SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. _)*
AREA INVESTMENT AND DEVELOPMENT COMPANY
................................................................................
(Name of Issuer)
Common Stock, par value $0.01
................................................................................
(Title of Class of Securities)
039878 20 2
................................................................................
(CUSIP Number)
Steven A. Sanders, Esq.
Beckman, Millman & Sanders, L.L.P.
116 John Street, Suite 1313
New York, New York 10038
................................................................................
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
February 19, 2000
................................................................................
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d- 1(f) or 240.13d-1(g), check
the following box [ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Exchange Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes.)
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CUSIP No. 039878 20 2
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1) Name of Reporting Person
Maxx International, Inc.
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2) Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
00
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5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
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6) Citizenship or Place of Organization
Nevada
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Number of 7) Sole Voting Power
3,500,000
Shares -----------------------------------------------------
8) Shared Voting Power
Beneficially -0-
-----------------------------------------------------
Owned by 9) Sole Dispositive Power
3,500,000
Each Reporting -----------------------------------------------------
10) Shared Dispositive Power
Person With -0-
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,500,000
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions) [ ]
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in row (11)
27.9%
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14) Type of Reporting Person (See Instructions)
CO
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CUSIP No. 039878 20 2
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1) Name of Reporting Person
Rick Garson
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2) Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
U.S.A.
- --------------------------------------------------------------------------------
Number of 7) Sole Voting Power
-0-
Shares -----------------------------------------------------
8) Shared Voting Power
Beneficially 3,500,000
-----------------------------------------------------
Owned by 9) Sole Dispositive Power
-0-
Each Reporting -----------------------------------------------------
10) Shared Dispositive Power
Person With 3,500,000
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,500,000
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in row (11)
27.9%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions)
IN
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CUSIP No. 039878 20 2
- --------------------------------------------------------------------------------
1) Name of Reporting Person
CPW ASSOCIATES, INC.
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2) Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Nevada
- --------------------------------------------------------------------------------
Number of 7) Sole Voting Power
-0-
Shares -----------------------------------------------------
8) Shared Voting Power
Beneficially -0-
-----------------------------------------------------
Owned by 9) Sole Dispositive Power
-0-
Each Reporting -----------------------------------------------------
10) Shared Dispositive Power
Person With -0-
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,500,000
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
- --------------------------------------------------------------------------------
19) Percent of Class Represented by Amount in row (11)
27.9%
- --------------------------------------------------------------------------------
20) Type of Reporting Person (See Instructions)
CO
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Item 1. Security and Issuer
The class of equity securities to which this statement relates is the
common stock, $.01 par value per share (the "Common Stock"), of Area Investment
and Development Company, a Utah corporation (the "Issuer"). The principal
executive offices of Issuer are located at c/o Solomon Broadcasting
International, Inc., 130 S. El Camino Drive, Beverly Hills, California 90212.
Item 2. Identity and background
(a) - (c) and (f) This statement is being jointly filed by the following
persons (collectively, the "Reporting Persons") pursuant to Rule 13d-1 (k) of
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"):
(1) Maxx International, Inc., a Nevada corporation ("Maxx"), as beneficial
owner of 3,500,000 shares of Common Stock of the Issuer. Maxx has a
principal business address of c/o Solomon Broadcasting International,
Inc., 130 S. El Camino Drive, Beverly Hills, California 90212, and
until the close of the Asset Acquisition Agreement with the Issuer (as
described in Item 4 below) was primarily in the business of
entertainment media, with assets including the exclusive worldwide
distribution rights to the private prayer books of His Holiness, Pope
John Paul II.
(2) Rick Garson, as sole director, officer and shareholder of Maxx and CPW
Associates, Inc. Mr. Garson, a citizen of the United States, has a
business address of 350 Central Park West, New York, New York 10025.
As of the close of the Asset Acquisition Agreement (as defined in Item
4 below), Mr. Garson also serves as a director, President and
Secretary of the Issuer.
(3) CPW Associates, Inc., a Nevada corporation ("CPW"), as intended
recipient of a distribution of the 3,500,000 shares of Common Stock of
the Issuer from Maxx, and subsequent beneficial owner of 3,500,00
shares of Common Stock of the Issuer. CPW has a principal business
address of 350 Central Park West, New York, New York 10025. Upon
receipt of the distribution of Common Stock of the Issuer, from Maxx,
CPW will be a holding company, wholly owned by Mr. Garson.
The Reporting Persons have entered into a Joint Filing Agreement dated as
of February 23, 2000, a copy of which is attached hereto as Exhibit A and
incorporated herein by reference, pursuant to which the Reporting Persons have
agreed to file this statement jointly in accordance with the provisions of Rule
13d-1(k)(1) under the Exchange Act.
(d) None of the Reporting Persons or, to the knowledge of the Reporting
Persons, any of the executive officers or directors of Maxx or CPW, have, during
the last five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
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(e) None of the Reporting Persons or, to the knowledge of the Reporting
Persons, any of the executive officers or directors of Maxx or CPW, have, during
the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
Pursuant to the Asset Acquisition Agreement described in Item 4, Maxx
received 3,500,000 shares of Common Stock from the Issuer in exchange for 100%
of the assets of Maxx, including the exclusive worldwide distribution rights to
the private prayer books of His Holiness, Pope John Paul II. The 3,500,000
shares of Common Stock of the Issuer, issued to Maxx, which gave rise to the
beneficial interest for which this statement is being filed, were duly
authorized, validly issued, fully paid and non-assessable. As of the date of
this statement, Maxx is in the process of making a distribution of its 3,500,000
shares of Common Stock of the Issuer to CPW. Upon completion of the
distribution, it is the intention of Mr. Garson, as sole shareholder and
director of Maxx, to liquidate Maxx.
