ Xxxxxxx Xxxxxx
-----------------------
EXHIBIT A
Form of Agreement to Issue
and Deliver Additional Shares
This Agreement is made as of December 30, 1996, by On Stage
Entertainment, Inc., a Nevada corporation ("On Stage"), in favor of Xxxxxxx X.
Xxxxxx ("Kanfer").
On Stage hereby agrees pursuant to Section 2.02 of the Common Stock
Purchase Agreement by and among On Stage, Interactive Events, Inc., a Georgia
corporation, and Kanfer (the "Purchase Agreement") to issue and deliver Twenty
Thousand (20,000) shares of Common Stock of On Stage on the first anniversary of
the Closing Date (as defined in the Purchase Agreement).
Dated: December 30, 1996 ON STAGE ENTERTAINMENT, INC.
a Nevada corporation
By: /s/ Xxxxx Xxxx
--------------------------
Name: Xxxxx Xxxx
Title: President
EXHIBIT B
Stock Option Agreement
----------------------
OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Option Agreement") is dated as of November
1, 1996, and is by and between ON STAGE ENTERTAINMENT, INC., a Nevada
corporation, (the "Company"), and XXXXXXX X. XXXXXX, an individual ("Kanfer").
RECITALS
WHEREAS, pursuant to that certain Common Stock Purchase Agreement of
even date herewith by and between the Company and Kanfer, the Company has agreed
to grant to Kanfer an irrevocable option to purchase certain shares of the
Company; and
WHEREAS, the Company desires to grant to Kanfer an irrevocable option
to purchase all of the Optioned Shares (as defined below) upon the terms and
conditions set forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein, and for other good and valuable consideration,
the adequacy and receipt of which is hereby acknowledged, the parties mutually
agree as follows:
1. Option. Kanfer is hereby granted an irrevocable option (the "Option") to
acquire, pursuant to the exercise thereof during the Option Term (as defined
below) in the manner described hereinafter, the Optioned Shares (as defined in
the next sentence), upon the terms and conditions of this Option Agreement. The
Optioned Shares shall mean 27,225 shares of the common stock, par value $.01 per
share, of the Company. Kanfer shall exercise the option as to all of the
Optioned Shares at one time, or not at all.
2. Consideration for Optioned Shares. The consideration for the Optioned Shares
shall be (i) Twenty Seven Thousand Two Hundred Twenty Five (27,225) multiplied
by (ii) the price shares of common stock of the Company are offered to the
public in the Company's initial public offering of its common stock. The
Optioned Shares that are the subject hereof are in addition to the 36,000 shares
referred to in Section 4.4.6 of Kanfer's Employment Agreement.
3. Manner of Exercise. To exercise the Option, Kanfer shall deliver to the
Company during the Option Term a written notice indicating Kanfer's election to
exercise the Option and purchase the Optioned Shares subject to the terms and
conditions of this Option Agreement. Any notice under this Section 3 shall be
given in accordance with the notice provisions hereof.
4. Option Term. The Option shall be exercisable during the period beginning on
the closing of the Company's initial public offering of its common stock (the
"IPO Closing Date")
and ending on the date of five (5) years after the IPO Closing Date (the "Option
Term"), and after the Option Term this option and all rights hereunder shall
expire.
5. Limitation of Kanfer's Rights. Kanfer shall not have any of the rights or
privileges of a shareholder of the Company in respect of the Optioned Shares
unless and until those shares have been paid for in full.
6. Purchase for Investment. By accepting the Option or the Optioned Shares,
Kanfer represents, warrants and agrees that the same are acquired for his own
account, for investment and not with a view to their resale or distribution.
Kanfer understands and acknowledges that the certificate(s) representing the
Optioned Shares shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT"). THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE PLEDGED OR HYPOTHECATED, AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SHARES
UNDER THE ACT OR AN EXEMPTION ESTABLISHED TO THE SATISFACTION OF THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT."
7. Additional Representations and Warranties of Kanfer. As a condition to
investing in the Company, Kanfer represents and warrants to the Company as
follows:
(a) Notwithstanding the receipt of the Option or the Optioned Shares
upon exercise of the Option, Kanfer has adequate means of providing for his
current needs and possible contingencies, and that he has no need for liquidity
from this investment.
(b) Kanfer is aware that no federal or state agency has made any
findings or determination as to the fairness for public or private investment or
any recommendation or endorsement of the Option or the Optioned Shares as an
investment.
(c) Kanfer is the sole party in interest and is acquiring the Option
and the Optioned Shares upon exercise of the option for Kanfer's own benefit and
not on behalf of any other person, trust, estate, corporation, partnership or
business organization.
(d) Kanfer, in making his decision regarding the Option and the
Optioned Shares upon exercise of the Option, has relied on independent
investigations made by him, and that Kanfer or any person acting on his behalf
has been given the opportunity to (i) examine all
documents and to ask questions of and to receive answers from the Company or any
person acting on the Company's behalf regarding every aspect of the Company's
business and operations specifically with respect to the terms and conditions of
the Option and the Optioned Shares and (ii) obtain any additional information to
the extent the Company possesses such information necessary to verify the
accuracy of the information discussed with Kanfer.
