AGREEMENT OF PURCHASE AND SALE OF STOCK
AGREEMENT, dated this 14th day of November, 2003, among (i) NARROWSTEP
INC., a Delaware corporation having an address at 00 Xxx Xxxxxxxxx Xxxxxx,
Xxxxxx X0X 0XX, Xxxxxx Xxxxxxx ("Purchaser"); (ii) Xxxxxxxx Xxxx, an individual
("Xxxx") having an address at 00 Xxxxxx Xxxx, Xxxxxx, Xxxxxx XX00 0XX, Xxxxxx
Xxxxxxx (Xxxx being sometimes referred to as a "Seller"); and SPORTSHOW
TELEVISION LTD., a company incorporated in England (the "Company") having an
address at 00 Xxxxxxx Xxxxx Xxxx, Xxxxxx XX0 0XX Xxxxxx Xxxxxxx.
W I T N E S S E T H:
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WHEREAS, the Company is engaged in the business of producing and
distributing television programs with sports themes;
WHEREAS, the authorized capital of the Company is comprised of a single
class of common stock, (pound)1 par value per share (the "Sportshow Shares"),
all as more specifically provided in the Certificate of Incorporation of the
Company, of which 1,001 Sportshow Shares are issued and outstanding;
WHEREAS, the Sportshow Shares are held by Seller as set forth in
Schedule A;
WHEREAS, Purchaser wishes to purchase, and Seller wish to sell, 801 of
the Sportshow Shares on the terms and subject to the conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements herein contained, the parties hereto do hereby
covenant and agree as follows:
1. PURCHASE AND SALE OF STOCK.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, the Seller will sell, transfer, convey, assign and
deliver to Purchaser, and Purchaser will purchase, 801 of the
Sportshow Shares. At the Closing, the Company's assets shall
include, without limitation, all of the business, assets,
properties, goodwill and rights owned by the Company as of the
Balance Sheet Date or the date hereof or to which the Company
has any right, title or interest of every nature, kind and
description, tangible and intangible, wheresoever located and
whether or not carried or reflected on the books and records of
the Company (hereinafter sometimes called the "Assets"),
INCLUDING, without limitation, all of the Company's photographic
and video equipment, cameras, editing and production equipment
and facilities, machinery, equipment, tools, fixtures, leasehold
improvements, furniture and office supplies, parts, inventory,
work-in-process, goods and other tangible personal property; all
of the Company's distribution agreements and arrangements,
rights, certificates, licenses and
authorizations relating to the conduct of the Company's
business, including but not limited to the copyrights and copies
of all works previously produced by or on behalf of the Company;
all of the Company's receivables (including without limitation
accounts receivable, loans receivable and advances, tax refunds
and overpayments) from all sources; all of the Company's
contracts, agreements, leases and claims under insurance
policies (except as otherwise specifically set forth in this
Agreement); all of the Company's trade names, trademarks,
trademark registrations and applications, trade secrets,
patents, patent applications, copyrights, logos, customer lists,
books and records and know-how; all of the Company's telephone
numbers, post office boxes, beepers, cellular or mobile
telephones and radios; and all choses in action and causes of
action, claims and rights of recovery or set-off of every kind
or character; but excluding those items listed on Schedule P. At
the Closing, the Assets shall include, without limitation, those
assets reflected on the Balance Sheet (as hereinafter defined),
with only such dispositions between the Balance Sheet Date and
the Closing Date as are not in violation of any of the Company's
representations, warranties or covenants contained in this
Agreement.
(b) In the event that any one or more of the Company's rights under
any contract, lease or other agreement is affected by the sale
of the Sportshow Shares hereunder, whether as a result of the
inability to obtain any required consent of any other party to
any such contract, lease or other agreement or otherwise, the
Seller will use their best efforts to retain and preserve such
rights, provide to the Company any and all of the benefits
thereof in a manner reasonably satisfactory to Purchaser, and,
at such time as such rights may become so transferable or
assignable, at Purchaser's instruction or request, transfer or
assign such rights to the Company. The provisions of this
Section do not diminish, reduce or otherwise impair or affect
any obligation or liability of the Seller under any other
provision of this Agreement or any other agreement entered into
pursuant hereto or in connection herewith.
(c) At the Closing, the Seller shall deliver to Purchaser
certificates representing 801 of the Sportshow Shares, together
with duly executed stock powers, with signatures guaranteed, in
proper form for transfer and with appropriate transfer stamps,
if any, affixed at the expense of the Seller, free and clear of
any lien or other encumbrance.
2. PURCHASE PRICE
(a) In consideration of the sale, transfer, conveyance, assignment
and delivery of the Sportshow Shares to Purchaser, and in
reliance upon the representations, warranties and covenants made
herein by the Seller, Purchaser will, in full payment therefor,
pay to Seller, in the manner set forth in Section 2.(c), a total
purchase price (the "Purchase Price") equal to UK(pound)750,000.
The purchase price shall consist of (i) payment of cash in the
amount of(pound)45,000.80 (representing 7.5% of the Purchase
Price), and (ii) the issuance of 3,122,800 shares of
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Purchaser's common stock, par value $.000001 per share
("Narrowstep Shares") (representing 92.5% of the Purchase
Price), as set forth in Schedule E. The Narrowstep Shares to be
issued to Seller will be issued pursuant to an exemption from
registration under the United States Securities Act of 1933, as
amended, and will be subject to substantial restrictions on
Seller' ability to sell or otherwise transfer such Narrowstep
Shares. In connection with the Purchaser's acquisition of the
Sportshow Shares, Seller will execute a subscription agreement
in the form set forth at Exhibit 3. Purchaser will use its best
efforts to register for resale in the Registration Statement on
Form SB-2, originally filed with the United States Securities
and Exchange Commission on September 9, 2003, fifteen (15%) of
the Narrowstep Shares issued to Xxxx. Any adjustment of the
Purchase Price necessitated by Section 2.(c) or otherwise shall
be 7.5% in cash and 92.5 % in Narrowstep Shares.
(b) As soon as practicable, and in any event within 60 days, after
the Closing Date, Seller will deliver to Purchaser the Closing
Date Balance Sheet in accordance with the provisions of this
Agreement. Leigh, Saxton, Green ("Leigh, Saxton, Green"),
chartered accountants, shall audit (and will provide their
opinion with respect to such audit) the Closing Date Balance
Sheet and shall state that the Closing Date Balance Sheet has
been adjusted as herein provided. The Closing Date Balance Sheet
will be accompanied by a copy thereof annotated with schedules
providing tax basis information (the "Closing Date Tax Basis
Information") prepared from the asset records of the Company
reflecting on an asset-by-asset basis, where the asset records
are so maintained, and, otherwise, for each fixed asset account,
the current tax basis, historical cost, method of depreciation
and accumulated book and tax depreciation of the Company for
each asset, or asset account, together with schedules showing
the book and tax basis of the Company in its receivables and
other assets. The term "Closing Date Balance Sheet" as used
herein shall mean an audited balance sheet of the Company, not
as part of a consolidated group with any other entity, business
or group, prepared by or on behalf of the Company as of the
close of business on the Closing Date from the books and records
of the Company, which Leigh, Saxton, Green shall audit as having
been prepared on an accrual basis in accordance with generally
accepted accounting principles, and as fairly presenting the
financial condition of the Company as at such date. All assets
and supplies reflected on the Closing Date Balance Sheet shall
be reflected on the basis of a complete physical count (the
"Inventory") taken by the Company (at the expense of Purchaser)
immediately prior to the Closing Date or as soon thereafter as
is practicable. Purchaser's representatives and accountants
shall have the right to participate in the taking of the
Inventory and the valuation of assets and supplies and to
review, audit and verify that the physical count so taken and
the valuation of the assets and supplies are in accordance with
generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the Balance
Sheet as defined at Section 5.(i). In addition, Purchaser's
representatives and accountants shall be entitled to review,
audit and verify that the video equipment, video cameras,
editing facilities, machinery, equipment, tools, supplies,
furniture, fixtures and
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fixed assets of the Company reflected on the Closing Date
Balance Sheet are owned by the Company at the Closing and the
valuation thereof is in accordance with generally accepted
accounting principles applied on a basis consistent with those
used in the preparation of the Balance Sheet.
(c) At the Closing, Seller will deliver to Purchaser an unaudited
balance sheet (the "Interim Balance Sheet") of the Company as of
the close of business on the immediately preceding day. The
Company shall have, and the Interim Balance Sheet shall reflect
that the Company has, working capital (the "Working Capital"),
as determined by Leigh, Saxton, Green in accordance with
generally accepted accounting principles consistently applied,
of negative(pound)28,540, it being understood and agreed that:
if the Working Capital shall at the Closing be less than
negative(pound)28,540, then the Purchase Price shall be reduced
pound sterling for pound sterling by the amount, if any, by
which the Working Capital is less than negative(pound)28,540;
and if the Working Capital shall at the Closing be more than
negative (pound)28,540, then the Purchase Price shall be
increased pound sterling for pound sterling by the amount, if
any, by which the Working Capital is greater than
negative(pound)28,540. The Purchase Price shall be adjusted at
the Closing for the amount of any shortfall or excess of Working
Capital appearing on the Interim Balance Sheet, with a final
adjustment to be made promptly after Leigh, Saxton, Green has
completed a post-closing audit of the Company, but in any event,
not later than ninety (90) days after the Closing Date. For all
purposes of this Agreement, "Working Capital" shall be all cash
and cash equivalents of the Company as of the Closing Date; PLUS
all valid accounts receivable outstanding as of the Closing Date
which were created by the Company in the ordinary course of its
business and with respect to which the Company has no basis to
believe they are all or in part not valid and collectible; PLUS
all of the Company's inventory as of the Closing Date actually
used in its business to the extent the same is not obsolete or
obsolescent; PLUS all of the Company's supplies as of the
Closing Date actually used in its business to the extent the
same are not obsolete or obsolescent; plus all of the Company's
prepaid expenses as of the Closing Date for services (including
but not limited to insurance policies) to be performed for the
Company by unrelated third parties in the twelve months
immediately following the Closing Date; LESS all obligations and
accounts payable owed by the Company to vendors or others
(including but not limited to the HM Customs & Excise and the
Inland Revenue or other taxing authorities for periods through
the day immediately preceding the Closing Date) as of the
Closing Date; LESS any short-term loans, lines of credit,
overdrafts, or similar facilities, and the short term portion of
any long-term loans; LESS all accrued liabilities of the Company
at the Closing Date for employee vacation, severance, or other
employee-related obligations.
(d) Purchaser and Seller will, for all tax and other purposes,
allocate the Purchase Price 100% to the purchase of the
Sportshow Shares. Neither Seller nor Purchaser shall, for any
tax purposes, take any position respecting the allocation of the
Purchase Price which is inconsistent with such allocation.
