ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated February 5, 2000 among WORLDWIDE
XXXXXXXXXXXXX.XXX INC. ("Acquiror"), a Delaware corporation, with principal
offices located at 00 Xxxxxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx 00000,
WORLDWIDE ENTERTAINMENT & SPORTS CORP., with principal offices located at 00
Xxxxxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx 00000 ("WWES"), and XXXX XXXXXXX and
XXXXXXXX XXXXXXX, individuals whose principal offices are located at 000 Xxxxx
Xxxxx Xx., Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx (collectively, the "Sellers").
WITNESSETH
Whereas, the Sellers own all the right, title and interest in the Internet
website specializing in boxing content known as House of Boxing ("HOB"), the
domain name xxx.xxxxxxxxxxxxx.xxx and all customized software and certain
hardware related to such website (collectively, with HOB, the "HOB Business");
Whereas, the Acquiror is a wholly owned subsidiary of Worldwide
Entertainment & Sports Corporation, a publicly traded NASDAQ company ("WWES"),
which is engaged in the business of providing professional representation for
professional athletes and teams;
Whereas, Sellers desire to sell to Acquiror and Acquiror wishes to buy
from Sellers all of Sellers right, title and interest in the HOB Business on the
date hereof, on the terms set forth herein (the "Acquisition"); and
Whereas, each of the Sellers will, contemporaneously with the execution of
this Asset Purchase Agreement, execute employment agreements with the Acquiror
(the "Employment Agreements"), by which the Sellers will operate the HOB
Business subject to the control of the Board of Directors of the Acquiror.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises and covenants contained herein, the parties, intending to be legally
bound, hereby represent, warrant and agree as follows:
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I. DEFINITION
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the meanings indicated below:
"Additional Domain Names" shall refer to the domain names set forth on
Schedule 1.1.
"Closing" shall mean the consummation of the transactions contemplated
hereby on the date hereof.
"Consents" shall refer to the consents or approval of any third party
including any governmental agency required in connection with the Acquisition
including, but not limited to, any consent required in connection with the
transfer of the Assets as hereinafter defined or resulting from completion of
the Acquisition required by or necessary to prevent any termination of a
Material Contract referred to in Section 5.5 and listed in the Disclosure
Schedules.
"Contract" shall mean any agreement, contract, license, indenture, lease,
mortgage, plan, arrangement, commitment or instrument including any note or
other debt instrument (whether written or oral to the extent any of the
foregoing represent binding obligations of a party).
"Enforceability Exceptions" shall mean the extent to which enforceability
of an obligation may be limited by applicable bankruptcy, insolvency,
re-organization or other similar laws affecting the enforcement of creditors'
rights generally and by principles of equity regarding the availability of
remedies.
"HOB Domain Name" shall mean the domain name xxx.xxxxxxxxxxxxx.xxx.
"Knowledge" shall mean with respect to a party's awareness of the presence
or absence of a fact, event or condition (a) actual knowledge plus, if
different, (b) the knowledge that would be obtained if such party conducted
itself faithfully and exercised a sound discretion in the management of his own
affairs. The knowledge of any party making a representation for warranties
hereunder shall be attributable to all other parties making such representations
for warranties.
"Laws" shall mean all laws, common laws, rules, regulations, ordinances,
codes, judgments, injunctions, orders, decrees, permits, policies and other
requirements of the United States, including all local governments and all
agencies and instrumentalities thereof, including any administrative agencies or
administrative body created by any such government.
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"Liabilities" shall mean any indebtedness, liability, claim, loss, damage,
deficiency, obligation or responsibility, fixed or unfixed, xxxxxx or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent
or otherwise, whether or not of a kind required by generally accepted accounting
principles to be set forth on a financial statement including the notes thereto.
"Lien" means any mortgage, pledge, lien, encumbrance, charge, adverse
claim or restriction of any kind affecting title or resulting in an encumbrance
against property, real or personal, tangible or intangible, or a security
interest of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any third party option or other
agreement to sell and any filing of or agreement to give, any financing
statement under the Uniform Commercial Code (or equivalent statute) of any
jurisdiction).
"Material Adverse Effect" or "Material Adverse Change" with respect to a
party means a change which would in the aggregate have material adverse effect
on the assets, liabilities (whether absolute, accrued, contingent or otherwise),
condition (financial or otherwise), results of operations, business or future
business or financial condition on a consolidated or combined basis of such
party.
"Person" shall mean any natural person, corporation, division of a
corporation, partnership, trust, joint venture, association, company, estate,
unincorporated organization or governmental entity.