Item 4. Purpose of the Transaction
(a) - (j) The purpose of the issuance of 3,500,000 shares of Common Stock
to Maxx was to provide consideration for the sale of 100% of the assets of Maxx
to the Issuer, as set forth in the Asset Acquisition Agreement, described below.
On February 3, 2000, the Issuer entered into an Asset Acquisition Agreement
("Acquisition Agreement") with Maxx. Pursuant to the Acquisition Agreement, at
Closing (as hereinafter defined), the Issuer would acquire 100% of the assets of
Maxx in exchange for 3,5000,000 shares of Common Stock (the "Acquisition"). At
the time of the Acquisition, the Issuer was authorized to issue 50,000,000
shares of Common Stock with a par value of $.01 of which, 9,048,171 shares were
outstanding prior to Closing. The Acquisition Agreement further contemplated
that, after the Closing, approximately 12,548,171 shares of the Common Stock
would be issued and outstanding.
The Acquisition Agreement further contemplated that the Issuer would accept
the resignations of Ken Kurtz and Carrie Kurtz, two of the members of the Board
of Directors of the Issuer, as well as officers of the Issuer, and Michael
Solomon and Rick Garson, sole officer and director of Maxx, would be appointed
as new directors to fill the vacancies created by the resignations.
Additionally, Rick Garson would be appointed as President, Secretary and
Treasurer of the Issuer. Tammy Gehring, a director prior to Closing, remains a
director after the Closing. The effective date of the resignations of the
directors, the effective date of the appointment of the new directors and
officers and the Closing of the Acquisition Agreement took place upon the
expiration of a ten-day period beginning on the later of the date of the filing
of the Issuer's information statement with the Securities and Exchange
Commission (the "SEC") pursuant to Rule 14f-1 of the Exchange Act (the
"Information Statement"), or the date of mailing of the Information Statement
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to the Issuer's stockholders. Thus, the Closing date of the Acquisition
Agreement was February 19, 2000.
As a result of the actions described above, the Issuer now seeks to utilize
and exploit the assets obtained from Maxx, as well as the contacts and
experience of its new directors, in order to pursue opportunities in the
entertainment media industry.
Maxx is currently in the process of making a distribution to CPW, a wholly
owned corporation of Mr. Garson's, of the 3,500,000 shares of Common Stock of
the Issuer received pursuant to the Acquisition Agreement. Upon completion of
the distribution, it is the intention of Mr. Garson, as sole shareholder and
director of Maxx, to liquidate Maxx.
The Reporting Persons may acquire additional shares through open market
purchases, privately negotiated transactions, or certain stock option plans,
upon such terms and at such prices as shall be determined. The Reporting
Persons, and its affiliates, also reserve the right to dispose any or all shares
of Common Stock acquired by them, subject to the terms of the Acquisition
Agreement or any other applicable agreement.
Except as otherwise discussed herein, the Reporting Persons have no current
plans or proposals which relate to or would result in any of the following:
(a) the acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer or of
any of its subsidiaries;
(d) a sale or transfer of a material amount of assets of the Issuer or any
of its subsidiaries;
(e) any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(f) any material change in the present capitalization or dividend policy of
the Issuer;
(g) any other material change in the Issuer's business or corporate
structure, including but not limited to, if the Issuer is a registered
closed-end investment company, any plans or proposals to make any changes in its
investment policy for which a vote is required by Section 13 of the Investment
Company Act of 1940;
(h) causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
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(i) a class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act;
or,
(j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer
(a) As of the date of this statement, and as a result of the Acquisition
Agreement described in Item 4, Maxx beneficially owns a total of 3,500,000
shares of Common Stock of the Issuer. However, Maxx is currently in the process
of making a distribution to CPW, of its 3,500,000 shares of Common Stock of the
Issuer. Mr. Garson is the sole director, officer and shareholder of both Maxx
and CPW.
(b) Pursuant to the Acquisition described in Item 4, Maxx has the power to
vote or direct the vote of the 3,500,000 shares of Common Stock it beneficially
owns. Upon completion of Maxx's distribution of the 3,500,000 shares of Common
Stock to CPW, CPW will have the power to vote or direct the vote of the
3,500,000 shares of Common Stock of the Issuer. While beneficially owned by
Maxx, Mr. Garson retains the right to vote, on behalf of Maxx, those shares
issued to Maxx in Mr. Garson's capacity as sole officer, director and
shareholder of Maxx. Upon completion of the distribution of the shares to CPW,
Mr. Garson will have the right to vote, on behalf of CPW, those shares issued to
Maxx and distributed to CPW, in Mr. Garson's capacity as sole officer, director
and shareholder of CPW.
(c) Except as otherwise described herein, neither Maxx, Mr. Garson, CPW,
nor to the knowledge of Maxx, Mr. Garson or CPW, has effected any transactions
in the Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
The information set forth, or incorporated by reference, in Item 4
regarding the Acquisition, the Acquisition Agreement and the distribution of
Common Stock of the Issuer from Maxx to CPW is hereby incorporated by reference.
Item 7. Material to Be Filed as Exhibits
Exhibit A: Joint Filing Agreement dated as of February 23,
2000 between the Reporting Persons.