(e) Kanfer has knowledge and experience in business and financial
matters and, in particular, investments generally comparable from an investment
point of view to the investment offered in the Company so as to enable him to
utilize such experience in evaluating the risks and merits of the proposed
investment in the Company and to make an informed investment decision.
8. Assignment. No assignment, transfer, sale, pledge, hypothecation or other
disposition of the Option, this Option Agreement or of any rights hereunder may
be made by Kanfer (by operation of law or otherwise) and any attempted
assignment, transfer, sale, pledge, hypothecation or other disposition in
violation hereof shall be void.
9. Counterparts. This Option Agreement may be executed in any number of
counterparts, each of which shall be an original, but which together constitute
one and the same instrument.
10. Headings and Interpretation. Headings are inserted for the convenience of
reference only and are not intended to be a part of or affect the meaning or
interpretation of this Option Agreement. Clerical and stenographic errors in the
construction of this document are subject to correction. The parties acknowledge
that the interpretation of any ambiguity in this Option Agreement shall not be
construed against either party.
11. Entire Agreement. The terms of this Option Agreement are intended by the
parties as a final expression of their agreement with respect to such terms as
are included in this Option Agreement and may not be contradicted by evidence of
any prior or contemporaneous agreement. The parties further intend that this
Option Agreement constitutes the complete and exclusive statement of their terms
and that no extrinsic evidence whatsoever may be introduced in any proceeding,
if any, involving terms of this Option Agreement.
12. Modifications and Amendments. This Option Agreement may not be modified,
changed or supplemented except in a writing signed by the Company and Kanfer.
13. Waivers. No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof
or of any other agreement or provision herein contained. No waiver may be made
except by written instrument signed by an authorized representative of the party
which is the beneficiary of the provision being waived.
14. Attorneys Fees. Should any party institute any action or proceeding to
enforce this Option Agreement or any provision hereof, or for a declaration of
rights hereunder, the prevailing party in any such action or proceeding shall be
entitled to receive from the other party all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party in connection with
such action or proceeding.
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15. Severability. If any provision of this Option Agreement is held to be void
and unenforceable, the remaining provisions shall continue in full force and
effect.
16. Notices.
(a) Any notice under this Option Agreement given by the Company to
Kanfer shall be personally delivered to him or sent by certified mail or
overnight express courier to the following address:
Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx #0000-00
Xxx Xxxxx, Xxxxxx 00000
(b) Any notice by Kanfer to the Company shall be personally delivered
or sent by certified mail or overnight express courier to the following address:
On Stage Entertainment, Inc.
0000 Xxxx Xxxxx Xxxxx, Xxxxx 00
Xxx Xxxxx, Xxxxxx 00000
(c) Any notice sent by certified mail shall be effective when mailed
and any notice personally delivered or sent by overnight express courier shall
be effective when received. Any party may change its address for purposes of
this Section by giving the other parties written notice of the new address in
the manner set forth above.
17. Governing Law; Arbitration. This Option Agreement shall be governed by and
interpreted and enforced in accordance with the substantive laws of the State of
Nevada without reference to the principles governing the conflicts of laws
applicable in that or any other jurisdiction. The parties agree that all
disputes, claims and controversies between them arising from or related to this
Option Agreement shall be arbitrated in Xxxxx County, Nevada, pursuant to the
Rules of the American Arbitration Association, upon the request of any party.
IN WITNESS WHEREOF, the parties have duly executed this Option
Agreement as of the date first set forth above.
ON STAGE ENTERTAINMENT, INC.
By: /s/ Xxxxx Xxxx /s/ Xxxxxxx X. Xxxxxx
------------------------ -------------------------
Name: Xxxxx Xxxx XXXXXXX X. XXXXXX
Its: President
EXHIBIT C
Assignment of Shows
-------------------
ASSIGNMENT OF RIGHTS IN
"XXXXXXX AND XXXXX GET MARRIED"
For and in consideration of the right to receive certain royalties (the
"Royalty Consideration") offered to me simultaneously herewith by On Stage
Entertainment, Inc., a Nevada corporation (herein called the "Assignee"),
I, Xxxxxxx X. Xxxxxx, residing at 0000 X. Xxxxxxx # 0000-00, Xxxx xx
Xxx Xxxxx, Xxxxx of Nevada, do hereby unconditionally sell, transfer, assign and
set over unto the Assignee all my right, title and interest in and to a certain
play entitled "Xxxxxxx and Xxxxx Get Married" (herein called the "Play"),
including (but not by way of limitation) (a) the copyright therein, and (b) any
and all moneys now or hereafter due me therefrom except for the Royalty
Consideration.