"Returns" shall mean all returns (including, without limitation,
information returns and other material information), reports and forms relating
to Taxation required by any Law to be filed with any tax authority.
"Software" shall refer to computer software other than off the shelf
computer software which has not been customized.
"Subsidiary" shall refer to any corporation or other entities in which a
Person has a majority interest or which is otherwise controlled by such Person.
"Taxation Authority" shall mean any taxing or other authority, whether of
the United States or elsewhere, competent to impose any Taxation liability.
"Taxes" shall mean:
1. All taxes, duties, charges, levies, deductions or withholdings wherever
imposed and whether of the United States or elsewhere including without
limitation income tax, (including income tax required to be deducted or withheld
from or accounted for in respect of any payment) capital gains tax, inheritance
tax, corporation tax, withholding tax, social security and other similar
contributions;
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2. Any interest penalty, fine and surcharge related to or arising in
connection with any of the matters specified in the preceding sub-paragraph.
"Transactions" shall mean, in respect of any party, all transactions set
forth in or contemplated by this Agreement that involve, relate to or affect
such party, including, without limitation, the Acquisition.
II. PURCHASE AND SALE
2.1 Assets To Be Conveyed. Subject to the terms and conditions herein set
forth, and on the basis of the mutual representations, warranties and covenants
herein set forth, at the Closing (as hereinafter defined), the Sellers hereby
sell, and Acquiror hereby buys, all assets of the Sellers related to the HOB
Business and substantially all of the operating assets used in, or related to,
the HOB Business (collectively the "Assets"), as more fully described in
Schedule 2.1, free and clear of all Liens, except as set forth in the Disclosure
Schedules, including (but not limited to):
(1) all equipment and other physical property related to the HOB Business;
(2) all of the Sellers' right, title and interest in, to and under all
Material Contracts;
(3) all of the Sellers' right, title and interest in, to and under the HOB
Domain Name;
(4) all of the Sellers' right, title and interest in, to and under the
Additional Domain Names;
(5) all customer lists relating to the HOB Business;
(6) all tradenames and trademarks utilized in the business, including, (but
not limited to) "House of Boxing," "HOB" and "xxxxxxxxxxxxx.xxx";
(7) all governmental licenses, operating certificates and permits, which may
be transferred pursuant to applicable law;
(8) all Software related to the HOB Business; and
(9) all books, papers, files, documents, and records (including without
limitation, records stored on electronic media) pertaining to the Assets
and HOB Business.
2.2 Disclosure Schedules. The Sellers have delivered schedules relating to
the Assets, the HOB Business and other matters as required herein (collectively,
the "Disclosure Schedules")
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setting forth the matters required to be set forth in the Disclosure Schedules
as described elsewhere in this Agreement. The Disclosure Schedules shall be
deemed to be part of this Agreement.
III. PURCHASE PRICE; PAYMENT
3.1 Purchase Price; Payment.
(a) The purchase price for the Assets shall be (x) $100,000 and (y)
One Hundred Thousand (100,000) shares of restricted common stock of WWES
(the "Restricted Shares").
(b) The purchase price shall be payable as follows:
(1) Cash Payment: Subject to the provisions of subsection (d)
below, Acquiror shall pay the cash portion of the Purchase
Price to Sellers as follows:
(i) $40,000 to Sellers at Closing;
(ii) $20,000 to Sellers on or before the expiration of eight
months from the Closing;
(iii) $20,000 to Sellers on or before the expiration of
sixteen months from the Closing; and
(iv) $20,000 to Sellers on or before the expiration of twenty
four months from the Closing:
(2) Issuance of Stock: The Restricted Shares shall be held in
escrow by Acquiror and released to Sellers, subject to the
provisions of subsection (d) below, as follows:
(i) 25,000 of the Restricted Shares to Sellers at Closing
(provided that this shall mean that WWES shall instruct
its transfer agent to issue such Restricted Shares to
Sellers as soon as possible following Closing, but
delivery will be made shortly thereafter in accordance
with the transfer agent's customary business practices);
(ii) 25,000 of the Restricted Shares on or before the
expiration of one year from the Closing; and
(iii) 50,000 of the Restricted Shares on or before the
expiration of two years from the Closing.
(c) Each payment of cash or issuance of Restricted Shares shall be
divided equally between the Sellers.
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(d) Each payment of cash or issuance of Restricted Shares shall be made
to the respective Seller only if he remains employed by Acquiror on
the due date for such payment.
