AGREEMENT OF PURCHASE AND SALE
Exhibit
10.1
THIS
AGREEMENT for Purchase and Sale dated November 30, 2006 (the “Agreement”), is
between XXXXXXX XXXXXXXXX and XXXXX XXXXX (collectively, "Seller") and TIX
CORPORATION ("Buyer"), collectively known as the “Parties”.
RECITALS
A.
Seller
is the owner of the business known as STAND-BY GOLF and owns certain business
assets, as more fully set forth in Exhibit A below, comprising its business
located in Las Vegas, Nevada. Seller desires to sell its business to Buyer
and
Buyer desires to purchase it on the terms and conditions contained herein.
Each
of the parties agrees to cooperate fully with the other in executing all
additional documents required to effectuate the intended transfer.
B.
Buyer
and Seller warrant that each has authority from its Board of Directors,
partners, associates or other individuals or entities, whatsoever, as required
to enter into this Agreement. Seller desires to sell all of the assets used
in
its business and Buyer desires to buy from Seller on the terms and conditions
contained herein.
C.
Seller
has licensed the use of the trade name STAND-BY GOLF in several other states
to
other individuals or entities, none of which is subject to this Agreement Seller
represents and warrants that the terms of those license agreements exclude
those
licensees from competing or interfering with the business sold hereunder and
such non-competition provisions are enforceable against the licensees.
D.
Seller
shall train and consult with Buyer and make his best efforts to operate and
further enhance the business for a period of three years from the date of
execution hereof and Buyer shall employ Xxxxx Xxxxx on terms and conditions
as
set forth herein
TERMS
AND CONDITIONS
1. PURCHASE
AND SALE.
1.1 Assets
to be Sold.
Buyer
agrees to purchase from Seller, and Seller agrees to sell to Buyer, the assets
and business listed as Exhibit A which assets constitute all the assets used
to
operate Stand-By Golf in Las Vegas, Nevada. The purchased assets include all
rights, title and ownership of the name and the Stand-By Golf business operated
in the State of Nevada. Seller agrees to deliver the purchased assets free
and
clear of any loans, liabilities, liens, or obligations. Seller warrants that
there are no other parties who own an interest in the business and that no
third
party is required to consent to the sale of the purchased assets. Seller
warrants that Buyer shall have the exclusive use of the name STAND-BY GOLF
in
the State of Nevada. Seller agrees to execute the appropriate documents
necessary to effectuate a transfer of the purchased assets, including without
limitation an assignment of the fictitious business name STAND-BY GOLF, to
Buyer
1.2 Purchase
Price.
The
purchase price for the purchased assets shall be as follows:
(a)
Within a reasonable period of time after closing, (to issue the stock
certificate), Buyer shall render payment to Seller in the form of shares of
unregistered common stock of Buyer with a value at the close of trading on
the
date of closing of this transaction in the amount of One Hundred Thousand
($100,000.00) Dollars based upon the average bid closing bid price per share
for
ten (10) days prior to closing. However, one year from the Closing, if the
market value of this $100,000 worth of stock is trading for less than the price
at Closing, then Buyer agrees to issue additional shares to Seller until
Seller’s stock equals $100,000 at that time, but the parties agree that Buyer
will not have to issue such additional stock at a value of less than $1.50
per
share, even if the stock price is lower than $1.50 per share at that time.
All
stock
issued to Seller with regard to this transaction will be restricted under Rule
144 and Buyer agrees to cooperate with and assist Seller to effect any future
sales of Seller’s stock in compliance with Rule 144.
(b)
Earnout: Provided Seller does not resign or cease performing his continuing
obligations as set forth herein, during the three anniversary years from the
closing of this Agreement and based upon the net revenues [net revenues shall
be
determined by subtracting deemed operational expenses from the gross revenue
from the golf reservation business of Buyer] as follows.
Anniversary
Year 1: for each additional dollar of net revenues, Buyer shall issue two
dollars worth of unregistered common stock of Buyer to Seller. Such stock shall
be valued at the average closing BID price for ten (10) days prior to the
one-year anniversary date of this Agreement, but in no event shall the stock
price be less than $2.00 per share. The first $25,000 net revenue increase
during the Anniversary Year 1 only, shall be payable to Seller in cash equal
to
$50,000 paid by Buyer. During the first anniversary year, the yearly operational
expenses are deemed to be One Hundred Thousand ($100,000.00) Dollars.
