SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) DECEMBER 31, 1999
--------------------------------
PIRANHA, INC
(Exact name of Registrant as specified in charter)
DELAWARE 0-20190 36-3859518
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1350 NORTH LAKE SHORE DRIVE CHICAGO, IL 60610
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (312) 664-7852
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CLASSICS INTERNATIONAL ENTERTAINMENT INC.
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
ACQUISITION OF IBP, INC.
On December 30, 1999, Classics International Entertainment, Inc.
("Classics") and IBP entered into a definitive Agreement and Plan of Merger and
Reorganization ("Merger Agreement") and the transaction was consummated.
Pursuant to the terms of the Agreement, Classics acquired all of the capital
stock of IBP through a merger of its specially formed subsidiary, Classics
Acquisition Corp., Inc. with and into IBP. As a result of the acquisition, IBP
became a wholly-owned subsidiary of Classics. The two stockholders of IBP
received an aggregate of 3,490,000 pre-reverse split shares of Common Stock of
Classics in exchange for all of their capital stock of IBP. The IBP acquisition
is intended to qualify as a tax free exchange pursuant to Section 368 of the
Internal Revenue Code. IBP was a private company owned by two persons, Mr.
Michael Steele and Mr. Carey Lotzer.
The Classics' Board of Directors determined to proceed with the
acquisition in order to obtain certain technology owned by IBP and its
shareholders regarding digital workflow processing and text stream data
compression. None of the technology is subject to a patent or trademark.
IBP was formed in November 1999 and had not engaged in any business
operations other than development of the technology, and has no revenues. IBP
had not produced any financial statements prior to the acquisition and it was
not a condition to closing that any financial statements be produced by IBP.
Messrs. Lotzer and Steele have entered into employment agreements with
Classics and its subsidiaries. Mr. Lotzer entered into a two-year employment
contract on November 16, 1999 at an annual salary of $150,000 year one and
$200,000 year two. Mr. Lotzer will serve in the capacity of Chief Scientist and
will be appointed to the Board of Directors in an annual alternation with Mr.
Steele. As part of his employment agreement, Mr. Lotzer has been granted the
option to receive up to 200,000 performance based stock options at the strike
price of $1.35 per share as well as 100,000 incentive based stock options at a
strike price of $5.00 per share.
Mr. Steele entered into a two-year employment contract on November 16,
1999 at an annual salary of $150,000 per year. Mr. Steele will serve in the
capacity of Chief Information Officer and will be appointed to the Board of
Directors in an annual alternation with Mr. Lotzer. As part of his employment
agreement, Mr. Steele has been granted the option to receive up to 200,000
performance based stock options at the strike price of $1.35 per share as well
as 100,000 incentive based stock options at a strike price of $5.00 per share.
ITEM 4. OTHER EVENTS
On or about January 30, 2000 Classics delivered an Information
Statement to its shareholders of record on January 12, 2000 to notify its
shareholders that it had received written consents from shareholders holding
approximately 60.3% of its outstanding shares of Common Stock (11,380,291
shares) to effect the following corporate actions:
1. changing the name of Classics to Piranha, Inc.;
2. increasing the number of authorized shares of Common Stock
from 30,000,000 shares to 100,000,000 shares; and
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3. effecting a reverse stock split of the Common Stock so that
all issued and outstanding shares of Common Stock (including
outstanding options, preferred stock and warrants to purchase
Common Stock) will be reduced at the rate of 1 share for every
3.49 shares of Common Stock prior to the reverse split.
With respect to the reverse stock split, by way of example, for every
3.49 shares held by a Classics' stockholder, the stockholder would be deemed to
own 1 one share after the split. By way of another example, if a stockholder
owns 10,000 shares, the stockholder would be deemed to own 2,866 shares (after
rounding). The par value of the Common Stock has not changed.
On the record date, January 11, 2000 there were 18,868,916 shares of
Common Stock outstanding. After completing the reverse stock split, Classics has
approximately 5,406,566 shares of Common Stock outstanding. Fractional shares
will not be issued and shareholders will receive the nearest whole share rounded
up. The reverse stock split will also similarly impact the number of outstanding
convertible securities such as warrants, options and preferred stock. Classics
intends to deliver to shareholders, through its transfer agent Continental Stock
Transfer & Trust Company, a letter of transmittal for shareholders to return
their share certificates to Continental for re-issuance to reflect the new name
and reverse split.
The board of directors of classics approved the amendments to the
certificate of incorporation and authorized the sending of the information
statement to all stockholders of Classics.
The foregoing actions became effective on February 23, 2000 with the
filing of an Amendment to the Classics' Certificate of Incorporation with the
Office of the Secretary of State of Delaware.
Exhibits
Item Description
3.1 Certificate of Amendment to Articles of Incorporation
10.1 Merger Agreement And Plan of Reorganization dated
as of December 30, 1999 Pursuant to Section 368 of the Internal
Revenue Code Among Classics International Entertainment, Inc.,
Classics Acquisition Corp., Inc. and IBP, Inc., Carey Lotzer And
Michael Steele.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report on Form 8K to be signed on its
behalf by the undersigned hereunto duly authorized.
March 7, 2000 PIRAHNA, INC
(formally Classics International Entertainment, Inc.)
(Registrant)
BY:
Richard Berger, Chief Executive Officer
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CLASSICS INTERNATIONAL ENTERTAINMENT, INC.
Classics International Entertainment, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify:
FIRST: That the Board of Directors of said corporation, by the
unanimous written consent of its members filed with the minutes of the Board,
adopted a resolution proposed and declaring advisable the following amendments
to the Certificate of Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of Classics
Entertainment International, Inc. be amended by changing Article
"FIRST" thereof so that, as amended, said Articles "FIRST" and "FOURTH
(a)" shall be and read as follows:
"FIRST The name of the Corporation is PIRANHA, INC.";
"FOURTH (a)The Corporation is authorized to issue One Hundred
and Five Million (105,000,000) shares of capital stock,
consisting of One Hundred Million (1,000,000) shares of Common
Stock, $.001 par value per share, and Five Million (5,000,000)
shares of Preferred Stock, $.001 par value (the "Preferred
Stock"), of which 1,000,000 shares have previously been
designated Series A 9% Cumulative Convertible Redeemable
Preferred Stock, 1,100,000 have previously been designated
Series B Cumulative Convertible Redeemable Preferred Stock and
2,000 shares have previously been designated Series D 4%
Cumulative Convertible Redeemable Preferred Stock.
All the shares of Common Stock, par value $.001 per share,
issued and outstanding as of the date of the filing of this
Certificate of Amendment of the Certificate of Incorporation
are hereby subject to a reverse stock split of its Common
Stock, whereby every 3.49 shares of issued and outstanding
shares of Common Stock (and it being understood that the
number of shares of Common Stock issuable upon exercise or
conversion of all issued and outstanding Preferred Stock,
options, warrants and
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convertible securities of every kind and all options under the
Company's Employee Stock Option Plan) shall equal 1 share of
Common Stock following the filing of this Certificate of
Amendment."
SECOND: That in lieu of a meeting and vote of stockholders, a majority
of the stockholders have given written consent to said amendment in accordance
with the provisions of Section 228 of the General Corporation Law of the State
of Delaware and written notice of the adoption of the amendment has been given
as provided in Section 228 of the General Corporation Law of the State of
Delaware to every stockholder entitled to such notice.
THIRD: That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of Sections 242 and 228 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, Classics International Entertainment, Inc. has
caused this certificate to be signed by its President and Secretary this __ day
of February, 2000.
CLASSICS INTERNATIONAL
ENTERTAINMENT, INC.
BY____________________
Name:
Title:
BY____________________
Name:
Title: Secretary
MERGER AGREEMENT AND
PLAN OF REORGANIZATION
PURSUANT TO SECTION 368
OF THE INTERNAL REVENUE CODE
AMONG
CLASSICS INTERNATIONAL ENTERTAINMENT, INC.,
CLASSICS ACQUISITION CORP., INC.