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3. CLOSING.
The closing hereunder (the "Closing") shall take place at 12:00
A.M., local time, on the 25th day of November, 2003 at the
offices of Sportshows TV Ltd at 00 Xxxxxxx Xxxxx Xxxx, Xxxxxx
XX0 0XX Xxxxxx Xxxxxxx, or at such other time and place as the
parties may agree. The day on which the Closing actually takes
place is herein sometimes referred to as the Closing Date.
4. THE SELLER' OBLIGATIONS; FURTHER ASSURANCES.
(a) Seller are delivering to Purchaser simultaneously herewith:
ii. stock certificates representing all of the issued and
outstanding Sportshow Shares, together with stock powers
duly endorsed in blank with signatures guaranteed;
iii. such assignments and transfers of any and all assets
used by the Company but held in the name of another
person, including but not limited to patents and patent
applications, trademarks, trademark registrations and
applications, copyrights, motor vehicle registrations,
authorizations, certificates of title and licenses, in
form and substance satisfactory to Purchaser, as shall
be effective to vest in Purchaser (or, at Purchaser's
election, the Company) good title to all of such assets;
iv. any such good and sufficient (and, where appropriate,
recordable) instruments of conveyance, assignment and
transfer, in form and substance satisfactory to
Purchaser, as shall be necessary to vest in the Company
good title to the Assets;
v. all contracts, files and other data and documents of
Seller pertaining to the Stock or the Assets (which may
be delivered at the principal office of the Company)
including, among other things, the stock records and
minute books of the Company, dating to its inception;
vi. a general release in favor of Purchaser, the Company and
the Assets from each Seller and each other entity
directly or indirectly owned, controlled, operated or
managed by any of them (each, a "Seller Entity";
together, the "Seller Entities");
vii. certificates (and telegrams dated as of the most recent
practicable date) as to the good standing of the
Company, the payment of franchise taxes and tiling of
required reports, from the appropriate officials of the
jurisdiction in which the Company is organized; and
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viii. all documents required to be delivered (and not
previously delivered) to Purchaser and/or the Company
under the provisions of this Agreement.
b. At any time and from time to time at or after the Closing, at
Purchaser's request and without further consideration, Seller
will execute and deliver, or cause to be executed and delivered,
such other instruments of sale, transfer, conveyance, assignment
and confirmation, and will take such action as Purchaser may
reasonably request, in order more effectively to transfer,
convey and assign to Purchaser, and to confirm their title to,
the Sportshow Shares and the Assets, to put Purchaser and/or the
Company in actual possession and operating control of the
business, assets, properties, goodwill, rights, books and
records of the Company and to assist Purchaser in exercising all
rights with respect thereto.
c. For purposes of enabling Seller to prepare, file, support and
defend their tax returns after the Closing, Purchaser and the
Company will, for a period of three years after the Closing,
make or cause to be made available to Seller upon reasonable
notice, during normal business hours and otherwise under
reasonable circumstances so as not to interfere with Purchasers
or the Company's business or personnel, all records of the
Company acquired by Purchaser pursuant to this Agreement
respecting periods and transactions prior to the Closing Date.
Not less than twenty-one days prior to the destruction or other
disposition of any such records, Purchaser will give Seller
written notice of its intended disposition, and shall permit
Seller to remove and retain any such records.
5. REPRESENTATIONS AND WARRANTIES BY SELLER. Seller hereby jointly
and severally represent and warrant to Purchaser as follows:
a. ORGANIZATION, STANDING AND QUALIFICATION OF THE COMPANY. The
Company is a corporation duly organized, validly existing and in
good standing under the laws of England and Wales, its
jurisdiction of incorporation. The Company has all requisite
corporate power and authority to carry on its business as now
being conducted and to own, lease or operate its properties as
and in the places where such business is now conducted and such
properties are now owned, leased or operated; and it is duly
qualified, licensed or domesticated and in good standing as a
foreign corporation authorized to do business in the
jurisdictions listed on Schedule B, which are the only
jurisdictions where the nature of the activities conducted by it
or the character of the properties owned, leased or operated by
it require such qualification, licensing or domestication,
excepting such places where such failure will not materially
adversely affect the business, assets or operations of the
Company or Purchaser. Seller have delivered to Purchaser true
and complete copies of the Company's Memorandum and Articles of
Association, and all amendments thereto, certified as complete
and correct by Seller.
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b. PURCHASE AND SALES ORDERS. Seller have made available to
Purchaser for review copies of all contracts, sales orders or
commitments currently in effect by or on behalf of the Company.
c. SUBSIDIARIES. The Company has no subsidiaries. Except as set
forth on Schedule C, the Company has no interest, direct or
indirect, or any commitment to purchase any interest, direct or
indirect, in any other corporation or in any partnership, joint
venture or other business enterprise or entity. Except as set
forth on Schedule C, Seller have conducted the business and
owned the assets of the Company directly in the Company; except
as set forth on Schedule C, the Company has conducted such
business and owned such assets only through its direct ownership
thereof and not through any other direct or indirect subsidiary
or affiliate of either the Company or any Seller Entity.
d. TRANSACTIONS WITH CERTAIN PERSONS. Except as set forth on
Schedule C, between the Balance Sheet Date (as defined in
Section 5.(i)) and the Execution Date, the Company has not,
directly or indirectly, purchased, leased or otherwise acquired
any property or obtained any services from, or sold, leased or
otherwise disposed of any property or furnished any services to,
or otherwise dealt with, either Seller, any Seller Entity, or
any affiliate of any of them; the Company owes no amount to any
shareholder, director, officer, employee or consultant of the
Company (except for current compensation for not more than one
regular pay period), any Seller, any Seller Entity or any
affiliate of any of them, and none of such persons owes any
amount to the Company; and no part of the property or assets of
any Seller or any Seller Entity or any affiliate of any of them
is used by the Company or is required to be used by the Company
to conduct its business as now being conducted.
e. EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT; AUTHORITY.
Except as set forth on Schedule C, neither the execution,
delivery nor performance of this Agreement by the Seller does
now nor will, with or without the giving of notice or the
passage of time, or both, conflict with, result in a default,
right to accelerate, loss of rights under, or give rise to any
increase in interest rates, rentals or other costs related to,
or result in the creation of any lien, charge or encumbrance
pursuant to, any provision of the Company's certificate of
incorporation or by-laws or any operating license,
authorization, franchise, mortgage, deed of trust, law, rule or
regulation, or any lease, license or agreement, or any order,
judgment or decree to which either the Company or the Seller is
a party or by which any of them or any property of any of them
may be bound or affected. The Company and the Seller has the
full power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby, and all
proceedings or corporate action required to be taken by the
Company and the Seller to authorize the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby have been properly taken and
not revoked. This Agreement constitutes a valid and binding
obligation of each of the
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Company and the Seller and is enforceable against each of them
in accordance with its terms.
f. CAPITALIZATION. Set forth on Schedule D is a complete list of
all classes and amounts of capital stock or other equity which
the Company is authorized to issue. Only those shares and
interests set forth on Schedule D as issued and outstanding are
issued and outstanding. There are no outstanding subscriptions,
options, warrants, calls, contracts, demands, commitments,
convertible securities or other agreements or arrangements of
any character or nature whatsoever under which the Company is or
may become obligated to issue, assign or transfer any shares of
any capital stock of the Company at any time or which could
otherwise impair or hinder the ability of the Seller to convey
the Sportshow Shares to Purchaser at the Closing or which could
cause Purchaser, after the Closing, to own less than 100% of the
Sportshow Shares.
g. OWNERSHIP OF THE ASSETS. Except as set forth on Schedule C, all
of the Assets are owned by the Company beneficially and of
record, free and clear of any liens, claims, encumbrances or
restrictions of any kind.
h. OWNERSHIP OF SPORTSHOW SHARES. Except as set forth on Schedule
C, all of the Sportshow Shares are owned by the Seller
beneficially and of record, free and clear of any liens, claims,
encumbrances or restrictions of any kind. At the Closing, Seller
will convey to Purchaser good title to all of the Sportshow
Shares, free and clear of any liens, claims, encumbrances or
restrictions of any kind.
i. FINANCIAL STATEMENTS. The Company has delivered to Purchaser
copies (identified with a reference to this Section of this
Agreement) of the following financial statements (hereinafter
collectively called the "Financial Statements") prepared by the
Company, all of which have been prepared from the books and
records of the Company in accordance with the basis of
accounting used to prepare the Company's income tax returns
(commonly known as the "Accrual Basis of Accounting"), applied
on a basis consistent with the principles applied in the
preparation of prior financial statements of the Company, and
each of which has been compiled by Leigh, Saxton, Green:
i. a compiled balance sheet of the Company (the "Balance
Sheet") as at March 31, 2003 (the "Balance Sheet Date"),
and compiled financial statements of the Company as at
March 31, 2003 and 2002.
The statements of income contained in such financial
statements do not contain any items of special or
nonrecurring income or any other income not earned in
the ordinary course of business except as expressly
specified therein. The Company has delivered to
Purchaser a copy of the Balance Sheet annotated to
provide accurate tax basis information (the "Tax Basis
Information") prepared from the asset records of the
Company reflecting, on an asset-by-asset basis, the then
current tax basis, historical cost,
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method of depreciation and accumulated book and tax
depreciation of the Company for each asset, together
with schedules showing the book and tax basis of the
Company in its receivables and other assets. The Company
has made available to Purchaser the relevant records and
ledgers maintained by the Company, all of which are
complete and correct, showing tax and book basis,
historical cost, method of depreciation and accumulated
book basis, and tax depreciation by individual asset all
of which are complete and correct. The Closing Date Tax
Basis Information will be prepared on a basis consistent
with the preparation of the Tax Basis Information, and
will be accurate.
j. ABSENCE OF UNDISCLOSED LIABILITIES. Except as fully shown or
provided for on the face of the Balance Sheet (excluding the
notes thereto), as of the Balance Sheet Date, the Company had no
debts, liabilities or obligations (whether absolute, accrued,
contingent or otherwise) of any nature whatsoever required to be
shown or provided for thereon pursuant to generally accepted
accounting principles consistently applied, including, without
limitation, any liabilities incurred in respect of or measured
by the Company's income or property, or authorized or
outstanding capital stock, for any period prior to the close of
business on the Balance Sheet Date, or any debts, liabilities or
obligations relating to or arising out of any act, transaction,
circumstance or state of facts which occurred or existed on or
before the Balance Sheet Date whether or not then known, due or
payable (but excluding debts, liabilities or obligations which
do not, individually or in the aggregate, exceed (pound)5,000).