For
example, for the first year ending one year from the Close, if the net revenue
from the Stand-By Golf business, after deducting payments to golf courses and
deducting operational expenses of $100,000.00, is Three Hundred Thousand
($300,000.00) Dollars, consequently, at the anniversary date of this Agreement,
Seller shall be issued common stock with a valuation of $550,000.00 and cash
of
$50,000.
Anniversary
Year 2: for each additional dollar of net revenues, Buyer shall issue two
dollars worth of unregistered common stock of Buyer to Seller. Such stock shall
be valued at the average closing BID price for ten (10) days prior to the
two-year anniversary date of this Agreement, but in no event shall the stock
price be less than $2.00 per share. During the second anniversary year the
yearly operational expenses are deemed to be One Hundred Fifteen Thousand
($115,000.00) Dollars.
Anniversary
Year 3: for each additional dollar of net revenues, Buyer shall issue two
dollars worth of unregistered common stock of Buyer to Seller. Such stock shall
be valued at the average closing BID price for ten (10) days prior to the
three-year anniversary date of this Agreement, but in no event shall the stock
price be less than $2.00 per share. During the third anniversary year the yearly
operational expenses are deemed to be One Hundred Thirty Thousand ($130,000.00)
Dollars.
For
example, if net revenue in year one was $200,000, and net revenue in anniversary
year two is Four Hundred Thousand ($400,000.00) Dollars, Seller shall receive
common stock with a valuation of $400,000.00 (two times the increase from the
prior year).
Each
of
Xxxxxxxxx and Xxxxx is an "Accredited Investor" as defined in Rule 501 of
Regulation D promulgated pursuant to the Securities Act of 1933 (“Securities
Act”), and each is acquiring the shares for his own account and not with a view
to the resale or distribution of any or all of such securities in violation
of
the Securities Act, or any applicable state securities laws. Each of Bartfiled
and Xxxxx acknowledge that the stock will not be registered under the Securities
Act or any state securities laws. Any
issuance of stock to Seller made pursuant to this Agreement shall be payable
to
50% to Xxxxxxx Xxxxxxxxx and 50% to Xxxxx Xxxxx.
2. ESCROW.
The
parties waive escrow; this transaction is deemed to be closed as of 5:00 p.m.
on
the day of execution by all parties.
3. OTHER
AGREEMENTS.
(a)
At
any time, upon three days notice, Buyer shall have the right to examine the
books and records, including electronic and computer data, of Seller’s business
in Nevada during the years 2004-2006.
(b)
As
part of the consideration for Buyer’s entering into this Agreement and in
consideration of the earn-out payments above, Seller shall use his best efforts
to operate, promote and enhance the business for a period of three years. Seller
shall use his best efforts to obtain golf tee times at high quality golf courses
at high demand start times with or without pre-payment or guarantees to the
golf
courses. At all times, the operation of the discount golf business shall be
under the sole direction of Buyer.
(c)
Seller shall indemnify, defend and hold Buyer harmless from any and all damages,
obligations, liabilities, costs or expenses relating to operation of the
business before the purchase of the business by Buyer and for any breach of
representations and warranties.
(d)
Buyer
shall
indemnify, defend and hold Seller harmless from any and all damages,
obligations, liabilities, taxes, costs or expenses relating to operation of
the
business after the purchase of the business by Buyer.
(e)
All
receivables of the business arising prior to the purchase belong to the Seller.
Buyer shall not assume any liabilities of the business; all liabilities
including without limitation taxes arising prior to the purchase shall remain
the obligation of Seller. Seller shall pay all sales tax owed arising from
operation of this Agreement.
