Execution Copy
AGREEMENT AND PLAN OF SHARE EXCHANGE
BY AND AMONG
JAGUAR INVESTMENTS, INC.,
PREMIER SPORTS MEDIA AND ENTERTAINMENT GROUP, INC., AND
THE SHAREHOLDERS OF PREMIER SPORTS MEDIA
AND ENTERTAINEMENT GROUP, INC.
Dated as of September 24, 2001
AGREEMENT AND PLAN OF SHARE EXCHANGE
AGREEMENT (the "Agreement"), dated as of September 24, 2001, by and
among Jaguar Investments, Inc., a corporation existing under the laws of Nevada
(the "Jaguar"), Premier Sports Media and Entertainment Group, Inc., a
corporation existing under the laws of New York (the "Company"), and the
shareholders of the Company, all of whose names are listed on the signature
pages hereof (collectively the "Shareholders").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Shareholders own of record and beneficially an aggregate
of 388,889 shares (the "Shares") of the Company's common stock, par value $0.01
per share (the "Company Common Stock"), which Shares constitute all of the
issued and outstanding shares of all classes of capital stock of the Company;
and
WHEREAS, the parties to this Agreement intend to reorganize both Jaguar
and the Company as provided under Section 368(a)(1)(B) of the Code by an
exchange of shares of voting common stock pursuant to the following plan (the
"Plan"):
PLAN OF REORGANIZATION. It is intended that the terms and conditions of
this Agreement comply in all respects with Section 368(a)(1)(B) of the Code and
the regulations corresponding thereto, so that the reorganization contemplated
hereby shall qualify as a tax free reorganization under the Code. Accordingly,
it is the intention of the parties hereto that, as a result of this Agreement,
the transactions contemplated hereby shall be accomplished solely in exchange
for the voting common stock of each of Jaguar and the Company and that no gain
or loss shall be recognized by the Shareholders or by Jaguar who are each
transferring or issuing their shares of common stock solely in exchange for
receiving the common stock of the other; and further in pursuance of the Plan,
it is the intention of the parties hereto that any outstanding warrants to
purchase shares of Company Common Stock will be amended to provide for the
issuance of shares of Jaguar's common stock; and
WHEREAS, pursuant to the Plan, the Shareholders are desirous of
exchanging the Shares for shares of Jaguar's voting common stock, par value
$.001 per share (the "Jaguar Common Stock), on the basis of 2.5714 shares of
Jaguar Common Stock for each share of Company Common Stock (the ratio of 2.5714
shares of Jaguar Common Stock for each share of Company Common Stock is
hereinafter referred to as the "Exchange Ratio"). If the application of the
Exchange Ratio results in a fractional number, no fractional shares of Jaguar
Common Stock shall be issued but instead the fractional number shall be rounded
up to the next whole number. The aggregate shares of Jaguar Common Stock to be
issued to the Shareholders is hereinafter collectively referred to as the
"Exchange Shares"; and
WHEREAS, certain terms used in this Agreement are defined in Section
11.1.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter contained, the parties hereby agree as
follows:
ARTICLE I
EXCHANGE OF SHARES
1.1 Exchange of Shares.
------------------
At the Closing, each of the Shareholders shall transfer, convey and
deliver to Jaguar good and marketable title to that portion of the Shares to be
exchanged by such Shareholder as set forth opposite such Shareholder's name on
Annex A hereto, free and clear of all liens, claims, debts, obligations or other
encumbrances, except such restrictions as are imposed by Federal and state
securities laws; and Jaguar shall transfer, convey and deliver to each
Shareholder good and marketable title to such Shareholder's proportionate share
of the Exchange Shares or such other number of Exchange Shares as shall have
been agreed among the Shareholders, all as also set forth in Annex A hereto,
free and clear of all liens, claims debts, obligations or other encumbrances,
except such restrictions as are imposed by Federal or state securities laws. The
exchange of voting shares as herein provided shall be the sole consideration for
the acquisition of the Shares.
1.2 Restrictions on Transfer. Neither the Exchange Shares nor the
Shares to be exchanged as provided in Section 1.1 are being registered under the
Securities Act and are to be exchanged hereunder pursuant to an exemption that
requires that the further transfer of such shares to be restricted under the
Securities Act. Each of Jaguar and the Shareholders agree to deliver to the
other at or before the Closing an investment letter acknowledging the foregoing
and agreeing to comply with the requirements of such exemption. In order to
further evidence such restriction on transferability, each recipient of shares
pursuant to this Agreement hereby agrees to the imposition of a customary
restrictive legend on the face or back of each certificate representing the
shares to be exchanged.
1.3 Delivery of Shares. Subject to the terms and conditions
hereof, at the Closing (a) the Shareholders shall transfer to Jaguar the Shares
by delivering the stock certificates evidencing the Shares, accompanied by duly
endorsed stock powers, with signatures medallion guaranteed, in form and
substance satisfactory to Jaguar, permitting the transfer of the Shares to
Jaguar; and (b) Jaguar shall deliver to each Shareholder a stock certificate(s)
registered in the name of such Shareholder representing his, her or its share of
the Exchange Shares as set forth on Annex A hereto
1.4 Supplemental Action. If at any time after the Closing, Jaguar
or the Shareholders shall determine that any further conveyances, agreements,
documents, instruments, and assurances or any further action is necessary or
desirable to carry out the provisions of this Article 1, Jaguar or the
Shareholders, as the case may be, shall execute and deliver any and all proper
conveyances, agreements, documents, instruments, and assurances and perform all
necessary or proper acts to carry out the provisions of this Article 1.
2
ARTICLE II
CLOSING; CLOSING DATE
Section 2.1 Subject to the satisfaction of the conditions set forth
in Sections 7.1 and 7.2 hereof (or the waiver thereof by the party entitled to
waive that condition), the exchange of the Shares for the Exchange Shares
provided for in Section 1.1 hereof (the "Closing") shall take place at the
offices of Berlack, Israels & Xxxxxxxx LLP, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX
00000 (or at such other place as the parties may designate in writing) at 9:00
a.m. on November 9, 2001, or on such other date as the Shareholders and the
Jaguar may designate in writing. The date on which the Closing shall be held is
referred to in this Agreement as the "Closing Date".
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Jaguar that:
3.1 Organization and Good Standing.
------------------------------
The Company and each of its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now conducted. The Company and each of its Subsidiaries is duly qualified or
authorized to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which it owns or leases real property and each
other jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except where the
failure to be so qualified would not have a Material Adverse Effect.
3.2 Authorization of Agreement.
--------------------------
The Company has all requisite power, authority and legal capacity to
execute and deliver this Agreement and each other agreement, document,
instrument or certificate contemplated by this Agreement or to be executed by
the Company in connection with the consummation of the transactions contemplated
by this Agreement (such other agreements, documents, instruments and
certificates are hereinafter collectively referred to as the "Company
Documents"), and to consummate the transactions contemplated hereby and thereby.
This Agreement has been, and each of the Company Documents will be at or prior
to the Closing, duly and validly executed and delivered by the Company and
(assuming the due authorization, execution and delivery by the other parties
hereto and thereto) this Agreement constitutes, and each of the Company
Documents when so executed and delivered will constitute, legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
3
3.3 Capitalization.
--------------
(a) The authorized capital stock of the Company consists of
10,000,000 shares of Company Common Stock, of which only the Shares are issued
and outstanding. All of the Shares were duly authorized for issuance and are
validly issued, fully paid and non-assessable.
(b) Except as set forth on Schedule 3.3(b) hereto and except as
referred to in Section 4.3 hereof, there is no existing option, warrant, call,
right, commitment or other agreement of any character to which the Company is a
party requiring, and there are no securities of the Company outstanding which
upon conversion or exchange would require, the issuance, sale or transfer of any
additional shares of capital stock or other equity securities of the Company or
other securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase shares of capital stock or other equity securities of
the Company. The Company is not a party to any voting trust or other voting
agreement with respect to any of the Shares or to any agreement relating to the
issuance, sale, redemption, transfer or other disposition of the capital stock
of the Company.(b)
3.4 Subsidiaries.
------------
The Company's only Subsidiaries are Premier Boxing, Inc., a New York
corporation, CNB Sports and Entertainment, Inc., a New York corporation, and
Premier Publishing Group, Inc., a New York corporation, each of which the
Company wholly owns. There is no existing option, warrant, call, right
commitment or other agreement of any character to which the Company or any of
its Subsidiaries is a party requiring, and there are no securities of any of the
Company's Subsidiaries outstanding which upon conversion or exchange would
require, the issuance, sale or transfer of any additional shares of capital
stock or other equity securities of any of the Company's Subsidiaries or other
securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase shares of capital stock or other equity securities of
any of the Company's Subsidiaries. Neither the Company nor any of its
Subsidiaries is a party to any voting trust or other voting agreement with
respect to any of capital stock of any of the Company's Subsidiaries or to any
agreement relating to the issuance, sale, redemption, transfer or other
disposition of the capital stock of any of the Company's Subsidiaries.
3.5 Corporate Records.
-----------------
(a) The Company has delivered to Jaguar true, correct and complete
copies of the certificate of incorporation and by-laws or comparable
organizational documents of the Company and each of its Subsidiaries.
(b) The minute books of the Company and each of its Subsidiaries
previously made available to Jaguar contain complete and accurate records of all
meetings and accurately reflect all other corporate action of the stockholders
and board of directors (including committees thereof) of the Company and each of
4
its Subsidiaries. The stock certificate books and stock transfer ledgers of the
Company and each of its Subsidiaries previously made available to Jaguar are
true, correct and complete.
3.6 Conflicts; Consents of Third Parties.
------------------------------------
(a) None of the execution and delivery of this Agreement or the
Company Documents, the consummation of the transactions contemplated hereby or
thereby, or compliance by the Company with any of the provisions hereof or
thereof will (i) conflict with, or result in the breach of, any provision of the
certificate of incorporation or by-laws or comparable organizational documents
of the Company or any of its Subsidiaries; (ii) conflict with, violate, result
in the breach or termination of, or constitute a default under any note, bond,
mortgage, indenture, license, agreement or other instrument or obligation to
which the Company or any of its Subsidiaries is a party or by which any of them
or any of their respective properties or assets is bound; (iii) violate any
statute, rule, regulation, order or decree of any governmental body or authority
by which the Company or any of its Subsidiaries is bound; or (iv) result in the
creation of any Lien upon the properties or assets of the Company or any of its
Subsidiaries except, in case of clauses (ii), (iii) and (iv), for such
violations, breaches or defaults as would not, individually or in the aggregate,
have a Material Adverse Effect.
(b) No consent, waiver, approval, Order, Permit or authorization
of, or declaration or filing with, or notification to, any Person or
Governmental Body is required on the part of the Company in connection with the
execution and delivery of this Agreement or the Company Documents, or the
compliance by the Company with any of the provisions hereof or thereof.