AND
IBP, INC.,
CAREY LOTZER
AND
MICHAEL STEELE
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TABLE OF CONTENTS
PAGE
1 DEFINITIONS.................................................................1
2 BASIC TRANSACTION...........................................................6
(A) THE MERGER..............................................................6
(B) THE CLOSING.............................................................6
(C) MERGER CONSIDERATION ...................................................6
(D) ACTIONS AT THE CLOSING..................................................7
(E) EFFECT OF MERGER........................................................7
3 REPRESENTATIONS AND WARRANTIES OF CLASSICS AND CLASSICS ACQUISITION.........9
(A) ORGANIZATION, QUALIFICATION AND CORPORATE...............................9
(B) AUTHORIZATION OF TRANSACTION............................................9
(C) NONCONTRAVENTION.......................................................10
(D) BROKERS' FEES..........................................................10
(E) CAPITALIZATION.........................................................10
(F) DUE AUTHORIZATION OF CLASSICS SHARES...................................11
(G) ACQUISITION OF IBP SHARES FOR INVESTMENT...............................11
(H) CERTAIN MATTERS RELATING TO IBP........................................11
(I) FINANCIAL STATEMENTS...................................................11
(J) UNDISCLOSED LIABILITIES................................................11
(K) LEGAL COMPLIANCE.......................................................12
(L) TAX MATTERS............................................................12
(M) LITIGATION.............................................................13
(N) EVENTS SUBSEQUENT TO FINANCIAL STATEMENTS..............................13
(O) INTELLECTUAL PROPERTY..................................................14
(P) NOTES AND ACCOUNTS RECEIVABLE..........................................14
(Q) CONTRACTS..............................................................14
(R) DISCLOSURE.............................................................15
(S) FILINGS WITH THE SEC...................................................16
4 REPRESENTATIONS AND WARRANTIES OF IBP......................................16
(A) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER(A) ORGANIZATION,
QUALIFICATION, AND CORPORATE POWER.........................................16
(B) CAPITALIZATION.........................................................16
(C) AUTHORIZATION OF TRANSACTION...........................................16
(D) NONCONTRAVENTION.......................................................17
(E) REVENUE; OPERATIONS; ABILITY TO PREPARE FINANCIAL STATEMENTS...........17
(F) SELLERS' OWNERSHIP OF SHARES AND INVESTMENT REPRESENTATION.............17
(G) STOCK LEGENDS..........................................................18
(H) EVENTS SUBSEQUENT TO FORMATION OF IBP..................................18
(I) BROKERS' FEES..........................................................19
(J) UNDISCLOSED LIABILITIES................................................20
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(K) TAX MATTERS...........................................................20
(L) WARRANTIES.............................................................20
(M) REAL PROPERTY..........................................................20
(N) INTELLECTUAL PROPERTY..................................................21
(O) CONTRACTS..............................................................21
(P) NOTES AND ACCOUNTS RECEIVABLE..........................................22
(Q) POWERS OF ATTORNEY.....................................................22
(R) LITIGATION.............................................................23
(S) EMPLOYEE BENEFITS......................................................23
(T) GUARANTIES.............................................................23
(U) SUBSIDIARIES...........................................................23
(V) LEGAL COMPLIANCE.......................................................23
(W) INSURANCE..............................................................23
(X) DISCLOSURE.............................................................23
5 PRE-CLOSING COVENANTS......................................................23
(A) GENERAL................................................................23
(B) NOTICES AND CONSENTS...................................................23
(C) OPERATION OF BUSINESS..................................................24
(D) PRESERVATION OF BUSINESS...............................................24
(E) FULL ACCESS, AUDIT.....................................................24
(F) NOTICE OF DEVELOPMENTS.................................................24
(G) EXCLUSIVITY............................................................24
(H) APPROVAL...............................................................25
6 CONDITIONS TO OBLIGATION TO CLOSE..........................................25
(A) GENERAL CONDITIONS.....................................................25
(B) CONDITIONS TO OBLIGATION OF CLASSICS...................................25
(C) CONDITIONS TO OBLIGATION OF IBP........................................27
7 REMEDIES FOR BREACHES OF THIS AGREEMENT....................................29
(A) SURVIVAL OF REPRESENTATIONS AND WARRANTIES.............................29
(B) INDEMNIFICATION PROVISIONS FOR BENEFIT OF CLASSICS.....................29
(C) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLERS..................29
(D) MATTERS INVOLVING THIRD PARTIES(D) MATTERS INVOLVING THIRD PARTIES.....30
(E) OTHER INDEMNIFICATION PROVISIONS.......................................31
8 COVENANTS, CONFIDENTIALITY.................................................31
9 TERMINATION................................................................32
(A) TERMINATION OF AGREEMENT...............................................32
(B) EFFECT OF TERMINATION..................................................33
(C) EXTENSION; WAIVER......................................................33
10 GUARANTEE..................................................................33
11 Miscellaneous..............................................................33
(A) TAX FILINGS............................................................33
(B) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS................................33
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(C) NO THIRD-PARTY BENEFICIARIES...........................................33
(D) ENTIRE AGREEMENT.......................................................34
(E) SUCCESSION AND ASSIGNMENT..............................................34
(F) COUNTERPARTS...........................................................34
(G) HEADINGS...............................................................34
(H) NOTICES................................................................34
(I) GOVERNING LAW..........................................................35
(J) JURISDICTION AND VENUE.................................................35
(K) AMENDMENTS.............................................................35
(L) SEVERABILITY...........................................................35
(M) EXPENSES...............................................................35
(N) CONSTRUCTION...........................................................35
(O) INCORPORATION OF EXHIBITS AND SCHEDULES................................36
(P) AGREEMENT REGARDING POOLING ACCOUNTING TREATMENT.......................36
Exhibit A Sellers' Percentages
Exhibit B Classics' Financial Statements
Exhibit C IBP's Financial Statements
Exhibit D Opinion of Counsel
Schedule 3(e) Capitalization
Schedule 3(n) Events Subsequent to Financial Statements
Schedule 3(o) Classics' Intellectual Property
Schedule 4(f) Sellers' Ownership of Shares
Schedule 4(h) Events Subsequent to Most Recent Fiscal Quarter
Schedule 4(j) Undisclosed Liabilities
Schedule 4(n) IBP Intellectual Property
Schedule 4(q) Litigation
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MERGER AGREEMENT
This MERGER AGREEMENT (this "Agreement") is entered into as of December
30, 1999, by and among CLASSICS INTERNATIONAL ENTERTAINMENT, INC., a Nevada
corporation ("Classics"), CLASSICS ACQUISITION CORP., INC., a Delaware
corporation and wholly-owned subsidiary of Classics ("Classics Acquisition"),
IBP INC., a Nevada corporation ("IBP"), MICHAEL STEELE, ("Steele"), and CAREY
LOTZER, ("Lotzer," and together with "Steele" referred to as the "Sellers").
Classics, Classics Acquisition, IBP and Sellers are sometimes referred to
collectively herein as the "Parties."
RECITALS
WHEREAS, the Sellers own all of the issued and outstanding shares of
common stock, $.001par value per share, of IBP (the "IBP Common Stock");
WHEREAS, Classics is desirous of acquiring all of the IBP Common Stock
through a reverse subsidiary merger of newly formed Classics Acquisition with
and into IBP, the result of which IBP shall become a wholly-owned subsidiary of
Classics;
WHEREAS, the Parties intend the transaction to qualify as a tax free
merger pursuant to Section 368 of the Internal Revenue Code and also intend to
utilize the "pooling method" under GAAP (as defined below) for the transaction;
WHEREAS, the Parties desire to enter into this Agreement and to
consummate the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, and for other good and valuable consideration,
the Parties agree as follows.
1. DEFINITIONS
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"AFFILIATE" has the meaning set forth in Rule 12-2 of the regulations
promulgated under the Securities Exchange Act.
"ANNIVERSARY DATE" means the one (1) year anniversary of the date
hereof.
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"AVERAGE CLOSING PRICE ON THE ANNIVERSARY DATE" has the meaning set
forth in Section 2(c).
"BASIS" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"CLASSICS" has the meaning set forth in the preface above.
"CLASSICS SHARES" means shares of common stock, par value $.001 per
share, of Classics.
"CLASSICS ACQUISITION" HAS THE MEANING SET FORTH IN THE PREFACE ABOVE.
"CLASSICS ACQUISITION COMMON STOCK" means shares of common stock, par
value [$.001] per share of Classics Acquisition.
"CLOSING" has the meaning set forth in Section 2(b) below.
"CLOSING DATE" has the meaning set forth in Section 2(b) below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"DISCLOSURE SCHEDULES" means the Disclosure Schedules to this Agreement
annexed hereto (and subsequently supplemented and amended) which are approved by
such other party (with reservation of all rights with respect thereto) and
incorporated by reference to the Section of this Agreement to which each such
schedule relates. The disclosure of an item in a Disclosure Schedule or under a
heading in a Disclosure Schedule corresponding to that particular section or
subsection of this Agreement shall not be deemed a disclosure under (i) any
other item of such Disclosure Schedule, (ii) any other Disclosure Schedules, or
(iii) any other section or subsection thereof. In the event of any inconsistency
between the statements in the body of this Agreement and those in the Disclosure
Schedules hereto (other than an exception expressly set forth as such in the
schedules in relation to a specifically identified representation or warranty),
those in this Agreement shall control.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan or
material fringe benefit plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA Sec.
3(2).
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"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA Sec.
3(1).
"EMPLOYMENT AGREEMENTS" means the employment agreements to be entered
into among Classics, IBP, Michael Steele and Carey Lotzer concurrently with this
Agreement at the Closing.
"ENVIRONMENTAL, HEALTH, AND SAFETY LAWS" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 4(e) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"GOVERNMENTAL BODY" means any court or any federal, state, municipal or
other governmental department, commission, board, bureau, agency, authority or
instrumentality, domestic or foreign.
"IBP" has the meaning set forth in the preface above.
"IBP COMMON STOCK" has the meaning set forth in the recitals above.
"INDEMNIFIED PARTY" has the meaning set forth in Section 8(d) below.
"INDEMNIFYING PARTY" has the meaning set forth in Section 8(d) below.
"INTELLECTUAL PROPERTY" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations- in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications,
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registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals),
(f) all computer software (including data and related documentation), (g) all
other proprietary rights, and (h) all copies and tangible embodiments thereof
(in whatever form or medium). With respect to IBP, the term Intellectual
Property shall include all of the foregoing related to digital workflow
processing and data compression.
"KNOWLEDGE" means actual knowledge after reasonable investigation.
"LIABILITY" OR "LIABILITIES" means any liability (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due or to
become due), including any liability for Taxes.
"LIEN" means any mortgage, pledge, security interest, encumbrance,
lien, claim, or charge of any kind.
"MATERIAL" means any act, occurrence or event which results in, or will
result in, with the passage of time, the payment of, or incurrence of Liability
in the sum of $20,000 individually or $50,000 in the aggregate.
"MATERIAL ADVERSE EFFECT" OR "MATERIAL ADVERSE CHANGE" means any change
or effect that is, or is reasonably likely to be, materially adverse to the
business, financial condition, assets, liabilities, prospects or results of
operations of a Person.
"MERGER" has the meaning set forth in Section 2(a) below.
"MERGER CONSIDERATION" has the meaning set forth in Section 2(c) below.
"MOST RECENT FINANCIAL STATEMENTS" has the meaning set forth in Section
4(e) below.
"MULTIEMPLOYER PLAN" has the meaning set forth in ERISA Sec. 3(37).
"OPERATIVE DOCUMENTS" means all agreements, instruments, documents,
schedules, exhibits and certificates executed and delivered by or on behalf of
Sellers, Classics, Classics Acquisition and IBP at or before the Closing
pursuant to this Agreement.
"ORDER" means any order, writ, injunction, decree, judgment, award or
determination of any Governmental Body.
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"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PARTY" has the meaning set forth in the preface above.
"PERMITS" means all permits, authorizations, certificates, approvals,
registrations, variances, exemptions, rights-of-way, franchises, privileges,
immunities, grants, ordinances, licenses and other rights of every kind and
character (a) under any (1) federal, state, local or foreign statute, ordinance
or regulation, (2) Order or (3) contract with any Governmental Body or (b)
granted by any Governmental Body.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"PROCEEDING" means any action, Order, claim, suit, proceeding,
litigation, investigation, inquiry, review or notice.
"PUBLIC REPORTS" has the meaning set forth in Section 3(f).
"PURCHASE PRICE" has the meaning set forth in Section 2(c) below.
"PURCHASE PRICE ADJUSTMENT PERIOD" means the period beginning as of the
date of the Closing and ending on the Anniversary Date.
"REQUISITE CORPORATE APPROVAL"has the meaning set forth in Section 5(i)
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable or for Taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"SELLERS" has the meaning set forth in the preface above.