(e) The payments of cash and Restricted Shares made by Acquiror to
Sellers at Closing shall be fully refundable to Acquiror in the
event that the Sellers are not employed by the Acquiror on the due
date for the first scheduled cash payment following the Closing.
3.2 Return of Consideration upon Termination of Employment.
If Sellers and Acquiror mutually agree to terminate the Employment
Agreements:
(a) Certificates representing all of the Restricted Shares issued to
each Seller shall be returned by such Sellers to WWES within fifteen
days after the date of such termination.
(b) All cash payments made by Acquiror to Sellers in accordance with
Section 3.1 above shall be fully refunded by Sellers to Acquiror
within fifteen days after the date of such termination.
(c) Contemporaneously with WWES' and/or Acquiror's receipt of such
Restricted Shares and/or cash, as the case may be, the Acquiror
shall take appropriate steps to re-convey the HOB Domain Name and
Additional Domain Names to Sellers.
IV. DELIVERIES
4.1 The Sellers' Deliveries to Acquiror. The Sellers hereby deliver to
Acquiror (duly executed by the Sellers where appropriate):
(1) an instrument or instruments of conveyance in the form agreed
upon including bills of sale, assignments and other
instruments of conveyance pertaining to the Assets, all
containing a general warranty of title as shall, in Acquiror's
opinion, be necessary or appropriate to convey to the Acquiror
all of the Assets;
(2) originals of all materials Contracts (as hereinafter defined);
(3) the Employment Agreements;
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(4) an opinion of counsel of the sellers in form and substance
satisfactory to counsel for Acquiror;
(5) written Consents;
(6) assignment documents necessary to assign the HOB Domain Name
and Additional Domain Names from the Sellers to the Acquiror;
(7) assignment documents necessary to assign all trademarks and
tradenames from Sellers to Acquiror;
(8) such other documents, at the Closing or subsequent, as may be
requested by counsel for the Acquiror as necessary for the
implementation and consummation of this Agreement and the
other transactions contemplated hereby.
4.2 Acquiror's Deliveries to Sellers. The Acquiror hereby delivers to the
Sellers.
(1) the initial payment of $40,000 by check of WWES, payable $20,000 to the
order of Xxxx Xxxxxxx and Xxxxxxxx Xxxxxxx, respectively.
(2) one stock certificate of WWES, representing 12,500 of the Restricted Shares,
in the name of Xxxx Xxxxxxx; and
(3) one stock certificate of WWES, representing 12,500 Restricted Shares, in the
name of Xxxxxxxx Xxxxxxx.
V. REPRESENTATIONS AND WARRANTIES OF
THE SELLERS
Except as set forth in the Disclosure Schedule, in addition to any other
representations or warranties, the Sellers jointly and severally make the
following representations and warranties to Acquiror and WWES on the date hereof
with the knowledge and understanding that Acquiror and WWES are relying
materially upon such representations and warranties. References to Schedule
numbers shall refer to the subdivisions of the Disclosure Schedule.
5.1 Business Organization. The Sellers, collectively, own 100% of the HOB
Business, operating such business as a general partnership. There are no written
agreements evidencing such relationship between the Sellers or other
relationship or form of business organization with respect to the HOB Business
or the Assets.
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5.2 Authority. The Sellers have all the requisite power and authority to
execute and delivery and perform their obligations under this Agreement and all
related transactions as provided hereunder and upon execution and delivery, the
Agreement is a valid and binding agreement, enforceable in accordance with its
respective terms subject to the Enforceability Exception.
5.3 Title to Assets; Absence of Liens. The Sellers, collectively, have
good and marketable title to, or in the case of leases and licenses, valid and
subsisting leasehold interest or licenses in, the Assets, including without
limitation, all of the properties and assets that are shown on Schedule 2.1, in
each case free and clear of any and all Liens. The Assets include all assets
that are used or required to conduct the HOB Business.
5.4 Contracts. Schedule 5.4 consists of a true and complete list of all
Material Contracts, which relate to the HOB Business.
Except as set forth on Schedule 5.4 (i) each Material Contract is a full
force and effect and there is no default under any Material Contract either by
any of the Sellers or, to the knowledge of the Sellers, by any other party
thereto, and no event has occurred that with the lapse of time or the giving of
notice or both would constitute a default thereunder by either of the Sellers or
to the knowledge of either of the Sellers, any other party of which could result
in termination of a Material Agreement or which would provide the basis for a
claim against either of the Sellers; (ii) no party to any such Material Contract
has given notice to either of the Sellers of or made a claim against either of
the Sellers with respect to any breach or default thereunder; and (iii) neither
of the Sellers has received any payment from any contracting party in connection
with, or as an inducement for, entering into any contract, agreement, commitment
or instrument with the Sellers except for payment for actual services rendered
or to be rendered by the Sellers, consistent with amounts historically charged
for such service.