As of the Balance Sheet Date, there were no contingent
liabilities which were not adequately provided for in the
Balance Sheet or disclosed in the notes thereto. Except as will
be fully shown or provided for on the face of the Closing Date
Balance Sheet (excluding the notes thereto), as of the Closing
Date, the Company will have no debts, liabilities or obligations
(whether absolute, accrued, contingent or otherwise) of any
nature whatsoever required to be shown or provided for thereon,
including, without limitation, any liabilities incurred in
respect of or measured by the Company's income or property, or
authorized or outstanding capital stock, for any period prior to
the close of business on the Closing Date, or any debts,
liabilities or obligations relating to or arising out of any
act, transaction, circumstance or state of facts relating to the
Company which occurred or existed on or before the close of
business on the Closing Date, whether or not then known, due or
payable (but excluding debts, liabilities or obligations which
do not, individually or in the aggregate, exceed (pound)5,000).
k. TAXES. All taxes, including, without limitation, income,
property (real and personal), sales, use, franchise, added
value, employees' income withholding, social security taxes and
withholding taxes for payments made to foreign persons, imposed
by HM Government or by or by any foreign country or by any
state, municipality, subdivision or instrumentality of the
United Kingdom or of any foreign country, or by any other taxing
authority, which are now due or payable by the Company, or by
any Seller in respect of the Company, and all interest and
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penalties thereon, whether disputed or not, have been paid in
full or adequately provided for, and all tax returns required to
be filed in connection therewith have been accurately prepared
and duly and timely filed and all deposits required by law to be
made by the Company with respect to such taxes have been duly
made, or will at any time hereafter be or become due or payable
by the Company, or by any Seller in respect of the Company, for
all periods through the Closing Date, and all interest and
penalties thereon, whether disputed or not, will on the Closing
Date have been paid in full, or appropriate reserves therefor
established, and all tax returns required to be filed in
connection therewith will be accurately prepared and duly and
timely filed and all deposits required by law to be made by the
Company with respect to such taxes will be duly made. The
Company is not delinquent in the payment of any foreign or
domestic tax, assessment or governmental charge or deposit, the
Company has no tax deficiency or claim outstanding, proposed or
assessed against it, and, to the best knowledge of each of the
Company and each Seller, there is no basis for any such
deficiency or claim. There is not now in force any extension of
time with respect to the date on which any tax return was or is
due to be filed by or with respect to or any other waiver or
agreement by the Company, for the extension or for the
assessment of any agreement currently in effect, or which was
during the past three years in effect, to which the Company was
or is a party. The Closing Date Balance Sheet will reflect
adequate reserves for all taxes. The Company has no liability,
and will not at Closing have any liability, for any taxes of any
Seller or any Seller Entity, whether resulting from or arising
out of the Company's being part of a consolidated group at any
point in time or for any period or otherwise. No properties or
assets of the Company on the Closing Date will be subject to any
lien respecting any taxes of the Company or any Seller or any
Seller Entity.
l. ABSENCE OF CHANGES OR EVENTS. Except as set forth in Schedule F,
from the Balance Sheet Date through the date hereof, the Company
has conducted its business only in the ordinary course, and the
Company has not (and Seller has not with respect to the Assets
or business of the Company):
i. incurred any obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due,
except current liabilities for trade or business
obligations incurred in the ordinary course of business
and consistent with prior practice;
ii. discharged or satisfied any lien, charge or encumbrance
other than those then required to be discharged or
satisfied, or paid any obligation or liability,
absolute, accrued, contingent or otherwise, other than
current liabilities shown on the Balance Sheet and
current liabilities incurred since the Balance Sheet
Date, in each case in the ordinary course of business
and consistent with the Company's prior practice, and in
each case not before then due;
-10-
iii. mortgaged or pledged any of its property, business or
assets, tangible or intangible, or subjected to lien,
charge, security interest or any other encumbrance or
restriction any property, business or assets, tangible
or intangible;
iv. sold, transferred or otherwise disposed of any business
with any of its customers to any other entity; sold,
transferred, leased to others or otherwise disposed of
any of its assets or canceled or compromised any debt or
claim, or waived or released any right of a substantial
value, except in the ordinary course of business and
consistent with prior practice;
v. received any notice of termination of or default under
any contract, lease or other agreement or suffered any
damage, destruction or loss (whether or not covered by
insurance) which, in any case or in the aggregate, has
had or may have a materially adverse effect on its
assets, operations or prospects;
vi. been made a party to, or been threatened to be made a
party to, any claim, action, or by any current or former
employee or director or consultant or contractor under
current UK and EU employment legislation; or breached
any current UK or EU employment legislation with respect
to the rights of employees or contractors, nor breached
any employment-related laws or regulations that were in
force at the time of employment of any current or
previous employee;
vii. transferred or granted any rights under, or entered into
any settlement regarding the breach or infringement of,
any license, patent, copyright, trademark, trade name,
service xxxx, service name, invention, computer
software, license or similar intellectual property
rights, or modified any existing rights with respect
thereto, or received notice that any other party thereto
intended or desired to modify or alter any existing
rights with respect thereto;
viii. made any change in the rate of compensation, commission,
bonus or other direct or indirect remuneration payable,
or paid or agreed or orally promised to pay,
conditionally or otherwise, any bonus, extra
compensation, pension, severance or vacation pay, or any
other employment-related benefit (such as reimbursement
for tuition for employment-related studies) to any
Seller or any director, officer, employee, salesman,
distributor or agent of the Company;
ix. issued or sold or transferred (or acknowledged the
issuance, sale or transfer of) any shares of its capital
stock or other securities, or issued, granted or sold
any options, rights or warrants with respect thereto, or
acquired any capital stock or other securities of any
corporation or any
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interest in any business enterprise, or otherwise made
any loan or advance to or investment in any person, firm
or corporation;
x. made any capital expenditures or capital additions or
betterments in excess of (pound)5,000 in any single case
and (pound)20,000 in the aggregate;
xi. changed its banking or safe deposit arrangements;
xii. instituted, settled or agreed to settle any litigation,
action or proceeding before any court or governmental
body relating to it or its property;
xiii. failed to replenish its supplies in a normal and
customary manner consistent with its prior practice and
prudent business practices prevailing in the industry,
or made any purchase commitment materially in excess of
the normal, ordinary and usual requirements of its
business or at any price in excess of the then current
market price or upon terms and conditions more onerous
than those usual and customary in the industry, or made
any change in its selling, pricing, advertising or
personnel practices inconsistent with prudent business
practices prevailing in the industry; or
xiv. otherwise suffered any material adverse change in its
business, prospects, financial condition, or relations
with its vendors or customers.
m. LITIGATION. Except as set forth in Schedule F, there is no legal
action, suit, arbitration, governmental investigation or other
legal or administrative proceeding, nor any order, decree or
judgment in progress, pending or in effect against or relating
to the Company, the Company's officers, directors or employees,
any Seller, or any properties, assets or business or the
transactions contemplated by this Agreement. Except as set forth
in Schedule F, there is no claim, and to the best knowledge of
the Company and each Seller, there is not presently threatened,
any claim, legal action, suit, arbitration, governmental
proceeding, nor any order or decree, against or relating to the
Company, its officers, directors, or employees, properties,
assets or business or any Seller, or the transactions
contemplated by this Agreement which could reasonably be
expected to have, individually or in the aggregate, a material
adverse effect on the condition (financial or otherwise),
properties, assets, liabilities, business, operations or
prospects of the Company or the transactions contemplated by
this Agreement.
n. COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. Except as set forth
in Schedule G, the Company has complied, and is now in
compliance, and no Seller has taken any action, and has not
omitted to take any action, which would cause the Company not to
have complied or be in such compliance, with all existing laws,
rules, regulations, ordinances, orders, judgments and decrees
now or hereafter applicable to the business, properties or
operations of the Company as presently conducted, excepting only
such noncompliance therewith which is unknown to
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both the Company and each Seller and which would not have,
individually or in the aggregate, a material adverse effect on
the business, assets, financial condition or prospects of the
Company. Except as set forth in Schedule G, neither the present
ownership nor present use of the Company's properties nor the
present conduct of the Company's business violates, or with or
without the giving of notice or the passage of time, or both,
will violate, conflict with or result in a default, right to
accelerate or loss of rights under, any terms or provisions of
the Company's certificate of incorporation or by-laws or any
operating license or authorization, any order, judgment or
decree to which the Company is a party or by which it may be
bound or affected, or any lien, encumbrance, mortgage, deed of
trust, lease, license, agreement, law, ordinance, rule or
regulation, in each case as presently in effect, or conflicts
with the rights of any other person, firm or corporation. The
Company has not committed, knowingly or unknowingly, any
breaches of UK or EU environmental legislation applicable to the
Company's current or past operations (an "Environmental
Regulation"), which could reasonably be expected to have an
adverse effect on the condition (financial or otherwise),
properties, assets, liabilities, business, operations or
prospects of the Company or Purchaser or the transactions
contemplated by this Agreement which would be material or, in
any event, exceed(pound)10,000, or would be cause for any such
government or agency to impose any lien or encumbrance upon the
Company, its business, Purchaser, the Sportshow Shares or the
business transferred pursuant to this Agreement.
o. TITLE TO PROPERTIES. Except as set forth on Schedule H, the
Company has good title to all the properties and assets it owns
or uses in its business or purports to own, including, without
limitation, those reflected on the Balance Sheet (except assets
sold after the Balance Sheet Date in the ordinary course of
business). The Company will at the Closing have (subject only to
those exceptions set forth in this Section 5.(o)) good title to
all the properties and assets which will be reflected on the
Closing Date Balance Sheet. Except as set forth on Schedule H,
none of the properties and assets referred to in the preceding
sentences of this Section 5.(o) is subject to any mortgage,
pledge, lien, charge, security interest, encumbrance,
restriction, lease, license, easement, liability or adverse
claim of any nature whatsoever, direct or indirect, whether
accrued, absolute, contingent or otherwise. Except as set forth
on Schedule H, the properties and assets owned, leased or used
by the Company are now, and will on the Closing Date be, in good
operating condition and repair (excepting minor defects which do
not affect their value or use in the normal operations of the
Company), are now, and will on the Closing Date be, adequate and
sufficient for all of the Company's current operations, are used
in the business of the Company, include all properties and
assets necessary to conduct the Company's present business, and
will, at the Closing, include all properties and assets
necessary to conduct the Company's business.
