COMMON STOCK PURCHASE AGREEMENT
by and between
ON STAGE ENTERTAINMENT, INC.
(a Nevada corporation)
and
XXXXXXX X. XXXXXX
(an individual)
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT is made as of February ___, 1999, by and
among ON STAGE ENTERTAINMENT, INC., a Nevada corporation ("On Stage") and
XXXXXXX X. XXXXXX, an individual ("Kanfer").
RECITALS:
WHEREAS, on or about November 1, 1996, On Stage and Kanfer entered into
a Common Stock Purchase Agreement for the acquisition of Kanfer's limited
engagement business in Georgia entitled Interactive Events, Inc., a Georgia
corporation ("Interactive Events Acquisition"); and
WHEREAS, pursuant to the express terms of the Interactive Events
Acquisition, Kanfer transferred his ownership in Interactive Events, Inc., a
Georgia corporation to On Stage in exchange for, among other items: (1) 30,304
shares of On Stage common stock; (2) an option to purchase 15,000 shares of On
Stage common stock at a strike price of $5.00 per share; and (3) an employment
agreement through December 31, 1998; and
WHEREAS, Kanfer's Employment Agreement has subsequently expired and the
parties hereto are desirous of entering into this Agreement to unwind the
Interactive Events Acquisition, save for the Covenant Not to Compete and the
Assignment of Shows paragraphs contained therein, and to continue Kanfer and On
Stage's working relationship.
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 1
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).
"Agreement" means this Agreement and the schedules hereto.
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"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 2.3.
"Code" means the Internal Revenue Code of 1986, as amended, and the
Regulations promulgated thereunder.
"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.
"GAAP" means United States generally accepted accounting principles.
"GGCL" means the Georgia General Corporations Law.
"Interactive" means Interactive Events, Inc., a Georgia corporation.
"Interactive Shares" means all of the outstanding shares of
Interactive Common Stock.
"IRS" means the Internal Revenue Service.
"Kanfer Options" means Kanfer's option to acquire 15,000 On Stage
Shares dated November 1, 1996 along with Kanfer's option to purchase
19,835 On Stage Shares dated September 1, 1996.
"Kanfer Shares" means the 30,304 shares of On Stage Common Stock owned
by Kanfer.
"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.
"Person" means any natural person, corporation, partnership,
proprietorship, association, trust or other legal entity.
"Real Property Lease" is defined in Section 3.5.
"Securities Act" means the Securities Act of 1933, as amended, and the
Regulations promulgated thereunder.
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"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
2.1 Sale and Purchase of Interactive Shares. Subject to the terms and conditions
of this Agreement, at the Closing, On Stage shall sell, transfer, convey, assign
and deliver to Kanfer, and Kanfer shall purchase, acquire and accept from On
Stage, all the Interactive Shares free and clear of all liens, claims, charges,
restrictions, equities and encumbrances of any kind. It is understood that for
purposes of this Agreement, Kanfer is re-purchasing/re-acquiring his former
business which he sold to On Stage including all assets, phone numbers, real and
personal property, customer lists, cast lists, goodwill and anything else that
is necessary for the continued operation of the Interactive Events business.
2.2 Issuance and Transfer of Shares. In consideration for the Interactive Shares
Kanfer shall return to On Stage the: (a) Kanfer Shares; and (b) Kanfer Options.
2.3 Closing. The Closing shall take place on or before February 1, 1999. The
date on which the Closing occurs is referred to herein as the "Closing Date."
2.4 Delivery to Kanfer . At the Closing, On Stage shall deliver to Kanfer: (i)
certificates representing the Interactive Shares; and (ii) all such other
endorsements, assignments and other instruments as are necessary to vest in
Kanfer title to the Interactive Shares free and clear of any adverse claims.
2.5 Delivery to On Stage. At the Closing, Kanfer shall deliver to On Stage the
number of Kanfer Shares and Kanfer Options referred to in Section 2.
2.6 Further Assurances. After the Closing, Kanfer 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 Kanfer Shares or
Interactive Shares, as the case may be, being transferred hereunder.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ON STAGE
On Stage each hereby represents and warrants to Kanfer as follows:
3.1 Corporate Status. Interactive is a corporation duly organized, validly
existing and in good standing under the laws under which it was incorporated.
3.2 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 in
accordance with their terms.
3.3 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. 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. All of the Interactive Shares are duly and
validly authorized and issued, fully paid and non-assessable. On Stage is the
sole record owner of all of the Interactive Shares. Interactive complied with
all applicable Regulations in connection with the issuance of all of the
Interactive Shares.
3.4 Title to Interactive Assets and Related Matters. To the best knowledge of On
Stage, Interactive has good and marketable title to, or valid leasehold
interests in, all of the Interactive Assets, a true and correct list of which is
attached hereto as Schedule 3.4. 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.
3.5 Real Property. Schedule 3.5 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 On Stage on behalf of 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"). Neither On Stage nor
Interactive are currently in Default under any of the Real Estate Leases, nor
are they aware of any Default by any of the lessors thereunder.
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3.6 Certain Personal Property. Schedule 3.6 is an asset schedule, describing and
specifying the location of all items of tangible personal property that are to
be transferred to Kanfer pursuant to this Agreement. All personal property
listed on Schedule 3.6 are being transferred "As Is" with no warranties either
express or implied.