3.7 Financial Statements; Financial Matters.
---------------------------------------
(a) Annexed hereto as Schedule 3.7 (a) is the unaudited
consolidated balance sheet of the Company and its Subsidiaries as at April 30,
2001, and the related unaudited statements of income, retained earnings and of
cash flows of the Company and each of its Subsidiaries for the four months then
ended. Such unaudited statements, including the related notes and schedules
thereto, are referred to herein as the "Company Unaudited Financials, the
unaudited consolidated balance sheet as at April 30, 2001 included therein is
sometimes referred to herein as the "Company Balance Sheet" and April 30, 2001,
is sometimes referred to herein as the "Balance Sheet Date".
(b) At or prior to the Closing Date, the Company will have
furnished to Jaguar such audited and unaudited financial statements of the
Company and its Subsidiaries as shall be required to permit Jaguar to comply
with its obligations as a reporting issuer under the Exchange Act, including,
without limitation, such financial statements (excluding pro forma combined
financial statements with Jaguar) that must be included in the Current Report on
Form 8-K required to be filed by Jaguar following the Closing under applicable
SEC rules and regulations (collectively, the "Required Company Financials").
5
(c) The Company Unaudited Financials are, and the Company Required
Financials will be, (i) in accordance with the books and records of the Company
and its Subsidiaries, (ii) complete and correct, (iii) prepared in accordance
with GAAP (subject to normal year-end adjustments) and in conformity with the
practices consistently applied by the Company without modification of the
accounting principles used in the preparation thereof, and (iv) present fairly
the consolidated financial position, results of operations and cash flows of the
Company as at the dates and for the periods indicated.
3.8 No Undisclosed Liabilities.
--------------------------
Neither the Company nor any Subsidiary has any indebtedness,
obligations or liabilities of any kind (whether accrued, absolute, contingent or
otherwise, and whether due or to become due) that would have been required to be
reflected in, reserved against or otherwise described on the Company Balance
Sheet or in the notes thereto in accordance with GAAP which was not fully
reflected in, reserved against or otherwise described in the Company Balance
Sheet or the notes thereto except for indebtedness, obligations and liabilities
incurred in the ordinary course of business consistent with past practice since
the Balance Sheet Date and which in the aggregate do not exceed $800,000 as of
the date hereof and will not exceed $800,000 as of the Closing Date.
3.9 Absence of Certain Developments.
-------------------------------
Except as expressly contemplated by this Agreement, since the Balance
Sheet Date:
(i) there has not been any Material Adverse Change nor
has there occurred any event which is reasonably likely to result in a Material
Adverse Change;
(ii) there has not been any damage, destruction or loss,
whether or not covered by insurance, with respect to the property and assets of
the Company or any of its Subsidiaries having a replacement cost of more than
$25,000 for any single loss or $50,000 for all such losses;
(iii) there has not been any declaration, setting aside or
payment of any dividend or other distribution in respect of any shares of
capital stock of the Company or any of its Subsidiaries or any repurchase,
redemption or other acquisition by the Company or any of its Subsidiaries of any
outstanding shares of capital stock or other securities of, or other ownership
interest in, the Company or any of its Subsidiaries;
(iv) except as set forth on Schedule 3.9(iv), neither the
Company nor any of its Subsidiaries has awarded or paid any bonuses to employees
of the Company or any of its Subsidiaries with respect to the four months ended
April 30, 2001 or any prior period, except to the extent reflected or accrued on
the Company Balance Sheet or entered into any employment, deferred compensation,
severance or similar agreement (nor amended any such agreement) or agreed to
increase the compensation payable or to become payable by it to any of the
Company's or any of its Subsidiaries' directors, officers, employees, agents or
representatives or agreed to increase the coverage or benefits available under
any severance pay, termination pay, vacation pay, company awards, salary
6
continuation for disability, sick leave, deferred compensation, bonus or other
incentive compensation, insurance, pension or other employee benefit plan,
payment or arrangement made to, for or with such directors, officers, employees,
agents or representatives (other than normal increases in the ordinary course of
business consistent with past practice and that in the aggregate have not
resulted in a material increase in the benefits or compensation expense of the
Company or any of its Subsidiaries);
(v) there has not been any change by the Company or any
of its Subsidiaries in accounting or tax reporting principles, methods or
policies;
(vi) neither the Company nor any of its Subsidiaries has
entered into any transaction or Contract or conducted its business other than in
the ordinary course consistent with past practice;
(vii) except as set forth on Schedule 3.9(vii), neither the
Company nor any of its Subsidiaries has failed to promptly pay and discharge
current liabilities except where disputed in good faith by appropriate
proceedings;
(viii) except as set forth on Schedule 3.9(viii), neither
the Company nor any of its Subsidiaries has made any loans, advances or capital
contributions to, or investments in, any Person or paid any fees or expenses to
any Shareholder or any Affiliate of any Shareholder;
(ix) neither the Company nor any of its Subsidiaries has
mortgaged, pledged or subjected to any Lien any of its assets, or acquired any
assets or sold, assigned, transferred, conveyed, leased or otherwise disposed of
any assets of the Company or any of its Subsidiaries, except for assets acquired
or sold, assigned, transferred, conveyed, leased or otherwise disposed of in the
ordinary course of business consistent with past practice;
(x) neither the Company nor any of its Subsidiaries has
discharged or satisfied any Lien, or paid any obligation or liability (fixed or
contingent), except in the ordinary course of business consistent with past
practice and which, in the aggregate, would not be material to the Company;
(xi) neither the Company nor any of its Subsidiaries has
canceled or compromised any debt or claim or amended, canceled, terminated,
relinquished, waived or released any Contract or right except in the ordinary
course of business consistent with past practice and which, in the aggregate,
would not be material to the Company;
(xii) neither the Company nor any of its Subsidiaries has
made or committed to make any capital expenditures or capital additions or
betterments in excess of $10,000 individually or $25,000 in the aggregate;
(xiii) neither the Company nor any of its Subsidaries has
instituted or settled any material Legal Proceeding; and
(xiv) neither the Company nor any of its Subsidiaries has
agreed to do anything set forth in this Section 3.9.
7
3.10. Taxes.
-----
(a) Except as set forth on Schedule 3.10, (A) all Tax Returns
required to be filed by or on behalf of the Company and each of its Subsidiaries
have been properly prepared and duly and timely filed with the appropriate
taxing authorities in all jurisdictions in which such Tax Returns are required
to be filed (after giving effect to any valid extensions of time in which to
make such filings), and all such Tax Returns were true, complete and correct in
all material respects; (B) all Taxes payable by or on behalf of the Company and
each of its Subsidiaries or in respect of its income, assets or operations have
been fully and timely paid, and adequate reserves or accruals for Taxes have
been provided with respect to any period for which Tax Returns have not yet been
filed or for which Taxes are not yet due and owing; and (C) neither the Company
nor any of its Subsidiaries has executed or filed with the IRS or any other
taxing authority any agreement, waiver or other document or arrangement
extending or having the effect of extending the period for assessment or
collection of Taxes (including, but not limited to, any applicable statute of
limitation), and no power of attorney with respect to any Tax matter is
currently in force.
(b) Except as set forth on Schedule 3.10, the Company and each of
its Subsidiaries has complied in all material respects with all applicable laws,
rules and regulations relating to the payment and withholding of Taxes and has
duly and timely withheld from employee salaries, wages and other compensation
and has paid over to the appropriate taxing authorities all amounts required to
be so withheld and paid over for all periods under all applicable laws.
(c) The Company has delivered to Jaguar complete copies of (A) all
federal, state, local and foreign income or franchise Tax Returns of the Company
and each of its Subsidiaries relating to the taxable periods since inception and
(B) any audit report issued within the last three years relating to Taxes due
from or with respect to the Company and each of its Subsidiaries, its income,
assets or operations
(d) Except as set forth on Schedule 3.10, all deficiencies
asserted or assessments made as a result of any examinations by the IRS or any
other taxing authority of the Tax Returns of or covering or including the
Company and its Subsidiaries have been fully paid, and there are no other audits
or investigations by any taxing authority in progress, nor has the Company or
any of its Subsidiaries received any notice from any taxing authority that it
intends to conduct such an audit or investigation. No issue has been raised by a
federal, state, local or foreign taxing authority in any current or prior
examination which, by application of the same or similar principles, could
reasonably be expected to result in a proposed deficiency for any subsequent
taxable period.
(e) There are no liens as a result of any unpaid Taxes upon any of
the assets of the Company or any of its Subsidiaries.
3.11 Real Property.
-------------
(a) Neither the Company nor any of its Subsidiaries owns in fee
any real property or interests in real property. Schedule 3.11(a) lists all real
property and interests in real property leased by the Company or any of its
8
Subsidiaries (individually, a "Real Property Lease" and the real properties
specified in such leases being referred to herein individually as a "Company
Property" and collectively as the "Company Properties") as lessee or lessor. The
Company Properties constitute all interests in real property currently used or
currently held for use in connection with the business of the Company and which
are necessary for the continued operation of the business of the Company as the
business is currently conducted. The Company has a valid and enforceable
leasehold interest under each of the Real Property Leases, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity), and there exists no defaults under the terms of
the Real Property Leases and no event has occurred which, upon the passage of
time or the giving of notice, or both, would result in any events of default or
prevent the Company from exercising or obtaining the benefits of any rights or
options contained therein. All of the Company Property, buildings, fixtures and
improvements thereon owned or leased by the Company are in good operating
condition and repair (subject to normal wear and tear). The Company has
delivered or otherwise made available to the Jaguar true, correct and complete
copies of (i) all deeds, title reports and surveys for the Owned Properties and
(ii) the Real Property Leases, together with all amendments, modifications or
supplements, if any, thereto.
(b) The Company and each of the Subsidiaries has all material
certificates of occupancy and Permits of any Governmental Body necessary or
useful for the current use and operation of each Company Property, and the
Company has fully complied with all material conditions of the Permits
applicable to it. No default or violation, or event that with the lapse of time
or giving of notice or both would become a default or violation, has occurred in
the due observance of any Permit, except as would not have a Material Adverse
Effect.
(c) There does not exist any actual or, to the best knowledge of
the Company, threatened or contemplated condemnation or eminent domain
proceedings that affect any Company Property or any part thereof, and the
Company has not received any notice, oral or written, of the intention of any
Governmental Body or other Person to take or use all or any part thereof.
(d) Neither the Company nor any of its Subsidiaries has received
any written notice from any insurance company that has issued a policy with
respect to any Company Property requiring performance of any structural or other
repairs or alterations to such Company Property.
9
3.12 Tangible Personal Property.
--------------------------
(a) Schedule 3.12(a) sets forth all leases of personal property
("Personal Property Leases") involving annual payments in excess of $10,000
relating to personal property used in the business of the Company, including its
Subsidiaries, or to which the Company, including its Subsidiaries, is a party or
by which the properties or assets of the Company or any of its Subsidiaries is
bound. The Company has delivered or otherwise made available to Jaguar true,
correct and complete copies of the Personal Property Leases, together with all
amendments, modifications or supplements thereto.