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p. SCHEDULES. Attached hereto as Schedule H is a separate schedule
containing an accurate and complete list (divided into
subschedules by subdivision of this Section 5.(p)) of:
i. All real property owned by the Company or in which the
Company has a leasehold or other interest or which is
used or required to be used by the Company in connection
with the operation of its business, together with a
description of each lease, sublease, license or any
other instrument under which the Company claims or holds
such leasehold or other interest or right to the use
thereof or pursuant to which it has assigned, sublet or
granted any rights therein;
ii. The name of each customer or client which accounted for
any of the Company's gross revenues and the name of each
vendor that accounted for any of the Company's total
purchases in the twelve-month period ended on the
Balance Sheet Date, as such information is maintained on
the Company's computer data base;
iii. As of the Balance Sheet Date, a schedule of all of the
Company's receivables (which includes without limitation
accounts receivable, loans receivable and any advances,
as well as all receivables between and among the
Company, and Seller, and any of them or affiliates of
any of them), showing separately those receivables which
have been outstanding as of such date not more than 30
days; more than 30 days but not more than 60 days; more
than 60 days but not more than 90 days; more than 90
days; together with information of the type normally
generated by the Company on such lists as to each such
listed receivable which has been outstanding for more
than 60 days and identifying all receivables as to which
there is any pending or threatened dispute relating to
the amount or the collectability of any such receivable;
iv. All patents, patent applications, patent licenses,
trademarks, trademark registrations, and applications
therefor, service marks, service xxxx registrations and
applications therefor, service names, trade names,
copyrights and copyright registrations, and applications
therefor, computer software (together with all
documentation and operating instructions on all hardware
and software) and all other intellectual property wholly
or partially owned or held by the Company or used in the
operation of its business; all of the Company's
operating rights, any and all other rights,
certificates, licenses and authorizations relating to
the conduct of the Company's business;
v. All fire, theft, casualty, liability and other insurance
policies insuring the Company and its properties,
specifying with respect to each such policy the name of
the insurer, the risk insured against, the limits of
coverage, the deductible amount (if any), the premium
rate, the date through which
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coverage will continue by virtue of premiums already
paid and a history of claims relating to the assets,
properties, liabilities or business of the Company since
March 1, 2003. Except as disclosed in Schedule H, such
policies provide adequate coverage for all normal risks
incident to the Company's assets, properties and
business operations;
vi. All sales or distributorship agreements and
arrangements, or other material agreements or
arrangements to which the Company is a party or by which
it is bound providing for, or pursuant to which, persons
or entities other than the Company's own employees sell
or distribute the Company's products or services;
vii. All contracts, agreements, commitments or licenses
relating to patents, trademarks, trade names,
copyrights, inventions, processes, know-how, formulae,
trade secrets, software, hardware, or maintenance or
service agreements (whether for computers or the other
assets or intellectual property rights included in the
Assets);
viii. All loan agreements, indentures, mortgages, pledges,
conditional sale or title retention agreements, security
agreements, guaranties, and leases or lease purchase
agreements to which the Company is a party or by which
it is bound, in the case of leases, lease purchase
agreements, conditional sale or title retention
agreements requiring an expenditure of more than
(pound)10,000 and which, in the case of leases and lease
purchase agreements, cannot be terminated without
penalty, forfeiture or loss, or which will not be fully
performed within ninety days;
ix. All contracts, agreements, commitments or other
understandings or arrangements to which the Company is a
party or by which it or any of its property is bound or
affected which are, individually or in the aggregate,
material to the Company, the Company's business, the
Company's Assets or the Company's operations;
x. All collective bargaining agreements, employment and
consulting agreements, executive compensation plans,
bonus plans, deferred compensation agreements, employee
pension plans or retirement plans, employee stock
options or stock purchase plans, employee savings plans,
and group life, health and accident insurance and other
significant employee benefit plans, agreements,
arrangements or commitments, whether or not legally
binding, including, without limitation, severance,
holiday, vacation, Christmas and other bonus practices,
to which the Company is a party or bound or which relate
to the operation of its business;
xi. The names and current annual salary rates of all persons
who are currently being compensated (directly or
indirectly) by the Company at a rate equal
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to or in excess of (pound)15,000 per annum, and for each
such person the amounts paid or payable as compensation
for the year ending December 31, 2003, and a history of
all raises and bonuses for such persons during the past
two years;
xii. The names of all directors and officers of the Company,
the name of each bank in which the Company has an
account or safe deposit box and the names of all persons
authorized to draw thereon or have access thereto; and
the names of all persons, if any, holding tax or other
powers of attorney from the Company and a summary of the
terms thereof; and
xiii. The location and description of any property in which
the Company has any interest and which is not located on
the Company's premises.
Except as disclosed in Schedule H, all of the contracts,
agreements, leases, licenses and commitments listed or
required to be listed on Schedule H or any other
Schedule to this Agreement (other than those which have
been fully performed) are valid and binding, enforceable
in accordance with their respective terms, in full force
and effect and, except as otherwise specified in
Schedule H, will be unaffected by the sale of the
Sportshow Shares to Purchaser hereunder so that, after
such sale, the Company will be entitled to the full
remaining benefits thereof (with the exception of minor
deficiencies or problems not rising, individually or in
the aggregate, to significant levels), except those
which, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), properties,
assets, liabilities, business, operations or prospects
of the Company or Purchaser or the transactions
contemplated by this Agreement. Except as disclosed in
Schedule H, there is not under any contract, agreement,
lease, license or commitment listed or required to be
listed on Schedule H or any other Schedule to this
Agreement, any existing default by the Company, or event
which, after notice or lapse of time, or both, would
constitute a default by the Company or result in a right
to accelerate against the Company or loss of rights by
the Company, except those which, individually or in the
aggregate, could not reasonably be expected to have a
material adverse effect on the condition (financial or
otherwise), properties, assets, liabilities, business,
operations or prospects of the Company or Purchaser or
the transactions contemplated by this Agreement. Except
as disclosed in Schedule H, none of the Company's
existing or completed contracts is subject to
renegotiation with any governmental body. True and
complete copies of all such contracts, agreements,
leases, licenses and other documents listed or required
to be listed on Schedule H and each other Schedule to
this Agreement (together with any and all amendments
thereto), certified on behalf of the Company, have been
delivered to Purchaser. Except as disclosed in Schedule
H, the Company knows of no
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default, or event which, after notice or lapse of time,
or both, would become a default, by any party other than
the Company to any contract, agreement, lease, license,
commitment or document listed on Schedule H under any
such contract, agreement, lease, license, commitment or
document, with the exception of those which,
individually or in the aggregate, could not reasonably
be expected to have a material adverse effect on the
condition (financial or otherwise), properties, assets,
liabilities, business, operations or prospects of the
Company or Purchaser or the transactions contemplated by
this Agreement.
q. CERTAIN AUTHORIZATIONS, PATENTS, ETC. The Company owns or
possesses the royalty-free licenses or other rights to use the
copyrights, trademarks, service marks, service names, trade
names, patents, trade secrets, computer software and other
proprietary intellectual property rights necessary to conduct
its business as it is presently operated. The Company is not
infringing upon or otherwise acting adversely to any license,
copyright, trademark, trademark right, service xxxx, service
name, trade name, patent, patent right, license, trade secret,
computer software or other proprietary intellectual property
right owned by any other person or persons. There is no claim or
action by any such other person pending, or to the knowledge of
the Company or the Seller threatened, against either the Company
or the Seller with respect to any of the rights or property
referred to in this Section 5.(q).
r. NO GUARANTIES. Except as set forth on Schedule B, the Company
has not guaranteed the obligations or liabilities of any other
person, firm or corporation, and none of the Company's business,
properties or assets is subject to any guaranty by the Company,
any Seller Entity, or the Seller.
s. RECEIVABLES. Except as disclosed in Schedule I, all receivables
of the Company (including without limitation accounts
receivable, loans receivable and advances) which are reflected
in the Balance Sheet, and all such receivables which will have
arisen since the date thereof through the Closing Date, shall
have arisen only from bona fide transactions in the ordinary
course of business.
t. RECORDS. The books of account of the Company are, and will at
the Closing be, complete and correct in all material respects,
and there have been, and there will have been at the Closing, no
transactions involving the business of the Company which
properly should have been set forth therein and which have not
been accurately so set forth.
u. EMPLOYEE BENEFIT PROGRAMS.
i. Except as set forth on Schedule N, the Company has
maintained no Employee Program (as defined below) and
has acquired no company which maintained any Employee
Program with respect to which either the Company or
Purchaser has or could have any liability following the
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Closing Date. For purposes of this section "Employee
Program" means any program, scheme or benefit set in
place for the benefit of employees including, but not
limited to, bonus schemes, pension schemes, share option
schemes health insurance and any benefit-in-kind
schemes.
v. ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither the
Company, nor any Seller, nor any of their respective
officers, nor, to the best knowledge of the Company or
the Seller, any employees or agents, nor any other
person acting on behalf of any of them, has, directly or
indirectly, since January l, 1997, given or agreed to
give any gift or similar benefit to any customer,
supplier, governmental employee or other person who is
or may be in a position to help or hinder the business
of the Company which might subject the Company to any
damage or penalty in any civil, criminal or governmental
litigation or proceeding, if not given in the past,
could reasonably be expected to have had a material
adverse effect on the assets, business, operations or
prospects of the Company as reflected in the Financial
Statements, or if not continued in the future, could
reasonably be expected to have a material adverse effect
on the assets, business, operations or prospects of the
Company. Each of the Company and the Seller know of no
breach or violation, since January 1, 1997, of any law,
rule, regulation, ordinance, order, judgment or decree
in effect at the time respecting the types of actions
referred to in this Section 5.(w).
w. DISCLOSURE. No representation or warranty by or on
behalf of any Seller contained in this Agreement, in any
Schedule hereto, in any agreement entered into pursuant
hereto or in connection herewith, in the Financial
Statements, in the Tax Basis Information, in the Closing
Date Tax Basis Information, in any certificate delivered
at Closing, in any certificate delivered pursuant to
Section 7, or in any other certificate which states that
it is delivered pursuant to or in connection with this
Agreement (certificates referred to in this sentence are
sometimes referred to herein individually as an
"Agreement Certificate" and collectively as the
"Agreement Certificates"), contains or will contain any
untrue statement of a material fact, or omits or will
omit to state any material fact required to make the
statements herein or therein contained not misleading.