The Assignee shall have the unconditional right at any time hereafter
to sell, license or otherwise dispose of any and all rights in the Play, and to
retain the entire proceeds thereof for its exclusive benefit except for the
Royalty Consideration. Notwithstanding the foregoing, any sale, license or other
disposal shall be subject to the Royalty Consideration and credits referred to
below and the Assignee shall continue to be responsible for assuring that the
Royalty Consideration is paid and continues to be paid and that the credits
referred to below are given. Additionally, in the event of any proposed sale of
all of Assignee's rights in the Play, Kanfer shall have a first right of refusal
to acquire back such rights on the same terms and conditions proposed. In this
regard, prior to (and as a condition of) the proposed conveyance of such rights
other than to Kanfer, Assignee shall first give Kanfer notice in writing stating
the terms upon which Assignee intends to transfer said rights along with the
name, owners, and representatives of such party, and giving Kanfer sixty (60)
days to accept or reject the terms offered to such other party which respect to
such disposal. If Kanfer does not accept such offer within such sixty (60) day
period, Assignee shall then be permitted to enter into an agreement allowing
such other party to acquire such right under the same terms offered to Kanfer
provided the terms of such agreement are in writing and such agreement is signed
and a copy given to Kanfer within sixty (60) days of the rejection or expiration
of the offer to Kanfer. If such written agreement is not entered into with a
copy to Kanfer within such period, Assignee shall not enter into any such
arrangement with that party or any other party without first again going through
the above procedure giving Kanfer his first right of refusal.
Assignee agrees to pay Kanfer, in perpetuity, a Royalty Consideration
to me in an amount equal to 3% of the gross receipts, if any, actually received
by the Assignee for performances of the Play in productions that are open to the
general public. A production that is performed for a company event is not open
to the general public. Assignee will pay Kanfer the Royalty Consideration at the
end of each of Assignee's fiscal quarters.
It is agreed that Kanfer shall be given credits as follows which
credits shall be prominently displayed on all materials, including programs,
handed out at the Play and signs, posters and other materials displayed in
connection with the Play, including any theater, showroom or casino marquis. In
addition, credits will be given to Kanfer at each venue, and in all sales,
advertising and promotional materials relating to the Play on the same terms and
conditions as other credits are given, if any. The credit to be given will be
substantially in the form set forth below:
"Xxxxxxx and Xxxxx Get Married" was created and written by Xxxxxxx X.
Xxxxxx.
In the event that Assignee inadvertently fails to give Kanfer the
aforementioned credit(s), Kanfer agrees the same will not be a material breach
of this Assignment of Rights, provided Assignee cures the same within forty-five
(45) days of written notice from Kanfer specifically notifying Assignee of its
inadvertent failure thereof.
To induce the Assignee to accept this assignment, I hereby represent
and warrant (a) that I wrote all the scripted portions of the Play and the
related materials; (b) that the Play and its related materials are protected
under the common law of copyrights and/or can be duly registered for copyright
in the United States Copyright Office; (c) that I am the sole and exclusive
owner of the copyright and all rights in the Play herein assigned; (d) that such
copyrights and rights are in all respects free, clear and unencumbered; (e) that
I have made no commitment with respect to the Play that may
or will impair the Assignee's rights hereunder; and (f) that I have the full
power and authority to make this assignment.
I agree to take any and all steps to execute, acknowledge and deliver
to the Assignee any and all further documents that may be necessary or desirable
to effectuate this assignment.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 24th day
of December, 1996.
--------------------------------
Xxxxxxx X. Xxxxxx
Accepted and agreed to:
On Stage Entertainment, Inc.
By: Xxxxx Xxxx
Its: President
Date: December 30, 1996
ASSIGNMENT OF RIGHTS IN
"WAKE UP XXXXXX X'XXXXXX"
For and in consideration of the right to receive certain royalties (the
"Royalty Consideration") offered to me simultaneously herewith by On Stage
Entertainment, Inc., a Nevada corporation (herein called the "Assignee"),
I, Xxxxxxx X. Xxxxxx, residing at 0000 X. Xxxxxxx # 0000-00, Xxxx xx
Xxx Xxxxx, Xxxxx of Nevada, do hereby unconditionally sell, transfer, assign and
set over unto the Assignee all my right, title and interest in and to a certain
play entitled "Wake Up Xxxxxx X'Xxxxxx" (herein called the "Play"), including
(but not by way of limitation) (a) the copyright therein, and (b) any and all
moneys now or hereafter due me therefrom except for the Royalty Consideration.