(b) The Company (directly or through its Subsidiaries) has a valid
leasehold interest under each of the Personal Property Leases under which it is
a lessee, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity), and there
is no default under any Personal Property Lease by the Company (including its
Subsidiaries) or, to the best knowledge of the Company, 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.
(c) The Company (directly or through its Subsidiaries) has good
and marketable title to all of the items of tangible personal property reflected
in the Unaudited Company Balance Sheet (except as sold or disposed of subsequent
to the date thereof in the ordinary course of business consistent with past
practice), free and clear of any and all Liens other than the Permitted
Exceptions. All such items of tangible personal property which, individually or
in the aggregate, are material to the operation of the business of the Company
are in good condition and in a state of good maintenance and repair (ordinary
wear and tear excepted) and are suitable for the purposes used.
(d) All of the items of tangible personal property used by the
Company and its Subsidiaries under the Personal Property Leases are in good
condition and repair (ordinary wear and tear excepted) and are suitable for the
purposes used.
3.13 Intangible Property.
-------------------
Schedule 3.13 contains a complete and correct list of each patent,
trademark, trade name, service xxxx and copyright owned or used by the Company
or any of its Subsidiaries as well as all registrations thereof and pending
applications therefore, and each license or other agreement relating thereto.
Except as set forth on Schedule 3.13, each of the foregoing is owned by the
party shown on such Schedule as owning the same, free and clear of all
mortgages, claims, liens, security interests, charges and encumbrances and is in
good standing and not the subject of any challenge. There have been no claims
made and the Company nor any of its Subsidiaries has received any notice or
otherwise knows or has reason to believe that any of the foregoing is invalid or
conflicts with the asserted rights of others. The Company and its Subsidiaries
possess all patents, patent licenses, trade names, trademarks, service marks,
brand marks, brand names, copyrights, know-how, formulae and other proprietary
and trade rights necessary for the conduct of its business as now conducted, not
10
subject to any restrictions and without any known conflict with the rights of
others and neither the Company nor any of its Subsidiaries has forfeited or
otherwise relinquished any such patent, patent license, trade name, trademark,
service xxxx, brand xxxx, brand name, copyright, know-how, formulate or other
proprietary right necessary for the conduct of its business as conducted on the
date hereof.
3.14 Material Contracts.
------------------
Schedule 3.14 sets forth all of the following Contracts to which the
Company or any of its Subsidiaries is a party or by which it is bound
(collectively, the "Material Contracts"): (i) Contracts with any of the
Shareholders or any current officer or director of the Company or any of its
Subsidiaries; (ii) Contracts with any labor union or association representing
any employee of the Company; (iii) Contracts pursuant to which any party is
required to purchase or sell a stated portion of its requirements or output from
or to another party; (iv) Contracts for the sale of any of the assets of the
Company or any of its Subsidiaries other than in the ordinary course of business
or for the grant to any person of any preferential rights to purchase any of its
assets; (v) joint venture agreements; (vi) Material Contracts containing
covenants of the Company or any of its Subsidiaries not to compete in any line
of business or with any person in any geographical area or covenants of any
other person not to compete with the Company in any line of business or in any
geographical area; (vii) Contracts relating to the acquisition by the Company or
any of its Subsidiaries of any operating business or the capital stock of any
other person; (viii) Contracts relating to the borrowing of money; or (ix) any
other Contracts, other than Real Property Leases, which involve the expenditure
of more than $10,000 in the aggregate or require performance by any party more
than one year from the date hereof. There have been made available to the
Jaguar, its affiliates and their representatives true and complete copies of all
of the Material Contracts. All of the Material Contracts and other agreements
are in full force and effect and are the legal, valid and binding obligation of
the Company or of its Subsidiaries, as the case may be, enforceable against each
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity). Except as set forth on Schedule 3.14, neither the Company nor any of
its Subsidiaries is in default in any material respect under any Material
Contracts, nor, to the knowledge of the Company, is any other party to any
Material Contract in default thereunder in any material respect.
3.15 Employee Benefits.
-----------------
(a) Neither the Company nor any of its Subsidiaries has ever had
or been a party or contributed to any "employee benefit plans", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). Schedule 3.15(a) lists any other pension plans or employee benefit
arrangements, programs or payroll practice (including, without limitation,
severance pay, vacation pay, company awards, salary continuation for disability,
sick leave, retirement, deferred compensation, bonus or other incentive
compensation, stock purchase arrangements or policies, hospitalization, medical
insurance, life insurance and scholarship programs) maintained by the Company or
11
any Subsidiary or to which the Company or any of its Subsidiaries contributes or
is obligated to contribute thereunder with respect to employees of the Company
("Employee Benefit Plans").
(b) Each of the Employee Benefit Plans has been maintained, in all
material respects, in accordance with its terms and all provisions of applicable
Law.
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any employee of Company or any Subsidiary; (ii) increase
any benefits otherwise payable under any Employee Benefit Plan; or (iii) result
in the acceleration of the time of payment or vesting of any such benefits.
3.16 Labor.
-----
(a) Neither the Company nor any of its Subsidiaries is party to
any labor or collective bargaining agreement and there are no labor or
collective bargaining agreements which pertain to employees of the Company or
any of its Subsidiaries.
(b) No employees of the Company or any of its Subsidiaries are
represented by any labor organization. No labor organization or group of
employees of the Company or any of its Subsidiaries has made a pending demand
for recognition, and there are no representation proceedings or petitions
seeking a representation proceeding presently pending or, to the best knowledge
of the Company, threatened to be brought or filed, with the National Labor
Relations Board or other labor relations tribunal. There is no organizing
activity involving the Company or any of its Subsidiaries pending or, to the
best knowledge of the Company or any of its Subsidiaries, threatened by any
labor organization or group of employees of the Company or any of its
Subsidiaries.
3.17 Litigation.
----------
There is no suit, action, proceeding, investigation, claim or order
pending or, to the knowledge of the Company, overtly threatened against the
Company or any of its Subsidiaries (or to the knowledge of the Company, pending
or threatened, against any of the officers, directors or key employees of the
Company or any of its Subsidiaries with respect to their business activities on
behalf of the Company or any of its Subsidiaries), or to which the Company or
any of its Subsidiaries is otherwise a party, which, if adversely determined,
would have a Material Adverse Effect, before any court, or before any
governmental department, commission, board, agency, or instrumentality; nor to
the knowledge of the Company is there any reasonable basis for any such action,
proceeding, or investigation. Neither the Company nor any of its Subsidiaries is
subject to any judgment, order or decree of any court or governmental agency
except to the extent the same are not reasonably likely to have a Material
Adverse Effect and the Company is not engaged in any legal action to recover
monies due it or for damages sustained by it.
12
3.18 Compliance with Laws; Permits.
-----------------------------
The Company and each of its Subsidiaries is in compliance with all Laws
applicable to the Company or such Subsidiary or to the conduct of the business
or operations of the Company or any of its Subsidiaries or the use of its
properties (including any leased properties) and assets, except for such
non-compliances as would not, individually or in the aggregate, have a Material
Adverse Effect. The Company and each of its Subsidiaries has all governmental
permits and approvals from state, federal or local authorities which are
required for the Company or such Subsidiary to operate its business, except for
those the absence of which would not, individually or in the aggregate, have a
Material Adverse Effect.
3.19 Environmental Matters.
---------------------
(a) The operations of the Company and its Subsidiaries are in
compliance with all applicable Environmental Laws and all permits issued
pursuant to Environmental Laws or otherwise;
(b) the Company and its Subsidiaries have obtained all permits
required under all applicable Environmental Laws necessary to operate its
business;
(c) neither the Company nor any of its Subsidiaries is the subject
of any outstanding written order or Contract with any governmental authority or
person respecting (i) Environmental Laws, (ii) Remedial Action or (iii) any
Release or threatened Release of a Hazardous Material;
(d) neither the Company nor any of its Subsidiaries has received
any written communication alleging that the Company or any of its Subsidiaries
may be in violation of any Environmental Law, or any permit issued pursuant to
Environmental Law, or may have any liability under any Environmental Law;
(e) neither the Company nor any of its Subsidiaries has any
current contingent liability in connection with any Release of any Hazardous
Materials into the indoor or outdoor environment (whether on-site or off-site);
(f) to the Company's and its Subsidiaries' knowledge, there are no
investigations of the business, operations, or currently or previously owned,
operated or leased property of the Company or any of its Subsidiaries pending or
threatened which could lead to the imposition of any liability pursuant to
Environmental Law;
3.20 Insurance.
---------
Schedule 3.20 sets forth a complete and accurate list of all policies
of insurance of any kind or nature covering the Company and its Subsidiaries or
any of their employees, properties or assets, including, without limitation,
policies of life, disability, fire, theft, workers compensation, employee
fidelity and other casualty and liability insurance. All such policies are in
full force and effect, and, to the Company's and its Subsidiaries' knowledge,
13
the Company and its Subsidiaries are not in default of any provision thereof,
except for such defaults as would not, individually or in the aggregate, have a
Material Adverse Effect.
3.21 Receivables; Payables.
---------------------
(a) All accounts receivable of the Company and its Subsidiaries
have arisen from bona fide transactions in the ordinary course of business
consistent with past practice. All accounts receivable of the Company or its
Subsidiaries reflected on the Company Balance Sheet are good and collectible at
the aggregate recorded amounts thereof, net of any applicable reserve for
returns or doubtful accounts reflected thereon, which reserves are adequate and
were calculated in a manner consistent with past practice and in accordance with
GAAP consistently applied. All accounts receivable arising after the Balance
Sheet Date are good and collectible at the aggregate recorded amounts thereof,
net of any applicable reserve for returns or doubtful accounts, which reserves
are adequate and were calculated in a manner consistent with past practice and
in accordance with GAAP consistently applied.
(b) All accounts payable of the Company or its Subsidiaries
reflected in the Company Balance Sheet or arising after the date thereof are the
result of bona fide transactions in the ordinary course of business and have
been paid or are not yet due and payable.
3.22 Banks.
-----
Schedule 3.22 contains a complete and correct list of the names and
locations of all banks in which Company or any of its Subsidiaries has accounts
or safe deposit boxes and the names of all persons authorized to draw thereon or
to have access thereto. Except as set forth on Schedule 3.22, no person holds a
power of attorney to act on behalf of the Company or any of its Subsidiaries.
3.23 No Misrepresentation.
--------------------
No representation or warranty of the Company contained in this
Agreement or in any schedule hereto or in any certificate or other instrument
furnished by the Company to Jaguar pursuant to the terms hereof, contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein not misleading.
3.24 Financial Advisors.
------------------
Except as set forth on Schedule 3.24, no Person has acted, directly or
indirectly, as a broker, finder or financial advisor for the Company in
connection with the transactions contemplated by this Agreement and no Person is
entitled to any fee or commission or like payment in respect thereof.
14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each of the Shareholders hereby severally represents and warrants to
Jaguar that:
4.1 Organization and Good Standing.
------------------------------
Such Shareholder, if applicable, is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation as set forth above and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now conducted. Such Shareholder, if applicable, is duly qualified or
authorized to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which it owns or leases real property and each
other jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except where the
failure to be so qualified would not have a Material Adverse Effect.