3.7 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.
3.8 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 Directors or
committees thereof and stockholders. The stock record book of Interactive is
complete and correct.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF KANFER
Kanfer hereby represents and warrants to On Stage as follows:
4.1 Consents and Approvals. Neither the execution and delivery by Kanfer of the
Transaction Documents to which it is or will be a party, nor the performance of
the Transactions to be performed by Kanfer, will require any filing, consent or
approval.
4.2 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 Interactive Shares will be acquired
for investment for Kanfer's own account, not as a nominee or agent, and not with
a view to transfer. Kanfer represents that it has full power and authority to
enter into this Agreement.
4.3 Restricted Securities. Kanfer understands that the Interactive 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 Interactive Shares shall bear a legend
to such effect.
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ARTICLE 5
COVENANTS OF KANFER
5.1 Expenses. Kanfer shall pay all of the legal, accounting and other expenses
incurred by Kanfer in connection with the Transactions.
ARTICLE 6
CONDITIONS PRECEDENT TO THE TRANSACTIONSARTICLE
VIII.CONDITIONS PRECEDENT TO THE TRANSACTIONS
6.1 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) Assumption of Atlanta Obligations. Kanfer, through his
company Real Source Publications, will assume the lease agreement for the office
located at West One Business Park, 0000 XxxXxxx Xxxx, Xxxxx 00, Xxxxxxxx,
Xxxxxxx 00000-0000, all of the equipment leases and change all utilities into
his name within ten (10) days from the date of this Agreement. Kanfer will use
his good faith best efforts to have On Stage removed from all equipment and
office leases. Until Kanfer is successful in removing On Stage from said leases,
Kanfer will personally indemnify, save and otherwise hold On Stage harmless from
any default under the office and equipment lease agreements. Once On Stage is
removed from all responsibility under the office and equipment lease agreements,
Kanfer will be released from personal liability therefrom.
(b) Consents and Approvals. Kanfer shall have obtained all governmental and
third party consents and approvals necessary, proper or advisable to consummate
the Transactions.
(c) Outstanding Accounts Recievable/Accounts Payable. Kanfer has indicated on
Schedule 6.1(c) which accounts receivable he thinks are recoverable and will
utilize his good faith best efforts to assist On Stage with collection of these
outstanding accounts and the payment of the same to On Stage. Kanfer has also
indicated on Schedule 6.1(c) which accounts payable are due (for their Atlanta
office) as of the date of this Agreement and On Stage agrees that they will be
solely responsible for the payment of these accounts. On Stage further agrees
that they will be responsible for payment of any and all accounts receivable
incurred by them during their ownership of Interactive Events up to the date of
this Agreement.
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(d) Release of Liability. Simultaneous with the execution of this Agreement, On
Stage and Kanfer shall each execute a Release of Liability in the forms attached
hereto on Schedule 6.1(d).
(e) Return of Options. Kanfer shall deliver to On Stage the Kanfer Options,
which will be considered null and void, ab initio, upon the execution of this
Agreement.
6.2 Conditions to Obligations of Kanfer. The obligations of Kanfer to consummate
the Transactions shall be subject to the satisfaction or waiver, on or before
the Closing, of each of the following conditions:
(a) Assignment of Office and Equipment Leases and Title to Personal Property. On
Stage shall assign to Kanfer all of its rights in the office and equipment
leases for the Atlanta property, along with the title to the personal property
listed on Schedule 3.4 attached hereto.
(b) Right to Represent Legends in Concert. On Stage shall have executed the
Right to Represent Legends in Concert in the form as is attached hereto on
Schedule 6.2. It is expressly understood that Kanfer is
re-purchasing/re-acquiring his list of Interactive Clients and Actors listed on
Schedule 4.23 of the Interactive Events Acquisition Agreement. Kanfer warrants
that neither he nor anyone working for him in the Atlanta office since November
1, 1996 has ever sold, produced or otherwise made to happen a Legends in Concert
show or derivative thereof for any of the clients on Schedule 4.23, a true and
correct copy of said list is attached to the Right to Represent Legends
agreement contained on Schedule 6.2.
ARTICLE 7
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
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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 8
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.
ARTICLE 9
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 Kanfer:
Xxxxxxx X. Xxxxxx
======================
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ARTICLE 10
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 11
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 original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
ARTICLE 12
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 13
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 14 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.
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ARTICLE 15
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.
Kanfer shall indemnify and hold On Stage harmless against all liabilities which
may be asserted by third parties with respect to assets sold by On Stage as a
result of noncompliance with any such bulk sales laws.
ARTICLE 16
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 17
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.
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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:___________________________________
Name:
Title:
XXXXXXX X. XXXXXX,
an individual
--------------------------------------
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SCHEDULE 3.4
Interactive Events Assets
SCHEDULE 3.5
Real Property
NOT APPLICABLE
SCHEDULE 3.6
Personal Property
SEE SCHEDULE 3.4--INTERACTIVE EVENTS ASSETS
SCHEDULE 6.1(c)
Outstanding Accounts Receivable/Accounts Payable
SCHEDULE 6.1(d)
Release of Liability
SCHEDULE 6.2
Form of Rights of Representation Agreement