The Assignee shall have the unconditional right at any time hereafter
to sell, license or otherwise dispose of any and all rights in the Play, and to
retain the entire proceeds thereof for its exclusive benefit except for the
Royalty Consideration. Notwithstanding the foregoing, any sale, license or other
disposal shall be subject to the Royalty Consideration and credits referred to
below and the Assignee shall continue to be responsible for assuring that the
Royalty Consideration is paid and continues to be paid and that the credits
referred to below are given. Additionally, in the event of any proposed sale, of
all of Assignee's rights in the Play, Kanfer shall have a first right of refusal
to acquire back such rights on the same terms and conditions proposed. In this
regard, prior to (and as a condition of) the proposed conveyance of such rights
other than to Kanfer, Assignee shall first give Kanfer notice in writing stating
the terms upon which Assignee intends to transfer said rights along with the
name, owners, and representatives of such party, and giving Kanfer sixty (60)
days to accept or reject the terms offered to such other party which respect to
such disposal. If Kanfer does not accept such offer within such sixty (60) day
period, Assignee shall then be permitted to enter into an agreement allowing
such other party to acquire such right under the same terms offered to Kanfer
provided the terms of such agreement are in writing and such agreement is signed
and a copy given to Kanfer within sixty (60) days of the rejection or expiration
of the offer to Kanfer. If such written agreement is not entered into with a
copy to Kanfer within such period, Assignee shall not enter into any such
arrangement with that party or any other party without first again going through
the above procedure giving Kanfer his first right of refusal.
Assignee agrees to pay Kanfer, in perpetuity, a Royalty Consideration
in an amount equal to 3% of the gross receipts, if any, actually received by the
Assignee for performances of the Play in productions that are open to the
general public. A production that is performed for a company event is not open
to the general public. Assignee will Kanfer the Royalty Consideration at the end
of each of Assignee's fiscal quarters.
It is agreed that Kanfer shall be given credits as follows which
credits shall be prominently displayed on all materials, including programs,
handed out at the Play and signs, posters and other materials displayed in
connection with the Play, including any theater, showroom or casino marquis. In
addition, credits will be given to Kanfer at each venue, and in all sales,
advertising and promotional materials relating to the Play on the same terms and
conditions as other credits are given, if any. The credit to be given will be
substantially in the form set forth below:
"Wake Up Xxxxxx X'Xxxxxx" was created and written by Xxxxxxx X. Xxxxxx.
In the event that Assignee inadvertently fails to give Kanfer the
aforementioned credit(s), Kanfer agrees the same will not be a material breach
of this Assignment of Rights, provided Assignee cures the same within forty-five
(45) days of written notice from Kanfer specifically notifying Assignee of its
inadvertent failure thereof.
To induce the Assignee to accept this assignment, I hereby represent
and warrant (a) that I wrote all the scripted portions of the Play and the
related materials; (b) that the Play and its related materials are protected
under the common law of copyrights and/or can be duly registered for copyright
in the United States Copyright Office; (c) that I am the sole and exclusive
owner of the copyright and all rights in the Play herein assigned; (d) that such
copyrights and rights are in all respects free, clear and unencumbered; (e) that
I have made no commitment with respect to the Play that may
or will impair the Assignee's rights hereunder; and (f) that I have the full
power and authority to make this assignment.
I agree to take any and all steps to execute, acknowledge and deliver
to the Assignee any and all further documents that may be necessary or desirable
to effectuate this assignment.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 24th day
of December, 1996.
/s/ Xxxxxxx X. Xxxxxx
--------------------------
Xxxxxxx X. Xxxxxx
Accepted and agreed to:
On Stage Entertainment, Inc.
By: Xxxxx Xxxx
Its: President
Date: December 20, 1996
EXHIBIT D
Kanfer Employment Agreement
---------------------------
EMPLOYMENT AGREEMENT
for
XXXXXXX XXXXXX
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this
10th day ofSeptember, 1996, by and between ON STAGE ENTERTAINMENT, INC., a
Nevada corporation ("Company"), and XXXXXXX XXXXXX, an individual ("Kanfer").
RECITALS
A. The Company desires to be assured of the association and services of
Kanfer for the Company.
X. Xxxxxx is willing and desires to be employed by the Company, and the
Company is willing to employ Kanfer, upon the terms, covenants and conditions
hereinafter set forth.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS ALONG WITH
THE MUTUAL PROMISES AND UNDERSTANDINGS HEREIN CONTAINED AND FOR OTHER GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY
ACKNOWLEDGED, THE PARTIES HERETO AGREE AS FOLLOWS:
1. RECITALS. The above-listed Recitals are incorporated into this Agreement in
their entirety and expressly made a part hereof.
2. EMPLOYMENT. The Company hereby employs Kanfer as the Vice President of Sales,
Corporate Events and Limited Engagements of ON STAGE ENTERTAINMENT, INC.,
subject to the supervision and direction of the Company's President or such
person(s) designated by the Board for that purpose.
3. TERM. Unless sooner terminated or extended as provided herein, the term of
this Agreement shall commence on the date hereof and shall continue through and
include December 31, 1998 (the "Term"). However, it should be noted that
Kanfer's obligation in Sections 6, 7.3, 7.5 and 8, as well as the Company's
obligations in Section 7.2, below, will continue in effect even after the
termination of this Agreement, whether the same be caused by the natural elapse
of time or otherwise.