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Exhibit B: Information Statement on Schedule 14F1 filed by
Issuer with the SEC on February 9, 2000. (1)
Exhibit C: Asset Acquisition Agreement dated January 26,
2000, by and between Issuer and Maxx.
- ----------
(1) Incorporated herein by reference.
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of each of
the undersigned, each such person certifies that the information set forth in
this statement is true, complete and correct.
Maxx International, Inc.
Date: February 23, 2000 By: /s/ Rick Garson
----------------------------------
Name: Rick Garson
Title: President
Date: February 23, 2000 /s/ Rick Garson
-------------------------------------
Rick Garson
CPW Associates, Inc.
Date: February 23, 2000 By: /s/ Rick Garson
----------------------------------
Name: Rick Garson
Title: President
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EXHIBIT A
Joint Filing Agreement
In accordance with Rule 13d-1(k) of the Securities Exchange Act of 1934, as
amended, each of the parties hereto agrees with the other parties that the
statement of Schedule 13D pertaining to certain securities of Area Investment
and Development Company to which this agreement is an exhibit is filed by and on
behalf of each such party and that any amendment thereto will be filed on behalf
of each such party.
Maxx International, Inc.
Date: February 23, 2000 By: /s/ Rick Garson
------------------------------
Name: Rick Garson
Title: President
Date: February 23, 2000 /s/ Rick Garson
---------------------------------
Rick Garson
CPW Associates, Inc.
Date: February 23, 2000 By: /s/ Rick Garson
------------------------------
Name: Rick Garson
Title: President
<PAGE>
EXHIBIT C
ASSET ACQUISITION AGREEMENT
THIS ASSET ACQUISITION AGREEMENT, made and entered into as of this 3rd day
of February, 2000, by and between Maxx International, Inc., a corporation duly
organized under the laws of the State of Nevada and having its principal place
of business at 116 John Street, New York, New York 10038 (hereinafter referred
to as the "Seller") and Area Investment and Development Company, a corporation
duly organized under the laws of the State of Utah and subject to the reporting
requirements imposed pursuant to Section 12(g) of the Securities Exchange Act of
1934, as amended, and having its principal place of business at 2133 East 9400
South, Suite 151, Sandy, Utah 84093 (hereinafter referred to as the
"Purchaser").
W I T N E S S E T H :
WHEREAS, Seller desires to sell certain of its assets, including but not
limited to certain contractual rights, pursuant to the terms and conditions
hereof; and,
WHEREAS, Purchaser desires to purchase such assets in accordance with the
terms and provisions hereof.
NOW, THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the parties hereto agree as follows:
1. SALE AND PURCHASE OF ASSETS
1.1 Transfer of Assets
Subject to the terms and conditions of this Agreement, Purchaser, in
reliance upon Seller's warranties and representations herein made, shall
purchase and acquire from Seller, and Seller, shall sell, transfer and convey to
Purchaser, with the exceptions set forth herein and in the schedules annexed
hereto, all of the assets, properties and rights of Seller, of every type and
description, whether tangible or intangible, including the following:
(a) All rights of Seller under any licensing agreements, distribution
agreements, and all other agreements of whatever nature or kind
relating to the Seller and/or its Proprietary Rights (as
hereinafter defined); the foregoing being more specifically
defined and described in the Schedule of Contract Rights,
Schedule A, attached hereto and made a part hereof (hereinafter
collectively referred to as the "Contract Rights").
(b) All patents, patent applications, copyrights, trade secrets,
trademarks, trade names, and other proprietary rights; the
foregoing being more specifically defined and described in the
Schedule of Proprietary Rights, Schedule B, attached hereto and
made a part hereof (hereinafter collectively referred to as the
"Proprietary Rights").
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All assets of Seller to be transferred to the Purchaser pursuant hereto,
including the Proprietary Rights and Contract Rights, are sometimes hereinafter
collectively referred to as the "Seller's Assets".
1.2 Excluded Assets
The following shall be excluded from Seller's Assets being sold and
transferred hereunder:
(a) All liabilities or obligations of Seller, in existence at the time of
the Closing.
1.3 Encumbrances
The sale and transfer of Seller's Assets shall, at the time of Closing, be
free and clear of all obligations, security interests, liens, infringements and
encumbrances whatsoever, except to the extent expressly included in the Schedule
of Encumbrances, Schedule C, attached hereto and made a part hereof.
1.4 Purchase Price
In consideration for the sale of the Seller's Assets to Purchaser,
Purchaser shall pay Seller as follows:
Three Million Five Hundred Thousand (3,500,000) shares of Area Investment
and Development Company common stock, $0.01 par value, which shall be duly
authorized, validly issued, fully paid and non-assessable (hereinafter referred
to as the "Purchaser Stock").
1.5 Closing
The "Closing" means the settlement of the obligations of Seller and
Purchaser to each other under this Agreement, including the payment of the
purchase price to Seller as provided in Paragraph 1.4 above and the satisfactory
fulfillment of the condition precedents provided for in Paragraph 6 hereof. The
Closing shall be held at the offices of Beckman, Millman & Sanders, LLP, 116
John Street, New York, New York 10038 on or about February 4, 2000 (the "Closing
Date").