(f)
Buyer
shall employ Xxxxx Xxxxx for a period of three years at an annual salary of
Forty-Eight Thousand [$48,000.00] Dollars plus the usual and customary benefits
and vacation period that the Buyer provides each of its employees. As and for
additional consideration for Buyer’s entering into this Agreement, Xxxxx Xxxxx
agrees to be employed under the aforementioned terms and further agrees to
use
his best efforts to contribute positively to the golf business as contemplated
herein. Nothing herein shall be deemed to create a contract of employment of
Xxxxx Xxxxx and, in any event, Buyer reserves the right to terminate the
employment of Xxxxx Xxxxx if the results of such employment are not productive
and beneficial to the Buyer, all in Buyer’s sole discretion. However, so long as
Xxxxxxx Xxxxxxxxx remains active in the business, he must reasonably agree
to
and consent to a termination of Xxxxx Xxxxx.
(g)
As
and for additional consideration for Buyer’s entering into this Agreement, for a
period of five years from closing, Seller hereby conveys a first right of
refusal to Buyer to purchase any or all of the licensed locations in the United
States which may be offered to Seller from any other licensee. In the event
any
such licensed location is offered to Seller to purchase, Seller shall notify
Buyer in writing within two days of receiving such offer and provide the terms
and conditions for such purchase. Buyer shall have five business days following
receipt of notice to inform Seller in writing that it will purchase such
licensed location at such offered price.
Within
five years from closing, if Buyer intends to discontinue the Stand-By Golf,
(or
other surviving named entity), business in Nevada, Seller shall have the first
right of refusal to purchase the business from Buyer at a price of Ten [$10.00]
Dollars and the assumption of all liabilities associated with the business.
(h)
As
and for additional consideration for Buyer’s entering into this Agreement,
Seller agrees that he shall not engage in any competing business in any
capacity, directly or indirectly, within the State of Nevada, for a period
of
five years from the date hereof unless Buyer has chosen to discontinue operation
of the business not as a result of such competition. Any business which involves
the booking of golf “tee times” shall be deemed competing for the purposes of
this provision. Seller acknowledges that violation of this non-competition
provision would cause irreparable harm and that Buyer shall be entitled to
enforce this provision with injunctive or other equitable relief without bond
and further agrees that if any portion of this provision is unenforceable,
it
shall not effect the enforceability of the Agreement and any court shall have
the authority to enforce such portion of the provision which is enforceable
against Seller.
(i)
As
and for additional consideration for Buyer’s entering into this Agreement,
commencing upon execution hereof and continuing for a period of one year [the
first annual golf season] and subject to availability, Seller shall either
pay
for or guarantee payment for golf tee times, as required, to ensure the growth
and tee time availability of the business. Both parties agree that this is
a
material term and condition without which provision Buyer would not enter into
this Agreement and a breach of such provision shall terminate all of the Earnout
payments. In each such instance of pre-payment by Seller, when Buyer receives
the proceeds for any of the specific golf tee times paid for in advance by
Seller, Buyer shall repay Seller within seven days of its receipt of proceeds.
Seller shall not be repaid in the event any if the pre-paid or guaranteed golf
tee times are not sold by Buyer.
(j)
Seller warrants that no other Stand-By Golf licensed party has any right or
interest in doing business under the Stand-By Golf name in the State of Nevada,
nor do any of such parties have any right of first refusal or option to operate
Stand-By Golf in Nevada. Seller further warrants that he owns one hundred
percent of the Stand-By Golf business in Nevada. Seller shall provide Buyer
copies of all of Seller’s outstanding license agreements in the United States
prior to execution hereof.
4. GENERAL
PROVISIONS.
4.1
Assignment.
This
Agreement shall be binding upon and shall inure to the benefit of Buyer and
its
respective representatives, successors and assigns. Buyer shall have the right
to assign this Agreement or any interest or right under this Agreement to any
party. Seller shall not have the right to assign his duties and responsibilities
of this Agreement without first obtaining the express written consent of Buyer.
4.2.
Attorney's
Fees.
In
any
action between the parties to enforce any of the terms or provisions of this
Agreement, the prevailing party in the action shall be entitled, in addition
to
damages, injunctive relief or other relief, to its reasonable costs and
expenses, including, without limitation, reasonable attorneys'
fees.
4.3.
Approvals
and Notices.