Such schedule also lists all pending executed letters of intent. To the
Knowledge of the Sellers none of the letters of intent have been canceled or
terminated.
5.5 Litigation. There is no claim, action, proceeding, or investigation
pending or, to their Knowledge, threatened against or affecting the Sellers, the
HOB Business, or any of the Assets before or by any court, arbitrator or
governmental agency or authority (including Network Solutions, with respect to
domain names) which, in their reasonable judgment, could have a Material Adverse
Effect on the Sellers or the HOB Business. There are no decrees, injunctions or
orders of any court, governmental department, agency or arbitration outstanding
against the Sellers, the HOB Business and with respect to any action or claim
covered by insurance, the Sellers have complied with all requirements of any
such policy which are conditions to the defense and continued defense of such
claim or action. Neither the Sellers, the HOB Business or any person for whose
acts or defaults in the matter it may be contractually or vicariously liable is
involved in any civil criminal or arbitration
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proceedings or reference of any dispute to any expert and to the knowledge,
information or belief of the Sellers no such proceeding is pending or threatened
against the Sellers or the HOB Business and there are no facts likely to give
rise to such proceedings or reference.
5.6 No Conflict. The execution and delivery of this Agreement by the
Sellers does not, and the consummation by the Sellers of the transactions
contemplated hereby will not, violate, conflict with or result in a breach of
any provision of, or constitute a default (or in an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in a right
of termination or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or Assets of
the HOB Business under any (i) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of any court or
governmental authority applicable to the HOB Business or any of the Assets, or
(iii) except as set forth in Schedule 5.6, any note, bond, mortgage, indenture,
deed of trust, license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which the Sellers are now a
party or by which the Sellers or any of the properties or Assets of the HOB
Business may be bound or affected, excluding from the foregoing clauses (i) and
(ii), such violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens, security interests, charges or encumbrances
that would not, in the aggregate, have a Material Adverse Effect.
5.7 Financial Statements. No financial statements have ever been with
respect tothe HOB Business.
5.8 Compliance With Law.
(a) The Sellers have complied and are presently complying, in all material
respects, with all Laws applicable to them in all jurisdictions where the HOB
Business is conducted or to which the Sellers or the HOB Business is subject,
including, without limitation, all applicable laws regulating Internet commerce
and the conduct of web sites generally. Sellers know of no pending or
anticipated changes to such Laws that could cause the current business practices
of the HOB Business to fall out of compliance with such Laws. The Sellers do not
know of any assertion by any party that the HOB Business is in violation in any
material respect of any such laws, rules, regulations, orders, restrictions or
requirements with respect to its operations and no notice in that regard has
been received by the Sellers.
(b) The Sellers do not know of any (i) pending or anticipated changes to
such Laws that could cause any of the HOB Business' current business practices
to fall out of compliance with such Laws; or (ii) assertion by any party that
the Sellers are in violation in any material respect of any such Laws, and no
notice in that regard has been received.
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(c) The HOB Business has all material governmental licenses, permits,
consents, authorizations and approvals necessary for the Sellers' conduct of its
business as currently conducted ("Government Licenses and Permits"). Schedule
5.8 includes a list of all Government Licenses and Permits and such Government
Licenses and Permits are attached thereto. All Government Licenses and Permits
are in full force and effect, and no proceedings for the suspension or
cancellation of any thereof is pending or, to their knowledge, threatened. The
Sellers know of no action, omission or policy which could form a reasonable
basis for the loss of any such Government licensure or Permit. The HOB Business
is not in breach of the terms or conditions of such licenses and consents and
there are no pending or threatened proceedings which might in any way affect
such licenses and consents. To the knowledge of the Sellers, there is no reason
why any Government License or Permit should be suspended, threatened or revoked
or be invalid.
5.9 Employee Matters. Other than the Sellers, there are no employees of
the HOB Business. The HOB Business has never maintained or contributed to any
employee benefit plan, or any stock purchase plan, stock option plan, fringe
benefit plan, bonus plan or any other deferred compensation agreement, plan or
funding arrangement, whether or not such plan has been terminated and whether or
not such plan is of legally binding nature in the form of an informal
understanding.
5.10 Non Governmental Consents. Except with respect to the Consents listed
in Schedule 5.10, no Consent of any third party is required pursuant to any
Material Contract or by any non governmental third party to preserve any
material right of the Sellers being transferred hereby or which relates to the
HOB Business.
