ASSET PURCHASE AGREEMENT by and between COLLECTIBLE CONCEPTS, INC. as the Buyer and PACIFICAP ENTERTAINMENT HOLDINGS, INC. as the Seller Dated on December 21, 2005 (effective date, January 20, 2006)
Exhibit
10.5
by
and
between
COLLECTIBLE
CONCEPTS, INC.
as
the
Buyer
and
PACIFICAP
ENTERTAINMENT HOLDINGS, INC.
as
the
Seller
Dated
on
December 21, 2005
(effective
date, January 20, 2006)
==================================================================================================================================================================
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TABLE
OF CONTENTS
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ARTICLE
I PURCHASE AND
SALE OF ASSETS AND ASSUMPTION OF LIABILITIES
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Page
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Section
1.1
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Purchase
and Sale of Assets
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1
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Section
1.2
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Purchase
Price
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1
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Section
1.3
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Closing:
Closing Date
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2
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Section
1.4
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Post
Closing Access
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3
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Section
1.5
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Further
Assurances
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3
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Section
1.6
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Allocation
of Purchase Price
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3
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ARTICLE
II REPRESENTATONS
AND WARRANTIES OF SELLER
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4
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|
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Section
2.1
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Organization
and Qualifications of Seller
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4
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Section
2.2
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Organizational
Documents
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4
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Section
2.3
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Authority:
Binding Obligation
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4
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Section
2.4
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No
Conflict: Required Consents
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5
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Section
2.5
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Absence
of Undisclosed Liability
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5
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Section
2.6
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Personal
Property
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5
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Section
2.7
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Intellectual
Property
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5
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Section
2.8
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No
Material Adverse Change
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7
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ARTICLE
III REPRESENTATION
AND WARRANTIES OF BUYER
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7
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Section
3.1
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Organization
of CCGI
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7
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Section
3.2
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Authority:
Binding Obligation
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7
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Section
3.3
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No
Conflict: Required Consents
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7
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Section
3.4
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Broker
Fees
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8
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ARTICLE
IV COVENANTS
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8
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Section
4.1
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Events
of Default
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8
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Section
4.2
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Notice
of Default
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10
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Section
4.3
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Consummation
of Agreement
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10
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Section
4.4
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Notice
to Third Parties
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10
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Section
4.5
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Confidentiality
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10
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Section
4.6
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Supplements
to Schedules
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11
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Section
4.7
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Compliance
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11
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Section
4.8
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Severability
of Covenants
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11
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ARTICLE
V CONDITIONS
OF
CLOSING
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12
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Section
5.1
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Condition
to the Obligations of the Buyer
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12
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Section
5.2
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Conditions
to the Obligations of Seller
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12
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Section
5.3
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Further
Conditions to the Obligations of the Buyer and Seller
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13
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Section
5.4
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Condition
Subsequent, and Effectiveness of Agreement
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13
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ARTICLE
VI RIGHTS AND
OBLIGATIONS SUBSEQUENT TO CLOSING
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13
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Section
6.1
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Survival
of Warranties
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13
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ARTICLE
VII
TERMINATION
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13
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Section
7.1
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Right
to Terminate
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13
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Section
7.2
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Obligations
to Cease
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14
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ARTICLE
VIII
INDEMNIFICATION
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14
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Section
8.1
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Indemnification
of Seller
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14
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Section
8.2
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Indemnification
of CCGI
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15
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Section
8.3
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Procedures
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15
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Section
8.4
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Settlement
of Claims
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15
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ARTICLE
IX MISCELLAENOUS
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16
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Section
9.1
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Fees
and Expenses
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16
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Section
9.2
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Notices
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16
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Section
9.3
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Governing
Law
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17
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Section
9.4
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Entire
Agreement
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17
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Section
9.5
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Assignability:
Binding Effect
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17
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Section
9.6
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Execution
in Counterparts
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18
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Section
9.7
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Amendments
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18
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Section
9.8
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Publicity
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18
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Section
9.9
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Agreement
to Continue in Full Force
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18
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Section
9.10
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Severability
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18
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ASSET
PURCHASE AGREEMENT dated as of December 21, 2005 (this "Agreement")
by and
among COLLECTIBLE CONCEPTS GROUP, INC. , Delaware corporation (“CCGI”
or
the
"Buyer")
and
PACIFICAP ENTERTAINMENT HOLDINGS, INC., a Delaware corporation ("Seller")
(CCGI,
Buyer and the Seller are each hereinafter individually referred to as a
"Party"
and
collectively as the "Parties").