Any
approval, disapproval, demand, document or other notice ("Notice") which either
party may desire to give to the other party must be in writing and may be given
by personal delivery, facsimile or by certified mail, Federal Express or
comparable delivery service, to the party to whom the
Notice
is
directed at the address of the party set forth below or at any other address
as
the parties may later designate:
TO SELLER: | XXXXXXX XXXXXXXXX | |
_______________________________ | ||
_______________________________ | ||
Las Vegas, Nevada | ||
Phone: ______________________________ | ||
Fax: ________________________________ | ||
TO BUYER: | TIX CORPORATION | |
00000
Xxxxxxx Xxxxx
Xxxxx
000
Xxxxxx
Xxxx, Xx. 00000
Phone:
818/000-0000
Fax:
818/000-0000
|
Any
notice given under this paragraph shall be deemed received on the date indicated
on the receipt for certified mail, telecopy confirmation or Federal Express,
but
if neither of those methods are used, upon actual receipt by the intended
party.
4.4
Interpretation.
This
Agreement shall be construed under the laws of the State of Nevada and shall
be
enforced in Xxxxx County.
4.5
Titles,
Captions and Paragraph Numbers.
Titles
and captions are for convenience only and shall not constitute a portion of
this
Agreement. Reference to Agreement numbers are to paragraphs as numbered in
this
Agreement unless expressly stated otherwise.
4.6.
Gender.
As
used
in this Agreement, masculine, feminine or neuter gender and the singular or
plural number shall each be deemed to include the others where and when the
context so dictates.
4.7. No
Waiver.
A
waiver
by either party of a breach of any of the covenants, conditions or agreements
under this Agreement to be performed by the other party shall not be construed
as a waiver of any succeeding breach of the same or other covenants, agreements,
restrictions or conditions of this Agreement.
4.8.
Modifications.
Any
alteration, change or modification of or to this Agreement, in order to become
effective, shall be made in writing and in each instance signed on behalf of
each party.
4.9. Severability.
If
any
term, provision, condition or covenant of this Agreement or its application
to
any party or circumstances shall, to any extent, be held invalid or
unenforceable, the remainder of this Agreement, or the application of the term,
provision, condition or covenant to persons or circumstances other than those
as
to whom or which it is held invalid or unenforceable, shall not be affected,
and
shall be valid and enforceable to the fullest extent permitted by
law.
4.10
Merger
of Prior Agreements and Understandings.
This
Agreement contains the entire understanding between the parties relating to
the
transaction contemplated by this Agreement. All prior or contemporaneous
agreements, understandings, representations and statements, oral or written,
are
merged in this Agreement and shall be of no further force or
effect.
4.11
Survival
of Representations and Warranties.
All
representations, warranties and covenants under this Agreement shall survive
close of purchase.
4.12 Time
of Essence.
Time
is
expressly made of the essence with respect to the performance by Buyer and
Seller of each and every obligation and condition of this Agreement.
4.13 Possession
of Property.
Buyer
shall be entitled to possession and ownership of all of the assets as described
in Exhibit A upon execution of this Agreement
4.14
Counterparts.
This
Agreement may be signed in multiple counterparts which, when signed by all
parties, constitute a binding agreement.
4.15
Computation
of Time.
The
time
in which any act is to be done under this Agreement is computed by excluding
the
first day and including the last day, unless the last day is a holiday or
Saturday or Sunday, and then that day is extended to the next business
day.
DATED:
_____________________
SELLER | BUYER | |
/s/ Xxxxxxx Xxxxxxxxx | ||
XXXXXXX XXXXXXXXX | TIX CORPORATION | |
By: /s/ XXXXX XXXXXXX, | ||
Its: President | ||
/s/ Xxxxx Xxxxx | ||
XXXXX XXXXX |
EXHIBIT
A
1. |
Trade
name: STAND-BY GOLF currently registered in
Nevada.
|
2. |
Goodwill.
|
3. |
Yellow
Pages and all other outstanding Directory and media
advertising.
|
4. |
Telephone
number(s).
|
5. |
All
Internet websites and domain names utilized for the Las Vegas Stand-By
Golf operation.
|
6. |
Customer
lists, including names, addresses, telephone numbers, email
addresses.
|
7. |
Golf
booking software, including, but not limited to, licensing, maintenance
contracts, disks, manuals and
instructions.
|
8. |
All
logos, artwork and documents used in the operation, marketing and
promotion of the business.
|