4. COMPENSATION; REIMBURSEMENT.
4.1 Base Salary. For all services rendered by Kanfer under this
Agreement, the Company shall pay Kanfer an annual base salary of One Hundred and
Ten Thousand Dollars ($110,000.00) per annum, payable every other week in 26
equal installments ("Base Salary").
4.2 Signing Bonus. Kanfer shall receive a one-time "signing bonus" of
Ten Thousand Dollars ($10,000.00) upon the execution of this Agreement.
4.3 Salary Bonus. Kanfer will be entitled to an annual bonus to be paid
in accordance with Schedule "A" ("Bonus"). Actual payment of said Bonus will be
made at the same time that all other corporate bonuses are paid, which is likely
to be within thirty (30) days of the date the Company publishes its financial
accounts for the year, but in no event shall said Bonus be paid later than April
15th of any respective year.
4.4 Additional Benefits. In addition to the Base Salary and Bonus,
Kanfer shall receive the following benefits during the period for which Kanfer
is employed by the Company:
4.4.1 Automobile Allowance: The Company shall reimburse Kanfer
his actual costs associated with purchasing or leasing one (1) vehicle
for Company use, up to Five Hundred Dollars ($500.00) per month.
4.4.2 Medical/Dental Coverage: Until such time as the Company
at its own discretion implements a Company wide Medical/Dental policy,
the Company will reimburse Kanfer his actual cost of his Medical/Dental
policy currently in effect up to Three Hundred Fifty Dollars ($350.00)
per month. At such time as the Company implements a Company wide
Medical/Dental policy, Kanfer will be provided with such coverage under
said policy which is commensurate with executives of similar status
(i.e. Vice President) in lieu of the aforementioned monthly
reimbursement.
4.4.3 Relocation Allowance: The Company will reimburse Kanfer
for all actual out-of pocket moving/relocation/transportation expenses
reasonably incurred by him in connection with his relocation to the
Company's headquarters, up to a maximum of $5,000.
4.4.4 Housing Allowance: The Company will pay the actual cost
of temporary housing for Kanfer for the first three (3) months of his
employment, up to a maximum allowance of $1,000 per month.
4.4.5 Expense Reimbursement: The Company shall reimburse
Kanfer for those expenses incurred by him in connection with the
performance of the duties on behalf of the Company that are in
accordance with the Company's expense reimbursement procedures then in
place; that such expenses are reasonable for an executive of Kanfer's
status and are appropriately documented.
4.4.6 Stock Options. As of the date of the execution of this
Agreement, the Company agrees to reserve for Kanfer an option to
purchase thirty-six thousand (36,000) shares of the Company under the
Company's 1996 Stock Option Plan, contingent upon Kanfer's continued
employment with the Company ("Options"). The Options shall only accrue
and/or vest during the period in which Kanfer is actually employed by
the Company. In the event that Kanfer leaves the employ of the Company,
he shall only be entitled to those Options which have vested at that
time, and shall not be entitled to the remaining balance of the Options
which the Company reserved for Kanfer. The rate at which the Options
will vest is as follows:
(1) 12,000 on first anniversary date of Kanfer's employment; and
(2) 12,000 on second anniversary date of Kanfer's employment;
and
(3) Remaining 12,000 on the third anniversary date of Kanfer's
employment.
5. SCOPE OF DUTIES.
5.1 Assignment of Duties. Kanfer shall have such duties as may be
assigned to him from time to time by the Company's President, commensurate with
his experience and responsibilities in the position for which he is employed
pursuant to Section 2, above. Such duties shall be exercised subject to the
control and supervision of the President.
5.2 Kanfer's Devotion of Time. Kanfer hereby agrees to devote his
full-time, abilities and energy to the faithful performance of the duties
assigned to him and to the promotion and development of the business affairs of
the Company, and not to divert any business opportunities from the Company to
himself or to any other person or business entity.
5.3 Conflicting Activities.
5.3.1 Kanfer shall not, during the Term, be engaged in any
other business activity, regardless of whether such activity is or may
be competitive with the business of the Company, without the prior
written consent of the Board or such person(s) designated by the Board
for that purpose; provided, however, that this restriction shall not be
construed as preventing Kanfer from being a director of, or investing
his personal assets in passive investments in, business entities which
are not in competition with the Company or any of its affiliates, or
from pursuing business opportunities as permitted by paragraph 5.3.2,
below.
5.3.2 Kanfer hereby agrees to promote and develop all business
opportunities that come to his attention relating to current or
anticipated future business of the Company, in a manner consistent with
the best interests of the Company and with his duties under this
Agreement. Should Kanfer discover a business opportunity, whether or
not such business opportunity is related to the business of the
Company, he shall first offer such opportunity to the Company. In the
event that the Board of Directors of the Company elects not exercise
its right to pursue this business opportunity within a reasonable
period of time, not to exceed thirty (30)
days, then Kanfer may develop the business opportunity for himself,
provided, however, that such development may in no way conflict or
interfere with the duties owed by Kanfer to the Company under this
Agreement. Further, Kanfer may develop such business opportunities only
on his own time, and may not use any service, personnel, equipment,
supplies, facility, or trade secrets of the Company in their
development. Notwithstanding anything contained herein to the contrary,
Kanfer may passively invest in publicly traded stocks, bonds or other
securities, provided that those investments do not conflict with
activities competitive with or are adverse to the business or welfare
of the Company, and that such passive investments are not to the extent
that Kanfer beneficially owns Ten Percent (10%) or more of any other
company.
