ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
XA SCENES, INC. LEASE
On December 23, 2005, XA Scenes, Inc., XA, Inc.'s (the "Company," "we,"
"us") wholly owned subsidiary entered into a Lease, (the "Lease") on the ninth
floor of 636-642 West 28th Street, New York, New York 10001, also known as the
"Terminal Warehouse" (the "Property") with Waterfront NY Realty Corp.
("Landlord"). Throughout this Form 8-K, all references to the Company include
the operations of XA Scenes, Inc. The Lease has a term of ten (10) years (the
"Term"), and will commence upon thirty (30) days notice after the completion of
certain improvements by the Landlord (as described below). We agreed to pay
initial annual rent under the Lease equal to $260,000 per year, which rent
increases at the rate of 3% per year (with the rate of rent for the 10th year of
the Lease being $350,000), payable monthly at the initial rate of $21,666.66 per
month. In connection with the lease, we agreed to deposit two months rent
($43,333,333) with the Landlord, which deposit we are required to increase in
the future in connection with the 3% annual increases in rent for the Property.
Pursuant to the Lease, we agreed to provide not less than $10,000,000
combined single limit bodily injury and property damage in insurance coverage
for the property covered by the Lease. The Lease also requires that we pay
Landlord an aggregate of $400 per month for the use of two elevators, one a
freight elevator and one a passenger elevator on the Property and $130 on a semi
annual basis for inspection of the elevators. The Lease also provides for us to
pay a portion of the fuel cost, real estate taxes, electricity, gas and water,
as well as the cost of compliance with certain local New York laws for the
Property.
We plan to use the Property for office space, event and production space
and to host certain events in the future.
ABOUT XA SCENES
We formed XA Scenes, Inc. as a special events venue management firm. Our
senior management team believes that there is a significant opportunity for XA
Scenes, Inc. to capitalize on the synergies that exist between our wholly owned
event marketing agency, The Experiential Agency, Inc., and selected joint
venture partners.
SEVERANCE AGREEMENT WITH FRANK GOLDSTIN
In December 2005, we entered into a "Severance Agreement and Release in
Full" (the "Severance Agreement") with Frank Goldstin, our former Chief
Executive Officer and Director. Mr. Goldstin was previously employed as
Chairman of our Board of Directors under an Executive Employment Agreement
("Employment Agreement") entered into with Mr. Goldstin on or about February 17,
2005. Mr. Goldstin's Employment Agreement was terminated effective December 19,
2005, due to the fact that he was not elected a Director of the Company at our
annual meeting of shareholders on the same day. In connection with the
termination of Mr. Goldstin's employment, he was provided a lump sum payment in
the amount of $50,000, less applicable tax withholding, a payment of $5,538.43,
less applicable tax withholding, in connection with amounts previously owed to
Mr. Goldstin in connection with his employment, and Mr. Goldstin was given an
IBM Thinkpad laptop which he had used during his employment (collectively the
"Severance Pay").
Pursuant to the Severance Agreement, Mr. Goldstin agreed to release and
forever discharge us, our former, present and future officers, directors,
employees, agents, administrators, persons and corporations who may be liable
for the conduct of any of the aforesaid parties, from any and all debts,
demands, promises, actions, claims, liabilities, damages, and causes of action
of any nature, known or unknown, both in law and equity, which have accrued or
may ever accrue to Mr. Goldstin, his heirs, executors, legal administrator,
successors, or assigns by reason of his employment with us. Mr. Goldstin's
release included all claims whether arising in tort, contract or statute.
Additionally, pursuant to the Severance Agreement, Mr. Goldstin agreed to repay
us the Severance Pay if he violates the Severance Agreement in any material
respect.
LEGAL SERVICES AGREEMENT
On December 27, 2005, we entered into an Agreement with David M. Loev, an
attorney, to be responsible for certain corporate/securities matters including
the preparation of and/or review of Schedule 13ds, Form 3's, Form 4's, Schedule
13g's, Schedule 14a's, Schedule 14c's, Form 10-QSB's, Form 10-KSB's and Form
8-K's to be filed by us with the Securities and Exchange Commission and the
review of our press releases (the "Legal Services Agreement"). In connection
with the Legal Services Agreement, we agreed to pay Mr. Loev $4,250 per month,
reimburse him for out of pocket expenses and to issue him 30,000 S-8 shares of
our common stock, which we have agreed to register within 30 days of the date of
the Legal Services Agreement. The Legal Services Agreement is in effect until
December 31, 2006 and services provided outside of the Legal Services Agreement
are to be rendered on an hourly basis.
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