1.6 Access and Information
Seller shall give to Purchaser, Purchaser's accountants, technical
personnel, counsel and other representatives access, during normal business
hours, from the date hereof to Closing, books, records, contracts and
commitments of Seller (including Contract Rights) and shall furnish the
Purchaser, during such period, with information concerning Seller's Assets as
the Purchaser may reasonably request. Such information shall be subject to the
provisions of Paragraph 7.15.
1.7 Conduct of Business
Seller warrants and represents to, and covenants and agrees with Purchaser
that, pending completion of the Closing, unless otherwise agreed upon in writing
by the Purchaser:
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(1) Seller shall not sell, license, contract, commit or otherwise encumber
Seller's Assets, other than in the ordinary course of business;
(2) Seller shall not amend, modify or terminate any agreement to which it
is a party and which in any way relates to Seller's Assets, other than
in the ordinary course of business;
(3) Seller shall not increase compensation payable or to become payable by
Seller to any employee, agent or consultant; and,
(4) Seller and its officers and employees shall use their best efforts to
preserve the business organization, Contract Rights and Proprietary
Rights in good order; and to preserve for the Purchaser the good will
of those having any business relationship with Seller which relates to
Seller's Assets or any portion thereof.
2. COVENANTS, WARRANTIES AND REPRESENTATIONS OF SELLER
Seller warrants and represents to Purchaser as follows:
2.1 Corporate Organization
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada and has full power and authority
to carry on its current business and to own, use and sell its assets, including
Seller's Assets, and properties.
2.2 Corporate Authority
The execution and delivery of this Agreement to Purchaser and the carrying
out of the provisions hereof have been duly authorized by the Board of Directors
of Seller and authorized by Seller's shareholders, and at Closing, Seller shall
furnish Purchaser duly certified copies of the authorizing resolutions of
Seller's Board of Directors and its shareholders.
2.3 Labor Issues
To the best of Seller's knowledge and belief, no strike, picketing or
similar action is pending or threatened against Seller by its employees or any
labor union. Seller further represents and warrants that to the best of its
knowledge and belief, Seller is not engaged in any unfair labor practices in
connection with the operation of the business of Seller relating to Seller's
Assets. Seller will not be responsible for any violations arising or determined
subsequent to Closing which have been caused by any act of Purchaser or any
failure to act by Purchaser. Seller warrants and represents that it has not had
any solicitation by any labor organization within the preceding three (3) years.
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2.4 Noninfringement
To the best of Seller's knowledge, the Proprietary Rights, in whole or in
part, do not infringe any patents, copyrights, trade secrets, trademarks or
other proprietary rights of any third parties and, to the best of Seller's
knowledge and belief, no rights or licenses are required from third parties to
exercise any rights with respect to Seller's Assets or any portion thereof.
2.5 Proprietary Rights
The Proprietary Rights are in full force and effect and there are no liens,
claims, proceedings or causes of actions which in any way affect the validity or
enforceability of such Proprietary Rights.
2.6 Contracts, Licenses, Permits and Approvals
(a) To the best of Seller's knowledge, Seller has no presently existing
contracts or commitments extending beyond the execution date hereof
which in any way relate to Seller's Assets that are not included in
the Schedule of Contract Rights, Schedule A hereto.
(b) Seller does not have any obligation under any collective bargaining
agreement or any other contract with a labor union. Except to the
extent set forth in the Schedule of Contract Rights, Schedule A
hereto, Seller is not a party to any executive or employee
compensation plan or agreement or compensatory plan or agreement with
any independent contractors, or employees or agents of Seller,
including, without limitation, any pension, retirement, profit
sharing, stock purchase, stock option, bonus or savings plan. Seller
agrees to pay or allow as a credit to the Purchaser any vacation or
sick pay accrued to Seller's employees at Closing up to and including
the Closing Date.
(c) Seller agrees to update Purchaser of any changes in status of the
Paragraph 2.6 representations.
2.7 Compliance
Neither the execution and delivery of this Agreement, nor any instrument or
agreement to be delivered by Seller to the Purchaser at the Closing pursuant to
this Agreement, nor the compliance with the terms and provisions thereof by
Seller, will result in the breach of any applicable statute or regulation
promulgated thereunder, or any administrative or court order or decree, nor will
such compliance conflict with, or result in the breach of; any of the terms,
conditions or provisions of the Certificate of Incorporation or by-laws of
Seller, as amended, or any agreement or other instrument to which Seller is a
party, or by which Seller is or may be bound, or constitute an event of default
or default thereunder, or with the lapse of time or the giving of notice or both
constitute an event of default thereunder.
2.8 Litigation
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There is no suit or action, or legal, administrative, arbitration or other
proceeding or governmental investigation affecting Seller's Assets pending, or
to the best knowledge and belief of Seller, threatened against Seller which
materially or adversely affects the business of Seller relating to Seller's
Assets or Seller's Assets. Seller further warrants and represents that there is
no outstanding judgment, decree or order against Seller which affects Seller or
Seller's Assets in any way.
2.9 Effect of Agreement
The terms and conditions of this Agreement and all other instruments and
agreements to be delivered by Seller to Purchaser pursuant to the terms and
conditions of this Agreement are valid, binding and enforceable against Seller
in accordance with their terms, subject only to the applicable bankruptcy,
moratorium and other laws generally affecting the rights and remedies of
creditors.
2.10 Good Title
Seller has and shall transfer to Purchaser at Closing good and marketable
title to Seller's Assets, free and clear of any and all security interests,
encumbrances or liens.