6. CONFIDENTIALITY OF TRADE SECRETS AND OTHER MATERIALS.
6.1 Trade Secrets and Confidential Information. Kanfer agrees not to
disclose to others, or take or use for his own purposes or the purposes of
others, during or after his employment, any trade secrets, confidential
information, knowledge, data or the like that Kanfer acquires during the term of
this Employment Agreement. Kanfer agrees that these restrictions shall also
apply to (a) information, knowledge, trade secret, data or know-how belonging to
third parties in the Company's possession; and (b) information, knowledge, trade
secret, or data received, originated, discovered or developed by Kanfer during
the term of this Agreement. Kanfer recognizes that this obligation applies not
only to technical information, but also to any business, financial or marketing
information that the Company treats as confidential. Any information of the
Company which is not readily available to the public shall be considered to be a
trade secret unless the Company advises Kanfer otherwise in writing.
6.2 Ownership of Trade Secrets; Assignment of Rights. Kanfer hereby
agrees that all know-how, documents, reports, plans, proposals, marketing and
sales plans, client lists, client files and materials made by him or by the
Company are the property of the Company and shall not be used by him in any way
adverse to the Company's interests. Kanfer shall not deliver, reproduce or in
any way allow such documents or things to be delivered or used by any third
party without specific direction or consent of the Board of Directors of the
Company. Kanfer hereby assigns to the Company any rights which he or she may
have in any such trade secret or proprietary information.
Kanfer agrees that for a period of two (2) years immediately following
his termination (voluntary or with cause) with the Company, he shall not
interfere with the business of the Company by inducing an employee or associate
to leave the Company, or by inducing a consultant or other independent
contractor to sever that person's relationship with the Company, or disrupting
the Company's relationships with customers, agents, representatives or vendors.
6.3 Non-Solicitation of Company's Employees or Independent Contractors.
During the term of this Agreement and for a period of two (2) years thereafter,
Kanfer specifically agrees not to solicit or encourage or cause others to
solicit or encourage any full-time employees, impersonators and/or any other
administrative or managerial personnel, to terminate their employment with the
Company.
7. TERMINATION.
7.1 Basis for Termination.
-29-
7.1.1 Kanfer's employment hereunder may be terminated at any
time by mutual agreement of the parties.
7.1.2 This Agreement shall automatically terminate on the last
day of the month in which Kanfer dies or becomes permanently
incapacitated. For purposes of this paragraph, "permanent incapacity"
shall mean mental or physical incapacity, or both, reasonably
determined by the Company's Board of Directors based upon a
certification of such incapacity by, in the discretion of the Company's
Board of Director's, either Kanfer's regularly attending physician or a
duly licensed physician selected by the Company's Board of Directors,
rendering Kanfer unable to perform substantially all of his duties
hereunder and which appears reasonably certain to continue for at least
six consecutive months without substantial improvement. Kanfer shall be
deemed to have "become permanently incapacitated" on the date the
Company's Board of Directors has determined that Kanfer is permanently
incapacitated and so notifies Kanfer based upon certification of the
same by a licensed physician.
7.1.3 Kanfer's employment may be terminated by the Company
"with cause," effective upon delivery of written notice to Kanfer given
at any time (without any necessity for prior notice) if any of the
following shall occur:
(a) In the event Kanfer's division fails to meet the
minimum budgetary targets during any calendar quarter computed
on a four quarter cumulative basis and/or cumulative yearly
total beginning in 1997 as set forth in Schedule "B" attached
hereto and incorporated herein by reference; or
(b) A material breach of this Agreement by Kanfer,
which breach has not been cured within thirty (30) days after
a written demand for such performance is delivered to Kanfer
by the Company that specifically identifies the manner in
which the Company believes that Kanfer has breached this
Agreement; or
(c) Any material acts or events which inhibit Kanfer
from fully performing his responsibilities to the Company in
good faith, such as (i) a felony criminal conviction; (ii) any
other criminal conviction involving Kanfer's lack of honesty
or Kanfer's moral turpitude; (iii) drug or alcohol abuse; or
(iv) acts of dishonesty, gross carelessness or gross
misconduct.