4.2 Authorization of Agreement.
--------------------------
Such Shareholder has all requisite power, authority and legal capacity
to execute and deliver this Agreement and each other agreement, document,
instrument or certificate contemplated by this Agreement or to be executed by
such Shareholder in connection with the consummation of the transactions
contemplated by this Agreement (such other agreements, documents instruments or
certificates are hereinafter referred to as the "Shareholder Documents"). This
Agreement has been, and each of the Shareholder Documents will be at or prior to
the Closing, duly and validly executed and delivered by such Shareholder and
(assuming the due authorization, execution and delivery by the other parties
hereto and thereto) this Agreement constitutes, and each of the Shareholder
Documents when so executed and delivered will constitute, legal, valid and
binding obligations of such Shareholder, enforceable against such Shareholder in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
4.3 Capitalization.
--------------
There is no existing option, warrant, call, right, commitment or other
agreement of any character to which such Shareholder is a party, except for an
agreement granting anti-dilution rights that such Shareholder, by his, her or
its signature hereto, agrees with the Company is hereby terminated in all
respects. Such Shareholder is not a party to any voting trust or other voting
agreement with respect to any of the Shares to be transferred hereunder by such
Shareholder or to any agreement relating to the issuance, sale, redemption,
transfer or other disposition of the capital stock of the Company.
4.4 Conflicts; Consents of Third Parties.
------------------------------------
No consent, waiver, approval, Order, Permit or authorization of, or
declaration or filing with, or notification to, any Person or Governmental Body
is required on the part of such Shareholder in connection with the execution and
delivery of this Agreement or the Shareholder Documents, or the compliance by
such Shareholder with any of the provisions hereof or thereof.
15
4.5 Ownership and Transfer of Shares.
--------------------------------
Such Shareholder is the record and beneficial owner of that portion of
the Shares indicated as being owned by such Shareholder on Annex A, free and
clear of any and all Liens. Such Shareholder has the power and authority to
sell, transfer, assign and deliver such Shares as provided in this Agreement,
and such delivery will convey to Jaguar good and marketable title to such
Shares, free and clear of any and all Liens.
4.6 Taxes.
-----
Such Shareholder is not a foreign person within the meaning of Section
1445 of the Code.
4.7 Employee Benefits.
-----------------
Such Shareholder, any ERISA Affiliate or any organization to which any
is a successor or parent corporation, has divested any business or entity
maintaining or sponsoring a defined benefit pension plan having unfunded benefit
liabilities (within the meaning of Section 4001(a)(18) of ERISA) or transferred
any such plan to any person other than such Shareholder or any ERISA Affiliate
during the five-year period ending on the Closing Date.
4.8 Related Party Transactions.
--------------------------
Except as set forth on Schedule 4.8, neither such Shareholder nor any
of such Shareholder's respective Affiliates have borrowed any moneys from or has
outstanding any indebtedness or other similar obligations to the Company or any
of its Subsidiaries. None of such Shareholder, any Affiliate of such Shareholder
or any officer or employee of any of them (i) owns any direct or indirect
interest of any kind in, or controls or is a director, officer, employee or
partner of, or consultant to, or lender to or borrower from or has the right to
participate in the profits of, any Person which is (A) a competitor, supplier,
customer, landlord, tenant, creditor or debtor of the Company or any of its
Subsidiaries, (B) engaged in a business related to the business of the Company
(including its Subsidiaries), or (C) a participant in any transaction to which
the Company or any of its Subsidiaries is a party or (ii) is a party to any
Contract with the Company or any of its Subsidiaries.
4.9 No Misrepresentation.
--------------------
No representation or warranty of such Shareholder contained in this
Agreement or in any schedule hereto or in any Shareholder Documents furnished or
to be furnished by such Shareholder to Jaguar pursuant to the terms hereof,
contains or will contain any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading. To the best knowledge of such Shareholder, no
representation or warranty of the Company contained in this Agreement or in any
schedule hereto furnished by the Company to Jaguar pursuant to the terms hereof,
16
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not
misleading.
4.10 Financial Advisors.
------------------
No Person has acted, directly or indirectly, as a broker, finder or
financial advisor for such Shareholder in connection with the transactions
contemplated by this Agreement and no Person is entitled to any fee or
commission or like payment in respect thereof.
4.11 Litigation and Claims.
---------------------
Except as otherwise set forth in Schedule 4.11 , there is no suit,
action, proceeding, claim or investigation pending or to the best knowledge of
such Shareholder, threatened against or affecting such Shareholder that would
have a Material Adverse Effect on the assets, business or financial condition of
such Shareholder or the Company or the ability of such Shareholder to perform
his, her or its obligations under this Agreement.
4.12 Certain Payments.
----------------
Such Shareholder, directly or indirectly, has not given or agreed to
give or solicited or received any gift, rebate or similar benefit to any
customer, supplier, governmental employee or other person or entity that might
subject the Company or Jaguar to any damage or penalty in any civil, criminal or
governmental litigation or proceeding or if not given in the past might have had
an adverse effect on the assets, business, operations or prospects of the
Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF JAGUAR
Jaguar represents and warrants to the Shareholders that:
5.1 Organization and Good Standing.
------------------------------
Jaguar is a corporation duly organized, validly existing and in good
standing under the laws Nevada and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now conducted. Jaguar is duly qualified or authorized to do business as a
foreign corporation and is in good standing under the laws of each jurisdiction
in which it owns or leases real property and each other jurisdiction in which
the conduct of its business or the ownership of its properties requires such
qualification or authorization, except where the failure to be so qualified
would not have a Material Adverse Effect.
5.2 Authorization of Agreement.
--------------------------
Jaguar has all requisite power, authority and legal capacity to execute
and deliver this Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by Jaguar in
17
connection with the consummation of the transactions contemplated by this
Agreement (such other agreements, documents, instruments or certificates are
herein collectively referred to as the "Jaguar Documents"), and to consummate
the transactions contemplated hereby and thereby. This Agreement has been, and
each of the Jaguar Documents will be at or prior to the Closing, duly and
validly executed and delivered by Jaguar and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this Agreement
constitutes, and each of the Jaguar Documents when so executed and delivered
will constitute, legal, valid and binding obligations of Jaguar, enforceable
against Jaguar in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
5.3 Capitalization.
--------------
(a) The authorized capital stock of Jaguar consists of 100,000,000
shares of Jaguar Common Stock and 1,000,000 shares of Preferred Stock, of which
11,310,000 shares of Jaguar Common Stock are issued and outstanding and no
shares of Preferred Stock are issued and outstanding. All of the issued and
outstanding shares of Jaguar Common Stock were duly authorized for issuance and
are validly issued, fully paid and non-assessable.
(b) Except as set forth on Schedule 5.3(b), there is no existing
option, warrant, call, right, commitment or other agreement of any character to
which Jaguar is a party requiring, and there are no securities of Jaguar
outstanding which upon conversion or exchange would require, the issuance, sale
or transfer of any additional shares of capital stock or other equity securities
of Jaguar or other securities convertible into, exchangeable for or evidencing
the right to subscribe for or purchase shares of capital stock or other equity
securities of Jaguar. Jaguar is not a party to any voting trust or other voting
agreement with respect to any of the Acquisition Shares or to any agreement
relating to the issuance, sale, redemption, transfer or other disposition of the
capital stock of Jaguar.
5.4 No Subsidiaries.
---------------
Jaguar does not, directly or indirectly, own any stock or other equity
interest in any other Person.
5.5 Corporate Records.
-----------------
(a) Jaguar has delivered to the Shareholders true, correct and
complete copies of the certificate of incorporation and by-laws or comparable
organizational documents of Jaguar.
(b) The minute books of Jaguar previously made available to the
Shareholders contain complete and accurate records of all meetings and
accurately reflect all other corporate action of the stockholders and board of
directors (including committees thereof) of Jaguar. The stock certificate books
and stock transfer ledgers of the Jaguar previously made available to the
Shareholders were true, correct and complete.
18
5.6 Conflicts; Consents of Third Parties.
------------------------------------
(a) None of the execution and delivery of the Jaguar Documents,
the consummation of the transactions contemplated hereby or thereby, or
compliance by Jaguar with any of the provisions hereof or thereof will (i)
conflict with, or result in the breach of, any provision of the certificate of
incorporation or by-laws or comparable organizational documents of Jaguar; (ii)
conflict with, violate, result in the breach or termination of, or constitute a
default under any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which Jaguar is a party or by which any of them or
any of their respective properties or assets is bound; (iii) violate any
statute, rule, regulation, order or decree of any governmental body or authority
by which Jaguar is bound; or (iv) result in the creation of any Lien upon the
properties or assets of Jaguar except, in case of clauses (ii), (iii) and (iv),
for such violations, breaches or defaults as would not, individually or in the
aggregate, have a Material Adverse Effect.
(b) No consent, waiver, approval, Order, Permit or authorization
of, or declaration or filing with, or notification to, any Person or
Governmental Body is required on the part of Jaguar in connection with the
execution and delivery of this Agreement or the Jaguar Documents, or the
compliance by Jaguar with any of the provisions hereof or thereof.
5.7 SEC Documents.
-------------
Jaguar has delivered to the Shareholders a true and correct copy of
each of the following documents (the "SEC Documents"): (a) Quarterly Reports on
Form 10-QSB for the periods ended June 30, 2000 and September 30, 2000, (b)
Current Report on Form 8-K dated December 14, 2000, (c) Preliminary Information
Statement dated January 12, 2001, (d) Definitive Information Statement dated
February 1, 2001, (e) Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2000, (f) Quarterly Report on Form 10-QSB for the period ended
March 31, 2001, (g) Registration Statement on Form S-8 as filed on June 4, 2001,
(h) Current Report on Form 8-K dated June 6, 2001 and (i) Quarterly Report on
Form 10-QSB for the period ended June 30, 2001. The SEC Documents constitute all
of the documents and reports that Jaguar was required to file with the SEC
pursuant to the Exchange Act and the rules and regulations promulgated
thereunder by the SEC since June 30, 2000. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder and none of
the SEC Documents contained an untrue statement of a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Jaguar included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the case of
unaudited statements, as permitted by the applicable form under the Exchange
Act) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of the Jaguar as of the dates thereof and their consolidated statements
19
of operations, stockholders' equity and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal and recurring year-end
audit adjustments which were and are not expected to have a Material Adverse
Effect). Except as and to the extent set forth on the consolidated balance sheet
of the Jaguar as of June 30, 2001, including the notes thereto, the Jaguar has
no liability or obligation of any nature (whether accrued, absolute, contingent
or otherwise and whether required to be reflected on a balance sheet or not),
except for liabilities and obligations incurred in the ordinary course of
business consistent with past practices since June 30, 2001 which in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
5.8 Financial Statements.
--------------------
(a) Included in the SEC Documents are the audited balance sheet of
Jaguar as at December 31, 2000, and the related statements of income,
stockholders' equity and cash flows for the two years then ended, together with
the unqualified report thereon (except with respect to continuation as a going
concern) of HJ & Associates, LLC ("HJA"), independent auditors (collectively,
"Jaguar's Audited Financials").