2.11 Representations and Warranties
No representation or warranty by Seller in this Agreement or any document
provided hereunder contains or will contain any untrue statement or omissions,
or will omit to state any material fact necessary to make the statements
contained herein or therein not misleading. All representations and warranties
made by Seller in this Agreement and any document provided hereunder shall be
true and correct as of the date of Closing with the same force and effect as if
they had been made on and as of such date.
2.12 Due Performance
Seller has in all material respects performed all obligations required to
be performed by it under, and is not in default in any material respect under,
or in violation in any material respect of, its Certificate of Incorporation or
by-laws, as amended, or any agreement, lease, mortgage, note, bond, indenture,
license or other documents or undertaking, oral or written, to which it is a
party or by which it is bound, or by which it or any of its properties or assets
may be materially affected. To the best of its knowledge, Seller is not in
violation or default in any material respect of any order, regulation,
injunction or decree of any court, administrative agency or governmental body.
The execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby will not result in any of the violations or
defaults referred to in this paragraph.
2.13 Subsidiaries
Seller does not have any subsidiaries nor does it have any interest in any
undisclosed business enterprise relating to or competing with Seller's Assets or
any portion thereof.
3. COVENANTS, WARRANTIES AND REPRESENTATIONS OF PURCHASER
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Purchaser warrants and represents to Seller as follows:
3.1 Corporate Organization
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Utah and is subject to the reporting
requirements imposed pursuant to Section 12(g,) of the Securities Exchange Act
of 1934, as amended, and has full power and authority to carry on its current
business and to purchase, own, use and sell its assets and properties.
3.2 Corporate Authority
The execution and delivery of this Agreement to Seller and the carrying out
of the provisions hereof have been duly authorized by the Board of Directors of
Purchaser, and at Closing, Purchaser shall furnish Seller duly certified copies
of the authorizing resolutions of Purchaser's Board of Directors.
3.3 Capitalization
The authorized capital stock of the Purchaser immediately prior to giving
effect to the transactions contemplated hereby consists of 50,000,000 shares, of
which 9,048,171 shares of its $.01 par value common stock are issued and
outstanding as of the date hereof. After giving effect to the issuance of its
shares, as provided herein, the Purchaser shall have 12,548,171 shares of its
$.01 par value common stock issued and outstanding. Additionally, all securities
issued by Purchaser as of the date of this Agreement have been issued in
compliance with all applicable state and federal laws.
3.4 Binding Nature
This Agreement shall be, when duly executed and delivered, a legal and
binding obligation of Purchaser, enforceable in accordance with its terms.
3.5 Warranties and Representations
No representation or warranty by Purchaser in this Agreement contains or
will contain any untrue statement or omission, or will omit to state a material
fact necessary to make the statements contained herein not misleading. All
representations and warranties made by Purchaser in this Agreement shall be true
and correct as of Closing with the same force and effect as if they had been
made on and as of such date.
3.6 Compliance with Securities Laws
Neither Purchaser nor any officer, director, affiliate, or controlling
person of Purchaser has committed any violation, or been in any way in
contravention, of any law, rule or regulation governing transactions in
securities, in connection with the transactions herein.
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3.7 Inspection and Value
Purchaser has formed its own opinion as to the value of Seller's Assets
being purchased hereunder. Seller's warranties include only such express written
warranties as are contained in this Agreement. Any other express warranty, oral
or written, not contained in this Agreement are of no force and effect. Seller
hereby disclaims all implied warranties, including without limitation, implied
warranties of merchantability and implied warranties of fitness for special or
ordinary uses or purposes. Purchaser has inspected Seller's Assets to the full
extent of Purchaser's desire, and Seller has given Purchaser ample opportunity
to conduct such inspections. Seller's Assets, except as expressly warranted or
represented herein, are purchased "As Is" and "With All Faults."
3.8 Litigation
There are no pending, or to the best knowledge and belief of the Purchaser,
threatened actions or proceedings before any court or administrative agency or
other authority which might or will materially or adversely affect Purchaser's
ability or right to perform all of Purchaser's obligations hereunder.
3.9 Conduct of the Business
Purchaser covenants that pending the Closing:
(a) Except as otherwise described herein, or as may be necessary to
effect the transactions contemplated by this Agreement, no change
will be made in Purchaser's Certificate of Incorporation or
bylaws and no change will be made in Purchaser's issued shares of
stock, as set forth in Paragraph 3.3 above, other than such
changes as may be first approved in writing by Seller.
(b) No dividends shall be declared and no stock options shall be
granted.
(c) Purchaser shall not sell any of its assets, nor incur additional
debt, without the express written consent of the Seller.
3.10 SEC Filings
As of the date of this Agreement, Purchaser has accurately and timely filed
with the Securities and Exchange Commission ("SEC") all registration statements,
financial statements, applications, reports, schedules, forms, proxy statements
and all other instruments, documents and written information (collectively, the
"SEC Filings") required to be filed by Purchaser under the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as amended. At the
date hereof, none of the SEC Filings contains or, on the Closing Date, will
contain any untrue statement of a material fact or omits or, on the Closing
Date, will omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances in which they were
made or shall have been made, not misleading.
4. LIABILITIES
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4.1 No Assumption of Liabilities
(a) Seller acknowledges that Purchaser is acquiring Seller's Assets
hereunder without any assumption of Seller's liabilities, except
to the extent expressly set forth in Schedule of Contract Rights,
Schedule A hereto.