5.11 Liabilities. The HOB Business does not have any Liabilities. Each of
the Sellers severally represents and warrants that he has no Liabilities that
are in any way related to theHOB Business or that could, in any event, affect
the HOB Business.
5.12 Governmental Approvals. Except with respect to any Consents listed in
Schedule 5.12 no authorization, license, permit, franchise, approval, order or
consent of, and no registration, declaration or filing by the Sellers in the
United States with any governmental authority, domestic or foreign, federal,
state or local, is required in connection with the Sellers' execution, delivery
and performance of this Agreement and consummation of the Acquisition, the
continuation of the HOB Business as now conducted after the transfer of the
Assets to Acquiror.
5.13 Accounts Receivable. The HOB Business has no accounts receivable
5.14 Condition of Assets. All personal property owned by Sellers included
in the Assets and all personal property held pursuant to leases is in good
operating condition and repair, subject only to ordinary wear and tear, has been
operated, serviced and maintained properly within the recommendation and
requirements of the manufacturer thereof (if any) and is suitable and
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appropriate for the use thereof made and proposed to be made by Sellers in their
respective business operations. The personal property set forth on Schedule 5.14
comprise all of the personal property used in, or necessary the conduct of the
HOB Business as presently conducted by it.
5.15 [INTENTIONALLY OMITTED].
5.16 [INTENTIONALLY OMITTED].
5.17 Intellectual Property. Schedule 5.17 sets forth a complete and
correct list and summary description of all trademarks, trade names, service
marks, service names, brand names, know-how, copyrights, domain names, design,
design rights and patents, and all other intellectual property rights whatsoever
(the "Intellectual Property") and all registrations thereof and applications
therefore, applicable to or used in the HOB Business (other than any of the
foregoing relating to Software covered by paragraph 5.18 hereof). To the best of
the knowledge and belief of the Sellers, the Sellers own or have the right or
license to Intellectual Property necessary for the conduct of the HOB Business,
including as set forth in the Material Contracts under Schedule 5.4. A complete
list of all licenses granted by or to such entities with respect to any of the
forgoing is set forth as a Material Contract as Schedule 5.4. Except as
otherwise set forth in Schedule 5.17 all Intellectual Property is owned by the
Sellers as applicable, free and clear of all liens, claims, security interests
and encumbrances of any nature whatsoever. The Sellers are currently not in
receipt of any notice of any violation or infringements of, and are not
knowingly violating or infringing, the rights of others with respect to
Intellectual Property owned by it.
5.18 Software.
(a) Schedule 5.18 contains a complete and accurate list of all
Software owned by the Sellers (the "Owned Software"). Except as set forth on
Schedule 5.18 the Sellers have exclusive title to the Owned Software, free and
clear of all claims, including claims or rights of employees, agents,
consultants, customers, licensees or other parties involved in the development,
creation, documentation, marketing, maintenance, enhancement or licensing of
such computer software, excluding licenses granted to third parties in the
ordinary course of business. The Owned Software is not dependent on any Licensed
Software (as defined in subsection 5.18 (b) below) in order to operate fully in
the manner in which it is intended.
The source code for Owned Software has not been published or
otherwise knowingly disclosed. To the knowledge of the Sellers, no such other
party has breached any obligation of confidentiality.
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(b) Schedule 5.18 contains a complete and accurate list of all
Software under which the Sellers or HOB Business is a licensee, lessee or
otherwise has obtained the right to use Software and the Sellers pay a royalty
for the use of such Software (the "Licensed Software"). Schedule 5.18 also sets
forth a list of all license fees, rents, royalties or other charges that a the
Sellers are required or obligated to pay with respect to Licensed Software. The
HOB Business has the right and license to use, sublicense, modify and copy
Licensed Software, free and clear of any limitations or encumbrances pursuant to
licenses, leases or other agreements constituting a Material Contract and listed
in Schedule 5.18. The HOB Business is in material compliance with all provisions
of each license, lease or other similar agreement pursuant to which it has
rights to use the Licensed Software. Except as disclosed on Schedule 5.18, none
of the Licensed Software has been incorporated into or made a part of any Owned
Software or any other Licensed Software. The Sellers have not published or
knowingly disclosed any Licensed Software to any other party.