7.2 Payment Upon Termination. Upon termination under paragraph 7.1, the
Company shall pay to Kanfer within 10 days after termination an amount equal to
the sum of (a) Kanfer's Base Salary accrued to the date of termination; (b) any
Bonus accrued to date of termination for sales receipts that have been
collected; and (c) unreimbursed expenses accrued to the date of termination. The
Company shall pay Kanfer any Bonus amount(s) Kanfer may be entitled to hereunder
for events and shows procured and contracted by Kanfer's division on behalf of
the Company during the term of his employment, which the Company had not been
paid on as of the termination date, and will remit the same to Kanfer within
thirty (30) days of Company's actual receipt of the contracted amount. After any
such termination, the Company shall not be obligated to compensate Kanfer, his
estate or representatives except for the forgoing compensation then due and
owing, nor provide benefits to Kanfer described in Section 4, above (except as
provided by law).
7.3 Return of Company Records. In the event of the termination of this
Agreement for any reason, Kanfer agrees to deliver promptly to the Company all
equipment, notebooks, documents, memoranda, reports, files, books, and the like,
relating to the Company's business, which are or have been in his possession or
under his control.
7.4 Dismissal from Premises. At the Company's option, Kanfer shall
immediately leave the Company's premises on the date notice of termination is
given by Kanfer.
7.5 Unfair Competition after Termination. Because of his employment by
the Company, Kanfer will have access to trade secrets and confidential
information about the Company, its products, its customers and its methods of
doing business. Kanfer agrees that for a period of two (2) years after
termination of his employment he will not directly compete with Company in the
field of producing and/or creating live production shows. It is understood and
agreed upon that direct competition means the design, development, production,
promotion, presentation, or sale of products or services which are or could be
considered a derivative of the Company's Shows "Legends in Concert", "Xxxxxxx &
Xxxxx Get Married" or "Wake Up Xxxxxx X'Xxxxxx" and any Shows within the gaming
casino market. Kanfer further agrees that he will not directly or indirectly
disclose to any third person any confidential information or trade secrets,
including, but not limited to customer lists, as to which he gained knowledge
during the term of his employment.
8. INJUNCTIVE RELIEF.
The Company and Kanfer hereby acknowledge and agree that any breach or
default under Section 6 or 7, above, will cause damage to the Company in an
amount which is difficult, if not impossible, to ascertain. Accordingly, in
addition to any other relief to which the Company may be entitled, the Company
shall be entitled to such injunctive relief as may be ordered by any court of
competent jurisdiction including, but not limited to, an injunction restraining
any violation of Section 7 above.
9. MISCELLANEOUS.
9.1 Kanfer's Right to "Put" Vested Shares. Upon termination of this
Agreement, either by the natural passage of time or at any time and for any
reason precedent thereto, Kanfer will have the option to "put" (re-convey) to
the Company the 55,000 shares that were issued to him in connection with the
merger of Interactive Events, Inc. with On Stage Entertainment, Inc. In exchange
for the return of said 55,000 shares, the Company hereby agrees to do the
following: (i) pay Kanfer $100 as good an valuable consideration therefore; and
(ii) relieve Kanfer of his obligations contained herein that heretofore
prohibited Kanfer to compete with the Company by allowing Kanfer to solicit,
contact and otherwise provide services to his clients precedent to is employ
with the Company. Notwithstanding the above, Kanfer shall expressly not be
relieved of his obligation not to complete with the Company by: (i) booking any
look-alike or other show containing impersonators; or (ii) booking any show
within the main showroom of any casino. In the event Kanfer elects to exercise
his right to put said shares to the Company in return for the right to compete
with the Company as set forth above, nothing contained herein shall be deemed as
a waiver of the Company's right to prohibit Kanfer, for a twelve (12) month
period from the date Kanfer elects to exercise his right herein, from
soliciting, providing services for, or otherwise competing with the Company via
contacting the Company's clients, which clients specifically include, but are
not limited to those that had contact with the Company, before, during and after
the effective termination date of this Agreement. It should be noted, however,
that if Kanfer should elect to exercise his right to put his shares on the
Company that the Company would continue to own Interactive Events, Inc.
9.2 Transfer and Assignment. This Agreement is personal to Kanfer and
shall not be assigned or transferred without the prior written consent of the
Company. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective pretermitted heirs, personal
representatives, successors and assigns.
9.3 Severability. If for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be illegal, inoperative,
unenforceable or invalid as applied to any particular case or in all cases, such
circumstances shall not have the effect of rendering such provisions illegal,
inoperative, unenforceable or invalid in any other case or of rendering any
other provisions of this Agreement illegal, inoperative, unenforceable or
invalid. Nothing contained herein shall be construed to require the commission
of any act contrary to law. Should there be any conflict between any provisions
hereof and any present or future statute, law, ordinance, regulation, or other
pronouncement having the force of law, the latter shall prevail, but the
provision of this Agreement affected thereby shall be curtailed and limited only
to the extent necessary to bring it within the requirements of the law, and the
remaining provisions of this Agreement shall remain in full force and effect.
9.4 Governing Law. This Agreement is made under and shall be construed
in accordance with the laws of the State of Nevada.