(b) Seller will indemnify and hold Purchaser harmless from and
against any and all claims for products, service, and
professional liability against Seller arising out of sales of
products or services or grants of licenses rendered by Seller
prior to Closing.
4.2 Bulk Sales Law
Purchaser and Seller hereby waive compliance by Seller with the provisions
of the Bulk Sale Transfer Article of the Nevada Uniform Commercial Code, to the
extent applicable. Seller hereby represents and warrants that it presently has
sufficient amount of net cash proceeds in its operating and/or trust account to
pay all of Seller's creditors, if any, as and when their claims come due and to
indemnify and hold Purchaser harmless from and against any loss, damage or
expense, including a reasonable attorneys' fees and court costs, incurred by
Purchaser as a result of or attributable to the Seller's failure to comply with
said provisions.
5. CONDITIONS PRECEDENT
5.1 Conditions Precedent to Seller's Obligations
The obligations of Seller to complete the Closing hereunder are, at
Seller's option, subject to the following conditions:
(a) Purchaser's representations, warranties and covenants contained
in this Agreement shall be true at the time of Closing as though
such representations, warranties and covenants were made at such
time.
(b) Purchaser shall have performed and complied with all agreements
and conditions required by this Agreement to be performed or
complied with prior to or at the Closing.
(c) Purchaser covenants that it has complied in all material respects
with all applicable laws, orders and regulations of federal,
state, municipal and/or other governments and/or any
instrumentality thereof, domestic or foreign, applicable to its
assets, to the business conducted by it and to the transactions
contemplated by this Agreement.
(d) Effective as of the Closing Date, all of the members of
Purchaser's current board of directors and each and every person
serving as an officer of Purchaser shall resign their respective
positions and/or offices by tendering written resignations.
Immediately prior to said resignations, Purchaser's
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board of directors shall appoint those persons set forth on the
Schedule of New Directors and Officers, Schedule D, attached
hereto and made a part hereof, as members of Purchaser's new
board and/or as officers of Purchaser, with such appointments to
correspond with the position or office designated on Schedule D
and with such appointments to be effective as of the Closing.
(e) All press releases, shareholder communications, SEC Filings and
other publicity generated by Purchaser regarding the transactions
contemplated by this Agreement, or indirectly related to this
Agreement, shall have been reviewed and approved by the Seller
before their release to the public or any governmental agency.
5.2 Conditions Precedent to Purchaser's Obligations
The obligations of Purchaser to complete the Closing under this Agreement
are, at Purchaser's option, subject to fulfillment by Seller, or otherwise, of
each of the following conditions:
(a) All representations and warranties of Seller contained in this
Agreement shall be true in all material respects as of and at the
Closing with the same effect as if said representations and
warranties had been made on and as of Closing, except and to the
extent otherwise specifically provided by the terms and
conditions of this Agreement.
(b) Seller shall have performed and complied with all agreements,
terms and conditions required by this Agreement to be performed
and complied with by Seller on or before the Closing.
(c) Seller shall have delivered to Purchaser such other instruments
and documents as Purchaser shall reasonably request for the
purpose of further perfecting the title of Purchaser in Seller's
Assets.
(d) Seller shall not be in bankruptcy or similar proceedings.
(e) Seller shall deliver to Purchaser an Investment Letter
substantially similar to the Form of Investment Letter attached
hereto as Exhibit A.
5.3 Waivers and Consents
Promptly following the execution of this Agreement, Seller shall use its
best efforts to obtain such written waivers and consents as may be required, or
reasonably requested by Purchaser, in connection with the sale and assignment of
Seller's Assets by Seller to Purchaser in accordance with the terms of this
Agreement.
6. CLOSING OBLIGATIONS
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6.1 Seller's obligations at Closing
At the Closing, Seller shall execute and deliver to Purchaser:
(a) A bill of sale, assignments, or such other instruments, and
documents of conveyance and transfer to Purchaser of all of
Seller's Assets.
(b) Appropriate original instruments of consent or waiver executed by
third parties with respect to all Contract Rights being
transferred to Purchaser hereunder in order more fully to effect
transfer of Seller's Assets hereunder, including, without
limitation, consents by all appropriate governmental agencies, if
any.
(c) Possession of the originals of all Seller's Assets and all copies
thereof; it being understood and agreed that no Seller's Assets
or any portion thereof shall remain in the possession or control
of Seller after the Closing.
(d) True and complete copies of resolutions duly accepted by Seller's
board of Directors and all shareholders entitled to vote hereon
confirming this Agreement, authorizing the carrying out of all
transactions contemplated herein and the execution and delivery
by Seller of all instruments then or thereafter required to do
so; said resolutions to be duly certified by the Secretary of
Seller.
(e) Such other instruments and documents as may be elsewhere herein
required.
(f) A certificate signed by the President and by the Secretary of
Seller, dated the date of Closing, certifying that all of
Seller's representations and warranties set forth in this
Agreement continue to be true on the Closing date as if
originally made on such date, except and to the extent otherwise
expressly provided or permitted in this Agreement.
(g) Seller shall deliver to Purchaser an Investment Letter
substantially similar to the Form of Investment Letter attached
hereto as Exhibit A.
6.2 Seller's Further Assurance
From time to time, at Purchaser's request and expense, whether at or after
the Closing and without further consideration, Seller shall:
(a) Execute and deliver to Purchaser such instruments as may
reasonably be required to carry out the intent and purpose of
this Agreement.