Except as set forth in this Agreement, in any Schedule
hereto, in any agreement entered into pursuant hereto or
in connection herewith, in the Financial Statements, or
in any Agreement Certificate delivered at or prior to
the execution hereof, neither the Company nor the Seller
is aware of any event or condition which could
reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), properties,
assets, liabilities, business or prospects of the
Company. Any and all representations and warranties
respecting or relating to the actions, knowledge,
condition, assets, liabilities, business, operations or
prospects of Seller or the Company made in this
Agreement, in any Schedule hereto, in any agreement
entered into pursuant hereto or in connection herewith,
in the Financial Statements, in the Tax Basis
Information, in the Closing Date Tax Basis Information,
or in any Agreement Certificate are for all purposes the
joint and several representations and warranties of each
Seller. In connection with any claim by or on behalf of
Purchaser asserting that any representation or warranty
contained in this Agreement, in the Schedules hereto, in
the agreements entered into pursuant hereto or in
connection herewith,
-18-
in the Financial Statements, in the Tax Basis
Information, in the Closing Date Tax Basis Information,
or in any Agreement Certificate has been breached or
violated, it shall not constitute a defense available to
Seller or any other person that Purchaser and/or its
representatives knew or should have known that any such
representation or warranty was or might have been
inaccurate in any respect.
x. SUPPLIERS AND CUSTOMERS. Except as set forth on Schedule
K, the relationship of the Company with each of its
suppliers and customers accounting for sales to or
purchases from the Company in excess of(pound)2,000
annually is a good commercial working relationship (such
suppliers and customers being sometimes hereinafter
referred to as the "Major Suppliers" and the "Major
Customers", respectively), and the relationships of the
Company with its other suppliers and customers are, in
the aggregate, good commercial working relationships.
Except as set forth on Schedule K, no Major Supplier or
Major Customer of the Company has canceled or otherwise
terminated or threatened in writing to cancel or
otherwise terminate their respective relationships with
the Company or have during the 12 months immediately
prior hereto decreased materially, or threatened to
decrease or limit materially, their services, supplies
or materials to the Company, or usage of the services or
products of the Company. Except as set forth on Schedule
K, neither the Company nor Seller has any notice that
any such Major Supplier or Major Customer intends to
cancel, fail to renew or otherwise, in any material
respect adverse to the Company, modify their
relationships with the Company or to decrease materially
or limit their services, supplies or materials to the
Company, or their purchase of the services of products
of the Company, and, except as set forth on Schedule K,
the Company and Seller know of no reason why the
transaction contemplated hereby would adversely affect
the relationship of the Company with any such Major
Supplier or Major Customer.
y. THE CLOSING DATE BALANCE SHEET. The Closing Date Balance
Sheet will be prepared from the books and records of the
Company in accordance with Section 2.(b).
6. REPRESENTATIONS AND WARRANTIES BY PURCHASER. Purchaser hereby
represents and warrants to the Company as follows:
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a. ORGANIZATION AND STANDING. Purchaser is a corporation
duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation set
forth above. Purchaser has full power and authority to
enter into this Agreement and to carry out the
transactions contemplated hereby.
b. EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT;
AUTHORITY. Neither the execution, delivery nor
performance of this Agreement by Purchaser will, with or
without the giving of notice or the passage of time, or
both, conflict with, result in a default, right to
accelerate or loss of rights under, or result in the
creation of any lien, charge or encumbrance pursuant to,
any provision of Purchaser's Certificate of
Incorporation or any franchise, mortgage, deed of trust,
law, rule or regulation, or any material lease, license
or agreement, or any order, judgment or decree to which
Purchaser is a party or by which it or any of its
property may be bound or affected. Purchaser has the
full power and authority to enter into this Agreement
and to carry out the transactions contemplated hereby,
all proceedings or corporate action required to be taken
by Purchaser to authorize the execution, delivery and
performance of this Agreement and consummation of the
transactions contemplated hereby have been properly
taken and this Agreement constitutes a valid and binding
obligation of Purchaser, enforceable in accordance with
its terms.
c. LITIGATION. There is no legal action, suit, arbitration,
governmental investigation or other legal or
administrative proceeding, nor any order, decree or
judgment in progress, pending or in effect against or
relating to Purchaser in connection with or relating to
the transactions contemplated by this Agreement. There
is no (and to the best knowledge of Purchaser, there is
not presently threatened any) claim, legal action, suit,
arbitration, governmental proceeding, nor any order or
decree, against or relating to Purchaser in connection
with or relating to the transactions contemplated by
this Agreement which could reasonably be expected to
have, individually or in the aggregate, a material
adverse effect thereon.
7. CONDUCT OF BUSINESS PRIOR TO CLOSING. From and after the date
hereof, Seller shall use their best efforts to cause Company to
conduct its business and affairs only in the ordinary course and
consistent with prior practices, and to maintain, keep and
preserve its assets and properties in good condition and repair
(it being understood that occasional breakdowns which do not
materially affect the value of such assets and properties will
nonetheless occur from time to time) and maintain insurance
thereon in accordance with present practices, and Seller will
use their best efforts to preserve the business and organization
of Company intact, to keep available to Purchaser the services
of the Company's officers and employees and to preserve for the
benefit of Purchaser the goodwill of Company's suppliers and
customers and others having business relations with the Company;
provided, that Company will not have any accounts payable which
shall have been, at the Closing,
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outstanding for a period of time (in any event, not more than
forty-five days after the date the same shall be due) greater
than Company customarily waits before paying such accounts
payable. Seller shall give Purchaser prompt written notice of
any change in any of the information contained in the
representations and warranties made in Section 5 or the
Schedules referred to therein which occurs prior to the Closing.
Without limiting the generality of the foregoing, prior to the
Closing the Company will not, and Seller will not permit Company
to:
a. change its certificate of incorporation or by-laws or
merge or consolidate or obligate itself to do so with or
into any other entity;
b. enter into any contract, agreement, commitment or other
understanding or arrangement that would have been
required to be listed under subsection (i), (v) (except
that the Company may renew or replace expiring or
terminating insurance policies with policies having
substantially the same coverage for approximately the
same, or fair market, premiums), (vi), (vii), (viii),
(ix)(except for entering into ordinary course agreements
which are not individually material to Purchaser or the
Company in connection with the ordinary course operation
of Company's business), (x) or (xiii) of Section 5(l);
or
c. perform, take any action or incur or permit to exist any
of the acts, transactions, events or occurrences of the
type described in subsection (i), (ii), (iii), (iv),
(v), (viii), (ix), (x), (xi), (xii), (xiii), or (xiv) of
Section 5(l) which would have been inconsistent with the
representations and warranties set forth herein had the
same occurred after the Balance Sheet Date and prior to
the date hereof; or
d. otherwise take or cause to be taken any action which
could have any long-term or lasting effect of any kind
on the Company or with respect to the Company's business
or assets.
In the event that the Company engages prior to the
Closing in any act or activity described in Section 7,
Seller will give Purchaser prompt written notice
thereof. In the event that Seller engages prior to the
Closing in any act or activity described or referred to
in Section 7(a), (b), (c) or (d), Seller will give
Purchaser prompt written notice thereof. In furtherance
and not in limitation of the foregoing provisions of
this Section 7, (A) the Company shall not be entitled to
pay the Seller Transaction Costs (as defined in Section
15(i)), redeem any or all of Seller' Sportshow Shares,
or otherwise pay, directly or indirectly, to, for or on
behalf of Seller, any payment or amount for any reason
or purpose whatsoever, excepting only salary, payable
from the Execution Date at a rate of (pound)10,000 per
week, (B) the Company shall not be entitled to pay,
directly or indirectly, to, for or on behalf of Seller,
any payment or amount for any reason or purpose
whatsoever, excepting only salary, payable from the
Execution Date at the
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same rate paid prior to March 31, 2003, and (C) Seller
shall, at or prior to the Closing, reimburse to
Purchaser the amount of any Seller Transaction Costs
borne by Seller with respect to services performed from
and after March 31, 2003, to the extent the same shall,
in the aggregate, exceed the lesser of (x) (pound)2,000
or (y) such amount, if any, as the financial statements
of Seller shall reflect as an accrued account payable of
Seller as of March 31, 2003.
8. ACCESS TO INFORMATION AND DOCUMENTS. The Seller has given, and
has caused the Company to give, Purchaser and Purchaser's
attorneys, accountants and other representatives full access to
the Company's personnel, properties, documents, contracts, books
and records, and has furnished Purchaser with copies of such
documents (certified on behalf of the Company as to authenticity
by an officer or other responsible employee of the Company if so
requested by Purchaser), and with such information with respect
to the affairs of the Company, as Purchaser has from time to
time requested. No such furnishing of information to Purchaser
or any investigation by Purchaser shall affect Purchaser's right
to rely on any representations and warranties made in this
Agreement.
9. PERSONNEL. Each Seller will use its best efforts (without
expending or incurring any obligation to expend any money) to
cause the Company to cause all the employees, independent
contractors and sales personnel of the Company, including but
not limited to those persons listed on Schedule J, to continue
to provide their services to the Company after the date hereof
and to Purchaser after the Closing Date. Each Seller will,
promptly upon the Company's receipt thereof, advise Purchaser of
the giving of notice of termination or cessation of employment
or contract by any such employee, independent contractor or
sales person of the Company, including but not limited to those
persons listed on Schedule J.
10. NON-COMPETITION AGREEMENT. In consideration of the Purchase
Price, and as part of the transaction contemplated hereby, for
the period from the Closing Date through the second anniversary
of the Closing Date (the "Covenant Period"), neither any Seller,
nor any Seller Entity, will, directly or indirectly, through any
third party or otherwise engage in, or acquire any interest in
any business which is engaged in, the business of, or any
business competitive with the business of, the Company or
Purchaser on the date hereof, including but not limited to
designing, manufacturing, marketing, selling or providing
equipment, products or services related to webcasting or the
delivery of video over IP networks in any state in the European
Union or the United States or any other country in the world in
which the Company, Seller, any Seller Entity, or Purchaser has
designed, manufactured, marketed, sold or provided such
equipment, products or services, or is at the time doing so, or
has, at any time, planned or proposed to do so (altogether,
including but not limited to the Americas, Europe and Asia, the
"Covenant Area"), or directly or indirectly, engage, employ,
recruit or solicit to engage, employ or recruit any person who
is or was employed by the Company at any time after January 1,
1997, for a period ending on the later of the date eighteen
months after the date on which such person ceases to be employed
by the Company and the last day of the Covenant Period; or
directly or indirectly, solicit (for business of the same or of
a competitive nature with the business of the Company) any
person who is or was a customer of the Company at any time after
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January 1, 1997, for a period ending on the later of the date
eighteen months after the date on which such person ceases to be
a customer of the Company and the last day of the Covenant
Period. Purchaser and each Seller recognize and acknowledge that
the Company and Seller have been intimately involved in, and
associated with, the manufacture, marketing, selling and
providing such equipment and products in sports video production
and the Covenant Area for more than nine years and have
developed extensive personal knowledge and familiarity with the
businesses of the Company, the personnel of the Company, and the
customers and suppliers of the Company, both present and past.