W
I T N E
S S E T H:
WHEREAS,
the Seller is engaged, inter alia, in the business of financing films,
and also
owns certain intellectual property consisting of nostalgic sports footage
and a
vintage cartoon library as defined in Schedule 1.1(a) (hereinafter, the
“Film
Library”) for the purposes of licensing, selling or broadcasting such
intellectual property (the "Film
Library Business");
WHEREAS,
Seller desires to sell, and the Buyer desires to purchase and acquire all
of the
Assets (as hereinafter defined) including, without limitation, all intellectual
property, receivables, and contractual rights and the other assets designated
in
this agreement and utilized in the Seller’s Film Library Business;
WHEREAS,
in connection with the acquisition of the Assets, Seller desires to assign
and
the Buyer has agreed to assume certain liabilities and obligations of the
Seller
as more fully described herein; and
WHEREAS,
to induce the Buyer to proceed with the transactions described in this
Agreement, Seller is prepared to make certain representations, warranties
and
covenants to Buyer, and to provide certain rights of indemnification to
Buyer.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements set
forth
herein, and for other good and valuable consideration the receipt and adequacy
of which is hereby acknowledged, and intending to be legally bound hereby,
the
Parties hereto agree as follows:
ARTICLE
I
PURCHASE
AND SALE OF ASSETS
Section
1.1 Purchase
and Sale of Assets
. Upon
the
terms and subject to the conditions hereinafter set forth and the performance
by
the Parties hereto of their respective obligations hereunder, the Seller
shall
sell, transfer, convey, assign and deliver free from all liens, charges
and
encumbrances to Buyer, and Buyer shall purchase, acquire and accept from
Seller,
on the Closing Date (as defined herein), the right, title and interest
in all of
the properties and assets of Seller including without limitation, the following
(the "Assets"):
(a) all
films
of sporting events and cartoons as defined on Schedule 1.1(a) and all records
with respect to the film library’s development, content development, product
development, costs, and all procedures, research and development files,
data and
other records; and
(b) the
unused brochures, literature, advertising, catalogues, photographs, display
materials, media materials, packaging materials and other similar items
which
have been produced by or for the Seller;
(c) all
Intellectual Property (as defined herein) rights of Seller (whether owned,
licensed or otherwise), including without limitation (i) rights in the
names
"Cavalcade of Sports Media, Inc. and any other name utilizing the names
set
forth on Schedule 1.1(a), (ii) the rights in the tradenames, information
and
materials contained in Seller's Websites, and (iii) all claims against
third
parties for infringement of such Intellectual Property rights;
(d)
the
Parties acknowledge that the Seller has previously granted an exclusive
worldwide license to ▇▇▇▇▇ Film and Entertainment Corp. to use, modify,
reproduce, distribute, display and transmit the contents of the film library
as
listed on Schedule 1.1(a), the Agreement being attached hereto as Schedule
1.1(d), which agreement shall transfer to Buyer with all rights granted
therein.
Section
1.2 Purchase
Price.
(a) (i) The
aggregate purchase price (the "Purchase
Price")
for
the Assets being sold hereunder shall be $250,000 under the following
terms:
(ii) Seller
will be repaid, with interest, within three years of the date hereof on
December
21, 2010, the “Maturity Date”), at the principal offices of the Seller, the
principal sum of
Two Hundred Fifty Thousand Dollars ($250,000) in
such
coin or currency of the United States of America as at the time of payment
shall
be legal tender for the payment of public and private debts, and to pay
interest
on the outstanding principal sum hereof at the rate of six percent (6%)
per
annum. An initial payment of $50,000 is due within ninety (90) days of
this
Agreement. Any principal payment or interest payment on the unpaid principal
amount of this Note not paid when due, whether at the Maturity Date, on
the
effective date of an Early Termination Event, by acceleration or otherwise,
shall bear interest at twelve percent (12%) or the maximum rate permissible
by
law, whichever is less. Payment of Principal and accrued interest, if any,
shall
be payable on the Maturity Date in like coin or currency to the Seller
hereof at
the address of the Seller designated above or at such other place as the
Seller
shall have notified the Company in writing at least five (5) days before
the
Maturity Date, provided that any payment otherwise due on a Saturday, Sunday
or
legal Bank holiday may be paid on the following business day.
-2-
(b) On
the
Closing Date, Seller shall pay all municipal, county, state and federal
sales
and transfer taxes, if any, incurred by the Buyer or Seller in connection
with
the transaction contemplated by this Agreement. Each Party shall in a timely
manner sign and swear to any return, certificate, questionnaire or affidavit
as
to matters within its knowledge required in connection with the payment
of any
such tax.
Section
1.3 Closing;
Closing Date.
Subject
to the fulfillment or waiver of the conditions precedent set forth in Article
V
of this Agreement, the closing of the purchase and sale provided for in
this
Agreement (herein called the "Closing")
shall
be held at the offices of Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ on Wednesday, December 21, 2005 or such
other
location, date and time as to which the parties may agree (such date and
time
being referred to herein as the "Closing
Date").
Section
1.4 Post-Closing
Access.
(a) After
the
Closing, the Buyer shall provide to the Seller and its accountants and
attorneys, for any reasonable legal or business purpose, including defending
third party claims and preparing such tax returns of Seller as may be reasonably
required after the Closing, copies of relevant portions of the books and
records
of Seller delivered to the Buyer under this Agreement.
(b) After
the
Closing, the Seller shall provide to the Buyer and its accountants and
attorneys, for any reasonable legal or business purpose, including defending
third party claims and preparing such tax returns of Buyer as may be reasonably
required after the Closing, copies of relevant portions of the books and
records
of Buyer delivered to the Seller under this Agreement.
Section
1.5 Further
Assurances.
(a) Seller
shall, from time to time on being reasonably required to do so by the Buyer,
now
or at any time in the future, do or procure the doing of all such acts
and/or
execute or procure the execution of all such documents in a form reasonably
satisfactory to the Buyer as the Buyer may reasonably consider necessary
for
giving full effect to this Agreement and securing to the Buyer the full
benefit
of the rights, powers and remedies conferred upon the Buyer in this
Agreement.
(b) Seller
shall promptly transfer or deliver to the Buyer any of the Assets delivered
to,
or retained or received by, Seller after the Closing Date.
-3-
Section
1.6 Allocation
of Purchase Price.
The
Purchase Price shall be allocated among the Assets being sold hereunder
in the
manner required by Treasury Regulation §1.1060-1T as determined by Buyer (the
"Allocation").
Buyer
shall deliver its determination with respect to the Allocation within ninety
(90) days of the Closing Date. Seller agrees that: except as otherwise
required
by law (i) the Allocation shall be binding on Seller for all federal, state,
local and foreign tax purposes, and (ii) Seller shall file with its respective
federal income tax returns consistent IRS Forms 8594 - Asset Acquisition
Statements under Section 1060, including any required amendments thereto
which
shall reflect the allocation set forth in the Allocation pursuant to this
Section 1.6. The Parties acknowledge that the allocation of the Purchase
Price
provided for in the Allocation will be reasonable and based upon the fair
market
value of each component of the Assets.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF SELLER
Seller
hereby represents and warrants to the Buyer and CCGI as follows:
Section
2.1 Organization
and Qualifications of Seller.