9.5 Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties with respect to the subject matter of the
parties with respect to the subject matter hereof and supersedes all prior or
written agreements, arrangements, and understandings with respect thereto. No
representation, promise, inducement, statement or intention has been made by any
party hereto that is not embodied herein, and no party shall be bound by or be
held liable for any alleged statement no so set forth herein.
9.6 Modification. This Agreement may be modified, amended, superseded,
or canceled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties to be bound by any such modification, amendment, supersession,
cancellation or waiver.
9.7 Waiver. The waiver by either of the parties, express or implied, of
any right under this Agreement or any failure to perform under this Agreement by
the other party, shall not constitute or be deemed as a waiver of any other
right under this Agreement or of any other failure to perform under this
Agreement by the other party, whether of a similar or dissimilar nature.
9.8 Cumulative Remedies. Each and all of the several rights and
remedies provided in this Agreement, by law or in equity, shall be cumulative,
and no one of them shall be exclusive of any other right or remedy, and the
exercise of any one of such rights or remedies shall not be deemed a waiver of,
or an election to exercise, any other such right or remedy.
9.9 Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning and interpretation of this Agreement.
9.10 Survival. Any provision of this Agreement which imposes an
obligation after termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement and be binding on Kanfer and the
Company.
9.11 Right to Set-Off. Upon termination or expiration of this
Agreement, the Company shall have the right to set-off against the amounts due
Kanfer hereunder the amount of any outstanding loan or advance from the Company
to Kanfer.
9.12 Notices. Any notice under this Agreement must be in writing, may
be telecopied, sent by express 24 hour guaranteed courier, or hand-delivered, or
may be served by depositing the same in the United States mail, addressed to the
party to be notified, postage pre-paid and registered or certified with a return
receipt requested. The address of the parties for the receipt of notice shall be
as follows:
PARTY ADDRESS
----- -------
Company ON STAGE ENTERTAINMENT, INC.
0000 X. XXXXX, XXXXX 00
XXX XXXXX, XXXXXX 00000
ATTN: XXXXXXXXXXX X. XXXXX, ESQ.
Kanfer XXXXXXX XXXXXX
0000 XXXXX XXXXXXX, XXX. 0000-00
XXX XXXXX, XXXXXX 00000
Each notice given by registered or certified mail shall be deemed
delivered and effective on the date of delivery as shown on the return receipt,
and each notice delivered in any other manner shall be deemed to be effective as
of the time of actual delivery thereof. Each party may change its address for
notice by giving notice thereof in the manner provided for above.
9.13 Effective Date. This Agreement shall become effective as of the
date set forth on page 1 when signed by Kanfer and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.
By: /s/ Xxxxx Xxxx By: /s/ Xxxxxxx Xxxxxx
----------------- -------------------------
Xxxxx Xxxx Xxxxxxx Xxxxxx, an individual
President
On Stage Entertainment, Inc.
Schedule A -- Bonus
-------------------------------- --------------------------- ----------------------------
1996 1997 1998
SEPT - DEC KANFER ANNUAL KANFER ANNUAL KANFER
PROFIT* BONUS PROFIT* BONUS PROFIT * BONUS
-------------------------------- --------------------------- ----------------------------
200,000 1,583 680,000 4,750 1,200,000 4,750
225,000 3,167 765,000 9,500 1,350,000 9,500
250,000 6,333 850,000 19,000 1,500,000 25,000
275,000 7,917 935,000 23,750 1,650,000 30,000
300,000 9,500 1,020,000 28,500 1,800,000 35,000
325,000 11,083 1,105,000 33,250 1,950,000 40,000
350,000 12,667 1,190,000 38,000 2,100,000 45,000
375,000 15,833 1,275,000 47,500 2,250,000 52,500
400,000 19,000 1,360,000 57,000 2,400,000 57,000
425,000 22,167 1,445,000 66,500 2,550,000 66,500
450,000 25,333 1,530,000 76,000 2,700,000 76,000
475,000 28,500 1,615,000 85,500 2,850,000 85,500
500,000 31,667 1,700,000 95,000 3,000,000 95,000
* Profit
defined as
set forth in
the attached
Sales Plan.
$31,667 250,000
$95,000 850,000
$95,000 1,500,000
% OF % OF
TARGET BONUS
80% 5%
90% 10%
100% 20%
110% 25%
120% 30%
130% 35%
140% 40%
150% 50%
160% 60%
170% 70%
180% 80%
190% 90%
200% 100%
Schedule B -- Minimum Budgetary Requirements
For Quarter Ended Minium Required Profit* - or - Cumulative Required Profit
Mar-97 40,000 40,000
Jun-97 90,000 130,000
Sep-97 150,000 280,000
Dec-97 570,000 850,000
Mar-98 300,000 300,000
Jun-98 200,000 500,000
Sep-98 350,000 850,000
Dec-98 650,000 1,500,000
* Profit defined as
set forth in the
attached Sales Plan.