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"SUBSIDIARY" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"TAX" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Sec. 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"THIRD PARTY CLAIM" has the meaning set forth in Section 7(d) below.
2. BASIC TRANSACTION
(a) The Merger. On and subject to the terms and conditions of this
Agreement, Classics Acquisition will merge with and into IBP (the "Merger") at
the Effective Time (hereinafter defined). The separate existence of Classics
Acquisition shall thereupon cease, and IBP, as the surviving corporation in the
Merger (the "Surviving Corporation"), shall continue its corporate existence
under the laws of the State of Nevada under the name of IBP, Inc.
(B) THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "CLOSING") shall take place by fax and overnight courier,
commencing at 10:00 a.m. local time on December 30, 1999 or such other place or
date as the Parties may mutually determine (the "Closing Date").
(C) MERGER CONSIDERATION
(I) PRELIMINARY PURCHASE PRICE: The preliminary purchase price
to be paid by Classics (the "Preliminary Purchase Price") to the
Sellers for the IBP Common Stock shall be an aggregate of 3,490,000
shares of Classics' Shares to be issued to the Sellers proportionately
in accordance with the percentages set forth in Exhibit A (the
"Preliminary Purchase Price"). The Preliminary Purchase Price shall be
subject to post-Closing adjustment as set forth below in Section
2(c)(ii). The number of Classics Shares set forth above is reflective
of the proposed .349 for 1 reverse stock split which Classics intends
to complete prior to closing. In the event that the proposed stock
split of .349 to 1 of Classics is effective prior to Closing, then
Sellers shall receive an aggregate of 3,490,000 Classics Shares.
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(II) ADJUSTMENT TO PRELIMINARY PURCHASE PRICE: If during the
Purchase Price Adjustment Period, the Classics Shares have not obtained
a per share price of at least $5 per share, as reported on the OTC
Bulletin Board, for any twenty (20) consecutive trading days during
such period, then the Sellers shall be entitled to be issued within
seven (7) business days of the Anniversary Date an aggregate amount of
Classics Shares as determined as follows (rounded to the next highest
whole share): (i) $5,000,000, less (ii) the product of (a) the Average
Closing Price on the Anniversary Date for the Classics Shares
multiplied by (b) 1,000,000 (post split figure), the difference of
which is then (iii) divided by the Average Closing Price on the
Anniversary Date.
This additional amount of shares shall be issued to the
Sellers proportionately in accordance with the percentages set forth in
Exhibit A. For purposes of this Agreement, the "Average Closing Price
on the Anniversary Date" shall mean the average trading price of the
Classics Shares for the twenty (20) trading days ending on and
including the last trading day immediately preceding the Anniversary
Date; provided, however, that if fewer than 100,000 shares of Classics
Shares have been traded in such twenty (20) day period, then the
calculation of the average trading price of Classics Shares shall
include such number of full, immediately preceding trading days as are
required to include at least 100,000 shares of Classics Shares in such
calculation. The Preliminary Purchase Price as so adjusted, if at all,
is referred to herein as the "Purchase Price".
(D) ACTIONS AT THE CLOSING. At the Closing, (i) IBP will deliver to
Classics the various certificates, instruments, and documents referred to in
Section 6(b) below, and (ii) Classics will deliver to IBP the various
certificates, instruments, and documents referred to in Section 6(c) below.
(E) EFFECT OF MERGER
(I) DIRECTORS AND OFFICERS OF IBP AND CLASSICS. The officers
and directors of IBP after the Effective Time (hereinafter defined)
shall be as follows:
NAME TITLE
Edward Sample President/Director
Carey Lotzer Director
R. Donald Ashley Secretary/Director
Such directors shall hold office in accordance with this
Agreement and otherwise until their successors have been duly elected
in accordance with the Certificate of Incorporation and Bylaws of IBP.
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The officers and directors of Classics after the Effective Time
(hereinafter defined) shall be as follows:
NAME TITLE
Edward Sample Chief Executive Officer/Secretary/Director
R. Donald Ashley President
Michael Steele Director
Richard S. Berger Director
Such directors shall hold office in accordance with this
Agreement and otherwise until their successors have been duly elected
in accordance with the Certificate of Incorporation and Bylaws of
Classics.
(II) GENERAL. The Certificate of Merger shall be filed with
and recorded by the Secretary of State of the State of Nevada
concurrently with the Closing, and the Merger shall be effective at the
time of such filings (the "Effective Time"). The Merger shall have the
effect set forth in Section 92A.110 of the Nevada Corporation Law. The
Surviving Corporation may, at any time after the Effective Time, take
any action (including executing and delivering any document) in the
name and on behalf of either IBP or the Classics Acquisition in order
to carry out and effectuate the transactions contemplated by this
Agreement.
(III) CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of IBP in effect at and as of the Effective Time shall
remain the Certificate of Incorporation of the Surviving Corporation
without any modification or amendment in the Merger.
(IV) BYLAWS. The Bylaws of IBP in effect at and as of the
Effective Time shall remain the Bylaws of the Surviving Corporation
without any modification or amendment in the Merger.
(V) CONVERSION OF IBP SHARES; PROCEDURE FOR PAYMENT
a. Conversion. At Closing, the Sellers shall
surrender the IBP Common Stock to Classics for exchange, together with
a duly executed letter of transmittal and such other documents as may
be reasonably required by Classics. Each of the Sellers shall be
entitled to receive in exchange therefor certificates representing his
proportion of the Preliminary Purchase Price in accordance with the
percentages set forth in Exhibit A. The stock certificates representing
IBP Common Stock in the name of the Sellers so surrendered shall be
canceled. Until surrendered as contemplated in this Section 2, each
certificate for IBP Common Stock shall be deemed, from and after the
Closing, to represent only the right to receive upon such surrender a
certificate representing shares of
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Classics. If any certificate for IBP Common Stock shall have been lost,
stolen or destroyed, Classics may, in its discretion and as a condition
precedent to the issuance of any certificates representing IBP Common
Stock require the owner of such lost, stolen or destroyed IBP Common
Stock to provide an appropriate affidavit and to deliver a bond (in
such sum as Classics may reasonably direct) as indemnity or an
indemnity agreement reasonably satisfactory to Classics against any
claim that may be made against Classics or the Surviving Corporation
with respect to such lost or destroyed IBP Common Stock.
(VI) CONVERSION OF CAPITAL STOCK OF THE CLASSICS ACQUISITION.
At and as of the Effective Time, each share of the Classics Acquisition
Common Stock shall be converted into 100 shares of IBP Common Stock.
(VII) CLOSING OF IBP STOCK RECORD BOOKS. Effective at the
Closing, all stock record books of IBP shall be closed and no transfers
or issuances of capital stock of IBP shall be allowed. The Sellers
listed in Exhibit A shall be the only persons entitled to receive
Classics Shares based on the Preliminary Purchase Price, which list
shall include the name, address, social security number and number of
Classics Shares to be received. Classics shall be entitled to rely
solely upon the list delivered pursuant hereto, and shall have no
obligation to issue any Classics Shares to any person or entity whose
name does not appear on the list.
3. REPRESENTATIONS AND WARRANTIES OF CLASSICS AND CLASSICS ACQUISITION
Classics and Classics Acquisition jointly and severally represent and
warrant to IBP that the statements contained in this Section 3 are correct and
complete as of the date of this Agreement and will be correct and complete in
all material respects as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
Section 3), except as set forth in the Disclosure Schedules accompanying this
Agreement.
(A) ORGANIZATION, QUALIFICATION AND CORPORATE. Classics and Classics
Acquisition are duly incorporated, validly existing and in good standing under
the laws of the state of their incorporation, with all requisite power and
authority to own, lease, license, and use their properties and assets and to
carry out the business in which they are engaged, except where the failure to
have or be any of the foregoing may not necessarily be expected to have a
Material Adverse Effect. Classics and Classics Acquisition are duly qualified to
transact the business in which they are engaged and are in good standing as a
foreign corporation in every jurisdiction in which its ownership, leasing,
licensing or use of property or assets or the conduct of its business make such
qualification necessary, except where the failure to be so qualified may not be
expected to have a Material Adverse Effect.
(B) AUTHORIZATION OF TRANSACTION. Classics and Classics Acquisition
have full power and authority (including full corporate power and authority) to
execute, deliver and perform this
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Agreement (including, without limitation, execution, delivery and performance of
the Operative Documents to which each of them is a party) and to perform their
obligations thereunder. This Agreement constitutes the valid and legally binding
obligation of Classics and Classics Acquisition, enforceable in accordance with
its terms and conditions except as enforcement may be limited by bankruptcy,
insolvency, reorganization, arrangement, fraudulent conveyance or transfer,
moratorium or other laws or court decisions, now or hereinafter in effect,
relating to or affecting the rights of creditors generally and as may be limited
by general principles of equity and the discretion of the court having
jurisdiction in an enforcement action (regardless of whether such enforceability
is considered in a proceeding in equity or at law). Classics and Classics
Acquisition need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order to consummate the transactions contemplated by this Agreement.
(C) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, Permit, charge, or other restriction of any Governmental
Body to which Classics is subject or any provision of its charter or bylaws or
(B) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which each of Classics and Classics
Acquisition is a party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Security Interest upon any of its
assets), except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation, failure to give notice, or Security
Interest would not have a Material Adverse Effect or deny the ability of the
Parties to consummate the transactions contemplated by this Agreement. Classics
and Classics Acquisition do not need to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any Governmental Body
in order for the Parties to consummate the transactions contemplated by this
Agreement except where the failure to give notice, to file, or to obtain any
authorization, consent, or approval would not have a Material Adverse Effect or
deny the ability of the Parties to consummate the transactions contemplated by
this Agreement.
(D) BROKERS' FEES. Classics and Classics Acquisition have no Liability
or obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement for which IBP
could become liable or obligated.
(E) CAPITALIZATION. The entire authorized capital stock of Classics
consists of 35,000,000 shares, of which (i) 30,000,000 are designated Common
Stock, par value $.001 per share and of which 15,378,916 are issued and
outstanding and (ii) 5,000,000 are designated Preferred Stock, par value $.001
per share, of which none are outstanding, as of December 1, 1999. All of the
issued and outstanding shares of Classics Common Stock have been duly authorized
and are validly issued, fully paid, and nonassessable. As of December 1, 1999,
there were an aggregate of 4,385,214 outstanding options, warrants, purchase
rights, subscription rights, conversion
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rights, exchange rights, or other contracts or commitments that could require
Classics to issue, sell, or otherwise cause to become outstanding any of its
capital stock. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to Classics,
except as set forth in Schedule 3(e). Prior to Closing, Classics intends to
complete: (i) a reverse stock split of .349 for 1 per share of Common Stock and
(ii) increase its authorized Common Stock to 100,000,000 shares.