Seller
is a corporation duly organized, validly existing and in good standing
under the
laws of the State of Delaware with full corporate power and authority to
own,
operate or lease its Assets and to carry on its business as currently conducted.
Seller is duly qualified to conduct business as a foreign corporation and
is in
good standing in the states, countries and territories listed in Section
2.1 and
in each jurisdiction where the nature of its business or the ownership,
operation or leasing of its Assets makes such qualification necessary.
Seller
has no subsidiaries, other than inactive subsidiaries which have not conducted
any business.
Section
2.2 Organizational
Documents.
Seller
has furnished to the Buyer a true and complete copy of its Restated Certificate
of Incorporation and By-Laws, as in effect on the date hereof.
Section
2.3 Authority;
Binding Obligation.
Seller
has the requisite authority and power to enter into, execute and deliver
this
Agreement and each agreement, document and instrument to be executed and
delivered by Seller pursuant to this Agreement and to perform its obligations
hereunder. The execution, delivery and performance by Seller of this Agreement
and each such other agreement, document and instrument have been duly authorized
by all necessary action of Seller, and no other action on the part of Seller,
is
required in connection therewith. This Agreement has been duly executed
and
delivered by Seller and constitutes a valid and binding obligation of Seller
enforceable in accordance with the terms hereof and each agreement, document
and
instrument executed and delivered by Seller pursuant to this Agreement
constitutes, or when executed and delivered will constitute, valid and
binding
obligations of Seller enforceable in accordance with their
terms.
-4-
Section
2.4 No
Conflict; Required Consents.
The
execution, delivery and performance by Seller of this Agreement and each
agreement, document and instrument contemplated hereby, the fulfillment
of and
compliance with the terms and provisions hereof and thereof and the consummation
by the Seller of the transactions contemplated hereby and thereby, do not
and
will not: (i) conflict with, or violate any provision of, the Restated
Certificate of Incorporation or By-Laws of Seller; (ii) conflict with,
result in
any breach of, or constitute a default (or an event that with notice or
lapse of
time or both would become a default) or result in the termination or
acceleration under any agreement to which Seller is a party or by which
Seller,
or any of the Assets, may be bound; (iii) result in or require the creation
or
imposition of, or result in the acceleration of, any indebtedness or any
lien of
any nature upon, or with respect to any of the Assets; (iv) require any
consent,
approval, authorization or permit of, or filing with or notification to,
any
person not party to this Agreement.
Section
2.5 Absence
of Undisclosed Liability.
To the
best of the Seller’s knowledge, the Seller has no liabilities or obligations of
any nature (absolute, accrued, contingent or otherwise) relating to the
Business.
Section
2.6 Personal
Property.
(a) Seller
has good and marketable title to all of the tangible personal property
utilized
in the Business. None of such personal property is subject to any mortgage,
pledge, lien, conditional sale agreement, security agreement, encumbrance,
fixed
charge or floating charge, or other charge.
(b) The
Assets will be sufficient to allow the Buyer to conduct the Business subsequent
to the Closing and, at the Closing, title to the Assets will pass to the
Buyer
free and clear of all mortgages, pledges, liens, encumbrances and charges
of any
kind.
Section
2.7 Intellectual
Property.
(a) Schedule
2.7 sets forth a true, correct and complete list of all patents, trade
names,
trademark, data compilations, masks and models, domain names, service ▇▇▇▇
and
copyright registrations, all applications for any of the foregoing, all
common
law trademarks, service marks, copyrights and trade names, slogans and
all
permits, grants, franchises and licenses or other rights relating to any
of the
foregoing (including any registrations or pending applications for registration
of any of the foregoing) that are attributable to the conduct of, used
in or
relating to the Business (the "Intellectual
Property"),
copies of any documentation in respect of which have been delivered or
made
available to the Buyer. Seller has exclusive ownership or has a license
to use
all of the Intellectual Property used in Business as presently conducted.
Except
as set forth on Schedule 2.7, Seller's rights in all of such Intellectual
Property are valid and freely transferable. There are no claims or demands
of
any other person pertaining to any of such Intellectual Property and no
proceedings have been instituted, or are pending or threatened, which challenge
the rights of Seller in respect thereof which would impair the use of the
Intangible Property by the Buyer; and, except as set forth on Schedule
2.7,
Seller has the right to use, free and clear of claims or rights of other
persons, the Intellectual Property for or incident to the Business as presently
conducted. Seller has not acted in any way such that its acts would invalidate,
eliminate, or otherwise render unenforceable any of the Intellectual Property.
None of the Intellectual Property has been, or will be, charged, mortgaged
or
otherwise encumbered by Seller.
-5-
(b) All
trademarks and common law copyrights which are owned by or licensed to
Seller or
used by Seller in the Business as presently conducted are listed in Schedule
2.7. All of Seller's trademark registrations have been duly registered
in, filed
in or issued by the appropriate offices in the countries identified on
said
Schedule.
(c) In
relation to registered rights, all registrations forming part of the
Intellectual Property have been maintained and all renewal fees have been
paid
on time. Seller has received no adverse opinion (whether from the registry
concerned or its advisor) or notice of opposition in relation to any such
application.
(d) Seller
has no licenses, authorizations (whether express or implied) or other agreements
under which Seller has granted rights to others in Intellectual
Property.
(e) Seller
has required all of its key employees to execute agreements under which
such
employees are required to maintain the confidentiality of any information
concerning the Business, transactions, secrets or affairs of Seller or
of any of
its customers or suppliers during or after termination of their employment
and
are required to assign to the Seller all inventions (including new
contributions, improvements, designs, developments, ideas, discoveries,
copyrightable material or trade secrets) which have been developed or conceived
while employed by the Seller.