(b) Included in the SEC Documents is the unaudited balance sheets
of Jaguar as at March 31, 2001 and June 30, 2001, and the related statements of
operations and cash flows for the three months ended March 31, 2001 and 2000 and
the six months ended June 30, 2001 and 2000, as reviewed by HJA ("Jaguar's
Interim Financials"). The unaudited balance sheet at June 30, 2001, included in
Jaguar's Interim Financials is hereinafter referred to as Jaguar's Unaudited
Balance Sheet and June 30, 2001 is hereinafter also referred to as the "Balance
Sheet Date".
(c) Jaguar's Audited Financials and Jaguar's Interim Financials
(collectively "Jaguar's Financial Statements") are (i) in accordance with the
books and records of Jaguar, (ii) correct and complete, (iii) fairly present the
financial position and results of operations of Jaguar as of the dates
indicated, and (iv) prepared in accordance with GAAP (except that (x) unaudited
financial statements may not be in accordance with GAAP because of the absence
of footnotes normally contained therein, and (y) interim (unaudited) financials
are subject to normal year-end audit adjustments that in the aggregate will not
have a Material Adverse Effect..
5.9 No Undisclosed Liabilities.
--------------------------
Jaguar has no indebtedness, obligations or liabilities of any kind
(whether accrued, absolute, contingent or otherwise, and whether due or to
become due) that would have been required to be reflected in, reserved against
or otherwise described on the Jaguar Unaudited Balance Sheet or in the notes
thereto in accordance with GAAP which was not fully reflected in, reserved
against or otherwise described in the Jaguar Unaudited Balance Sheet or the
notes thereto, except for indebtedness, obligations or liabilities incurred in
the ordinary course of business consistent with past practice since the Balance
Sheet Date which in any event do not exceed $10,000 and expenses occurred in
connection with the transactions contemplated hereby.
20
5.10 Absence of Certain Developments.
-------------------------------
Except as expressly contemplated by this Agreement, since the Balance
Sheet Date:
(i) there has not been any Material Adverse Change nor
has there occurred any event which is reasonably likely to result in a Material
Adverse Change;
(ii) there has not been any damage, destruction or loss,
whether or not covered by insurance, with respect to the property and assets of
Jaguar having a replacement cost of more than $25,000 for any single loss or
$50,000 for all such losses;
(iii) there has not been any declaration, setting aside or
payment of any dividend or other distribution in respect of any shares of
capital stock of Jaguar or any repurchase, redemption or other acquisition by
the Jaguar of any outstanding shares of capital stock or other securities of, or
other ownership interest in, Jaguar;
(iv) Jaguar has not awarded or paid any bonuses to
employees of the Jaguar with respect to the fiscal year ended December 31, 2000,
except to the extent reflected or accrued on the Jaguar Unaudited Balance Sheet
or entered into any employment, deferred compensation, severance or similar
agreement (nor amended any such agreement) or agreed to increase the
compensation payable or to become payable by it to any of Jaguar's directors,
officers, employees, agents or representatives or agreed to increase the
coverage or benefits available under any severance pay, termination pay,
vacation pay, Jaguar awards, salary continuation for disability, sick leave,
deferred compensation, bonus or other incentive compensation, insurance, pension
or other employee benefit plan, payment or arrangement made to, for or with such
directors, officers, employees, agents or representatives (other than normal
increases in the ordinary course of business consistent with past practice and
that in the aggregate have not resulted in a material increase in the benefits
or compensation expense of Jaguar);
(v) there has not been any change by Jaguar in accounting
or tax reporting principles, methods or policies;
(vi) Jaguar has not entered into any transaction or
Contract or conducted its business other than in the ordinary course consistent
with past practice;
(vii) except as set forth on Schedule 5.10(vii), the Jaguar
has not failed to promptly pay and discharge current liabilities except where
disputed in good faith by appropriate proceedings;
(viii) Jaguar has not made any loans, advances or capital
contributions to, or investments in, any Person;
(ix) Jaguar has not mortgaged, pledged or subjected to any
Lien any of its assets, or acquired any assets or sold, assigned, transferred,
conveyed, leased or otherwise disposed of any assets of Jaguar, except for
assets acquired or sold, assigned, transferred, conveyed, leased or otherwise
disposed of in the ordinary course of business consistent with past practice;
21
(x) Jaguar has not discharged or satisfied any Lien, or
paid any obligation or liability (fixed or contingent), except in the ordinary
course of business consistent with past practice and which, in the aggregate,
would not be material to the Jaguar;
(xi) Jaguar has not canceled or compromised any debt or
claim or amended, canceled, terminated, relinquished, waived or released any
Contract or right except in the ordinary course of business consistent with past
practice and which, in the aggregate, would not be material to Jaguar;
(xii) Jaguar has not made or committed to make any capital
expenditures or capital additions or betterments in excess of $10,000
individually or $50,000 in the aggregate;
(xiii) Jaguar has not instituted or settled any material
Legal Proceeding; and
(xiv) Jaguar has not agreed to do anything set forth in
this Section 5.10.
5.11 Taxes.
-----
(a) Except as set forth on Schedule 5.11, (A) all Tax Returns
required to be filed by or on behalf of Jaguar have been properly prepared and
duly and timely filed with the appropriate taxing authorities in all
jurisdictions in which such Tax Returns are required to be filed (after giving
effect to any valid extensions of time in which to make such filings), and all
such Tax Returns were true, complete and correct in all material respects; (B)
all Taxes payable by or on behalf of Jaguar or in respect of its income, assets
or operations have been fully and timely paid, and adequate reserves or accruals
for Taxes have been provided with respect to any period for which Tax Returns
have not yet been filed or for which Taxes are not yet due and owing; and (C)
Jaguar has not executed or filed with the IRS or any other taxing authority any
agreement, waiver or other document or arrangement extending or having the
effect of extending the period for assessment or collection of Taxes (including,
but not limited to, any applicable statute of limitation), and no power of
attorney with respect to any Tax matter is currently in force.
(b) Jaguar has complied in all material respects with all
applicable laws, rules and regulations relating to the payment and withholding
of Taxes and has duly and timely withheld from employee salaries, wages and
other compensation and has paid over to the appropriate taxing authorities all
amounts required to be so withheld and paid over for all periods under all
applicable laws.
(c) All deficiencies asserted or assessments made as a result of
any examinations by the IRS or any other taxing authority of the Tax Returns of
or covering or including Jaguar have been fully paid, and there are no other
audits or investigations by any taxing authority in progress, nor has Jaguar
received any notice from any taxing authority that it intends to conduct such an
22
audit or investigation. No issue has been raised by a federal, state, local or
foreign taxing authority in any current or prior examination which, by
application of the same or similar principles, could reasonably be expected to
result in a proposed deficiency for any subsequent taxable period.
(d) There are no liens as a result of any unpaid Taxes upon any of
the assets of Jaguar.
5.12 Litigation.
----------
There is no suit, action, proceeding, investigation, claim or order
pending or, to the knowledge of Jaguar, overtly threatened against Jaguar (or to
the knowledge of Jaguar, pending or threatened, against any of the officers,
directors or key employees of Jaguar with respect to their business activities
on behalf of Jaguar), or to which Jaguar is otherwise a party, which, if
adversely determined, would have a Material Adverse Effect, before any court, or
before any governmental department, commission, board, agency, or
instrumentality; nor to the knowledge of Jaguar is there any reasonable basis
for any such action, proceeding, or investigation. Jaguar is not subject to any
judgment, order or decree of any court or governmental agency except to the
extent the same are not reasonably likely to have a Material Adverse Effect and
Jaguar is not engaged in any legal action to recover monies due it or for
damages sustained by it.
5.13 Compliance with Laws; Permits.
-----------------------------
Jaguar is in compliance with all Laws applicable to Jaguar or to the
conduct of the business or operations of Jaguar or the use of its properties
(including any leased properties) and assets, except for such non-compliances as
would not, individually or in the aggregate, have a Material Adverse Effect.
Jaguar has all governmental permits and approvals from state, federal or local
authorities which are required for Jaguar to operate its business, except for
those the absence of which would not, individually or in the aggregate, have a
Material Adverse Effect.
5.14 No Misrepresentation.
--------------------
No representation or warranty of Jaguar contained in this Agreement or
in any schedule hereto or in any certificate or other instrument furnished by
Jaguar to the Shareholders pursuant to the terms hereof, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading.
5.15 Financial Advisors.
------------------
No Person has acted, directly or indirectly, as a broker, finder or
financial advisor for Jaguar in connection with the transactions contemplated by
this Agreement and no Person is entitled to any fee or commission or like
payment in respect thereof.
23
ARTICLE VI
COVENANTS
6.1 Access to Information.
---------------------
The Company and Jaguar agree that, prior to the Closing Date, each
shall be entitled, through their respective officers, employees and
representatives (including, without limitation, its legal advisors and
accountants), to make such investigation of the properties, businesses and
operations of the other and such examination of the books, records and financial
condition of the Company and Jaguar as each reasonably requests and to make
extracts and copies of such books and records. Any such investigation and
examination shall be conducted during regular business hours and under
reasonable circumstances, and the Company and Jaguar shall cooperate fully
therein. No investigation by the Company or Jaguar prior to or after the date of
this Agreement shall diminish or obviate any of the representations, warranties,
covenants or agreements contained in this Agreement, the Company Documents, the
Shareholder Documents or the Jaguar Documents. In order that the Company and
Jaguar may have full opportunity to make such physical, business, accounting and
legal review, examination or investigation as it may reasonably request of the
affairs of the other, the Company and Jaguar shall cause their respective
officers, employees, consultants, agents, accountants, attorneys and other
representatives to cooperate fully with such representatives in connection with
such review and examination.
6.2 Conduct of the Business Pending the Closing.
-------------------------------------------
(a) Except as otherwise expressly contemplated by this Agreement
or with the prior written consent of the Company or Jaguar, the Shareholders
shall (with respect to the Company only), and shall cause the Company to, and
Jaguar shall (with respect to Jaguar only):
(i) conduct the business of the Company and Jaguar only
in the ordinary course consistent with past practice;
(ii) use their best efforts to (A) preserve their present
business operations, organization (including, without limitation, management and
the sales force) and goodwill of the Company and Jaguar, and (B) preserve their
present relationship with Persons having business dealings with the Company and
Jaguar;
(iii) maintain (A) all of the assets and properties of the
Company and Jaguar in their current condition, ordinary wear and tear excepted
and (B) insurance upon all of the properties and assets of the Company and
Jaguar in such amounts and of such kinds comparable to that in effect on the
date of this Agreement;
(iv) (A) maintain the books, accounts and records of the
Company and Jaguar in the ordinary course of business consistent with past
practices, (B) continue to collect accounts receivable and pay accounts payable
utilizing normal procedures and without discounting or accelerating payment of
such accounts, and (C) comply with all contractual and other obligations
applicable to the operation of the Company and Jaguar; and
24
(v) comply in all material respects with applicable laws,
including, without limitation, Environmental Laws.