The parties recognize and acknowledge that the provisions of
this Section 9 are of great importance and value to Purchaser.
Seller recognize that the provisions of this Section 9 are
necessary for Purchaser's protection, are reasonable restraints
ancillary to the purchase of the Sportshow Shares, and that
Purchaser would be irreparably damaged by a breach thereof and
would not be adequately compensated by monetary damages.
Purchaser, therefore, in addition to its other remedies, shall
be entitled to an injunction from any court having jurisdiction
restraining any violation or threatened violation of the
provisions of this Section 9, without the necessity of proving
monetary damages, and without the necessity of proving that
monetary damages would be insufficient. If any provision of this
Section 9 is held to be unenforceable because of the scope,
duration or area of its applicability, the court making such
determination shall have the power to modify such scope,
duration or area, or all of them, and such provision shall then
be applicable in such modified form. If, the foregoing
notwithstanding, any provision of this Section 9 would be held
to be invalid, prohibited or unenforceable in any jurisdiction
for any reason, such provision, as to such jurisdiction, shall
be ineffective to the extent of such validity, prohibition or
unenforceability, without invalidating the remaining provisions
of this Section 9 or affecting the validity or enforceability of
such provision in any other jurisdiction.
11. CERTAIN ADDITIONAL COVENANTS.
a. CERTAIN EXAMINATIONS. At any time after the date hereof
and from time to time before the Closing, Seller and the
Company shall provide to Purchaser reasonable
opportunities to examine and inventory the video
equipment, video cameras, editing facilities,
automobiles, machinery, equipment, tools, inventory,
supplies, furniture, fixtures and fixed assets of the
Company, to verify that all assets and equipment are in
good operating condition. In addition, at any time after
the date hereof and from time to time before the
Closing, Purchaser shall have the right and opportunity
to observe the conduct of the business of the Company,
so as to enable
-23-
Purchaser and its officers and representatives to become
familiar with the business practices and procedures of
the Company.
b. CERTAIN DOCUMENTATION. Seller and the Company will
deliver to Purchaser at the Closing full documentation
and operating instructions and manuals for all computer
software and hardware, and all other equipment and
machinery, then owned or used by the Company, except
documentation for such items set forth at Schedule Q.
c. NON-DISCLOSURE. No party hereto will make any public or
private disclosure, prior to the Closing hereunder or
any termination hereof, of the terms or existence of
this Agreement to any person or entity without the prior
written consent and approval of all the other parties
hereto; PROVIDED, that Purchaser may provide copies of
this Agreement to prospective investors or lenders of
funds to accomplish the transaction contemplated by this
Agreement or to the extent disclosure is required in
connection with any filings Purchaser is making with the
United States Securities and Exchange Commission, or
other regulatory authorities. The parties understand and
agree that any unauthorized disclosure of the existence
or terms of this Agreement may disrupt and injure the
ongoing businesses of the Company and Purchaser, may
needlessly disturb and trouble their respective
employees, customers, vendors and creditors, and that
such non-disclosure is important to assure the smooth
transition of the businesses of the Company to Purchaser
at the Closing.
d. CONFIDENTIALITY. Prior to the Closing, Purchaser will
treat as confidential all Confidential Information
regarding the Company, whether heretofore or hereafter
received by Purchaser from the Company, whether received
orally, in the form of written material or whether based
on visual observations or presentations in the course of
visits to the facilities of the Company. For purposes of
this Section 10.(e), "Confidential Information" shall
include all financial statements, financial projections,
shareholders agreements and employment contracts, as
well as any other material which is contemporaneously
described or designated to Purchaser as "secret" and/or
"proprietary" and/or "confidential". Purchaser and
Seller acknowledge that all such Confidential
Information is and will remain the property of the
Company. Except for use within the organization of
Purchaser, including but not limited to its employees,
accountants, attorneys, stock holders, consultants,
financial and lending institutions and prospective
investors, to further the purposes and investigations
contemplated by this Agreement, Purchaser will not
duplicate, publish or disclose to anyone or authorize
anyone else to duplicate, publish or disclose any
information concerning the Company's business methods,
sources of supply or customers, or information regarding
the Company's materials or equipment, or information
concerning any techniques used or being developed for
use by the Company, without the Company's prior
-24-
written consent, nor without such consent will Purchaser
utilize any information covered by this Section 10.(e)
in Purchaser's own business, or any enterprise in which
Purchaser has an interest. Nothing in this Agreement
shall restrict or impair Purchaser's use or disclosure
of any information which was in Purchaser's possession
prior to disclosure thereof by the Company, now is or
without any action of Purchaser hereafter becomes
information in the public domain; or is received from a
third party who, in making such disclosure, is not
violating any obligation of confidentiality to the
Company. In the event that, as a consequence of
negligent acts or omissions of Purchaser or any employee
or agent, there shall be any unauthorized disclosure to
parties other than Purchaser or use, dissemination or
exploitation by such parties, of Confidential
Information in violation of this Agreement, the Company
may at its option apply to a court of competent
jurisdiction for an order restraining any further
disclosure, use, dissemination or exploitation of such
information. This Section 10.(e) does not in any way
limit or exclude any other remedy which may be available
to the Company. In the event that the transactions
contemplated by this Agreement do not for any reason
close, the provisions of this Section shall nonetheless
survive. The Seller will not disclose, at any time,
whether during or after any consulting or employment
term following any Closing, any secret or confidential
information obtained by them while employed by (or
owning stock in) the Company or Purchaser, including but
not limited to the Company's or Purchaser's customer
lists, telephone contacts, and special arrangements with
vendors, without the Company's express, written consent.
e. CERTAIN ENVIRONMENTAL REGULATIONS. Seller has not
allowed the Company, at any time prior to the Closing,
to commit any act which violates any environmental
regulation which could reasonably be expected to have an
adverse effect on the condition (financial or
otherwise), properties, assets, liabilities, business,
operations or prospects of the Company or Purchaser or
the transactions contemplated by this Agreement which
would be material or, in any event, exceed(pound)10,000,
or would be cause for any such government or agency to
impose any lien or encumbrance upon the Company, its
business, Purchaser or the assets transferred pursuant
to this Agreement.
f. CERTAIN WARRANTIES. At the Closing, Seller will assign
to the Company all of their rights respecting
manufacturers' and suppliers' warranties, to the extent
the same are assignable; to the extent the same are not
assignable, the provisions of Section 1.(b) shall apply.
12. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. All obligations
of Purchaser hereunder are subject, at the option of Purchaser,
to the fulfillment of each of the following conditions at or
prior to the Closing, and Seller shall use their best efforts to
cause each such condition to be so fulfilled:
-25-
a. All representations and warranties of each of the Seller
contained in this Agreement, in any Schedule hereto, in
any agreement entered into pursuant hereto or in
connection herewith, in the Financial Statements, in the
Tax Basis Information, in the Closing Date Tax Basis
Information, or in any Agreement Certificate shall be
true and correct when made, shall be deemed to have been
made again at and as of the Closing, and shall then be
true and correct in all material respects.
b. All covenants, agreements and obligations required by
the terms of this Agreement to be performed by each of
the Company and Seller at or before the Closing shall
have been duly and properly performed.
c. Since the Balance Sheet Date, there shall not have
occurred any material adverse change in the condition
(financial or otherwise), business, properties, assets
or prospects of the Company.
d. All approvals of governmental agencies and authorities
necessary to enable the Company to consummate the
transactions contemplated hereby and to enable Purchaser
to continue to conduct the business of the Company as
conducted immediately prior to the Closing shall have
been obtained.
e. There shall be delivered to Purchaser a certificate
executed by both the Company and the Seller, dated the
Closing Date, certifying that the conditions set forth
in paragraphs (a), (b),(c), (d), (h), (i), (k) and (l)
of this Section 11 have been fulfilled and stating that
such certificate is an Agreement Certificate.
f. All documents required to be delivered to Purchaser at
or prior to the Closing shall have been so delivered.
g. No action or proceeding shall have been threatened,
instituted or pending before any court or governmental
agency or other regulatory or administrative agency or
commission, by any governmental agency or other
regulatory or administrative agency or commission or by
any other person, (i) challenging the acquisition by
Purchaser or the sale by Seller of the Sportshow Shares
or any material portion of the business of the Company,
(ii) seeking to prohibit Seller's sale or Purchaser's
purchase, ownership or operation of all or a significant
portion of the assets or business of the Company, or to
compel Purchaser to dispose of a significant portion of
the Company's assets or business or any assets or
business of Purchaser, or (iii) otherwise materially
adversely affecting the transactions contemplated hereby
or the agreements entered into pursuant hereto or in
connection herewith or the assets or business of the
Company, or Purchaser's operation of the business of the
Company.
-26-
h. The Company will not have committed any act which
violates any environmental regulation which could
reasonably be expected to have an adverse effect on the
condition (financial or otherwise), properties, assets,
liabilities, business, operations or prospects of the
Company or Purchaser or the transactions contemplated by
this Agreement which would be material or, in any event,
exceed (pound)10,000, or would be cause for any such
government or agency to impose any lien or encumbrance
upon the Company, its business, Purchaser or the assets
transferred pursuant to this Agreement.
13. CONDITIONS PRECEDENT TO SELLER' OBLIGATIONS. All obligations of
Seller hereunder are subject, at the option of Seller, to the
fulfillment of each of the following conditions at or prior to
the Closing, and Purchaser shall use its best efforts to cause
each such condition to be so fulfilled:
a. All representations and warranties of Purchaser
contained in this Agreement, in any Schedule hereto, in
any agreement entered into pursuant to hereto or in
connection herewith, or in any Agreement Certificate,
shall be true and correct when made, shall be deemed to
have been made again at and as of the Closing, and shall
then be true and correct in all material respects.
b. All covenants, agreements and obligations required by
the terms of this Agreement to be performed by Purchaser
at or before the Closing shall have been duly and
properly performed.
c. There shall be delivered to the Seller a certificate
executed by the President of Purchaser, dated the date
of the Closing, certifying that the conditions set forth
in paragraphs (a), (b) and (c) of this Section 13 have
been fulfilled and stating that such certificate is an
Agreement Certificate.
d. No action or proceeding shall have been threatened,
instituted or pending before any court or governmental
agency or other regulatory or administrative agency or
commission, by any governmental agency or other
regulatory or administrative agency or commission or by
any other person, challenging the sale by Seller of the
Sportshow Shares or any material portion of the assets
or business of the Company, seeking to prohibit Seller's
sale of all or a significant portion of the assets or
business of the Company, or otherwise materially
adversely affecting the transactions contemplated hereby
or in the agreements entered into pursuant hereto or in
connection herewith or the assets or business of the
Company.