(f) Seller
has no knowledge of any infringement by others of any of its Intellectual
Property rights.
(g) Except
as
set forth on Schedule 2.7, Seller's activities and products do not infringe
any
intellectual property rights of any other person or entity. No proceeding
charging Seller with infringement of any adversely held intellectual property
rights has been filed or, to Seller’s knowledge, is threatened to be filed and
Seller has not received notice of any breach and is not aware of any dispute
or
claim in relation to the Intellectual Property or any other intellectual
property. To the best of Seller's knowledge, there exists no unexpired
patent or
patent application which includes claims that would be infringed by or
otherwise
adversely affect the Business. To the best of Seller's knowledge, the regular
conduct of the Business will not infringe, or impair the intellectual property
rights of any other person or entity. Seller is not making unauthorized
use of
any confidential information or trade secrets of any person, including,
without
limitation, any former employer of any past or present employee of Seller.
Except as set forth in Schedule 2.7, neither Seller nor, to the best of
Seller's
knowledge, any of its employees have any agreements or arrangements with
any
persons other than Seller related to confidential information or trade
secrets
of such persons or restricting any such employee's ability to engage in
business
activities of any nature. The activities of its employees on behalf of
Seller do
not violate any such agreements or arrangements known to Seller which any
such
employees have with other persons.
(i) Seller
has no knowledge of any judgments, orders, liens, injunctions, or encumbrances
that could interfere with the use of the Intellectual Property. Seller
has no
knowledge of any circumstances that could be grounds for a third party
to bring
an action for an injunction, order, lien, judgment, or encumbrance that
could
interfere with the use of the Intellectual Property.
-6-
Section
2.8 No
Material Adverse Change.
Since
December 31, 2000, except as reflected in the Balance Sheet or as set forth
in
Schedule 2.12, there has been no material adverse change in the Business
(financial or otherwise) or in the Assets or Assumed Liabilities, nor has
there
been any damage, destruction or loss, whether or not covered by insurance,
which
would have a material adverse affect on: (i) the Business (financial or
otherwise), (ii) the Assets, (iii) the ability of the Seller to consummate
the
transactions contemplated hereunder, or (iv) the ability of the Buyer to
conduct
and operate the Business after the Closing Date in the manner conducted
and
operated prior to the Closing Date.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF BUYER
Seller
and Buyer hereby jointly and severally make the following representations
and
warranties to Seller:
Section
3.1 Organization
of CCGI.
CCGI
is
duly organized, validly existing and in good standing under the laws of
the
State of Delaware.
Section
3.2 Authority;
Binding Obligation.
CCGI
has
the requisite authority and power to enter into, execute and deliver this
Agreement and each agreement, document and instrument to be executed and
delivered by CCGI pursuant to this Agreement and to perform its obligations
hereunder. The execution, delivery and performance by CCGI of this Agreement
and
each such other agreement, document and instrument have been duly authorized
by
all necessary action of CCGI and no other action on the part of CCGI is
required
in connection therewith. This Agreement has been duly executed and delivered
by
CCGI and/or the Buyer and each agreement, document and instrument executed
and
delivered by CCGI and/or the Buyer pursuant to this Agreement constitutes,
or
when executed and delivered will constitute, valid and binding obligations
of
CCGI and/or the Buyer, as the case may be, enforceable in accordance with
their
terms.
Section
3.3 No
Conflict; Required Consents.
The
execution, delivery and performance by CCGI of this Agreement and each
agreement, document and instrument contemplated hereby, the fulfillment
of and
compliance with the terms and provisions hereof and thereof and the consummation
by CCGI of the transactions contemplated hereby and thereby, do not and
will
not: (i) conflict with, or violate any provision of, the Certificate of
Incorporation, By-Laws or Partnership Agreement of CCGI, as the case may
be;
(ii) conflict with, result in any breach of, or constitute a default (or
an
event that with notice or lapse of time or both would become a default)
or
result in the termination or acceleration under any material agreement
to which
CCGI is a party or by which CCGI may be bound; (iii) require any consent,
approval, authorization or permit of, or filing with or notification to,
any
person not party to this Agreement.
-7-
Section
3.4 Broker
Fees.
Neither
CCGI nor any of their officers, directors, employees or shareholders has
employed any broker or finder or incurred any liability for any brokerage
fees,
commission or finders' fee relating to or in connection with the transactions
contemplated by this Agreement or any other agreement contemplated
hereby.
ARTICLE
IV
COVENANTS
Section
4.1 Events
of Default and Remedies
(a)
Any
one or
more
of the following events which shall have occurred and be continuing shall
constitute an event of default (Event of Default):
(i)
Default in the payment of the principal or accrued interest on this Note
or upon
any other indebtedness of the Company after the date hereof that is greater
than
$100,000, as and when the same shall become due, whether by default or
otherwise, which Default shall have continued for a period of five (5)
business
days; or
(ii)
Any
knowing representation or warranty made by the Company or any officer of
the
Company in the Note, or in any agreement, report, certificate or other
document
delivered to the Seller pursuant to the Notes shall have been incorrect
in any
material respect when made which shall not have been remedied ten (10)
days
after written notice thereof shall have been given by the Seller; or
(iii)
The
Company shall fail to perform or observe any material affirmative covenant
contained in Section 4 of this Note or any of the Notes and such Default,
if
capable of being remedied, shall not have been remedied thirty (30) days
after
written notice thereof shall have been given by the Seller; or
(iv)
The
Company or any subsidiary (A) shall institute any proceeding or voluntary
case
seeking to adjudicate it bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its material debts under any law relating
to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking
the
entry of any order for relief or the appointment of a receiver, trustee,
custodian or other similar official for such the Company or any subsidiary
or
for any substantial part of its property, or shall consent to the commencement
against it of such a proceeding or case, or shall file an answer in any
such
case or proceeding commenced against it consenting to or acquiescing in
the
commencement of such case or proceeding, or shall consent to or acquiesce
in the
appointment of such a receiver, trustee, custodian or similar official;
(B)
shall be unable to pay its material debts as such debts become due, or
shall
admit in writing its inability to apply its debts generally; (C) shall
make a
general assignment for the benefit of creditors; or (D) shall take any
action to
authorize or effect any of the actions set forth above in this subsection
5(a)(iv); or
-8-
(v)
Any
proceeding shall be instituted against the Company seeking to adjudicate
it a
bankrupt or insolvent, or seeking dissolution, liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief of debtors,
or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for the Company or for any
substantial part of its property, and either such proceeding shall not
have been
dismissed or shall not have been stayed for a period of sixty (60) days
or any
of the actions sought in such proceeding (including, without limitation,
the
entry of any order for relief against it or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial
part
of its property) shall occur; or
(vi)
One
or more final judgments, arbitration awards or orders for the payment of
money
in excess of $100,000 in the aggregate shall be rendered against the Company,
which judgment remains unsatisfied for thirty (30) days after the date
of such
entry.