(F) DUE AUTHORIZATION OF CLASSICS SHARES. The Classics Shares, upon
delivery at the Closing, will be validly issued, fully paid and nonassessable
and will not be issued in violation of any preemptive or other rights of
stockholders, and will be delivered free and clear of all Liens.
(G) ACQUISITION OF IBP SHARES FOR INVESTMENT. Classics is not acquiring
the IBP Shares with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act.
(H) CERTAIN MATTERS RELATING TO IBP. Following the Merger, it is the
present intention of Classics to continue at least one significant business line
of IBP or to use at least a significant portion of IBP's historic business
assets in a business, in each case within the meaning of Treasury Regulations
1.368-1(d). Following the Merger, Classics has no plan or intention to liquidate
IBP; to merge IBP with and into another corporation; to sell or otherwise
dispose of the stock of IBP; or to cause IBP to sell or otherwise dispose of any
of the assets of IBP, whether or not acquired in the Merger, except for
dispositions made in the ordinary course of business or transfers described in
Section 368(a)(2)(C) of the IRC. Following the Merger, IBP has no present
intention to issue additional shares of its stock that would result in Classics
losing control of IBP within the meaning of Section 368(c) of the IRC.
(I) FINANCIAL STATEMENTS. Attached hereto as Exhibit B are the
following financial statements (collectively the "Financial Statements"): (i)
audited balance sheets and statements of operations, stockholders' deficit and
cash flows as of December 31, 1998 (the "Most Recent Audited Financials"); and
(ii) unaudited balance sheets and statements of income as of the period ended
September 30, 1999 for Classics ("Most Recent Financial Statements"). The
Financial Statements (including the notes thereto) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of Classics as of such
dates and the results of operations of Classics for such periods, are correct
and complete, and are consistent with the books and records for Classics (which
books and RECORDS ARE CORRECT AND COMPLETE); PROVIDED, HOWEVER, that the Most
Recent Financial Statements are subject to normal year-end adjustments (which
will not be Material individually or in the aggregate) and lack footnotes and
other presentation items.
(J) UNDISCLOSED LIABILITIES. Other than as set forth on Section 3(j) of
the Disclosure Schedule, to its Knowledge, Classics has no Material Liability
(and there is no Basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against any of them
giving rise to any Liability), except for (i) Liabilities set forth on the
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face of the Most Recent Financial Statements or entered into in the Ordinary
Course of Business or expressly approved by IBP prior to Closing and (ii)
Liabilities no more than thirty (30) days past due which have arisen after the
date of the Most Recent Financial Statement in the Ordinary Course of Business
(none of which results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law).
(K) LEGAL COMPLIANCE. Each of Classics and Classics Acquisition has
complied in all Material respects with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings,
Permits and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof) except where to failure to so comply
would not have a Material Adverse Effect and to its Knowledge no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against any of them alleging any failure so to
comply, nor pending, to its knowledge, threatened against, relating to or
affecting Classics and Classics Acquisition.
(L) TAX MATTERS
All Taxes that are due and payable by each of Classics and Classics
Acquisition, other than those presently payable without penalty or interest,
have been timely paid, and each of Classics and Classics Acquisition has timely
filed (and, through the Closing Date, will timely file) all Tax Returns required
by law to be filed by them. All such Tax Returns are true, complete and correct
in all material respects with regard to each of Classics and Classics
Acquisition for the periods covered thereby. Classics and Classics Acquisition
are not delinquent in the payment of any Tax. There is no Tax deficiency
asserted against either Classics or Classics Acquisition, and there is no unpaid
assessment, proposal for additional Taxes, deficiency or delinquency in the
payment of any of the Taxes of either Classics or Classics Acquisition or any
violation of any Tax law that could be asserted by any taxing authority. There
are no Tax Liens upon any properties or assets of either Classics or Classics
Acquisition nor has notice been given of any event which could lead to any such
Lien. No Internal Revenue Service, state or local, audit, investigation or
Proceeding of either Classics or Classics Acquisition is pending or Threatened,
and the results of any completed audits are properly reflected in the Financial
Statements. Classics and Classics Acquisition have not granted any extension to
any taxing authority of the limitation period during which any Tax Liability may
be asserted. Classics and Classics Acquisition have not committed any violation
of any Tax laws. All monies required for the payment of Taxes not yet due and
payable with respect to the operations of each of Classics and Classics
Acquisition through and including the Closing Date have been approved, reserved
against and entered upon the books and Financial Statements. All monies required
to be withheld by each of Classics and Classics Acquisition from employees, if
any, independent contractors, or others or collected from customers for income
taxes, social security and unemployment insurance taxes and sales, excise and
use taxes, and the portion of any such taxes to be paid by each of Classics and
Classics Acquisition to governmental agencies or set aside in accounts for such
purpose have been approved, reserved against and entered upon the books and
Financial Statements.
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(M) LITIGATION
Except as set forth on Schedule 3M, Classics and Classics Acquisition
are not subject to any outstanding injunction, judgment, order, decree, ruling,
or charge and is not a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator.
(N) EVENTS SUBSEQUENT TO FINANCIAL STATEMENTS. Since the date of the
Financial Statements, there has not been any Material Adverse Change in the
operations of business of Classics.
Without limiting the generality of the foregoing, since that date:
i. Classics has not incurred, or assumed or become subject
to, whether directly or by way of guarantee, any Material Liability;
ii. Classics has not imposed any Material Security Interest
upon any of its assets, tangible or intangible;
iii. Classics has not made any capital expenditure (or series
of related capital expenditures) involving more than $50,000;
iv. Classics has not issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any indebtedness
for borrowed money or capitalized lease obligation;
v. There has been no change made or authorized in the
certificate of incorporation or bylaws of Classics;
vi. Classics has not entered into any written or oral
employment contract or collective bargaining agreement, or modified the
terms of any existing such contract or agreement and Classics has not
made any other change in employment terms for any of the directors,
officers, and employees of Classics except as set forth in Schedule
3(n);
vii. Classics has not granted any increase in the compensation
of any of the directors, officers, and employees of Classics except as
set forth in Schedule 3(n);
viii. Classics has not adopted, amended, modified, or
terminated any bonus, profit-sharing, incentive, severance, or other
plan, contract, or commitment for the benefit of any of the directors,
officers, and employees of Classics, or taken any such action with
respect to any other Employee Benefit Plan;
ix. Classics has not permitted any of its assets to be
subjected to any Lien;
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x. Classics has not declared or paid any dividend or made any
distribution on any shares of its capital stock, or redeemed, purchased
or otherwise acquired any shares of its capital stock or any option,
warrant or other right to purchase or acquire any shares, except as set
forth in Schedule 3(n);
xi. Classics has not made any loan to any party other than in
the Ordinary Course of Business; and
xii. Classics has not committed orally or in writing to any of
the foregoing.
(O) INTELLECTUAL PROPERTY
(i) Classics owns or has the right to use pursuant to license,
sublicense, agreement, or permission the tradenames, trademarks, domain
names listed on the Schedule 3(o).
(ii) To its knowledge, Classics has not interfered with,
infringed upon, misappropriated, or otherwise come into conflict with
any Intellectual Property rights of third parties, and has never
received any charge, complaint, claim, demand, or notice alleging any
such interference, infringement, misappropriation, or violation
(including any claim that Classics must license or refrain from using
any Intellectual Property rights of any third party). To the knowledge
of Classics, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of Classics.
(P) NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts receivable of
Classics are reflected properly on its books and records, are valid receivables
subject to knowledge of Classics to any setoffs or counterclaims, are current
and collectible, and will be collected in accordance with their terms at their
recorded amounts, subject only to the reserve for bad debts set forth on the
face of the Financial Statements (rather than in any notes thereto) as adjusted
for the passage of time through the Closing Date in accordance with the past
custom and practice of Classics.
(Q) CONTRACTS. Classics has delivered to IBP a true and correct copy of
the following contracts and other agreements to which Classics is a party:
i. any agreement (or group of related agreements) for the
lease of personal property to or from any Person providing for lease
payments in excess of $10,000 per annum;
ii. any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or
other personal property, or for the furnishing or receipt of services,
the performance of which will extend over a period of more than one
year, result in a material loss to Classics, or involve consideration
in excess of $20,000;
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iii.any agreement concerning a partnership or joint venture;
iv. any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of
$20,000 or under which it has imposed a Security Interest on any of its
assets, tangible or intangible;
v. any agreement concerning confidentiality or noncompetition;
vi. any agreement with any of the Sellers or, to Classics'
knowledge, their Affiliates, other than IBP;
vii. any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other material plan
or arrangement for the benefit of its current or former directors,
officers, and employees;
viii. any collective bargaining agreement;
ix. any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $30,000 or providing severance benefits;
x. any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees outside the
Ordinary Course of Business;
xi. any agreement under which the consequences of a default or
termination could have a Material Adverse Effect; and
xii. any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $20,000.
With respect to each such agreement: (A) the agreement is legal, valid,
binding and enforceable against Classics, and in full force and effect; (B) the
agreement will continue to be legal, valid, binding and enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby; (C) to its knowledge, no party is in breach or
default, and no event has occurred which with notice or lapse of time would
constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (D) to its knowledge, no party has
repudiated any provision of the agreement.
(R) DISCLOSURE. The representations and warranties contained in this
Section 3 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
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(S) FILINGS WITH THE SEC. Classics has made all periodic reports on
Forms 10KSB or 10QSB with the SEC that it had been required to make under the
Securities Act and the Securities Exchange Act (collectively the "Public
Reports") during the 12 month period preceding the Closing Date. None of the
Public Reports, as of their respective dates, contained any untrue statement of
a material fact or omitted to state a material fact necessary to make the
statement made therein, in light of the circumstances in which they were made,
not misleading. Classics has delivered to IBP a correct and complete copy of
each Public Report (together with all schedules and exhibits thereto) as filed
with the SEC during the last 12 months.