(b) Deliver to Purchaser such other data, papers and information as
may be requested by the Purchaser to assist the Purchaser in the
use of Seller's Assets.
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6.3 Purchaser's Obligations at Closing
At Closing, Purchaser shall execute and deliver to Seller:
(a) The payments provided for herein in a form of stock certificates,
stock power and such other instruments and documents as may be
necessary and required herein.
(b) True and complete copies of resolutions duly adopted by
Purchaser's Board of Directors and duly certified by the
Secretary of the Purchaser which provide all necessary corporate
authorization for the execution and carrying out of this
Agreement and the provisions hereof.
(c) A certificate signed by the President and by the Secretary of the
Purchaser, dated the date of Closing, certifying that all of
representations and warranties set forth in this Agreement
continue to be true on the Closing date as if originally made on
such date and the fulfillment of the covenants and agreements as
of the Closing.
(d) Appropriate instruments assuming obligations of Seller in the
Contract Rights and indemnifying Seller.
7. MISCELLANEOUS
7.1 Brokerage
Each party hereto represents and warrants to the other that no broker or
finder is entitled to any commission, or similar fee, in connection with the
making and carrying out of this Agreement.
7.2 Sales Taxes
Any sales taxes which may be payable in connection with the transfer of any
of Seller's Assets shall be borne solely by Seller, who shall certify to the
Purchaser that all such taxes have been paid and shall indemnify and hold
Purchaser harmless therefor.
7.3 Indemnification
Seller covenants and agrees to defend, indemnify, and hold Purchaser
harmless against any loss, damage, claim of third parties, actions, suits,
demands, judgments, or expense (including legal and other fees, costs and
charges) incurred or sustained by Purchaser as a result of or attributable, in
whole or in part, to any misrepresentation or breach of any representation,
warranty, covenant, or agreement herein (including, without limitation,
provisions on applicable bulk transfer laws) given or made by Seller. Purchaser
covenants and agrees to defend, indemnify, and hold Seller harmless against any
loss, damage, claim of third parties, actions, suits, demands, judgments, or
expenses (including legal and other fees, costs and charges) incurred or
sustained by Seller as a result of or attributable, in while or in part, to any
misrepresentation or breach of any representation, warranty,
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covenant, or agreement herein (including, without limitation, provisions with
respect to applicable bulk transfer sales laws and Purchaser's representations
of compliance with securities laws, rules and regulations) given or made by
Purchaser.
7.4 Effectiveness
This Agreement supersedes any and all agreements, if any, previously made
between the parties relating to the subject matter hereof; and there are no
understandings or agreements other than those included herein.
7.5 Notices and Communications
Any notice, payment, request, instruction, or other document to be
delivered hereunder shall be deemed sufficiently given if in writing and
delivered personally, mailed by certified mail, postage prepaid, or by any
nationally-recognized overnight mail or courier services, if to Purchaser
addressed to Purchaser at the address first set forth above, with one copy to:
Beckman, Millman & Sanders, LLP
116 John Street
New York, NY 10038
Attention: Steven A. Sanders, Esq. and Laurence D. Paredes, Esq.
and if addressed to Seller, addressed to Seller at:
2133 East 9400 South, Suite 151
Sandy, Utah 84093
Attention: Ken Kurtz, President
unless in each case Purchaser or Seller shall have notified the other in writing
of a different address.
7.6 Non-waiver
No delay or failure on the part of either party in exercising any right
hereunder, and no partial or single exercise thereof; will constitute a waiver
of such right or of any other right hereunder.
7.7 Headings
Headings in this Agreement are for convenience only and are not to be used
for interpreting or construing any provision hereof
7.8 Governing Law
This Agreement shall be construed in accordance with and governed by the
laws of the State of Utah without giving effect to conflict of law principals.
7.9 Counterparts
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This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
7.10 Binding Nature
The provisions of this Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
7.11 Survival of Representations and Warranties
Except as otherwise expressly provided in this Agreement or the Schedules
annexed, the representations and warranties of Purchaser and Seller extended
hereunder shall survive the Closing. Each party against whom liability is
asserted under the provisions of this Agreement shall be given the opportunity
to participate, directly or through its authorized representative, at its cost
and expense, in the conduct of any negotiations relating to the settlements of
any liability or any other proceeding instituted by any third party against
either Seller or Purchaser, as the case may be, giving rise to the alleged
breach.
7.12 Expenses
Except as otherwise expressly provided herein, each party shall pay all of
its own expenses incidental to the negotiation and preparation of the
documentation and financial statements relating to this Agreement and for
entering into and carrying out the terms and conditions of this Agreement and
consummating the transactions, irrespective of whether the transactions
contemplated shall be consummated.
7.13 Payment of Taxes
All fees, costs, charges, and expenses payable to any federal, state, or
municipal authority, including without limitation all filing fees, documentary
stamps and transfer, sales and other taxes required to be paid, or imposed in
connection with the transfer of any of Seller's Assets pursuant to the terms of
this Agreement shall be paid by Seller.
7.14 Amendment; Successors and Assigns
This Agreement may be amended only by an instrument signed by the
authorized representatives of the parties hereto. Neither party may assign any
of its rights, obligations, or liabilities arising hereunder without the prior
written consent of the other, except as otherwise provided herein, and any such
assignment or attempted assignment shall be null and void.