(vii)
The
issuance of an SEC stop trade order or an order suspending trading of the
Common
Stock from the principal market or exchange on which the Common Stock is
listed
for trading for longer than fifteen (15) trading days.
(viii)
The Company shall encumber or hypothecate the collateral subject to the
Security
Agreement to any party;
(ix)
A
default by the Company of a material term, covenant, warranty or undertaking
of
any other agreement to which the Company and Seller are parties, or the
occurrence of an event of default under any such other agreement; or
(b)
In
the event of and immediately upon the occurrence of an Event of Default,
the
Note shall become immediately due and payable without any action by the
Seller
and the Note shall bear interest until paid at the rate of 12% per annum
or such
amount as shall be allowed by law (the “Default Interest Rate”). If an Event of
Default occurs and is continuing, Seller may pursue any available remedy
to
collect the payment of all amounts due under the Note or to enforce the
performance of any provision of the Note. No waiver of any default under
the
Note shall be construed as a waiver of any subsequent default, and the
failure
to exercise any right or remedy thereunder shall not waive the right to
exercise
such right or remedy thereafter.
(c)
The
Company covenants that in case the principal of, and accrued interest on,
the
Note becomes due and payable by declaration or otherwise, then the Company
will
pay in cash to the Seller of this Note, the whole amount that then shall
have
become due and payable on this Note for principal or interest, as the case
may
be, and in addition thereto, such further amount as shall be sufficient
to cover
the costs and expenses of collection, including reasonable fees of the
Seller's
legal counsel. In case the Company shall fail forthwith to pay such amount,
the
Seller may commence an action or proceeding at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any such action
or
proceeding to judgment or final decree against Company or other obligor
upon
this Note, wherever situated, the monies adjudicated or decreed to be payable.
-9-
(d)
The
Company agrees that it shall give notice to the Seller at its registered
address
by facsimile, confirmed by certified mail, of the occurrence of any Event
of
Default within twenty (20) days after such Event of Default shall have
occurred.
Section
4.2 Notice
of Default.
Promptly upon the occurrence of, or promptly upon the Parties becoming
aware of
the impending or threatened occurrence of, any event which would cause
or
constitute a breach or default, or would have caused or constituted a breach
or
default had such event occurred or been known to such Party prior to the
date
hereof, of any of the representations, warranties or covenants of such
Party
contained in or referred to in this Agreement or in any Schedule referred
to in
this Agreement, or of its inability to satisfy any conditions of Closing,
such
Party shall give detailed written notice thereof to the other Party and
shall
use its best efforts to prevent or promptly remedy the same.
Section
4.3 Consummation
of Agreement.
The
Parties hereto shall use their best efforts to perform and fulfill all
conditions and obligations on its part to be performed and fulfilled under
this
Agreement, to the end that the transactions contemplated by this Agreement
shall
be fully carried out. Until the Closing or the termination of this Agreement,
except as mutually agreed in writing by the parties, the Seller or any
of its
respective employees, representatives or agents shall not, directly or
indirectly, solicit, encourage, initiate or induce the making of any inquiries
or proposals for the acquisition of any of the Assets or the Business,
or
furnish information to, or engage in negotiations relating to the foregoing
or
otherwise cooperate in any way with, or accept any proposal relating to
the
foregoing from, any person or group other than CCGI and their respective
officers, employees, representatives or agents, and the Seller shall restrict
any such employee, representative or agent from doing any of the
foregoing.
Section
4.4 Notice
to Third Parties.
After
the
Closing, at the request of the Buyer, Seller and the Buyer shall send a
jointly
executed letter to those persons and entities as the Buyer may request
notifying
such persons or entities of the consummation of the transactions contemplated
by
this Agreement, such letter to be substantially in the form of Exhibit
4.4.
Section
4.5 Confidentiality.
Seller
agrees that, after the Closing has been consummated, Seller and its respective
officers, directors, agents, representatives and employees and affiliates
(collectively, its “Representatives”)
will
hold in strict confidence, and will not distribute or make available, any
confidential or proprietary data or information of Seller that is used
in
connection with or related to Business, except:
(a) information
which, as of the date hereof, is published or otherwise generally available
to
the public;
-10-
(b) information
which after the date hereof becomes available to the public other than
through
an act or omission of Seller or its Representatives which is in violation
of the
provisions hereof;
(c) information
rightfully acquired from a third party which did not obtain such information
under a pledge of confidentiality;
(d) information
which is developed by the disclosing Party independently of the relationship
established by this Agreement; or
(e) information
which is compelled to be disclosed by legal process, in which case Seller
shall
notify Buyer as soon as practicable after it becomes aware of such requirement,
and shall cooperate with Buyer in obtaining a protective order.
Section
4.9 Supplements
to Schedules.