(b) Except as otherwise expressly contemplated by this Agreement
or with the prior written consent of the Company or Jaguar, the Shareholders
shall not (with respect to the Company only), and shall cause the Company not
to, and Jaguar shall not (with respect to Jaguar only):
(i) declare, set aside, make or pay any dividend or other
distribution in respect of the capital stock of the Company or Jaguar or
repurchase, redeem or otherwise acquire any outstanding shares of the capital
stock or other securities of, or other ownership interests in, the Company or
Jaguar;
(ii) transfer, issue, sell or dispose of any shares of
capital stock or other securities of the Company or Jaguar or grant options,
warrants, calls or other rights to purchase or otherwise acquire shares of the
capital stock or other securities of the Company or Jaguar;
(iii) effect any recapitalization, reclassification, stock
split or like change in the capitalization of the Company or Jaguar;
(iv) amend the certificate of incorporation or by-laws of
the Company or Jaguar;
(v) (A) materially increase the annual level of
compensation of any employee of the Company or Jaguar, (B) increase the annual
level of compensation payable or to become payable by the Company or Jaguar to
any of its executive officers, (C) grant any unusual or extraordinary bonus,
benefit or other direct or indirect compensation to any employee, director or
consultant, other than in the ordinary course consistent with past practice and
in such amounts as are fully reserved against in the Company Unaudited
Financials or the Jaguar Financial Statements, as the case may be, (D) increase
the coverage or benefits available under any (or create any new) severance pay,
termination pay, vacation pay, company awards, salary continuation for
disability, sick leave, deferred compensation, bonus or other incentive
compensation, insurance, pension or other employee benefit plan or arrangement
made to, for, or with any of the directors, officers, employees, agents or
representatives of the Company or Jaguar or otherwise modify or amend or
terminate any such plan or arrangement or (E) enter into any employment,
deferred compensation, severance, consulting, non-competition or similar
agreement (or amend any such agreement) to which the Company or Jaguar is a
party or involving a director, officer or employee in his or her capacity as a
director, officer or employee of the Company or Jaguar;
(vi) except for trade payables and for indebtedness for
borrowed money incurred in the ordinary course of business and consistent with
past practice, borrow monies for any reason or draw down on any line of credit
or debt obligation, or become the guarantor, surety, endorser or otherwise
liable for any debt, obligation or liability (contingent or otherwise) of any
other Person;
25
(vii) subject to any Lien (except for leases that do not
materially impair the use of the property subject thereto in their respective
businesses as presently conducted), any of the properties or assets (whether
tangible or intangible) of the Company or the Jaguar;
(viii) acquire any material properties or assets or sell,
assign, transfer, convey, lease or otherwise dispose of any of the material
properties or assets (except for fair consideration in the ordinary course of
business consistent with past practice) of the Company or Jaguar;
(ix) cancel or compromise any debt or claim or waive or
release any material right of the Company or Jaguar except in the ordinary
course of business consistent with past practice;
(x) enter into any commitment for capital expenditures of
the Company or Jaguar in excess of $10,000 for any individual commitment and
$25,000 for all commitments in the aggregate;
(xi) enter into, modify or terminate any labor or
collective bargaining agreement of the Company or Jaguar or, through negotiation
or otherwise, make any commitment or incur any liability to any labor
organization with respect to the Company or Jaguar;
(xii) introduce any material change with respect to the
operation of the Company or Jaguar, including any material change in the types,
nature, composition or quality of its products or services, experience any
material change in any contribution of its product lines to its revenues or net
income, or, other than in the ordinary course of business, make any change in
product specifications or prices or terms of distributions of such products;
(xiii) permit the Company or Jaguar to enter into any
transaction or to make or enter into any Contract which by reason of its size or
otherwise is not in the ordinary course of business consistent with past
practice;
(xiv) permit the Company or Jaguar to enter into or agree
to enter into any merger or consolidation with, any corporation or other entity,
and not engage in any new business or invest in, make a loan, advance or capital
contribution to, or otherwise acquire the securities of any other Person;
(xv) except for transfers of cash pursuant to normal cash
management practices, permit the Company or Jaguar to make any investments in or
loans to, or pay any fees or expenses to, or enter into or modify any Contract
with, any Shareholder or any Affiliate of any Shareholder or Affiliate of
Jaguar; or
(xvi) agree to do anything prohibited by this Section 6.2
or anything which would make any of the representations and warranties of the
Company, the Shareholders or Jaguar in this Agreement or the Shareholder
Documents or Jaguar Documents untrue or incorrect in any material respect as of
any time through and including the Effective Time.
26
6.3 Consents.
--------
The Company, the Shareholders and Jaguar shall use their respective
best efforts and shall cooperate with each other, to obtain at the earliest
practicable date all consents and approvals required to consummate the
transactions contemplated by this Agreement, including, without limitation, the
consents and approvals referred to in Section 3.6(b) and 5.6(b) hereof;
provided, however, that none of the Company, the Shareholders or Jaguar shall be
obligated to pay any consideration therefor to any third party from whom consent
or approval is requested.
6.4 Other Actions.
-------------
The Company, the Shareholders and Jaguar shall use their respective
best efforts to (i) take all actions necessary or appropriate to consummate the
transactions contemplated by this Agreement and (ii) cause the fulfillment at
the earliest practicable date of all of the conditions to their respective
obligations to consummate the transactions contemplated by this Agreement.
6.5 No Solicitation.
---------------
The Shareholders will not, and will not cause or permit the Company's
directors, officers, employees, representatives or agents (collectively, the
"Representatives") to, directly or indirectly, (i) discuss, negotiate,
undertake, authorize, recommend, propose or enter into, either as the proposed
surviving, merged, acquiring or acquired corporation, any transaction involving
a merger, consolidation, business combination, purchase or disposition of any
amount of the assets or capital stock or other equity interest in the Company
other than the transactions contemplated by this Agreement (an "Acquisition
Transaction"), (ii) facilitate, encourage, solicit or initiate discussions,
negotiations or submissions of proposals or offers in respect of an Acquisition
Transaction, (iii) furnish or cause to be furnished, to any Person, any
information concerning the business, operations, properties or assets of the
Company in connection with an Acquisition Transaction, or (iv) otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other Person to do or seek any of the foregoing.
The Company, upon receiving notice from any Shareholder, or any representative
of any Shareholder or the Company of any proposal or inquiry in respect of any
acquisition transaction, will immediately inform the Jaguar in writing following
the receipt of such notice.
6.6 Publicity.
---------
None of the Company, the Shareholders or Jaguar shall issue any press
release or public announcement concerning this Agreement or the transactions
contemplated hereby without obtaining the prior approval of the other parties
hereto, which approval will not be unreasonably withheld or delayed, unless, in
the sole judgment of Jaguar, disclosure is otherwise required by applicable Law
or by the applicable rules of any stock exchange on which Jaguar lists
securities, provided that, to the extent required by applicable law, the party
intending to make such release shall use its best efforts consistent with such
applicable law to consult with the other parties hereto with respect to the text
thereof.
27
6.7 Use of Name.
-----------
The Shareholders hereby agree that upon the consummation of the
transactions contemplated hereby, Jaguar and the Company shall have the sole
right to the use of the name "Premier Sports Media and Entertainment Group,
Inc." and the Shareholders shall not, and shall not cause or permit any
Affiliate to, use such name or any variation or simulation thereof in any
business involving interactive cable television systems and services or any
related business.
28
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions Precedent to Obligations of Jaguar.
---------------------------------------------
The obligation of Jaguar to consummate the transactions contemplated by
this Agreement is subject to the fulfillment, on or prior to the Closing Date,
of each of the following conditions (any or all of which may be waived by the
Jaguar in whole or in part to the extent permitted by applicable law):
(a) all representations and warranties of the Company or
Shareholders contained herein shall be true and correct as of the date hereof;
(b) all representations and warranties of the Company or
Shareholders contained herein qualified as to materiality shall be true and
correct, and the representations and warranties of the Company or Shareholders
contained herein not qualified as to materiality shall be true and correct in
all material respects, at and as of the Closing Date with the same effect as
though those representations and warranties had been made again at and as of
that time;
(c) the Company and Shareholders shall have performed and complied
in all material respects with all obligations and covenants required by this
Agreement to be performed or complied with by them on or prior to the Closing
Date;
(d) Jaguar shall have been furnished with certificates (dated the
Closing Date and in form and substance reasonably satisfactory to the Jaguar)
executed by the Chief Executive Officer and Chief Financial Officer of the
Company certifying as to the fulfillment of the applicable conditions specified
in Sections 7.1(a), 7.1(b) and 7.1(c) hereof;
(e) Certificates representing 100% of the Shares shall have been,
or shall at the Closing be, validly delivered and transferred to Jaguar, free
and clear of any and all Liens;
(f) Jaguar shall have obtained all consents and waivers referred
to in Section 6.3 hereof with respect to the transactions contemplated by this
Agreement and the Jaguar Documents;
(g) there shall not have been or occurred any Material Adverse
Change with respect to the Company;
(h) the Company shall have obtained all consents and waivers
referred to in Section 3.6 hereof, in a form reasonably satisfactory to Jaguar,
with respect to the transactions contemplated by this Agreement and the
Shareholder Documents;
(i) no Legal Proceedings shall have been instituted or threatened
or claim or demand made against the Shareholders, the Company, or Jaguar seeking
to restrain or prohibit or to obtain substantial damages with respect to the
consummation of the transactions contemplated hereby, and there shall not be in
effect any Order by a Governmental Body of competent jurisdiction restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated hereby;
29
(j) each of the Shareholders shall have provided Jaguar with an
affidavit of non-foreign status that complies with Section 1445 of the Code (a
"FIRPTA Affidavit");
(k) each holder of a warrant to purchase shares of Company Common
Stock shall have executed a written agreement, in form and substance
satisfactory to Jaguar, pursuant to which such holder shall have agreed that
upon exercise of such warrant after the closing of the Transactions the holder
shall be entitled to receive shares of Jaguar Common Stock in lieu of shares of
Company Common Stock on the basis of the Exchange Ratio or as otherwise provided
in Annex A hereto.