7.15 Confidentiality
Prior to the Closing of the transactions contemplated hereunder, the
parties hereto shall keep confidential the existence of this Agreement, the
transactions described herein and all information obtained from the other
concerning Seller's Assets or the business plans of the Purchaser; provided,
however, the covenants contained in this Paragraph 7.15 shall not apply in
respect to any information
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which:
(a) was already known to either of the parties at the time of receipt
thereof from the other,
(b) was readily available to the general public at the time of
receipt thereof from the other,
(c) subsequently becomes known to the general public through no fault
or omission on the part of the party receiving such information,
(d) is subsequently disclosed by a third party which has the bona
fide right to make such disclosure, or
(e) is required to be disclosed by applicable law, regulation or
court order.
7.16 Third Party Beneficiaries
Except for their proper successors and assigns, the parties hereto intend
that no third party shall have any rights or claims by reason of this Agreement.
7.17 Facsimile Signatures
In order to expedite the execution of this Agreement, the parties hereto
agree that either party may send its signature by facsimile transmission to the
other party hereto and that, upon transmission, such signing party intends to be
bound by the terms and conditions of this Agreement. Both the Seller and the
Purchaser further acknowledge and agree that any signature obtained by facsimile
transmission shall be relied upon by the other party hereto and waive any and
all defenses to the enforcement of this Agreement based upon the form of the
signature.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed in
their respective corporate names by their respective Presidents, and their
respective corporate seals to be affixed and attested by their respective
Secretaries, duly authorized by resolution of their respective Boards of
Directors, on the day and year first above written.
SELLER:
Maxx International, Inc.
By: /s/ Rick Garson
---------------------------
Rick Garson, President
PURCHASER:
Area Investment and Development
Company
By: /s/ Ken Kurtz
---------------------------
Ken Kurtz, President
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Schedule A
Schedule of Contract Rights
1. July 14, 1999 Assignments of the June 21, 1999 Agreement between Max
Entertainment LLC, Doyle Capital Management Limited and Libreria Editrice
Rogate.
<PAGE>
Schedule B
Schedule of Proprietary Rights
1. URL: "www.maxxinternational.com"
2. "Maxx International, Inc."
3. All works in progress, or development, in connection with the rights
acquired from the July 14, 1999 Assignment of the June 21, 1999 Agreement
between Max Entertainment LLC, Doyle Capital Management Limited and
Libreria Editrice Rogate
<PAGE>
Schedule C
Schedule of Encumbrances
None
<PAGE>
Schedule D
Schedule of New Directors and Officers
Board of Directors:
Michael Solomon - Chairman of the Board
Rick Garson
Tammy Gehring
Officers:
Rick Garson - President, Secretary and Treasurer
<PAGE>
Exhibit A
Form of Investment Letter
AREA INVESTMENT AND DEVELOPMENT COMPANY
c/o Ken Kurtz, president
2133 East 9400 South Suite 151
Sandy, Utah 84093
Re: INVESTMENT LETTER DATED February 3, 2000
Dear Mr. Kurtz:
As consideration of a sale of assets by Maxx International, Inc. ("Maxx")
to Area Investment and Development Company ("Area"), Maxx has agreed to acquire
3,500,000 pre-split restricted shares of Common Stock of Area, a Utah
corporation, par value $0.01 (the "Securities"). To induce Area to issue the
Securities, Maxx hereby represents to Area that:
1. The Securities which are to be acquired by Maxx are being acquired for
its own account and for investment and not with a view to the public
resale or distribution thereof.
2. Maxx acknowledges and understands that the Securities have not been
registered pursuant to any federal or state securities laws and
therefore may not be resold unless the Securities are subsequently
registered under the Securities Act of 1933, as amended (the "Act"),
or an exemption from such registration is available. The Securities
are thus "restricted securities" as that term is defined in Rule 144
(the "Rule") promulgated under the Act, which Rule addresses the
resale of unregistered securities.
3. Maxx agrees not sell, transfer or otherwise dispose of the Securities
unless, in the opinion of the Area's counsel, such disposition
conforms with applicable securities laws requirements.
4. Maxx further acknowledges that it is fully aware of the applicable
limitations on the resale of the Securities. These restrictions for
the most part are set forth in the Rule. If and when the Rule is
available to Maxx, it may only make sales of the Securities in
accordance with the terms and conditions of the Rule.
5. Maxx has received and reviewed all of the information it deems
necessary from Area including Area's 10-SB filing dated August 10,
1999 and Area's 10-QSB filing dated September 30, 1999. Maxx
acknowledges that it has had an opportunity to ask questions of and
receive answers from duly designated representatives of Area
concerning the finances of Area and the proposed business plan of
Area.
6. By reason of Maxx's knowledge and experience in financial and business
matters in general and investments in particular it is capable of
evaluating the merits and risks of an investment in the Securities.
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7. Maxx is capable of bearing the economic risks of an investment in the
Securities. Maxx fully understand the speculative nature of the
Securities and the possibility of loss.
8. Maxx's present financial condition is such that it is under no present
or contemplated immediate future need to dispose of any portion of the
Securities to satisfy any existing or contemplated immediate
undertaking, need, or indebtedness.
9. Any and all certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefor,
shall bear a restrictive legend.
10. Maxx further agrees that Area shall have the right to issue
stop-transfer instructions to its transfer agent until such time as
sale is permitted under the Act and acknowledge that Area hereby
informs Maxx of its intention to issue such instructions.
Very truly yours,
Maxx International, Inc.
By: /s/ Rick Garson
-------------------------------
Name: Rick Garson
Title: President
Date: February 3, 2000
2