Prior
to
the Closing, the Parties will supplement or amend the Schedules hereto
with
respect to any matter hereafter arising which, if existing or occurring
at the
date of this Agreement, would have been required to be set forth or described
in
such Schedules. No supplement or amendment of the Schedules made pursuant
to
this Section 4.9 shall be deemed to cure any breach of any representation
or
warranty made in this Agreement unless the other Parties specifically agree
thereto in writing.
Section
4.10 Compliance.
Seller
shall use its best efforts to take or cause to be taken, all action and
do or
cause to be done all things necessary, proper or advisable to consummate
the
transactions contemplated by this Agreement, including, without limitation,
to
obtain all consents, approvals and authorization of third parties, and
to make
all filings with and give all notices to third parties which may be necessary
or
required in order to effectuate the transactions contemplated hereby and
to
otherwise comply and fulfill Seller’s obligations hereunder and thereunder.
Section
4.11 Severability
of Covenants
. Seller
and the Buyer agree that the foregoing covenants are reasonable and valid
in
geographical and temporal scope and in all other respects and that Seller
has
received full and adequate consideration therefor. If any court determines
that
any of such covenants or any part thereof is invalid or unenforceable,
the
remainder of such covenants shall not thereby be affected and shall be
given
full effect, without regard to the invalid portions. If any court determines
that any of the foregoing covenants, or any part thereof, is unenforceable
because of the duration or geographic scope of such provision, and should
such
court reduce the duration or scope of such provision, as the case may be,
such
provision in its reduced form shall then be enforceable.
-11-
ARTICLE
V
CONDITIONS
OF CLOSING
Section
5.1 Conditions
to the Obligations of the Buyer.
The
obligation of the Buyer to consummate this Agreement and the transactions
contemplated hereby is subject to the fulfillment, prior to or at the Closing,
of the following conditions precedent and the delivery of the following
documents:
(a) Representations;
Warranties; Covenants.
Each of
the representations and warranties of Seller contained in Article II shall
be
true and correct in all material respects as though made on and as of the
Closing; Seller shall, on or before the Closing, have performed in all
material
respects all of its obligations hereunder which by the terms hereof are
to be
performed on or before the Closing.
(b) Delivery
of Required Consents.
Seller
shall deliver to the Buyer the consents required pursuant to Section 2.4
that it
has obtained prior to the Closing.[i.e landlord consent]
(c) Certificate
From Officers.
Seller
shall deliver to the Buyer a certificate dated as of the Closing to the
effect
that the statements set forth in paragraph (a), (b) and (c) above in this
Section 5.1 are true and correct.
(d) Assignment
and ▇▇▇▇ of Sale to the Buyer.
Seller
shall deliver two (2) originals of the Assignment and ▇▇▇▇ of Sale in the
form
of Exhibit 5.1(e) executed by Seller.
Section
5.2 Conditions
to Obligations of Seller.
Seller's obligation to consummate this Agreement and the transactions
contemplated hereby is subject to
the
fulfillment, prior to or at the Closing, of the following conditions precedent
and the delivery of the following documents:
(a) Representations;
Warranties; Covenants.
Each of
the representations and warranties of CCGI and/or the Buyer contained in
Article
III shall be true and correct in all material respects as though made on
and as
of the Closing; CCGI shall, on or before the Closing, have performed in
all
material respects all of its obligations hereunder which by the terms hereof
are
to be performed on or before the Closing.
(b) Assignment
and ▇▇▇▇ of Sale to the Buyer.
The
Buyer shall deliver two (2) originals of the Assignment and ▇▇▇▇ of Sale
in the
form of Exhibit 5.1(e).
-12-
Section
5.3 Further
Conditions to Obligations of the Buyer and Seller.
The
respective obligations of each Party hereunder are subject to the satisfaction,
at or before the Closing, of the conditions set out below.
Section
5.4 Condition
Precedent and Effectiveness of Agreement.
A
condition to the effectiveness of Closing shall be the completion by CCGI
of a
full review of the File Library and the proper cataloguing of its contents.
Such
review will be conducted in a supervised manner and shall include the visual
review of all recorded material.
(a) Absence
of Litigation.
There
shall not have been issued and be in effect any order of any court or tribunal
of competent jurisdiction which (i) prohibits or makes illegal the purchase
by
the Buyer of the Assets, (ii) would require the divestiture by the Buyer
of all
or a material portion of the Assets, the Business or the assets of the
Buyer as
a result of the transactions contemplated hereby, or (iii) would impose
limitations on the ability of the Buyer to effectively exercise full rights
of
ownership of the Assets, or of a material portion of the Business as a
result of
the transactions contemplated hereby.
(b) No
Injunction.
On the
Closing Date there shall be no effective injunction, writ, preliminary
restraining order or any order of any nature issued by a court of competent
jurisdiction directing that the transactions provided for herein or any
of them
not be consummated as so provided or imposing any conditions on the consummation
of the transactions contemplated hereby which the Buyer deems unacceptable
in
its sole discretion.
ARTICLE
VI
RIGHTS
AND OBLIGATIONS SUBSEQUENT TO CLOSING
Section
6.1 Survival
of Warranties. The
representations and warranties shall survive the Closing for a period of
eighteen (18) months, regardless of any investigation or knowledge acquired
on
the part of the Buyer or its affiliates and shall not merge in the performance
of any obligation by either Party hereto.
ARTICLE
VII
TERMINATION
Section
7.1 Right
to Terminate.