4. REPRESENTATIONS AND WARRANTIES OF IBP
IBP represents and warrants to Classics that the statements contained
in this Section 4 are correct and complete in all material respects as of the
date of this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 4), except as set forth in the
Disclosure Schedules.
(A) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER(A) ORGANIZATION,
QUALIFICATION, AND CORPORATE POWER. IBP is a corporation duly incorporated,
validly existing, and in good standing under the laws of the State of Nevada.
IBP is duly authorized to conduct business and is in good standing under the
laws of each jurisdiction where such qualification is required, except where the
lack of such qualification would not have a Material Adverse Effect or on the
ability of the Parties to consummate the transactions contemplated by this
Agreement. IBP has full corporate power and authority to carry on the businesses
in which it is engaged and to own and use the properties owned and used by it.
IBP does not own any capital stock of any other corporation or any equity
interest in any other partnership or other entity. IBP has continuously
maintained in effect since the date it commenced business operations all Permits
required to operate its business.
(B) CAPITALIZATION. The entire authorized capital stock of IBP consists
of 100 shares of IBP Common Stock par value $.001 per share, of which 100 are
issued and outstanding. All of the issued and outstanding IBP Common Stock has
been duly authorized and are validly issued, fully paid, and nonassessable.
There are no outstanding options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require IBP to issue, sell, or otherwise cause to become outstanding
any of its capital stock. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to IBP.
(C) AUTHORIZATION OF TRANSACTION. IBP and the Sellers each have full
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its or his obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of each of IBP
and the Sellers, enforceable in accordance with its terms and conditions except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance or transfer, moratorium or other laws or
court decisions, now or
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hereinafter in effect, relating to or affecting the rights of creditors
generally and as may be limited by general principles of equity and the
discretion of the court having jurisdiction in an enforcement action (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
(D) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any Governmental Body to
which IBP or any Seller is subject or any provision of the charter or bylaws of
IBP or (ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which IBP or any
of the Sellers is a party or by which it is bound or to which any of its assets
is subject (or result in the imposition of any Security Interest upon any of its
assets), except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation, failure to give notice, or Security
Interest would not have a Material Adverse Effect or deny the ability of the
Parties to consummate the transactions contemplated by this Agreement. Other
than in connection with the provisions of the Nevada Corporation Law, neither
IBP nor the Sellers need to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental agency
in order for the Parties to consummate the transactions contemplated by this
Agreement except where the failure to give notice, to file, or to obtain any
authorization, consent, or approval would not have a Material Adverse Effect or
deny the ability of the Parties to consummate the transactions contemplated by
this Agreement.
(E) REVENUE; OPERATIONS; ABILITY TO PREPARE FINANCIAL STATEMENTS. To
date, IBP has minimal operations and has been primarily engaged in developing
its Intellectual Property. Since the date of its inception, neither IBP, nor any
predecessor-in-interest, if any, has had any revenues. To the knowledge of the
Sellers, the books and financial records of IBP may be audited in accordance
with GAAP.
(F) SELLERS' OWNERSHIP OF SHARES AND INVESTMENT REPRESENTATION. The
Sellers (A) understand that the Classics Shares have not been, and will not be
registered under the Securities Act, or under any state securities laws, and are
being offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering, (B) are acquiring the Classics
Shares solely for their own account for investment purposes, and not with a view
to the distribution thereof, (C) will not sell, pledge, transfer or assigns the
shares unless registered under the Act or an exemption therefrom otherwise
becomes available, (D) are sophisticated investors with knowledge and experience
in business and financial matters and/or "Accredited Investors" as defined under
Rule 501 promulgated by the SEC, (E) have received certain information
concerning Classics and has had the opportunity to obtain additional information
as desired in order to evaluate the merits and the risks inherent in holding the
Classics Shares and acknowledges that it has received to its satisfaction, such
additional information about the business
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and financial condition of Classics as requested, and (F) are able to bear the
economic risk and lack of liquidity inherent in holding the Classics Shares.
The Sellers further acknowledges that they are experienced in financial
matters, including the purchase and sale of securities and have such knowledge
and experience in business matters so that they are capable of understanding the
nature of this transaction and the substantial risks involved in connection
therewith.
Each Seller holds of record and owns beneficially the number of shares
of IBP Common Stock set forth next to his name in Schedule 4(f), free and clear
of any restrictions on transfer (other than any restrictions under the
Securities Act and state securities laws), Taxes, Security Interests, options,
warrants, purchase rights, contracts, commitments, equities, claims, and
demands. Neither Seller is a party to any option, warrant, purchase right, or
other contract or commitment that could require such Seller to sell, transfer,
or otherwise dispose of any capital stock of IBP (other than this Agreement).
Neither Seller is a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of IBP.
(G) STOCK LEGENDS. The Sellers understand that the following legends
may be placed upon the certificate(s) of Classics Shares to be delivered to the
Sellers at the Closing:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE ACT") OR
ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF A MERGER AGREEMENT AND PLAN OF REORGANIZATION PURSUANT TO
SECTION 368 OF THE INTERNAL REVENUE CODE AMONG CLASSICS INTERNATIONAL
ENTERTAINMENT, INC., CLASSICS ACQUISITION, IBP, INC. AND CERTAIN
STOCKHOLDERS OF IBP INC., DATED DECEMBER 30, 1999."
(H) EVENTS SUBSEQUENT TO FORMATION OF IBP, except as disclosed in
Schedule 4(h), there has not been any Material Adverse Change. Without limiting
the generality of the foregoing, since the date of IBP's formation, to the
knowledge of the Sellers:
i. IBP has not entered into any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and
licenses) either involving more than $20,000 individually or $50,000 in
the aggregate;
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ii.IBP has not granted any Security Interest upon any of its
assets, tangible or intangible;
iii. IBP has not made any capital expenditure (or series of
related capital expenditures) involving more than $50,000;
iv. IBP has not issued any note, bond, or other debt security
or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation;
v. There has been no change made or authorized in the
certificate of incorporation or bylaws of IBP;
vi. IBP has not entered into any written or oral employment
contract or collective bargaining agreement, or modified the terms of
any existing such contract or agreement and IBP has not made any other
change in employment terms for any of the directors, officers, and
employees of IBP;
vii. IBP has not granted any increase in the compensation of
any of the directors, officers, and employees of IBP;
viii. IBP has not adopted, amended, modified, or terminated
any bonus, profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of the directors,
officers, and employees of IBP, or taken any such action with respect
to any other Employee Benefit Plan;
ix. IBP has not incurred, discharged or satisfied any lien or
encumbrance or paid any obligation or liability except in the Ordinary
Course of Business;
x. IBP has not sold or transferred any of its assets, other
than in the Ordinary Course of Business;
xi.IBP has not canceled any debts or claims or waived any
rights of value;
xii. IBP has not made any loans other than extending credit to
customers in the Ordinary Course of Business;
xiii. IBP has not engaged in any activities or transactions
which shall be outside the Ordinary Course of Business; and
xiv. IBP has not committed orally or in writing to any of the
foregoing.
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(I) BROKERS' FEES. IBP has no liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.
(J) UNDISCLOSED LIABILITIES. Except as disclosed on Schedule 4(j), to
the Knowledge of any director or officer of IBP, IBP has no material Liability
(and there is no Basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against any of them
giving rise to any Liability), except for Liabilities which have arisen after
September 30, 1999 in the Ordinary Course of Business (none of which results
from, arises out of, relates to, is in the nature of, or was caused by any
breach of contract, breach of warranty, tort, infringement, or violation of
law).
(K) TAX MATTERS
All Taxes that are due and payable by each IBP, other than those
presently payable without penalty or interest, have been timely paid, and IBP
has timely filed (and, through the Closing Date, will timely file) all Tax
Returns required by law to be filed by them. All such Tax Returns are true,
complete and correct in all respects with regard IBP for the periods covered
thereby. IBP is not delinquent in the payment of any Tax. There is no Tax
deficiency asserted against IBP, and there is no unpaid assessment, proposal for
additional Taxes, deficiency or delinquency in the payment of any of the Taxes
of IBP or any violation of any Tax law that could be asserted by any taxing
authority. There are no Tax Liens upon any properties or assets of IBP nor has
notice been given of any event which could lead to any such Lien. No Internal
Revenue Service, state or local, audit, investigation or Proceeding of IBP is
pending or Threatened, and the results of any completed audits are properly
reflected in the Financial Statements. IBP has not granted any extension to any
taxing authority of the limitation period during which any Tax Liability may be
asserted. IBP has not committed any violation of any Tax laws. All monies
required for the payment of Taxes not yet due and payable with respect to the
operations of IBP through and including the Closing Date have been approved,
reserved against and entered upon the books and Financial Statements. All monies
required to be withheld by IBP from employees, if any, independent contractors,
or others or collected from customers for income taxes, social security and
unemployment insurance taxes and sales, excise and use taxes, and the portion of
any such taxes to be paid by IBP to governmental agencies or set aside in
accounts for such purpose have been approved, reserved against and entered upon
the books and Financial Statements. All such Tax Returns were correct and
complete in all Material respects.
(L) WARRANTIES. There are no claims or notices, written or oral, and
IBP has no knowledge that any service it rendered breached any representation or
warranty, express or implied, made by IBP; filed to meet any specification with
respect to such service which was furnished by IBP, or was otherwise improperly
or negligently provided, and there is no event or condition known to IBP which
will give rise to any such claim.
(M) REAL PROPERTY
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i. IBP owns no real property.
ii. IBP has no real property leases to which it is a party of
by which it may be obligated.
iii. IBP maintains office facilities at 6060 N. Central
Expressway, Suite 560, Dallas, TX 75206 and does not operate its
business from any other location or address.
(N) INTELLECTUAL PROPERTY.
i. IBP has no filed or registered Intellectual Proprietary
rights. Schedule 4(n) lists the Intellectual Proprietary Rights of IBP
specifying the nature of such rights.
ii. Except as disclosed in Schedule 4(n), IBP has not
interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any Intellectual Property rights of third parties,
and none of the Sellers has ever received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that IBP must
license or refrain from using any Intellectual Property rights of any
third party). To the Knowledge of any director or officer of IBP, no
third party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of
IBP.
iii. All Intellectual Property shall be transferred (and all
ownership rights and licenses thereto) from the personal holdings of
Michael Steele and Carey Lotzer (and any other entity in which the
Intellectual Property may reside) to IBP prior to the Closing pursuant
to the terms of written assignments in form acceptable to Classics and
its counsel.