(c) The Owned Software and Licensed Software constitute all material
software used in the HOB Business ("Acquired Company Software"). Except as set
forth in Schedule 5.18, the transactions contemplated herein will not cause a
breach or default under any licenses, leases or similar agreements relating to
the Acquired Company Software. Except as set forth in Schedule 5.18, the Sellers
are not knowingly infringing any intellectual property rights of any other
person or entity with respect to the Acquired Company Software, and, to the
knowledge of the Sellers, no other person or entity is infringing any
intellectual property rights of the Sellers with respect to the Acquired Company
Software.
5.19 Investment Intent. Each of the Sellers hereby represents, warrants
and agrees that such Seller will be acquiring any Restricted Shares to be issued
in connection with this Acquisition for investment, for his own account, and not
with a view to the distribution of the Restricted Shares. In such connection,
each Seller further represents and warrants that he understands that WWES is
issuing the Restricted Shares to such Seller in reliance upon an exemption from
the registration requirements of Section 5 of the Securities Act of 1933, as
amended (the "Act") and the rules and regulations thereunder. Each Seller agrees
that the Restricted Shares may not be sold, transferred, pledged, hypothecated,
assigned or otherwise disposed of by such Seller unless WWES shall have been
supplied with evidence satisfactory to it and its counsel that such transfer is
not in violation of the Act. Furthermore, each Seller understands that the
certificates for the Restricted Shares shall bear an appropriate restrictive
legend to reflect the foregoing restrictions and that stop transfer instructions
will be placed against the Restricted Shares with respect thereto. Each Sellers
consents to the placing of such legend on the certificates for the Restricted
Shares.
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IV. REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror represents and warrants to the Sellers as follows as of the date
hereof, with the Knowledge and understanding that the Sellers are relying
materially on such representations and warranties:
6.1 Organization and Standing of Acquiror. Acquiror is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Acquiror has all requisite corporate power to carry on its business as
it is now being conducted.
6.2 Acquiror's Authority. This Agreement and the transactions contemplated
hereby have been duly authorized by all necessary action of the Board of
Directors. This Agreement constitutes, and all other agreements contemplated
hereby will constitute, when executed and delivered by Acquiror the valid and
binding obligations of Acquiror, enforceable in accordance with their respective
terms.
6.3 Governmental Approval; Consents No authorization, license, permit,
franchise, approval, order or consent of, and no registration, declaration or
filing by Acquiror with, any governmental authority, domestic or foreign,
federal, state or local, is required in connection with Acquiror's execution,
delivery and performance of this Agreement or the other agreements contemplated
hereby.
6.4 WWES SEC Reports. Acquiror has previously delivered to the Sellers
true and complete copies of the reports filed by WWES with the Securities and
Exchange Commission and listed on Schedule 6.4 (the "SEC Reports"). The SEC
Reports do not contain any untrue statement of a material fact, or fail to state
any material fact required to be stated therein or necessary to make the
statements made therein not materially misleading and the financial statements
therein fairly present the financial position and results of operations of on a
consolidated or combined basis as of the dates and for the periods indicated.
6.5 Adverse Developments. Except as set forth on Schedule 6.5, since
September 30, 1999 there have been no materially adverse changes in the assets,
properties, operations, prospects or financial condition of WWES and its
subsidiaries considered as one enterprise, and no event has occurred other than
in the ordinary and usual course of business or as set forth in the SEC Reports
which could be reasonably expected to have a materially adverse effect upon WWES
and its subsidiaries considered as one enterprise, and WWES does not know of any
development or
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threatened development of a nature that will, or which could be reasonably
expected to, have a materially adverse effect upon WWES and its subsidiaries
considered as one enterprise.
6.6 No Omissions or Untrue Statements. To Acquiror's Knowledge, no
representation or warranty made by Acquiror in this Agreement (including the
exhibits hereto) or in any schedule, certificate, or other instrument furnished
or to be furnished by Acquiror to the Sellers pursuant hereto, or in connection
with the transactions contemplated hereby, contains or will knowingly contain
any untrue statement of a material fact, or omits or will knowingly omit to
state a material fact necessary to make the statements contained herein or
therein not misleading.
VII. INDEMNIFICATION
7.1 General. The Sellers, jointly and severally, shall indemnify, defend,
and hold Acquiror and WWES harmless from and against any and all losses, costs,
liabilities, damages, and expenses (including reasonable legal and other
expenses incident thereto) of every kind, nature, and description, including any
unassumed liabilities, and any undisclosed liabilities (collectively "Losses")
that result from or arise out of (i) the breach of any representation or
warranty of the Sellers set forth in this Agreement (including the exhibits
hereto) or in any certificate or schedule, or other instrument delivered to
Acquiror pursuant hereto; (ii) the breach of any of the covenants of the Sellers
contained in this Agreement; (iii) any liability of the Sellers or the HOB
Business with respect to the ownership or use of the Assets prior to the date
hereof, whether or not such liability arises prior to, on or following the date
hereof (as well as any liability arising under Section 9.1); or (iv) any Taxes
of the HOB Business for any and all taxable periods of the HOB Business up to
and including the date hereof , without regard to whether or not the existence
of such tax liability would constitute a breach of a representation or warranty
made by the Sellers hereunder.