14. INDEMNIFICATION. The Seller hereby agrees to indemnify and to
hold Purchaser (and, with respect to Section 13.(a)(v), any and
all employees and independent contractors of
-27-
Purchaser) and the Company harmless from, against and in respect
of, and shall on demand reimburse Purchaser or the Company, as
the case may be, for:
i. any and all debts, liabilities or obligations of the
Company, direct or indirect, fixed, contingent or
otherwise (including without limitation any contingent
liability for taxes of the Company, any Seller Entity,
or any affiliate of any of them, including without
limitation withholding taxes, for any period commencing
prior to the Closing Date), existing at or as of the
Closing Date hereunder or arising out of any act,
transaction, circumstance or state of facts which occurs
or exists on or before the Closing Date, whether or not
then known, due or payable (including without limitation
any claims of customers of the Company respecting goods
sold or services performed prior to the Closing Date and
any breach or violation of any environmental
regulation), except to the extent the same are reflected
and reserved against on the face of the Closing Date
Balance Sheet (excluding the notes thereto);
ii. any and all loss, liability or damage suffered or
incurred by Purchaser by reason of any untrue
representation, breach of warranty or nonfulfillment of
any covenant or agreement contained in this Agreement,
of the Seller, any Seller Entity, or affiliates of any
of them, in any Schedule hereto, in any agreement
entered into pursuant hereto or in connection herewith,
in the Financial Statements or in any Agreement
Certificate;
iii. any and all loss, liability or damage suffered or
incurred by Purchaser by reason of or in connection with
any claim for finder's fee or brokerage or other
commission arising by reason of any services alleged to
have been rendered to or at the instance of the Company,
the Seller, any Seller Entity or any affiliates of any
of them with respect to this Agreement or any of the
transactions contemplated hereby;
iv. any and all loss, liability or damage suffered or
incurred by Purchaser resulting from any Employee
Program as defined in section 5(v);
v. any outstanding liabilities and taxes due for Employees'
tax liabilities, Director's tax liabilities and National
Insurance or any penalties resulting therefrom; and
vi. any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses,
including, without limitation, reasonable legal fees and
disbursements, incident to any of the foregoing or
incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in
enforcing this indemnity.
b. Purchaser hereby agrees to indemnify and hold Seller
harmless from, against and in respect of, and shall on
demand reimburse Seller for:
i. any and all loss, liability or damage suffered or
incurred by Seller by reason of any untrue
representation, breach of warranty or nonfulfillment
-28-
of any covenant or agreement by Purchaser contained in
this Agreement, in any Schedule hereto, in any agreement
(subject only to any applicable limitation of liability
set forth in any such agreement) entered into by
Purchaser pursuant hereto or in connection herewith, or
in any Agreement Certificate;
ii. any and all loss, liability or damage suffered or
incurred by Seller by reason of or in connection with
any claim for finder's fee or brokerage or other
commission arising by reason of any services alleged to
have been rendered to or at the instance of Purchaser or
any affiliate of Purchaser with respect to this
Agreement or any of the transactions contemplated
hereby; and
iii any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses,
including, without limitation, reasonable legal fees and
disbursements, incident to any of the foregoing or
incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in
enforcing this indemnity. c.
c. In the event that a claim shall be asserted or
litigation shall be commenced for which indemnification
under the provisions of this Section 13 shall be sought,
the party entitled to indemnification hereunder
(individually and together, "Indemnitee") shall give
notice thereof to the party or parties required to
indemnify such party hereunder (individually and
together, jointly and severally, "Indemnitor"), as
promptly as practicable after Indemnitee's receipt of
such written assertion or the commencement of such
litigation. If Indemnitor reasonably demonstrates to
Indemnitee that Indemnitor will be able to pay the full
amount of potential liability in connection with any
such claim, Indemnitor may, at its sole cost and
expense, upon written notice given to Indemnitee within
30 days after its receipt of Indemnitee's notice under
this Section, assume the defense, with counsel
reasonably satisfactory to Indemnitee, of any such Third
Party Claim or litigation, provided that Indemnitor
admits in writing to Indemnitee its liability solely as
between it and Indemnitee with respect to all material
elements thereof. If Indemnitor assumes the defense of
any such claim or litigation, the obligations of
Indemnitor ereunder as to such claim or litigation shall
be limited to taking all steps necessary in the defense
or settlement thereof and to holding Indemnitee harmless
from, against and in respect of any and all losses,
liabilities, expenses and damages caused by or arising
out of any settlement approved by Indemnitor or any
judgment in connection with such claim or litigation.
Except with the prior written consent of Indemnitee,
Indemnitor shall not consent to the settlement or entry
of any judgment arising from any such claim or
litigation which in each case does not include as an
unconditional term thereof the giving by the claimant or
plaintiff, as the case may be, to Indemnitee of an
unconditional release from all liability in respect
thereof unless Indemnitor has actually paid the full
amount of any such settlement or judgment. Indemnitee
shall be entitled to be consulted
-29-
about (but not control) the defense of, and receive
copies of all pleadings and other material papers in
connection with, any such claim or litigation. If
Indemnitor does not assume the defense of any such claim
or litigation, Indemnitee may defend the same in such
manner as it may deem appropriate, including but not
limited to settling such claim or litigation after
giving reasonable notice of the same to Indemnitor on
such terms as Indemnitee may deem appropriate, and
Indemnitor will promptly reimburse Indemnitee in
accordance with the provisions of this Section, subject
to its having liability hereunder. Anything contained in
this Section to the contrary notwithstanding, Indemnitor
shall not be entitled to assume the defense of any such
claim or litigation if the Third Party Claim seeks an
order, injunction or other equitable relief against
Indemnitee which, if successful, might materially
interfere with, or adversely affect, the operation by
Indemnitee of its business or, if Purchaser or the
Company, the business of any of them; and Indemnitee may
defend any claim to which Indemnitee may have a defense
or counterclaim which Indemnitor is not entitled to
assert, to the extent necessary to assert and maintain
such defense or counterclaim.
15. MISCELLANEOUS.
a. ENTIRE AGREEMENT. This writing, together with the
exhibits hereto and the other documents, instruments and
agreements entered into contemporaneously herewith,
constitutes the entire agreement of the parties with
respect to the subject matter hereof and may not be
modified, amended or terminated except by a written
agreement specifically referring to this Agreement
signed by all of the parties hereto.
b. WAIVERS. No waiver of any breach or default hereunder
shall be considered valid unless in writing and signed
by the party giving such waiver, and no such waiver
shall be deemed a waiver of any prior, contemporaneous
or subsequent breach or default of the same or similar
nature or otherwise. No delay or omission on the part of
any party in exercising any right or remedy shall
operate as a waiver thereof, and no single or partial
exercise by any party of any right or remedy shall
preclude any other or future exercise thereof or the
exercise of any other right or remedy.
c. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; CERTAIN
LIMITATIONS ON CLAIMS. All written statements,
representations, warranties, indemnities, covenants and
agreements made by each of the parties hereto shall
survive the Closing for a period of seven years after
the Closing Date (provided that all covenants and any
representations and warranties respecting tax, pension,
and environmental matters, capitalization of the
Company, ownership of and title to the Sportshow Shares,
and the Company's Assets shall survive for the full
applicable statute of limitations). No claim for breach
of representation or warranty (other than claims
respecting capitalization, ownership of or title to the
Shares
-30-
or Patents, the financial condition of the Company or
taxes, and other than claims respecting the calculation
of, or any adjustments to, the Purchase Price) may be
asserted hereunder unless the aggregate amount of all
such claims equals or exceeds(pound)5,000 (the
"Threshold Amount"), and the liability of Seller with
respect to all such claims shall not exceed the amount
of(pound)200,000.
d. BINDING NATURE. This Agreement shall be binding upon and
inure to the benefit of each corporate party hereto,
each party hereto which is a trust, each party hereto
which is a limited liability partnership, and its
successors and assigns, and each individual party hereto
and his or her heirs, personal representatives,
successors and assigns, it being understood that no
party hereto shall have any right to convey or assign
any or all of its rights hereunder without the prior
written consent of all other parties hereto, except that
Purchaser may assign its rights hereunder to a
corporation wholly-owned by, or which wholly owns,
Purchaser.
e. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of
England and Wales applicable to contracts made and to be
performed wholly within said jurisdiction, and without
regard to principles of conflict of laws.
f. CONSENT TO JURISDICTION AND FORUM. The parties hereto
hereby consent to the competent jurisdiction of the
courts of England and Wales.
g. SERVICE OF PROCESS. The parties hereto further agree
that the service of process or of any other papers upon
them or any of them by registered mail in the manner
provided in Section 14.(h) shall be deemed good, proper
and effective service upon them.
h. Notices. Any and all notices or other communications
required or permitted to be given under any of the
provisions of this Agreement shall be in writing and
shall be deemed to have been duly given when personally
delivered or five days after the date mailed, postage
prepaid, by first class registered mail, return receipt
requested, addressed to the parties at the addresses set
forth above (or at such other address as any party may
specify by notice to all other parties given as
aforesaid), together with copies, to either or both of
the Company or Seller, to 00 Xxxxxxx Xxxxx Xxxx, Xxxxxx
XX0 0XX Xxxxxx Xxxxxxx, and if to Purchaser, to
Narrowstep Inc, 00 Xxx Xxxxxxxxx Xx, Xxxxxx, X0X 0XX.
i. EXPENSES. Whether or not the transaction contemplated by
this Agreement is consummated, Seller and Purchaser
shall pay all of its own fees and expenses incident to
the negotiation, preparation, execution and performance
of this Agreement, including, without limitation, the
fees and expenses of its own counsel and accountants, it
being understood and agreed that Purchaser shall not
bear or pay, directly or indirectly,
-31-
whether through increase of the Purchase Price,
inclusion of any of such amounts in accounts or loans
payable of the Company, reduction of or charges against
any of the assets of the Company or otherwise, any of
the fees and expenses of the Company or the Seller
incident to the negotiation, preparation, execution or
performance of this Agreement or related matters
("Seller Transaction Costs").
j. CAPTIONS; SECTIONS; EXHIBITS; SCHEDULES. The caption
headings of the Sections, subsections, Exhibits and
Schedules of and to this Agreement, and the descriptions
of Schedules, are for convenience of reference only and
are not intended to be, and should not construed as,
defining or limiting the contents of such Sections,
subsections, Exhibits or Schedules. Unless otherwise
indicated, all references in this Agreement to Sections,
subsections, Exhibits and Schedules are to Sections,
subsections, Exhibits and Schedules of this Agreement.
k. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to
be an original, but all of which taken together shall
constitute one and the same instrument.
l. REMEDIES CUMULATIVE. The rights and remedies provided
for in this Agreement are cumulative, not alternative,
and are in addition to the other benefits, rights and
remedies existing at law or in equity.
