ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On
The consideration for the sale will consist of the base purchase price of
The parties to the Asset Purchase Agreement have each made customary representations and warranties in the Asset Purchase Agreement, and have agreed to indemnify each other for breaches of such representations and warranties, subject to certain specified limitations. The assertions embodied in such representations and warranties are qualified by information contained in confidential disclosure schedules that the parties exchanged in connection with signing the Asset Purchase Agreement. Consummation of the Closing is subject to certain conditions, including the receipt of certain third party consents, the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of the Company's common stock, and other customary closing conditions for a transaction of this type.
The Company and Vendor are also subject to a "no shop" restriction that limits its ability to solicit alternative acquisition proposals or provide non-public information to, and engage in discussion with, third parties, except under limited circumstances to permit the Company and Vendor's board of directors to comply with its fiduciary duties.
The Asset Purchase Agreement can be terminated (i) by mutual consent, (ii) by
Purchaser, if Vendor breaches and such breach is not capable of being cured by
The parties will also enter into (i) a transition services agreement to be agreed in good faith by Purchaser and the Vendor relating to the provision by the Vendor or their affiliates of transition services to Purchaser as reasonably requested and necessary or would customarily be provided for the conduct of the Business immediately following the Closing and for a reasonable time period thereafter, and (ii) a transition services agreement to be agreed in good faith by Purchaser and the Vendor relating to the provision by Purchaser or its affiliates of transition services to the Vendor as reasonably requested and necessary for the Vendor to meet their obligations under the Asset Purchase Agreement and to give effect to the Transaction contemplated thereby immediately following the Closing and for a reasonable time period thereafter.
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The Asset Purchase Agreement and the foregoing description has been included to
provide the Company's stockholders with information regarding its terms and is
not intended to provide any other factual information about the parties to the
Transaction. The Asset Purchase Agreement contains representations and
warranties by each of the parties to the Asset Purchase Agreement, which are
made solely for the benefit of the other parties to the Asset Purchase
Agreement. The representations and warranties in the Asset Purchase Agreement
(i) are not intended to be treated as categorical statements of fact but rather
as a way of allocating risk to one of the parties if any such representation or
warranty proves to be inaccurate, (ii) are in certain cases qualified by
reference to the schedules to the Asset Purchase Agreement and/or reports filed
by the Company with the
The foregoing description of the Asset Purchase Agreement is qualified in its entirety by reference to the complete text thereof, a copy of which is included as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
ITEM 8.01. OTHER EVENTS
On
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) EXHIBITS. The following are furnished as Exhibits to this Report:
Exhibit Description No. 2.1 Asset Purchase Agreement dated as ofJanuary 23, 2020 , by and amongRecord Town, Inc. ,Record Town USA LLC ,Record Town Utah LLC ,Trans World FL LLC ,Trans World New York, LLC ,Trans World Entertainment Corporation , 2428392 Inc., and 2428391Ontario Inc , o/a Sunrise Records.* 99.1 Trans World Entertainment Corporation Press Release dated as ofJanuary 23, 2020 .
* Schedules, annexes and exhibits attached to the Asset Purchase Agreement have
been omitted pursuant to Item 601(b)(2) of
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ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with its Transaction, the Company expects to file with the
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PARTICIPANTS IN THE SOLICITATION
The Company and certain of its directors, executive officers, and employees may
be deemed to be participants in the solicitation of proxies in respect of the
Transaction. Information regarding the interests of the Company's participants
is set forth in the Company's Annual Report on Form 10-K for the fiscal year
ended
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this communication are forward-looking statements, including, without limitation, the statements made concerning the Transaction. The statements contained in this document that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties.
We have used the words "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", and similar terms and phrases, including references to assumptions, in this document to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, those regarding the transactions contemplated by the Asset Purchase Agreement. These forward-looking statements are made based on management's expectations and beliefs concerning future events and are subject to uncertainties and factors that could cause actual results to differ materially from the results expressed in the statements. The following factors are among those that may cause actual results to differ materially from the Company's forward-looking statements:
• the risk that the Transaction may not be completed in a timely manner or at
all, which may adversely affect the Company's business and the price of the Company's common stock?
• the failure to satisfy any of the conditions to the consummation of the
Transaction, including the adoption of the purchase agreement by the Company's stockholders and the receipt of third party consents?
• the occurrence of any event, change or other circumstance or condition that
could give rise to the termination of the Asset Purchase Agreement?
• the effect of the announcement or pendency of the Transaction on the Company's
business relationships, operating results and business generally?
• risks that the Transaction disrupts current plans and operations and the
potential difficulties in employee retention as a result of the Transaction?
• risks related to diverting management's attention from the Company's ongoing
business operations?
• the outcome of any legal proceedings that may be instituted against the Company
related to the Transaction;
• unexpected costs, charges, expenses, liabilities or delays in the consummation
of the Transaction?
• the Company's ability to operate as a going-concern following the closing of
the Transaction; and
• other risks described in the Company's filings with the
Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.
The reader should keep in mind that any forward-looking statement made by us in this document, or elsewhere, pertains only as of the date on which we make it. New risks and uncertainties come up from time-to-time and it's impossible for us to predict these events or how they may affect us. In light of these risks and uncertainties, you should keep in mind that any forward-looking statements made in this report or elsewhere might not occur.
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