7.2 Conditions Precedent to Obligations of the Shareholders.
-------------------------------------------------------
The obligations of the Shareholders to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions (any or all of which may
be waived by the Shareholders in whole or in part to the extent permitted by
applicable law):
(a) Certificates representing the Shareholders' share of the
Exchange Shares as set forth in Annex A hereto shall have been, or shall at the
Closing be, validly delivered and transferred to the Shareholders, free and
clear of any and all Liens except for restrictions on transferability under
applicable Federal and state securities laws;
(b) all representations and warranties of Jaguar contained herein
shall be true and correct as of the date hereof;
(c) all representations and warranties of Jaguar contained herein
qualified as to materiality shall be true and correct, and all representations
and warranties of Jaguar contained herein not qualified as to materiality shall
be true and correct in all material respects, at and as of the Closing Date with
the same effect as though those representations and warranties had been made
again at and as of that date;
(d) Jaguar shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement to be
performed or complied with by Jaguar on or prior to the Closing Date;
(e) the Shareholders shall have been furnished with certificates
(dated the Closing Date and in form and substance reasonably satisfactory to the
Shareholders) executed by the Chief Executive Officer and Chief Financial
Officer of Jaguar certifying as to the fulfillment of the conditions specified
in Sections 7.2(a), 7.2(b) and 7.2(c); and
(f) Jaguar shall have obtained all consents and waivers referred
to in Section 6.3 hereof in the form reasonably satisfactory to the
Shareholders, with respect to the transactions contemplated by this Agreement
and the Jaguar Documents.
(g) there shall not be in effect any Order by a Governmental Body
of competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby.
30
ARTICLE VIII
DOCUMENTS TO BE DELIVERED
8.1 Documents to be Delivered by the Shareholders.
---------------------------------------------
At the Closing, the Shareholders shall deliver, or cause to be
delivered, to Jaguar the following:
(a) stock certificates representing the Shares, duly endorsed in
blank or accompanied by stock transfer powers and with all requisite stock
transfer tax stamps attached;
(b) the certificates referred to in Section 7.1(d) and 7.1(e)
hereof;
(c) copies of all consents and waivers referred to in Section
7.1(f) hereof;
(d) written resignations of each of the directors of the Company;
(e) duly executed FIRPTA Affidavits for each Shareholder;
(f) certificates of good standing with respect to the Company and
each of its Subsidiaries issued by the Secretary of State of the their
respective states of incorporation and for each state in which the Company is
qualified to do business as a foreign corporation;
(g) representation letters, in form and substance satisfactory to
Jaguar, regarding the Exchange Shares as provided in Section 1.2;
(h) the Company Required Financials; and
(i) such other documents as Jaguar shall reasonably request.
8.2 Documents to be Delivered by Jaguar.
-----------------------------------
At the Closing, Jaguar shall deliver to the Shareholders the following:
(a) stock certificates representing each Shareholder's share of
the Exchange Shares as set forth in Annex A hereto duly registered in such
Shareholder's name;
(b) the certificates referred to in Section 7.2(d) and 7.2(e)
hereof;
(c) copies of all consents and waivers referred to in Section
7.2(f) hereof;
(d) subject to compliance with applicable Federal securities laws,
written resignations of each director and officer of Jaguar and resolutions
appointing the persons listed in Annex B hereto as the officers and directors of
Jaguar;
31
(e) duly executed FIRPTA Affidavits for each Shareholder;
(f) certificates of good standing with respect to Jaguar issued by
the Secretary of State of the their respective states of incorporation and for
each state in which Jaguar is qualified to do business as a foreign corporation;
(g) representation letter, in form and substance satisfactory to
the Shareholders, regarding the Shares as provided in Section 1.2;
(h) such other documents as the Shareholders shall reasonably
request.
ARTICLE IX
INDEMNIFICATION
9.1 Obligation of the Shareholders to Indemnify.
-------------------------------------------
Each of the Shareholders, severally and not jointly, agrees to
indemnify, defend and hold harmless Jaguar and its shareholders as of the date
of this Agreement and their respective directors, officers, heirs, legal
representatives, successors and assigns, from and against all losses,
liabilities, damages, deficiencies, actions, suits, proceedings, claims,
demands, orders, assessments, amounts paid in settlement, fines, and reasonable
costs and expenses (including interest, penalties and reasonable attorneys' fees
and disbursements and reasonable investigative costs) (collectively, "Losses")
based upon, arising out of or otherwise in respect of (i) any breach in any of
the representations and warranties of such Shareholder or the Company in this
Agreement and (ii) any breach or non-fulfillment of any of the covenants or
agreements of such Shareholder or the Company contained in this Agreement.
9.2 Obligation of Jaguar to Indemnify.
---------------------------------
Jaguar agrees to indemnify, defend and hold harmless the Shareholders,
and their respective directors, officers, heirs, legal representatives,
successors and assigns, from and against any Losses based upon, arising out of
or otherwise in respect of (i) any breach in any of the representations and
warranties of Jaguar set forth in this Agreement and (ii) any breach or
nonfulfillment of any covenant or agreement of Jaguar contained in this
Agreement.
9.3 Claims Notice.
-------------
Each party hereto (an "Indemnified Party") shall, promptly upon
becoming aware of any event or circumstance (an "Indemnifiable Event") which, in
his, her or its reasonable judgment, may result in a Loss for which the
Indemnified Party could assert a right of indemnification against any other
party (or parties) hereto (the "Indemnifying Party") under this Article 9, give
notice thereof (the "Claims Notice") to the Indemnifying Party (but the
obligations of the Indemnifying Party under this Article 9 shall not be impaired
by the Indemnified Party's failure to give such notice, except to the extent
that said failure actually prejudices the rights of the Indemnifying Party). The
Claims Notice shall describe the Indemnifiable Event in reasonable detail, shall
indicate whether the Indemnifiable Event involves a "Third Party Claim" (defined
below), and shall indicate the amount (estimated, if necessary) of the Loss that
32
has been or may be suffered by the Indemnified Party. In such event, the
Indemnifying Party shall, within fifteen (15) business days after receipt of the
Claims Notice, give notice to the Indemnified Party of whether he or it intends
to dispute the claim described in the Claims Notice (the "Response Notice"). If
the Indemnifying Party timely disputes the Claims Notice as provided above, the
Indemnified Party shall, for a period of not more than fifteen (15) business
days after receipt of the Response Notice (or less, if the nature of the
Indemnifiable Event so requires), seek out a negotiated settlement of the
dispute with the Indemnifying Party and shall refrain during that period from
commencing any judicial proceeding or other action to enforce this Article 9.
If, despite their good faith negotiations, the parties are unable to resolve the
dispute within the aforesaid period (or if the Indemnifying Party fails to
timely give the Response Notice), the Indemnified Party shall be free to
exercise all rights and remedies available to him or it hereunder, at law in
equity or otherwise to enforce his or its rights under this Article 9. As used
herein, "Third Party Claim" means any demand, claim or circumstance which, with
the lapse of time or otherwise, would give rise to a claim or the commencement
(or threatened commencement) of any action, proceeding or investigation against
the Indemnified Party by any other person.
9.4 Opportunity to Defend Against Third Party Claims.
------------------------------------------------
If the Claims Notice relates to a Third Party Claim, the Indemnifying
Party may elect to compromise or defend, at its own expense and by its own
counsel, such Third Party Claim. If the Indemnifying Party elects to compromise
or defend such Third Party Claim, it shall within 30 business days (or sooner,
if the nature of the Third Party Claim so requires) after his or its receipt of
the Claims Notice, notify the Indemnified Party of its intent to do so, and the
Indemnified Party shall cooperate, at the expense of the Indemnifying Party, in
the compromise of, or defense against, such Third Party Claim. If the
Indemnifying Party elects not to compromise or defend such Third Party claim,
fails to notify the Indemnified Party of its election as herein provided or
contests its obligation to indemnify under this Agreement, the Indemnified Party
may pay, compromise or defend such Third Party Claim. Notwithstanding the
foregoing, neither the Indemnifying Party nor the Indemnified Party may settle
or compromise any claim over the objection of the other, provided, however, that
consent to settlement or compromise shall not be unreasonably withheld. In any
event, the Indemnified Party and the Indemnifying Party may participate, at
their own expense, in the defense of such Third Party Claim. If the Indemnifying
Party chooses to defend any claim, the Indemnified Party shall make available to
the Indemnifying Party any books, records or other documents within its control
that are necessary or appropriate for such defense. The Indemnifying Party shall
be subrogated to all rights and remedies of the Indemnified Party to the extent
of any indemnification provided by the Indemnifying Party to the Indemnified
Party.
9.5 Limitation on Indemnification.
-----------------------------
Notwithstanding anything to the contrary in this Agreement, no
Indemnified Party shall have any liability for indemnification under this
Article 9 until the total of all Losses of the Indemnified Party exceeds $25,000
and the total liability of an Indemnifying Party under this Article 9 shall (i)
in no event exceed the fair market value of the consideration received as of the
date of the applicable Indemnifiable Event and (ii) be reduced to the extent of
payment to the Indemnified Party of any applicable insurance proceeds; provided,
however, that the foregoing limitations on indemnification shall be inapplicable
33
in the case of any Losses resulting from any breach of the representations and
warranties contained in Sections 3.1, 3.2, 3.3, 3.10, 4.1, 4.2, 4.5, 5.1, 5.2,
5.3 and 5.11hereof.
9.6 Survival.
--------
Notwithstanding the investigations by the parties hereto of each
other's affairs, and notwithstanding any knowledge of facts determined or
determinable by such parties pursuant to such investigation, each of Jaguar and
the Shareholders shall have the right to rely fully upon the representations,
warranties, covenants and agreements of the other parties contained in this
Agreement. The representations and warranties of the parties contained herein
shall survive the Closing (i) to the extent contained in Section 3.1, 3.2, 3.3,
3.10, 4.1, 4.2, 5.1, 5.2, 5.3 and 5.11 hereof, for the duration of the
applicable statute of limitations, (ii) to the extent relating to any other
matter, for twelve (12) months following the Closing. A claim for
indemnification hereunder must be asserted by a party seeking indemnification
within the respective period of survival.
9.7 Indemnification Exclusive Remedy.
--------------------------------
The parties hereto acknowledge and confirm that, except in the event of
fraud, the indemnification procedures described in this Article 9 shall be the
sole and exclusive remedies available to them for any breach or non-fulfillment
of the representations, warranties, covenants, agreements and other provisions
of this Agreement.
ARTICLE X
TERMINATION
10.1 Termination.
-----------
Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated and the transactions contemplated hereby abandoned
at any time prior to the Closing Date:
(a) By mutual consent of the Shareholders and Jaguar; or
(b) By the Shareholders if any of the conditions set forth in
Section 7.2 hereof shall have become incapable of fulfillment, and shall not
have been waived by the Shareholders; or
(c) By Jaguar if any of the conditions set forth in Section 7.1
hereof shall have become incapable of fulfillment, and shall not have been
waived by Jaguar; or
(d) By Jaguar or the Shareholders if the Closing has not occurred
on or before November 9, 2001.
10.2 Effects of Termination. If this Agreement is terminated and
the transactions contemplated hereby are not consummated as described above,
34
this Agreement shall become void and of no further force and effect, and each
party hereto shall bear its own costs and expenses incurred in connection with
and in contemplation of the transactions contemplated hereby.
ARTICLE XI
MISCELLANEOUS
11.1 Certain Definitions.
-------------------
Affiliate means with respect to a specified person, is a person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the person specified.
Agreement means this Agreement and Plan of Share Exchange, including
all exhibits and schedules attached hereto.
Balance Sheet Date shall have the meaning ascribed to it in Section
3.7(a).