Notwithstanding anything to the contrary set forth in this Agreement, this
Agreement may be terminated and the transactions contemplated herein abandoned
at any time prior to the Closing:
-13-
(a) by
mutual
written consent of the Parties hereto;
(b) by
either
the Buyer or the Seller if the Closing shall not have occurred by March
31,
2006; provided, however, that the right to terminate this Agreement under
this
Section 7.1(b) shall not be available to any Party whose failure to fulfill
any
obligation under this Agreement has been the cause of, or resulted in,
the
failure of the Closing Date to occur on or before such date;
(c) by
the
Seller if the Buyer (i) breaches its representations and warranties, (ii)
fails
to comply with any of its covenants or agreements contained herein, or
(iii) if
any of the conditions to closing set forth in Section 5.2 are not satisfied
or
capable of being satisfied on or before the Closing Date; or
(d) by
the
Buyer if the Seller (i) breaches its representations and warranties, (ii)
fails
to comply with any of its covenants or agreements contained herein, or
(iii) if
any of the conditions to closing set forth in Section 5.1 are not satisfied
or
capable of being satisfied on or before the Closing Date.
Section
7.2 Obligations
to Cease.
If this
Agreement is terminated pursuant to Section 7.1 hereof, all rights and
obligations of the Parties under this Agreement shall thereafter terminate
and
there shall be no liability of any party hereto to any other Party except
for
the obligations set forth in Sections 9.1 and 9.8 hereof. Termination of
this
Agreement pursuant to Section 7.1 shall not, however, limit or impair any
remedies that the terminating Party may have with respect to a breach or
default
by the other Party prior to the date of termination of its representations,
warranties, covenants or agreements or obligations under this
Agreement.
ARTICLE
VIII
INDEMNIFICATION
Section
8.1 Indemnification
of Seller.
The
Buyer
shall defend and promptly indemnify Seller and save and hold harmless from,
against, for and in respect of and shall pay any and all damages, losses,
obligations, liabilities, claims, encumbrances, deficiencies, costs and
expenses, including, without limitation, reasonable attorneys’ fees and other
costs and expenses incident to any action, investigation, claim or proceeding
(all hereinafter collectively referred to as “Losses”)
suffered, sustained, incurred or required to be paid by Seller by reason
of (i)
any representation or warranty of CCGI herein being untrue or incorrect
in any
respect, (ii) any and all obligations of Buyer arising and required to
be
performed under the Assumed Liabilities or under the Assumed Contracts
for
periods after the Closing, or (iii) any breach or failure of observance
or
performance of any covenant, agreement or commitment made by the Buyer
hereunder
or under any document or instrument relating hereto or executed pursuant
hereto.
-14-
Section
8.2 Indemnification
of CCGI
.
(a) Seller
shall defend and promptly indemnify CCGI and their respective officers,
directors, stockholders and affiliates and save and hold them harmless
from,
against, for and in respect of and pay any and all Losses suffered, sustained,
incurred or required to be paid by CCGI by reason of (i) any and all obligations
and liabilities of Seller, other than obligations arising and required
to be
performed under the Assumed Liabilities or under the Assumed Contracts
after the
Closing; (ii) any breach or failure of observance or performance of any
covenant, agreement or commitment made by Seller hereunder or under any
document
or instrument relating hereto or executed pursuant hereto; or (iii) as
a result
of any representation, or warranty contained herein or in any document
or
instrument executed pursuant hereto being untrue or incorrect in any
respect.
Section
8.3 Procedures.
For
purposes of this Section, the party entitled to indemnification shall be
known
as the “Indemnified
Party”
and
the
party required to indemnify shall be known as the “Indemnifying
Party.”
In
the
event that the Indemnifying Party shall be obligated to the Indemnified
Party
pursuant to this Section or in the event that a suit, action, investigation,
claim or proceeding is begun, made or instituted as a result of which the
Indemnifying Party may become obligated to the Indemnified Party hereunder,
the
Indemnified Party shall give prompt written notice, within ten (10) business
days, to the Indemnifying Party of the occurrence of such event. The failure
of
the Indemnified Party to provide the Indemnifying Party with timely notice
will
limit the indemnification provided for in this Article VII, only if, and
to the
extent that, the failure to provide such timely notice results in the forfeiture
of substantial rights by the Indemnifying Party. The Indemnifying Party
agrees
to defend, contest or otherwise protect against any such suit, action,
investigation, claim or proceeding at the Indemnifying Party’s own cost and
expense. The Indemnified Party shall have the right but not the obligation
to
participate at its own expense in the defense thereof by counsel of its
own
choice. In the event that the Indemnifying Party fails to notify the Indemnified
Party within ten (10) days of its receipt of notice of a claim that it
intends
to assume the defense thereof or thereafter to timely defend, contest or
otherwise protect against any such suit, action, investigation, claim or
proceeding, the Indemnified Party shall have the right to defend, contest
or
otherwise protect against the same and may make any compromise or settlement
thereof and recover the entire cost thereof from the Indemnifying Party
including without limitation, reasonable attorneys’ fees, disbursements and all
amounts paid as a result of such suit, action, investigation, claim or
proceeding or compromise or settlement thereof.
Section
8.4 Settlement
of Claims.
If an
Indemnifying Party assumes the defense of any suit, action, claim, proceeding
or
investigation for which it is called upon to indemnify the Indemnified
Party
pursuant to this Article VII no compromise or settlement thereof may be
effected
by the Indemnifying Party without the Indemnified Party's prior written
consent
(which consent shall not be unreasonably withheld or delayed).
-15-
ARTICLE
IX
MISCELLANEOUS
Section
9.1 Fees
and Expenses.
Except
as
otherwise provided in this Agreement, each of the Parties will bear its
own
expenses in connection with the negotiation and the consummation of the
transactions contemplated by this Agreement, and no expenses of Seller
relating
in any way to the purchase and sale of the Assets hereunder and the transactions
contemplated hereby, including, without limitation, legal, accounting or
other
professional expenses of Seller, shall be charged to or paid by the Buyer
or
included in any of the Assumed Liabilities.