7.2 Claims Procedure. Should any claim covered by Section 7.1 be asserted
against a party entitled to indemnification under this Article VII (the
"Indemnitee"), the Indemnitee shall promptly notify the party obligated to make
indemnification (the "Indemnitor"), provided that any delay or failure in
notifying the Indemnitor shall not affect the Indemnitor's liability under this
Article VII if such delay or failure was not prejudicial to the Indemnitor. The
Indemnitor upon receipt of such notice shall assume the defense thereof with
counsel reasonably satisfactory to the Indemnitee and the Indemnitee shall
extend reasonable cooperation to the Indemnitor in connection with such defense.
No settlement of any such claim shall be made without the consent of the
Indemnitor, such consent not to be unreasonably withheld, nor shall any such
settlement be made by the Indemnitor which does not provide for the absolute,
complete, and unconditional release of the Indemnitee from such claim. In the
event that the Indemnitor shall fail, within a reasonable time, to
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defend a claim, the Indemnitee shall have the right to assume the defense
thereof without prejudice to its rights to indemnification hereunder.
7.3 Payment-Set Off. All amounts due hereunder shall be paid upon demand.
Acquiror may set off against the payment obligation to Sellers set forth in
Section 3.1 above, any amounts unpaid hereunder and undisputed. If the Sellers
dispute the payment of any amount claimed hereunder in writing within ten (10)
days after demand then, in addition to any other remedies, Acquiror shall
withhold payment of amounts due to Sellers set forth in Section 3.1 above, until
resolution of any dispute. In the event any dispute herein is litigated, the
losing party shall bear all costs of litigation including reasonable attorneys'
fees, and costs of experts. Interest on any improperly withheld amount by either
party shall accrue at Citibank's prime rate in effect for such period.
VIII. POST-CLOSING COVENANTS
8.1 No Transferee Liability. The parties agree that neither Acquiror nor
WWES will by virtue of the transactions contemplated hereby assume any
liabilities or obligations of the Sellers whatsoever and, accordingly, the
Sellers agree both prior and subsequent to the Closing to take all actions which
Acquiror and WWES may reasonably request so as to fully protect Acquiror and
WWES from and against any and all transferee liability arising out of the
Acquisition.
8.2 Preservation of Records. Acquiror and Sellers each covenant that they
will preserve and make reasonably available to the other party, its attorneys
and accountants, for six (6) years from and after the Closing Date and during
normal business hours, such of the books, records, files, correspondence,
memoranda and other documents (collectively, the "Records") they may possess as
the other party may reasonably require in connection with any legitimate
purpose, including, but not limited to, the preparation of tax reports and
returns and the preparation of financial statements provided, however, that the
parties shall not be required to furnish information reflecting attorney-client
communications or attorney work product. After the sixth anniversary of Closing
Date, neither Acquiror or Seller shall dispose of any of the Records, without
giving the other party at least thirty (30) days' prior notice of its intention
to do so. Such other party may, by written notice, request that such Records be
retained and such Records shall be transferred to the other party at such other
party's expense.
8.3 Payment of Taxes The Sellers will cause to be prepared and filed all
Returns required to be filed relating to the Assets or the HOB Business for
periods prior to the date hereof. The Sellers will be solely responsible for and
will pay all Taxes relating to the Assets or the HOB Business for periods prior
to or ending on the date hereof including any Taxes resulting from the
transactions contemplated herein, including any transfer tax.
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8.4 Brokers' Fees. Sellers and Acquiror shall save and hold the other
harmless from any claims made against the other on account of their acts or
alleged acts from any person for any other agent's, broker's or finder's fee or
commission incurred in connection with the transactions contemplated by this
Agreement. The provisions of this Section 8.4 (and not the provisions of Article
VII) shall apply to any claim with the scope of the proceeding sentence.
8.5 Further Assurances. From time to time, as Acquiror may reasonably
request in writing, whether at or after the Closing and without further
consideration, the Sellers, at their expense, will execute and deliver such
further instruments of conveyance, transfer and confirmation and take such other
action as Acquiror may reasonably request in order more effectively to convey,
confirm and transfer to Acquiror of any of the Assets to be acquired.