CERCLA National Priorities List means the list of hazardous substances
compiled under the Comprehensive Environmental Response, Compensation, and
Liability Act (also known as Superfund), of 1980, as amended from time to time.
Closing shall have the meaning ascribed to it in Section 2.1.
Closing Date shall have the meaning ascribed to it in Section 2.1.
Code mean the Internal Revenue Code of 1986, as amended from time to
time.
Company means Premier Sports Media and Entertainment Group, Inc., a New
York corporation.
Company Documents shall have the meaning ascribed to it in Section 3.2.
Company Property shall have the meaning ascribed to it in Section
3.11(a).
Company Properties shall have the meaning ascribed to it in Section
3.11(a).
Contract means and includes all contracts, agreements, understandings,
indentures, notes, bonds, loans, instruments, leases, mortgages, commitments,
obligations or other binding arrangements, oral or written
Employee Benefit Plans shall have the meaning ascribed to it in Section
3.15(a).
Environmental Laws mean any laws, statutes, regulations, rules or
orders which relate to or otherwise impose Liability or a standard of conduct
concerning the discharge, emission, storage, treatment, transportation,
handling, release, threatened release, or disposal of Hazardous Materials,
including, but not limited to, the Air Pollution Control Act, as amended, the
35
Federal Water Pollution Control Act, as amended, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, and the Toxic Substances
Control Act of 1976, as amended, and any other similar Federal, state or local
statutes.
ERISA shall have the meaning ascribed to it in Section 3.15(a).
Exchange Act means the Securities Exchange Act of 1934, as amended.
FIRPTA Affidavit shall have the meaning ascribed to it in Section
8.1(i).
GAAP means United States generally accepted accounting principles.
Governmental Body means any federal, state, municipal, domestic or
foreign court, tribunal, administrative agency, department, commission, board,
bureau or other governmental authority or instrumentality.
Hazardous Material means any pollutant, contaminant, hazardous,
radioactive or toxic substance, material, constituent or waste, or any other
waste, substance, chemical or material regulated under any Environmental Law,
including (i) petroleum, crude oil and any fractions thereof, (ii) natural gas,
synthetic gas and any mixtures thereof, (iii) asbestos and/or
asbestos-containing material, (iv) radon and (v) polychlorinated biphenyls
("PCBs"), or materials or fluids containing PCBs.
IRS means the Internal Revenue Service, or any successor organization.
Laws mean any federal, state, foreign, or local law, statute,
ordinance, rule, regulation, order, judgment or decree.
Legal Proceeding means any action, hearing, trial, or application
before a court or governmental body of competent jurisdiction.
Lien means and includes any lien, pledge, mortgage, security interest,
claim, lease, charge, option, right of first refusal or offer, easement,
servitude, transfer restriction or voting requirement under any or similar
agreement, or any other encumbrance, restriction or limitation whatsoever.
Losses shall have the meaning ascribed to it in Section 9.1.
Material Adverse Effect shall mean any effect on the business, stock
price, operations, properties, prospects, or financial condition to that entity
that is material and adverse to that entity and its subsidiaries and affiliates,
taken as a whole, and/or any condition, circumstance, or situation that would
prohibit or otherwise interfere with the ability of that entity to enter into
and perform any of its obligations under this Agreement in any material respect.
Material Adverse Change means any material adverse change (excluding
the occurrence of expenses in connection with the Transactions) since April 30,
2001 in the business, results of operations, condition (financial or otherwise),
36
assets, properties, liabilities (absolute, accrued, contingent or otherwise), or
reserves of the Company and since June 30, 2001 in the business, results of
operations (financial or otherwise), assets, properties, liabilities (absolute,
accrued, contingent or otherwise), or reserves of Jaguar.
Material Contracts shall have the meaning ascribed to it in Section
3.14.
Order means any decision issued by a court or governmental body of
competent jurisdiction.
Permit means any written warrant or license granted by any court or
governmental body of competent jurisdiction.
Person means an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, any unincorporated organization, or
a government or political subdivision thereof.
Personal Property Leases shall have the meaning ascribed to it in
Section 3.12(a).
Jaguar means Jaguar Investments, Inc., a Nevada corporation.
Jaguar Common Stock shall have the meaning ascribed to it in the
recitals to this Agreement.
Jaguar Documents shall have the meaning ascribed to it in Section 5.2.
Real Property Lease shall have the meaning ascribed to it in Section
3.11(a).
Release means any discharge of hazardous materials.
Remedial Action means an action taken to effect long-term restoration
of environmental quality (as under the Comprehensive Environmental Response,
Compensation, and Liability Act).
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Shareholder means individually, any of the shareholders listed on Annex
A, and collectively, the Shareholders.
Shareholder Documents shall have the meaning ascribed to it in Section
3.2.
Shares means the 388,889 shares of common stock of the Company, which
represents all of the issued and outstanding shares of capital stock of the
Company.
37
Subsidiaries mean any person that is directly, or indirectly controlled
by such person.
Tax Returns means all written returns, declarations, reports, forms,
estimates, information returns and statements filed in respect of any Taxes and
supplied to any taxing authority in connection with any Taxes.
Taxes (or "Tax" where the context requires) means all Federal, state,
county, local, foreign and other taxes (including, without limitation, income,
profits, premium, estimated, excise, sales, use, occupancy, gross receipts,
franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll-related and property
taxes, and other governmental charges and assessments), whether or not measured
in whole or in part by net income, and including deficiencies, interest,
additions to tax or interest and penalties with respect thereto.
11.2 Payment of Sales, Use or Similar Taxes.
--------------------------------------
All sales, use, transfer, intangible, recordation, documentary stamp or
similar Taxes or charges, of any nature whatsoever, applicable to, or resulting
from, the transactions contemplated by this Agreement shall be borne by the
Shareholders.
11.3 Expenses.
--------
Upon consummation of this Agreement, Jaguar, in addition to paying its
own expenses, shall pay the fees and expenses incurred by the Company and the
Shareholders in connection with this Agreement. The Company shall pay any fees
and expenses incurred by the Company not in connection with this Agreement. Any
fees and expenses incurred by any Shareholder or Shareholders not in connection
with this Agreement shall be borne by such Shareholder or Shareholders. [?]
11.4 Submission to Jurisdiction; Consent to Service of Process.
---------------------------------------------------------
(a) The parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of any federal or state court located within the
State of New York over any dispute arising out of or relating to this Agreement
or any of the transactions contemplated hereby and each party hereby irrevocably
agrees that all claims in respect of such dispute or any suit, action proceeding
related thereto may be heard and determined in such courts. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. Each of the parties hereto agrees that a judgment
in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
(b) Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or proceeding by the
mailing of a copy thereof in accordance with the provisions of Section 10.10.
38
11.5 Entire Agreement; Amendments and Waivers.
----------------------------------------
This Agreement (including the schedules and exhibits hereto) represents
the entire understanding and agreement between the parties hereto with respect
to the subject matter hereof and can be amended, supplemented or changed, and
any provision hereof can be waived, only by written instrument making specific
reference to this Agreement signed by the party against whom enforcement of any
such amendment, supplement, modification or waiver is sought. No action taken
pursuant to this Agreement, including without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law.
11.6 Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York with out regard to conflict of laws
principles.
11.7 Headings.
--------
The section headings of this Agreement are for reference purposes only
and are to be given no effect in the construction or interpretation of this
Agreement.
11.8 Notices.
-------
All notices and other communications under this Agreement shall be in
writing and shall be deemed given when delivered personally or mailed by
certified mail, return receipt requested, to the parties (and shall also be
transmitted by facsimile to the Persons receiving copies thereof) at the
following addresses (or to such other address as a party may have specified by
notice given to the other party pursuant to this provision):
If to Jaguar: Jaguar Investments, Inc.
0000 X. 0xx Xxxxxx, Xxxxx 0
Xxxxxxxxxx, XX 00000
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
39
With a copy to: Xxxxxx X. Xxxxx, Esq.
Berlack, Israels & Xxxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
If to the Shareholders: The addresses as listed on Annex A hereto.
With a copy to: Xxxxxxx X. X'Xxxxxx, Esq.
0 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
11.9 Severability.
------------
If any provision of this Agreement is invalid or unenforceable, the
balance of this Agreement shall remain in effect.
11.10 Binding Effect; Assignment.
--------------------------
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights
in any person or entity not a party to this Agreement except as provided below.
No assignment of this Agreement or of any rights or obligations hereunder may be
made by either the Shareholders or Jaguar (by operation of law or otherwise)
without the prior written consent of the other parties hereto and any attempted
assignment without the required consents shall be void; provided, however, that
Jaguar may assign this Agreement and any or all rights or obligations hereunder
(including, without limitation, the Jaguar's rights to acquire the Shares by
exchange and Jaguar's rights to seek indemnification hereunder) to any Affiliate
of Jaguar. Upon any such permitted assignment, the references in this Agreement
to Jaguar shall also apply to any such assignee unless the context otherwise
requires.
11.11 Counterparts.
------------
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which shall constitute together but
one and the same instrument.
40
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
JAGUAR INVESTMENTS, INC.
/s/ XXX XXXX
-----------------------------------------
By: Xxx Xxxx
Title: Chairman
PREMIER SPORTS MEDIA AND ENTERTAINMENT
GROUP, INC.
/s/ XXXX X. XXXXXXXXX
-----------------------------------------
By: Xxxx X. Xxxxxxxxx
Title: Chairman
SHAREHOLDERS:
/s/ XXXXXX XXXX
-----------------------------------------
Xxxxxx Xxxx
/s/ XXXXXXX XXXXXX
-----------------------------------------
Xxxxxxx Xxxxxx
/s/ XXXX XXXXX
-----------------------------------------
Xxxx Xxxxx
41
/s/ XXXX X. XXXXXXXXX
-----------------------------------------
Xxxx X. Xxxxxxxxx
/s/ XXXX XXXXXXXX
-----------------------------------------
Xxxx Xxxxxxxx
42
ANNEX A
Company
Name(1) Shares Jaguar Shares
------- ------ -------------
Total
[Warrants?]
--------------------
(1) Unless otherwise indicated, the mailing address of each Shareholder shall
be: c/o Premier Sports Media and Entertainment Group, Inc., 000 Xxxxxxxx, Xxxxx
0000, Xxx Xxxx, XX 00000.
43
Jaguar Investments, Inc.
Schedule 5.3(b) - Capitalization
Jaguar has agreed to issue an aggregate of 75,000 shares of Jaguar Common Stock
to three individuals for past services. Such shares will be issued prior to the
Closing.
S-1
Jaguar Investments, Inc.
Schedule 5.10(vii) - Absence of Certain Developments
Jaguar has not paid certain of its current liabilities, including legal and
accounting fees. Such liabilities will be satisfied on or prior to Closing.
S-2
Jaguar Investments, Inc.
Schedule 5.11(a) - Taxes
? Has Jaguar filed all tax returns. If not, we need to take an exception. Please
check with Jaguar's accountants.
S-3