(iv) IBP owns or has the right to use pursuant to license,
sublicense, agreement or permission those intellectual properties as
set forth of the IBP Disclosure Schedule.
(O) CONTRACTS. IBP has delivered to Classics a true and correct copy of
the following contracts and other agreements to which IBP is a party:
i. any agreement (or group of related agreements) for the
lease of personal property to or from any Person providing for lease
payments in excess of $10,000 per annum;
ii. any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or
other personal property, or for the furnishing or receipt of services,
the performance of which will extend over a period of more than one
year, result in a material loss to IBP, or involve consideration in
excess of $20,000;
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iii.any agreement concerning a partnership or joint venture;
iv. any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of
$20,000 or under which it has imposed a Security Interest on any of its
assets, tangible or intangible;
v. any agreement concerning confidentiality or noncompetition;
vi.any agreement with any of the Sellers or their Affiliates,
other than IBP;
vii. any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other material plan
or arrangement for the benefit of its current or former directors,
officers, and employees;
viii. any collective bargaining agreement;
ix. any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $30,000 or providing severance benefits;
x. any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees outside the
Ordinary Course of Business;
xi. any agreement under which the consequences of a default or
termination could have a material adverse effect on the business,
financial condition, operations, results of operations, or future
prospects of IBP; and
xii. any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $10,000.
Notwithstanding the foregoing, IBP has not, and shall not be, required to
deliver to Classics a copy of each and every: (i) customer agreement and (ii)
dealer agreements, but has provided a copy of its form agreements. With respect
to each such agreement: (A) the agreement is legal, valid, binding and
enforceable against Target, and in full force and effect; (B) the agreement will
continue to be legal, valid, binding and enforceable, and in full force and
effect on identical terms following the consummation of the transactions
contemplated hereby; (C) to its knowledge, no party is in breach or default, and
no event has occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or acceleration, under
the agreement; and (D) to its knowledge, no party has repudiated any provision
of the agreement.
(P) NOTES AND ACCOUNTS RECEIVABLE. IBP has no notes or accounts
receivable.
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(Q) POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of IBP.
(R) LITIGATION. Except as disclosed on Schedule 4(q), neither IBP nor
any Seller is subject to any outstanding injunction, judgment, order, decree,
ruling, or charge and is not a party to any action, suit, proceeding, hearing,
or investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator.
(S) EMPLOYEE BENEFITS. IBP has no Employee Benefit Plan and has no
liability under ERISA.
(T) GUARANTIES. IBP is not a guarantor or otherwise is liable for any
Liability or obligation (including indebtedness) of any other Person.
(U) SUBSIDIARIES. IBP does not own, directly or indirectly, shares in
any other corporation, or hold any interest in any partnership, limited
liability company, joint venture, business enterprise or other business entity.
(V) LEGAL COMPLIANCE. IBP has complied in all Material respects with
all applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof) except where to
failure to so comply would not have a Material Adverse Effect upon its business
operations, and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced against any of
them alleging any failure so to comply.
(W) INSURANCE. IBP holds no insurance polices.
(X) DISCLOSURE. The representations and warranties contained in this
Section 4 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 4 not misleading.
5. PRE-CLOSING COVENANTS
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing.
(A) GENERAL. Each of the Parties will use its or his best efforts to
take all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
and the Operative Documents (including satisfaction, but not waiver, of the
closing conditions set forth in Section 6 below).
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(B) NOTICES AND CONSENTS. IBP will give any notices to third parties,
and will use reasonable efforts to obtain any third-party consents (including
the consents of all issuers of manufacturers' medallions), that Classics may
reasonably request in connection with the matters referred to in Section 4(c)
above.
(C) OPERATION OF BUSINESS. Each of the Parties will not engage in any
practice, take any action, or enter into any transaction outside the Ordinary
Course of Business, without the prior written consent of the other, except as
specified herein. Without limiting the generality of the foregoing, the Parties
will not cause or permit to (without prior written consent of the other) (i)
declare, set aside, or pay any dividend or make any distribution with respect to
its capital stock or redeem, purchase, or otherwise acquire any of its capital
stock, (ii) increase the compensation payable or to become payable to any
officer or key employee, (iii) issue any shares of capital stock, options or
warrants, or other convertible securities, (iv) otherwise engage in any
practice, take any action, or enter into any transaction not in the Ordinary
Course of Business, (v) incur any debt or lien or allow and third party to
obtain a security interest in any assets, (vi) adopt or amend or agree to amend
any employee benefit plan, (vii) guarantee or agree to guarantee the obligations
of others, (viii) make any loans other than extending credit to customers in the
Ordinary Course of Business, (ix) waive or commit to waive any right of
substantial value, (x) sell, transfer, dispose of or encumber any of its assets
or the Assets which are the subject of this Agreement, (xi) amend its bylaws or
Certificate of Incorporation, (xii) allow any agreement to lapse or to default
under any such agreement, (xiii) sell, pledge, assign or hypothecate or transfer
any interest in any securities, and (xiv) enter into any employment agreement or
change or modify the terms of any existing employment agreement.
(D) PRESERVATION OF BUSINESS. Both Parties will keep its business and
properties substantially intact, including its present operations, physical
facilities, Assets, contracts, working conditions, and relationships with
lessors, licensors, suppliers, customers, and employees. Both Parties will
comply with all laws, rules and regulations applicable to the operation of its
business.
(E) FULL ACCESS, AUDIT. Each party will permit representatives of the
other party, at the requesting party's expense, to have full access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of to financial records (including Tax records), contracts,
and other financial documentation.
(F) NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice
to the others of any Material Adverse Change causing a breach of any of his or
its own representations and warranties in Section 3 or 4 above.
(G) EXCLUSIVITY. Unless this Agreement is terminated pursuant to
Section 9 hereof, neither of the Parties will (i) solicit, initiate, or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any capital stock or other voting securities, or any
substantial portion of the Assets of, IBP (including any acquisition structured
as a merger, consolidation, or share exchange) or (ii) participate in any
discussions or negotiations regarding,
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furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any Person to do or seek any of the
foregoing. The Sellers will not vote their IBP Common Stock in favor of any such
acquisition structured as a merger, consolidation, or share exchange, unless
this Agreement is terminated pursuant to Section 9 hereof. The Sellers will
notify Classics within a reasonable period of time if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing.
(H) APPROVAL. The Board of Directors of Classics and Classics
Acquisition shall have approved the Merger, the Agreement and Operative
Documents in accordance with the applicable requirements of the Delaware General
Corporation Law, the bylaws and certificate of incorporation of each ("Requisite
Corporate Approval").
6. CONDITIONS TO OBLIGATION TO CLOSE
(A) GENERAL CONDITIONS. Consummation of the Merger shall be subject to
the fulfillment at the Closing Date of each of the following conditions:
(I) NO INJUNCTION. No court having jurisdiction shall have
issued, to the Knowledge of the parties hereto, an injunction
preventing the consummation of the Merger that shall not have been
stayed or dissolved prior to or on the Closing Date.
(II) PROCEEDINGS. All proceedings taken or to be taken in
connection with the Merger, and all documents incident thereto shall be
reasonably satisfactory in form and substance to the parties and their
counsel, and the parties and their counsel shall have received all such
counterpart originals or certified or other copies of such documents as
the parties or their counsel may reasonably request.
(III) EMPLOYMENT AGREEMENTS. At the Closing, Classics, IBP and
each of the Sellers shall enter into Employment Agreements in form and
substance mutually agreed upon among the Parties.
(B) CONDITIONS TO OBLIGATION OF CLASSICS. The obligation of Classics to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(I) REPRESENTATION AND WARRANTIES OF IBP. The representations,
warranties and statements of IBP contained in this Agreement, the
exhibits hereto and the Disclosure Schedules shall be complete and
accurate as of the date of this Agreement and shall also be complete
and accurate at and as of the Closing Date, except for changes
contemplated by this Agreement, as if made at and as of the Closing
Date; and IBP shall have performed or complied with all agreements and
covenants required by this Agreement to be performed or complied with
by them at or prior to the Closing Date.
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(II) GOVERNMENTAL CONSENTS, AUTHORIZATIONS, ETC. All material
consents, authorizations, orders or approvals of, and filings or
registrations with, and any Permits required by, any Governmental Body
that are required for or in connection with, the execution and delivery
of this Agreement by IBP and the consummation by IBP of the Merger
shall have been obtained or made.
(III) SELLER'S CERTIFICATE. IBP and Sellers shall have
delivered to Classics certificates dated the Closing Date, certifying
as to the fulfillment of the conditions set forth in Section 6(b)(i)
and 6(b)(ii).
(V) LEGISLATION. No law or legally binding regulation shall
have been enacted that does or would prohibit, restrict or delay
consummation of the Merger or any of the conditions to the consummation
of the Merger.
(VI) LITIGATION. There shall be no effective order, writ,
injunction, decree, judgment, award or determination of any nature
(including any temporary restraining order) issued by a Governmental
Body restraining or prohibiting consummation or altering the terms of
the Merger, or actions seeking damages based upon the foregoing which
Classics reasonably deems Material. IBP and Sellers shall not have
become subject to any litigation, which, if adversely determined,
could, in the sole opinion of IBP, have a Material Adverse Effect on
IBP or Sellers.
(VII) NO ADVERSE CHANGE. There shall have occurred no adverse
change (whether or not covered by insurance) in operations, assets,
liabilities, properties or financial conditions of the IBP since the
date of the Financial Statements.
(VIII) DELIVERY OF DOCUMENTS/ACCEPTANCE OF DISCLOSURE
SCHEDULES. IBP shall have timely delivered any and all amendments
and/or supplements to the Disclosure Schedules and all other documents,
instruments, schedules and financial statements required hereunder to
Classics. The Disclosure Schedules, as amended and supplemented, shall
be acceptable in form and substance to Classics, in its absolute
discretion.
(IX) CLASSICS' INVESTIGATION. The investigations by Classics,
Classics' Subsidiary and their representatives in connection with the
proposed Merger shall not have caused Classics, Classics' Subsidiary or
their representatives to become aware of any facts or circumstances
relating to IBP or Sellers that in the sole discretion of Classics
makes it inadvisable for Classics to proceed with the Transactions.