Section
9.2 Notices.
All
notices and other communications hereunder shall be in writing and shall
be
deemed to have been given if delivered personally or sent by facsimile
transmission, overnight courier, or certified, registered or express mail,
postage prepaid. Any such notice shall be deemed given when so delivered
personally or sent by facsimile transmission (provided that a confirmation
copy
is sent by overnight courier), one day after deposit with an overnight
courier,
or if mailed, five days after the date of deposit in the United States
mails, as
follows:
|
To
Seller:
|
PACIFICAP
ENTERTAINMENT HOLDINGS, INC.
|
|
|
▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇
▇▇▇, ▇▇
|
|
|
Attention:
▇▇ ▇▇▇▇▇▇
|
|
|
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
|
|
To
Buyer:
|
COLLECTIBLE
CONCEPTS GROUP, INC.
|
|
|
Insert
address
|
|
|
|
|
|
Attention:
General Counsel
|
|
|
Facsimile:
|
|
|
|
|
With
a copy to:
|
Sichenzia
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
|
|
|
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
|
|
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
|
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
|
|
|
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
Any
notice given hereunder may be given on behalf of any Party by his counsel
or
other authorized representatives. The address of any Party may be changed
on
notice to the other Party duly served in accordance with the foregoing
provisions.
-16-
Section
9.3 Governing
Law.
This
Agreement is made pursuant to and shall be governed and construed in accordance
with the laws of the State of New York, without regard to the principles
of
conflict of laws thereof (the "Governing
Law").
Each
Party, however, shall make a good faith effort to avoid litigation, and
shall
exhaust all possible remedies prior to resorting to formal litigation.
Each
Party hereto (A) hereby irrevocably and unconditionally submits to the
exclusive
jurisdiction of any court of the State of New York or any federal court
sitting
in the State of New York for purposes of any suit, action or other proceeding
arising out of this Agreement or the subject matter hereof brought by any
Party,
(B) hereby waives and agrees not to assert, by way of motion, as a defense,
or
otherwise, in any such suit, action or proceeding, any claim that it is
not
subject personally to the jurisdiction of the above-named courts, that
its
property is exempt or immune from attachment or execution, that the suit,
action
or proceeding is brought in an inconvenient forum, that the venue of the
suit,
action or proceeding is improper or that this Agreement or the subject
matter
hereof may not be enforced in or by such court, and (C) hereby agrees not
to
assert in any such action, suit, or proceeding any right to a jury trial.
Each
Party hereby consents to service of process by certified mail at the address
set
forth in Section 8.2 and agrees that its submission to jurisdiction and
its
consent to service of process by mail is made for the express benefit of
the
other Party hereto. Final judgment against any Party, in any action, suit
or
proceeding shall be conclusive, and may be enforced in other jurisdictions
(A)
by suit, action or proceeding on the conclusive evidence of the fact and
of the
amount of any indebtedness or liability of the Party therein described
or (B) in
any other manner provided by or pursuant to the laws of such other
jurisdiction.
Section
9.4 Entire
Agreement.
This
Agreement, including the Schedules and Exhibits referred to herein and
other
agreements entered into in connection herewith (including, without limitation,
the Assignment and ▇▇▇▇ of Sale) and the other writings specifically identified
herein or contemplated hereby, is complete, reflects the entire agreement
of the
Parties with respect to its subject matter, and supersedes all previous
written
or oral negotiations, commitments and writings. No promises, representations,
understandings, warranties and agreements have been made by any of the
Parties
hereto except as referred to herein or therein in such Schedules and Exhibits
or
in such other writings; and all inducements to the making of this Agreement
and
such other agreements relied upon by either Party hereto have been expressed
herein or in such Schedules or Exhibits or in such other writings.
Section
9.5 Assignability;
Binding Effect.
This
Agreement may not be assigned by a Party (except by operation of law, in
a
merger or consolidation of a Party with or into a third party with a net
worth,
calculated in accordance with generally accepted accounting principles,
at least
as high as that of the assigning Party prior to the merger or consolidation)
without the prior written consent of the other Parties hereto, which shall
not
be unreasonably withheld. This Agreement shall be binding upon and enforceable
by, and shall inure to the benefit of, the Parties hereto and their respective
heirs, successors and permitted assigns.
-17-
Section
9.6 Execution
in Counterparts.
For the
convenience of the Parties and to facilitate execution, this Agreement
may be
executed in two (2) or more counterparts, each of which shall be deemed
an
original, but all of which shall constitute one and the same document.
Delivery
of a telecopied version of one or more signatures on this Agreement shall
be
deemed adequate delivery for purposes of this Agreement. Delivery of a
facsimile
version of one or more signatures to this Agreement shall be deemed adequate
delivery for purposes of this Agreement.
Section
9.7 Amendments.
This
Agreement may not be amended or modified, nor may compliance with any condition
or covenant set forth herein be waived, except by a writing duly and validly
executed by each Party hereto, or in the case of a waiver, the Party waiving
compliance.
Section
9.8 Publicity.
Except
if
and insofar as required by law (including any applicable stock exchange
regulation), no press releases, announcements or public disclosure of the
transactions contemplated by this Agreement, shall be made by a Party to
this
Agreement without the prior knowledge and written consent of the Buyer
and
Seller; provided that subsequent to the Closing Date Buyer shall not be
limited
by this provision.
Section
9.9 Agreement
to Continue in Full Force.
This
Agreement shall, insofar as it remains to be performed, continue in full
force
and effect notwithstanding Closing.
Section
9.10 Severability.
In the
event that any one or more of the provisions contained in this Agreement,
or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining
provisions contained in this Agreement shall not be in any way impaired
thereby,
it being intended that all of the rights and privileges of the Parties
hereto
shall be enforceable to the fullest extent permitted by law.
-18-
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their
respective names by their respective officers duly authorized, as of the
date
first written above.
COLLECTIBLE
CONCEPTS GROUP, INC.
By: /s/
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
PACIFICAP
ENTERTAINMENT HOLDINGS, INC.
By: /s/
▇▇▇▇▇▇ ▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
President