IX. MISCELLANEOUS
9.1 Waiver of Bulk Sales Law Compliance; Indemnity. Acquiror and WWES
hereby waive compliance with any applicable bulk sales laws. The Sellers,
jointly and severally, agree to fully indemnify WWES or Acquisor without any
deductible, for any and all liabilities, expenses and costs resulting from the
parties' failure to fully comply with applicable bulk sales laws.
9.2 Expenses. Each party shall pay its own expenses incident to the
negotiation, preparation, and carrying out of this Agreement, including all fees
and expenses of its counsel and accountants for all activities of such counsel
and accountants undertaken pursuant to this Agreement, whether or not the
transactions contemplated hereby are consummated.
9.3 Survival of Representations, Warranties and Covenants. All statements
contained in this Agreement (including the exhibits hereto) or in any schedule,
certificate or other instrument delivered by or on behalf of the Sellers or the
HOB Business pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed representations, warranties, agreements and covenants by
the Sellers or the Acquiror, as the case may be, hereunder. All representations,
warranties, and covenants made by all parties to this Agreement or pursuant
hereto, shall survive the Closing.
9.4 Succession and Assignments; Third Party Beneficiaries. This Agreement
may not be assigned (either voluntarily or involuntarily) by any party hereto
without the express written consent of the other party. Any attempted assignment
in violation of this Section shall be void and ineffective for all purposes. In
the event of an assignment permitted by this Section, this Agreement shall be
binding upon the heirs, successors and assigns of the parties hereto. Except for
WWES, there are no third party beneficiaries of this Agreement.
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The provisions of this Section shall not apply to the acquisition of the
Assets and the HOB Business by a different wholly owned subsidiary corporation
of WWES, or to the transfer following such acquisition, to any affiliate of
WWES. Without limiting the generality of the preceding sentence, references to
the Acquiror shall be deemed to include references to any other subsidiary of
WWES.
9.5 Accuracy of Documents. All documents delivered by the Sellers to
Acquiror , and by Acquiror to the Sellers, as photocopies faithfully reproduce
the originals thereof, and such originals are authentic and were, to the extent
execution was required, duly executed.
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9.6 Notices. All notices, requests, demands, or other communications with
respect to this Agreement shall be in writing and shall be personally delivered
by a nationally recognized express courier service, charges prepaid, to the
following addresses (or such other addresses as the parties may specify from
time to time in accordance with this Section).
(a) To the Sellers at their address first set forth above
Fax:
With a copy to:
, Esq.
Fax:
(b) To Acquiror and WWES at their address first set forth above:
Fax (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx Xxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. XxXxxxx, Esq.
Fax: 000-000-0000
Any such notice shall, when sent in accordance with the preceding sentence, be
deemed to have been given and received on the earliest of (i) the day delivered
to such address or sent by facsimile transmission, (ii) the fifth business day
following the date deposited with the United States Postal Service, or (iii)
twenty-four hours after shipment by such courier service.
9.7 Instruction. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of New York without giving effect
to the principles of conflicts of law thereof.
9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same Agreement.
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9.9 No Implied Waiver; Remedies. No failure or delay on the part of the
parties hereto to exercise any right, power, or privilege hereunder or under any
instrument executed pursuant hereto shall operate as a waiver nor shall any
single or partial exercise of any right, power, or privilege preclude any other
or further exercise thereof or the exercise of any other right, power, or
privilege. All rights, powers, and privileges granted herein shall be in
addition to other rights and remedies to which the parties may be entitled at
law or in equity.
9.10 Entire Agreement. This Agreement, including the Exhibits and
Schedules attached hereto, sets forth the entire understandings of the parties
with respect to the subject matter hereof, and it incorporates and merges and
supersedes any and all previous communications, representations, warranties,
understandings, agreements, oral or written and can not be amended or changed
except in writing, signed by the parties.
9.11 Headings. The headings of the Sections of this Agreement, where
employed, are for the convenience of reference only and do not form a part
hereof and in no way modify, interpret or construe the meanings of the parties.
9.12 Severability. To the extent that any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted hereof and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
WORLDWIDE HOUSE OF XXXXXX.XXX INC.
By:
------------------------------------
Name:
Title: Chairman
WORLDWIDE ENTERTAINMENT &
SPORTS CORPORATION
By:
------------------------------------
Name:
Title: Chairman & CEO
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XXXX XXXXXXX
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XXXXXXXX XXXXXXX
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