(X) APPROVAL. The Board of Directors of IBP shall have
approved this Agreement and the transactions contemplated hereby.
(XI) CERTIFICATE OF AUTHORITY. IBP shall have furnished to
Classics and Classics' Subsidiary (i) a certificate of the Secretary of
State of the state in which it is organized or
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incorporated, dated as of a date not more than five (5) business days
prior to the Closing Date, attesting to it's incorporation and good
standing, (ii) a copy, certified by the Secretary of the State of the
state in which it is organized or incorporated, as of a date not more
than five (5) business days prior to the Closing Date, of the
Certificate of Incorporation and all amendments thereto, (iii) a copy,
certified by the Secretary of the Bylaws, as amended and in effect as
of the Closing Date, and (iv) a copy, certified by the Secretary, of
resolutions duly adopted by the Board of Directors and stockholders of
duly authorizing the transactions contemplated in this Agreement.
(XII) CERTIFICATE OF MERGER. Classics shall have obtained
fully executed Certificates of Merger sufficient for filing with the
States of Delaware and Nevada in order to consummate the Merger.
(XIII) OTHER MATTERS. IBP shall have delivered to Classics, in
form and substance reasonably satisfactory to counsel for Classics,
such certificates and other evidence as Classics may reasonably request
as to the satisfaction of the conditions contained in this Section
6(b).
(C) CONDITIONS TO OBLIGATION OF IBP. The obligations of IBP and the
Sellers to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(I) REPRESENTATION AND WARRANTIES OF CLASSICS AND CLASSICS
ACQUISITION. The representations, warranties and statements of Classics
and Classics Acquisition contained in this Agreement, the exhibits
hereto and the Disclosure Schedules shall be complete and accurate as
of the date of this Agreement and shall also be complete and accurate
at and as of the Closing Date, except for changes contemplated by this
Agreement, as if made at and as of the Closing Date; and Classics and
Classics Acquisition shall have performed or complied with all
agreements and covenants required by this Agreement to be performed or
complied with by them at or prior to the Closing Date.
(II) GOVERNMENTAL CONSENTS, AUTHORIZATIONS, ETC. All material
consents, authorizations, orders or approvals of, and filings or
registrations with, and any Permits required by, any Governmental Body
that are required for or in connection with, the execution and delivery
of this Agreement by Classics or Classics Acquisition and the
consummation by Classics and Classics Subsidiaries of the Merger shall
have been obtained or made.
(III) SELLER'S CERTIFICATE. Classics and Classics Acquisition
shall have delivered to Seller certificates dated the Closing Date,
certifying as to the fulfillment of the conditions set forth in Section
6(c)(i) and 6(c)(ii).
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(IV) CLOSING CONSIDERATION. Classics shall have delivered to
Sellers the Preliminary Purchase Price required by Section 2(c)(i)
hereof.
(V) OPINION OF COUNSEL. IBP shall have received from counsel
to Classics and Classics Acquisition an opinion dated the Closing Date
in the form attached hereto as Exhibit E, or with such modification
thereto as are approved by IBP, in its sole and absolute discretion.
(VI) LEGISLATION. No law or legally binding regulation shall
have been enacted that does or would prohibit, restrict or delay
consummation of the Merger or any of the conditions to the consummation
of the Merger.
(VII) LITIGATION. There shall be no effective order, writ,
injunction, decree, judgment, award or determination of any nature
(including any temporary restraining order) issued by a Governmental
Body restraining or prohibiting consummation or altering the terms of
the Merger, or actions seeking damages based upon the foregoing which
IBP reasonably deems Material. Classics and Classics Subsidiaries shall
not have become subject to any litigation, which, if adversely
determined, could, in the sole opinion of IBP, have a Material Adverse
Effect on Classics or Classics Acquisition.
(VIII) NO ADVERSE CHANGE. There shall have occurred no adverse
change (whether or not covered by insurance) in operations, assets,
liabilities, properties or financial conditions of the Company since
the date of the Financial Statements.
(IX) DELIVERY OF DOCUMENTS/ACCEPTANCE OF DISCLOSURE SCHEDULES.
Classics and Classics Acquisition shall have timely delivered any and
all amendments and/or supplements to the Disclosure Schedules and all
other documents, instruments, schedules and financial statements
required hereunder to IBP. The Disclosure Schedules, as amended and
supplemented, shall be acceptable in form and substance to IBP, in its
absolute discretion.
(X) IBP'S INVESTIGATION. The investigations by IBP, Sellers
and their representatives in connection with the proposed Merger shall
not have caused IBP, the Seller or their representatives to become
aware of any facts or circumstances relating to Classics and Classics
Acquisition that in the sole discretion of IBP makes it inadvisable for
IBP to proceed with the Transactions.
(XI) APPROVAL. The Board of Directors of Classics and Classics
Acquisition each shall have approved this Agreement and the
transactions contemplated hereby.
(XII) CERTIFICATE OF AUTHORITY. Classics and Classics
Acquisition shall each have furnished to IBP and the Sellers (i)
certificates of the Secretary of State of each state in which they are
organized or incorporated, dated as of a date not more than five (5)
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business days prior to the Closing Date, attesting to their
incorporation and good standing, (ii) a copy, certified by the
Secretary of the State of each state in which they are organized or
incorporated, as of a date not more than five (5) business days prior
to the Closing Date, of the Certificate of Incorporation and all
amendments thereto for each, (iii) a copy, certified by the Secretary
of each, of the Bylaws of each, as amended and in effect as of the
Closing Date, and (iv) a copy, certified by the Secretary of each, of
resolutions duly adopted by the Board of Directors and stockholders of
each duly authorizing the transactions contemplated in this Agreement.
(XIII) CERTIFICATE OF MERGER. IBP shall have obtained fully
executed Certificates of Merger sufficient for filing with the States
of Delaware and Nevada in order to consummate the Merger.
(XIV) OTHER MATTERS. Classics shall have delivered to IBP, in
form and substance reasonably satisfactory to counsel for IBP, such
certificates and other evidence as IBP may reasonably request as to the
satisfaction of the conditions contained in this Section 6(c).
7. REMEDIES FOR BREACHES OF THIS AGREEMENT
(A) SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All of the representations and warranties of the Parties contained in
this Agreement shall survive the Closing hereunder (even if the damaged Party
knew or had reason to know of any misrepresentation or breach of warranty at the
time of Closing) and continue in full force and effect for a period of 12 months
following the Closing Date; provided, however, that the representations and
warranties contained in Section 3(l) shall survive until the expiration period
of the statutory period of limitations for assessment of Tax deficiencies,
including any extensions thereof, for each taxable year of Classics which begins
before Closing.
(B) INDEMNIFICATION PROVISIONS FOR BENEFIT OF CLASSICS
(i) In the event third party alleges facts that, if true,
would mean any of the Sellers has breached representations, warranties,
and covenants set forth in Sections 4, 5 and 6(b) and, if there is an
applicable survival period pursuant to Section 7(a) above, provided
that Classics makes a written claim for indemnification against any of
the Sellers pursuant to Section 7(d) below within such survival period,
then each of the Sellers agrees to indemnify Classics from the Adverse
Consequences Classics actually suffers through and after the date of
the claim for indemnification (including any Adverse Consequences
Classics may suffer after the end of any applicable survival period)
resulting from, arising out of, relating to, in the nature of, or
caused by the breach (or the alleged breach); provided, however, that
Sellers' obligation to indemnify for any and all of the Adverse
Consequences which Classics has suffered as a result of such breaches
shall be solely limited to payment out of shares of the Classics
Restricted Stock received by the Sellers
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in accordance with Section (2)(c)(i), with each such share being valued
at a market value of $5 per share.
(C) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLERS.
In the event Classics breaches (or in the event any third party alleges
facts that, if true, would mean Classics has breached) any of its
representations, warranties, and covenants contained in Sections 3, 5 and 6(b),
and, if there is an applicable survival period pursuant to Section 7(a) above,
provided that the Seller makes a written claim for indemnification against
Classics pursuant to Section 7(d) below within such survival period, then
Classics agrees to indemnify each of the Sellers from and against the entirety
of any Adverse Consequences such Seller suffers through and after the date of
the claim for indemnification (including any Adverse Consequences the Seller may
suffer after the end of any applicable survival period) resulting from, arising
out of, relating to, in the nature of, or caused by the breach (or the alleged
breach); provided, however, that Classics' obligation to indemnify for any and
all of the Adverse Consequences which Sellers have suffered as a result of such
breaches shall be solely limited to payment out of shares of the Classics Stock,
with each such share being valued at a market value of $5 per share.
(D) MATTERS INVOLVING THIRD PARTIES(D) MATTERS INVOLVING THIRD PARTIES
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against any other
Party (the "Indemnifying Party") under this Section 7, then the
Indemnified Party shall promptly (and in any event within five (5)
business days after receiving notice of the Third Party Claim) notify
each Indemnifying Party thereof in writing; provided, however, that no
delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (A)
the Indemnifying Party notifies the Indemnified Party in writing within
15 days after the Indemnified Party has given notice of the Third Party
Claim that the Indemnifying Party will indemnify the Indemnified Party
from and against the entirety of any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of, relating
to, in the nature of, or caused by the Third Party Claim, (B) the
Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third
Party Claim and fulfill its indemnification obligations hereunder, (C)
the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an adverse
judgment with respect to, the Third Party Claim is not, in the good
faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice materially adverse to the continuing
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business interests of the Indemnified Party, and (E) the Indemnifying
Party conducts the defense of the Third Party Claim actively and
diligently.
(iii) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with 7(d)(ii) above, (A)
the Indemnified Party may retain separate co- counsel at its sole cost
and expense and participate in the defense of the Third Party Claim,
(B) the Indemnified Party will not consent to the entry of any judgment
or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party (not to be
withheld unreasonably), and (C) the Indemnifying Party will not consent
to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in 7(d)(ii) above is
or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith), (B) the Indemnifying Parties will reimburse the
Indemnified Party promptly and periodically for the costs of defending
against the Third Party Claim (including reasonable attorneys' fees and
expenses), and (C) the Indemnifying Parties will remain responsible for
any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the
Third Party Claim to the fullest extent provided in this Section 7.