-32-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SPORTSHOW TELEVISION LTD.
By: /s/ Xxxxxxxx Xxxx
-------------------------------
Xxxxxxxx Xxxx, Managing Director
NARROWSTEP INC.
By: /s/ Iolo Xxxxx
-------------------------------
Iolo Xxxxx, President
By: /s/ Xxxxxxxx Xxxx
-------------------------------
Xxxxxxxx Xxxx, Individually
-33-
Exhibit 1
RESIGNATION
25th November 2003
The undersigned hereby resigns as a director of, and from all offices and
positions held by the undersigned in, Sportshow Television Ltd., a company
incorporated in England & Wales, effective immediately.
/s/ Xxxxxxxx Xxxx
-------------------
Xxxxxxxx Xxxx
Managing Director
-34-
Exhibit 2
RELEASOR: Xxxxxxxx Xxxx
RELEASEE: SPORTSHOW TELEVISION LTD
GENERAL RELEASE
In consideration of the payment of (pound) 1.00 and other good and
valuable consideration paid to the undersigned, the receipt and sufficiency of
which are hereby acknowledged, the undersigned Xxxxxxxx Xxxx, an individual
having an address at 00 Xxxxxx Xxxx, Xxxxxx, Xxxxxx XX 14 8QD, as RELEASOR,
hereby releases, acquits and forever discharges SPORTSHOW TELEVISION LTD., a
corporation having a place of business at 00 Xxxxxxx Xxxxx Xxxx, Xxxxxx XX0
00-XX Xxxxxx Xxxxxxx, as RELEASEE, RELEASEE's officers, directors, employees,
parents, affiliates, subsidiaries, attorneys at law, successors and assigns, of
and from any and all obligations, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, claims, debts, demands, covenants, contracts,
promises, agreements, variances, trespasses, damages, judgments, extents,
executions, liabilities, controversies, costs, expenses, attorneys' fees, suits,
actions or causes of action with respect to any matters, causes or things
whatsoever, whether known or unknown, in law, admiralty or equity which
RELEASOR, his successors or assigns ever had, now has, can or may have, or
claims to have upon or by reason of any matter whatsoever against the RELEASEE
from the beginning of the world to the date on which this General Release is
signed and delivered, including but not limited to any and all claims RELEASEE
may now have or which may hereafter accrue to RELEASEE arising out of or in
connection with RELEASEE's employment with or by Sportshow Television Ltd., and
any sexual harassment or discrimination which RELEASOR may have experienced or
suffered from RELEASEE or RELEASEE's officers, directors, employees, parents,
affiliates, subsidiaries, attorneys at law, successors and assigns, or any of
them.
This General Release is not to be construed as an admission of liability
on the part of RELEASEE.
If RELEASOR, or any person acting on behalf of RELEASOR, initiates any
action, proceeding or suit against RELEASEE which challenges the legality,
validity, or enforceability of any of the terms or provisions of this General
Release, then RELEASOR will reimburse RELEASEE, if and to the extent that
RELEASEE has to enforce and defend this General Release or RELEASEE's rights
under this General Release against such challenge, for all reasonable legal
expenses and related disbursements reasonably incurred by the RELEASEE and for
all payments made by such RELEASEE, if any, in connection with or in
satisfaction of any judgment, decree or settlement resulting from any such
action, proceeding or suit.
The provisions of this General Release shall be severable. In the event
that any provision of this General Release is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, the remaining
provisions of this General Release shall remain enforceable to the fullest
extent permitted by law.
-35-
Whenever the text hereof requires, the use of the singular number shall
include the appropriate plural number as the text of the within instrument may
require.
This General Release may not be changed orally.
This General Release shall be governed by, and construed and enforced in
accordance with, the substantive law of England and Wales.
IN WITNESS WHEREOF, RELEASOR has caused this General Release to be duly
executed as of this 17th day of November 2003.
/s/ XXXXXXXX XXXX
-----------------------
Xxxxxxxx Xxxx
-36-
EXHIBIT 3
SUBSCRIPTION FOR THE PURCHASE OF
SHARES OF NARROWSTEP INC.
November 17th 2003
Narrowstep Inc.
00 Xxx Xxxxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Xxxxxx Xxxxxxx
Gentlemen:
In connection with the AGREEMENT OF PURCHASE AND SALE OF STOCK dated
November 17th 2003, among (i) NARROWSTEP INC., a Delaware corporation having an
address at 00 Xxx Xxxxxxxxx Xxxxxx, Xxxxxx W 1 W 6XE United Kingdom, (the
"Company"), (ii) Xxxxxxxx Xxxx, having an address at 00 Xxxxxx Xxxx, Xxxxxx,
Xxxxxx XX00 0XX Xxxxxx Xxxxxxx, who owns all of the outstanding shares of
Sportshow Television Ltd. ("Sportshow"), a corporation having an address at 00
Xxxxxxx Xxxxx Xxxx, Xxxxxx XX0 0XX Xxxxxx Xxxxxxx, (Xxxxxxxx Xxxx is referred to
as the "Undersigned") and (iii) SPORTSHOW TELEVISION LTD, the Undersigned hereby
offers to sell to the Company 801 shares of ordinary stock of Sportshow
Television Ltd., representing Undersigned's entire ownership in Sportshow, for
the following consideration to be paid by the Company for such shares: (i) cash
payment of (pound)45,000.80, and (ii) 3,122,800 shares of Common Stock, par
value $.000001 per share ("Shares").
In order to induce the Company to sell you the Shares, the Undersigned,
for itself and for its legal representatives, successors and assigns, hereby
makes the following representations, warranties and acknowledgments, intending
that the Company rely hereon, to the Company, and covenants with the Company, as
follows:
1. The Company has made available to the Undersigned all requested
documents and records in its possession, and has offered the Undersigned an
opportunity to discuss this investment with the Company and/or representatives
of the Company and obtain any additional information necessary to verify the
accuracy of any information furnished. The Undersigned acknowledges that no
information furnished by the Company constitutes investment, accounting, legal
or tax advice. The Undersigned is relying solely upon itself and its
professional advisors, if any, for such advice.
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2. The Undersigned has been provided no offering memorandum, or similar
document, describing the Company. The Undersigned has relied solely upon its own
independent investigation in making a decision to accept the Company's Shares in
exchange for the Undersigned's shares in Sportshows TV. The Undersigned
acknowledges and represents to the Company that it is aware that the Shares are
a speculative investment which involves a substantial degree of risk with no
assurance of any income from such investment and the possibility that the Shares
may become worthless. The Undersigned acknowledges that neither the Shares nor
any securities of the Company are traded on any stock exchange and that there is
no market for the Shares. The Undersigned must therefore be prepared to bear the
economic risks for an indefinite period, and the total loss of its investment in
the Shares.
3. The Undersigned acknowledges that the Shares are not being registered
under the laws of any jurisdiction and are being sold pursuant to an exemption
from registration set forth in the United States Securities Act of 1933, as
amended, (the "Securities Act") The Undersigned agrees to resell the Shares only
(i) pursuant to registration under the Securities Act, or (ii) pursuant to an
available exemption from registration.
4. The Undersigned represents that the Shares are being acquired solely for
the account of the Undersigned, solely for investment purposes and not with a
view to resale or distribution, and that no other person has any direct or
indirect interest in the Shares. The Undersigned has no contract, undertaking,
agreement or arrangement with any person to sell, transfer or pledge to such
person, or anyone else, Shares, or any part thereof, or any interest therein,
and the Undersigned has no plans to enter into any such contract, undertaking,
agreement or arrangement. The Undersigned understands that it may not dispose of
the Shares, or any part thereof, or any interest therein, unless and until legal
counsel for the Company shall have determined that the intended disposition does
not violate the law of any jurisdiction. The Undersigned acknowledges that the
Shares are non-transferable, that the Share certificates will bear a legend
describing the restrictions on transfers, and that it will not be possible for
the Undersigned to liquidate its investment in case of an emergency.
5. The Undersigned acknowledges and understands that all of the Company's
outstanding Shares are restricted as to resale and cannot be sold unless a
registration statement covering their resales is declared effective by the
United States Securities and Exchange Commission ("SEC") or there is an
applicable exemption from registration. The Undersigned further acknowledges and
understands that in order for there to be a trading market for the Company's
Shares there are a number of steps that must be completed. These include (i)
having the SEC declare effective a registration statement qualifying for resale
the Company's outstanding Shares, (ii) having a broker-dealer agree to act as a
market maker for the Company's Shares, (iii) the broker-dealer making the
appropriate filings in the United States with the NASD, and (iv) the NASD
approving the Company's Shares for trading. The Undersigned acknowledges that
there can be no assurance all of these steps will be completed and that a
trading market for the Company's Shares ever develops in the United States or
elsewhere. The Undersigned acknowledges that in the event that no market for the
Shares develops, it will be extremely difficult for the Undersigned to dispose
of the Shares and that even if a market develops, there can be no assurance that
the market will be strong enough to absorb all of the Shares which may be
offered
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for sale by existing shareholders and the Undersigned. The Undersigned
acknowledges that the resales of substantial amounts of Shares will have a
depressive effect on the market.
6. The Undersigned is knowledgeable and experienced in making and
evaluating investments. The investments of the Undersigned in, and its
commitments to, all non-liquid investments (including an investment in the
Company ) are reasonable in relation to its net worth, and the Undersigned has
the ability to bear the financial risk of an investment in the Company.
7. The Undersigned will indemnify and hold the Company, its affiliates, and
representatives, harmless from and against any and all loss, liability, cost,
damage, expense (including attorney's fees and expenses) and claims arising out
of, in connection with or resulting (i) from the sale or distribution of Shares
by the Undersigned in violation of any applicable law, rule or regulation, and
(ii) any misrepresentation by the Undersigned or any breach of any warranties
herein or any covenants or agreements set forth herein.
8. The Undersigned acknowledges that no federal or state agency,
governmental authority, regulatory body, stock exchange or other entity in the
United States or in any other country has made any finding or determination as
to the merits of this investment, nor have any such agencies, governmental
authorities, regulatory bodies, stock exchanges or other entities made any
recommendation or endorsement with respect to the Shares.
The foregoing is not, and will not be, revocable by the Undersigned at any time.
The Undersigned gives this document to the Company intending to be legally bound
hereby.
Very truly yours,
/s/ Xxxxxxxx Xxxx
----------------------------
Signature
Xxxxxxxx Xxxx
----------------------------
Name
18/11/03
----------------------------
Date
00 Xxxxxx Xxxx
----------------------------
Barnus
----------------------------
London 8W148QD
----------------------------
Address
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