(E) OTHER INDEMNIFICATION PROVISIONS. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy any Party may have for breach of representation,
warranty, or covenant. Each of the Sellers hereby agrees that he or it will not
make any claim for indemnification against any of IBP by reason of the fact that
he or it was a director, officer, employee, or agent of any such entity or was
serving at the request of any such entity as a partner, trustee, director,
officer, employee, or agent of another entity (whether such claim is for
judgments, damages, penalties, fines, costs, amounts paid in settlement, losses,
expenses, or otherwise and whether such claim is pursuant to any statute,
charter document, bylaw, agreement, or otherwise) with respect to any action,
suit, proceeding, complaint, claim, or demand brought by Classics against such
Seller (whether such action, suit, proceeding, complaint, claim, or demand is
pursuant to this Agreement, applicable law, or otherwise).
8. COVENANTS, CONFIDENTIALITY
(a) Classics hereby covenants and agrees that within a reasonable time
after the Closing Date it shall take all action within its power to ensure the
appointment at all times after the
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Closing Date of at least one of the Sellers to the position of a member of the
Board of Directors of each of Classics and IBP.
(b) From and after the date hereof, and at all times hereafter, should
the transactions contemplated by this Agreement fail to close, then each of IBP,
the Sellers, Classics, and Classics Acquisition covenants and agrees, on behalf
of themselves, their Affiliates, parents, subsidiaries, directors, officers,
employees, agents, successors and assigns, to maintain strict confidentiality of
all information concerning IBP and Classics in accordance with the
Confidentiality Agreement entered into by the Parties on October 8, 1999.
(c) Classics, Classics Acquisition, IBP and the Sellers acknowledge and
agree that the covenants contained in this Section 8 are fair and reasonable and
of a special unique character which gives them peculiar value and exist in order
to protect Classics and IBP and that Classics and IBP would not have entered
into this Agreement without such covenants being made to it. If any such
covenants, however, be determined to be invalid by reason of their duration or
geographical scope, such duration or geographical scope, or both, as the case
may be, shall be considered to be reduced to a longest duration or greatest
geographical scope, or both, which will cure invalidity. Classics, Classics
Acquisition, IBP and the Sellers further acknowledge that damages alone will not
be an adequate remedy for any breach by it of the covenants contained in this
Section 8, and accordingly, each expressly agrees that, in addition to any other
remedies which each may have, each shall be entitled to injunctive relief in a
court of competent jurisdiction.
(d) The Parties acknowledges that the covenants contained in this
Section 8 are separate and distinct from, and shall not be merged with, any
similar covenants made by IBP, the Sellers, Classics, or Classics Acquisition in
any other agreement, document or understanding.
9. TERMINATION
(A) TERMINATION OF AGREEMENT. This Agreement may be terminated at any
time prior to the Closing Date:
(i) by mutual written agreement of Classics and IBP; or
(ii) by IBP if any representation or warranty of Classics or
Classics Acquisition or by Classics and Classics Acquisition if any
representation or warranty of IBP, contained herein shall have been
incorrect or breached in any Material respect, as to which notice shall
have been given to the breaching party, and shall not have been cured
or otherwise resolved to the reasonable satisfaction of the other party
on or before the Closing Date, or by either IBP or Classics if any
condition to the consummation of the Merger contemplated hereunder that
must be fulfilled to its satisfaction may not be fulfilled; or
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(iii) by either Classics or IBP if any permanent injunction or
other order of a court or other competent authority preventing the
consummation of the Merger shall have become final and non-appealable;
or
(iv) by Classics or IBP if the Closing has not occurred by
December 31, 1999 provided, however, that such date may be extended by
written agreement among the parties and provided, further, that no
party shall be permitted to terminate hereunder if such party is in
violation of this Agreement.
(B) EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided herein, this Agreement shall become wholly void and have
no further force and effect except as hereinafter provided, and there shall be
no Liability on the part of IBP or Classics (or Classics's respective officers
or directors). Nothing contained herein shall relieve any party from Liability
for its breach of this Agreement, and the Confidentiality Agreement shall remain
in place in accordance with Section 8(b) hereof.
(C) EXTENSION; WAIVER. At any time prior to the Closing Date, any party
hereto that is entitled to the benefits hereof (with respect to any such
corporate party by action taken by its Board of Directors or a duly authorized
officer), may (a) extend the time for the performance of any of the obligations
or other acts of any of the other parties hereto, (b) in whole or in part, waive
any inaccuracy in the representations and warranties of any of the other parties
hereto contained herein or in any exhibit or schedule hereto or in any document
delivered pursuant hereto, and (c) in whole or in part, waive compliance with
any of the agreements of any of the other parties hereto or conditions contained
herein. Any agreement on the part of any party hereto to any such extension or
waiver shall only be valid if same is set forth in an instrument in writing
signed and delivered on behalf of such party.
10. GUARANTEE
Classics hereby unconditionally guarantees the payment, performance and
accuracy of all of the obligations, representations, warranties, agreements and
covenants of Classics Acquisition as set forth in this Agreement and the
documents contemplated hereby. Any breach of such obligations, representations,
warranties, agreements and covenants by Classics Acquisition shall entitle the
Sellers and IBP to all remedies against Classics that are available against
Classics Acquisition under this Agreement, and the documents contemplated
hereby.
11. Miscellaneous
(A) TAX FILINGS. The Sellers, IBP, Classics Acquisition and Classics
shall cause all tax returns and any other filings reporting the Merger as a
reorganization under Section 368 of the Internal Revenue Code, if any, to be
filed in a timely manner.
(B) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written
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approval of the other Parties; provided, however, that any Party may make any
public disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise the
other Party prior to making the disclosure).
(C) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon ANY PERSON OTHER THAN THE PARTIES AND THEIR RESPECTIVE
SUCCESSORS AND PERMITTED ASSIGNS; PROVIDED, HOWEVER, that the provisions in
Section 2 above concerning payment of the Merger Consideration are intended for
the benefit of all stockholders of IBP.
(D) ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(E) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Parties.
(F) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(G) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(H) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
IF TO IBP: COPY TO:
IBP, Inc. Eric J. Golle, Esq.
6060 North Central Expressway Bell, Nunnally & Martin PLLC
Dallas, TX 75206 3232 McKinney Avenue, Suite 1400
Dallas, TX 75204
IF TO CLASSICS: COPY TO:
Richard Berger Victor J. DiGioia, Esq.
Classics International Entertainment, Inc. Goldstein & DiGioia, LLP
1350 N. Lake Shore Drive, Suite 315-S 369 Lexington Avenue-18th Floor
Chicago, IL 60610 New York, NY 10017
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IF TO THE SELLERS: COPY TO:
Michael Steele Eric J. Golle, Esq.
1930 Palace Drive Bell, Nunnally & Martin PLLC
Grand Prairie, TX 75050 3232 McKinney Avenue, Suite 1400
Dallas, TX 75204
Carey Lotzer Eric J. Golle, Esq.
2602 Palisades Place Bell, Nunnally & Martin PLLC
Mesquite, TX 75181 3232 McKinney Avenue, Suite 1400
Dallas, TX 75204
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(I) GOVERNING LAW. This Agreement has been executed in the State of
Delaware, and its validity, interpretation, performance, and enforcement will be
governed by the laws of such state, without application of the conflict of law
principles thereof.
(J) JURISDICTION AND VENUE. Any judicial proceedings brought by or
against any party on any dispute arising out of this Agreement or any matter
related thereto shall be brought in the state or federal courts of Dover,
Delaware and, by execution and delivery of this Agreement, each of the parties
accepts for itself the exclusive jurisdiction and venue of the aforesaid courts
as trial courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement after exhaustion of all appeals taken
(or by the appropriate appellate court if such appellate court renders
judgment).
(K) AMENDMENTS. This Agreement and the Exhibits and the Disclosure
Schedules hereto may be amended by the parties hereto at any time prior to the
Closing Date; provided, however, that any amendment must be by an instrument or
instruments in writing signed and delivered on behalf of each of the parties
hereto.
(L) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(M) EXPENSES. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
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(N) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean including without limitation.
(O) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and the
Disclosure Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(P) AGREEMENT REGARDING POOLING ACCOUNTING TREATMENT. The Parties agree
to use their best efforts to obtain the "pooling accounting" treatment to the
acquisition of IBP by Classics; provided, however, the failure to obtain such
treatment shall not be deemed a condition to Closing nor have any other effect
upon the Merger.
* * * *
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
CLASSICS INTERNATIONAL CLASSICS ACQUISITION CORP.
ENTERTAINMENT, INC.
By:______________________________ By:________________________
Name: ___________________________ Name: _____________________
Title: ____________________________ Title: ____________________
IBP, INC. SELLERS
By:______________________________ __________________
MICHAEL STEELE
Name: ___________________________
Title: ____________________________
__________________
CAREY LOTZER
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EXHIBIT A
SELLERS' PERCENTAGES
NAME PERCENTAGE NUMBER OF SHARES
1. Carey Lotzer 66% 2,303,400
2. Michael Steele 34% 1,186,600
1
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EXHIBIT B
CLASSICS' FINANCIAL STATEMENTS
1
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EXHIBIT C
IBP'S FINANCIAL STATEMENTS
NONE DELIVERED AND CLOSING CONDITION WAIVED BY CLASSICS
INTERNATIONAL ENTERTAINMENT
1
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EXHIBIT D
OPINION OF COUNSEL TO IBP
DELIVERYWAIVED BY CLASSICS INTERNATIONAL ENTERNATIONAL
ENTERTAINMENT
2
<PAGE>
EXHIBIT E
OPINION OF COUNSEL TO CLASSICS
3
<PAGE>
SCHEDULE 3(E)
CAPITALIZATION
1
<PAGE>
SCHEDULE 3(N)
EVENTS SUBSEQUENT TO FINANCIAL STATEMENTS
1
<PAGE>
SCHEDULE 3(O)
CLASSICS' INTELLECTUAL PROPERTY
1
<PAGE>
SCHEDULE 4(F)
SELLERS' OWNERSHIP OF SHARES
1
<PAGE>
SCHEDULE 4(H)
EVENTS SUBSEQUENT TO MOST RECENT FISCAL QUARTER
1
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SCHEDULE 4(J)
UNDISCLOSED LIABILITIES
Litigation: Anthony Knape v. Carey Lotzer
Cause No. 96-12383-A (District Court of Dallas County,
TEXAS 14TH Judicial District).
1
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SCHEDULE 4(N)
IBP INTELLECTUAL PROPERTY
See Schedule 4(j)
1
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SCHEDULE 4(Q)
LITIGATION
See Schedule 4(j)
2
