Exhibit 2.1
Execution Copy
STOCK PURCHASE AGREEMENT
among
COLLEGIATE PACIFIC INC.,
XXXXXXX RADIO CORP.
and
XXXXXXX RADIO
(HONG KONG) LIMITED
July 1, 2005
TABLE OF CONTENTS
Page
Article 1. Definitions.....................................................................................1
1.1. Definitions.....................................................................................1
Article 2. Purchase and Sale of Shares.....................................................................1
2.1. Purchase and Sale...............................................................................1
2.2. Purchase Price..................................................................................1
2.3. Payment of Purchase Price.......................................................................1
Article 3. Closing.........................................................................................1
3.1. Closing.........................................................................................1
3.2. Conditions to Obligation of Sellers.............................................................2
3.3. Conditions to Obligation of Buyer...............................................................2
Article 4. Representations and Warranties of the Sellers...................................................3
4.1. Organization; Authority.........................................................................3
4.2. Capital Structure of the Company and its Subsidiaries...........................................4
4.3. No Conflict or Violations.......................................................................5
4.4. Consents........................................................................................5
4.5. Title to Shares.................................................................................5
4.6. SEC Documents; Financial Statements.............................................................6
4.7. Absence of Undisclosed Liabilities..............................................................7
4.8. Absence of Changes..............................................................................7
4.9. Litigation......................................................................................8
4.10. Contracts.......................................................................................8
4.11. Employment Arrangements.........................................................................8
4.12. Related Party Agreements........................................................................9
4.13. Company Claims..................................................................................9
4.14. Brokers.........................................................................................9
4.15. Disclosure......................................................................................9
Article 5. Representations and Warranties of the Buyer....................................................10
5.1. Organization; Authority........................................................................10
5.2. No Conflicts or Violations.....................................................................10
5.3. Consents.......................................................................................10
5.4. Litigation.....................................................................................10
5.5. Intentions with Respect to the Company.........................................................11
5.6. Brokers........................................................................................11
5.7. Purchase Entirely for Own Account..............................................................11
5.8. Restricted Securities..........................................................................11
5.9. Disclosure of Information......................................................................11
5.10. Legends........................................................................................11
i
Article 6. Covenants and Agreements.......................................................................11
6.1. Notification of Certain Matters................................................................11
6.2. Noncompetition; Nonsolicitation................................................................12
6.3. Officers' and Directors' Indemnification.......................................................13
6.4. Transfer of Share of Capital Stock of Sport Supply (Asia)......................................13
6.5. Public Disclosure..............................................................................13
Article 7. General Provisions.............................................................................13
7.1. Survival of Representations, Warranties, and Covenants.........................................13
7.2. No Waiver Relating to Claims for Common Law Fraud..............................................14
7.3. Amendment and Modification.....................................................................14
7.4. Waiver of Compliance...........................................................................14
7.5. Severability...................................................................................14
7.6. Expenses and Obligations.......................................................................14
7.7. Notices........................................................................................15
7.8. Assignment.....................................................................................17
7.9. Counterparts...................................................................................17
7.10. Entire Agreement...............................................................................17
7.11. Governing Law..................................................................................17
7.12. Headings.......................................................................................17
APPENDIX A - Certain Defined Terms
SCHEDULES
2.1 Allocation of Purchase Price
4.4 Seller Consents
4.7 Undisclosed Liabilities
4.8 Liens
4.10 Company Material Contracts
4.11 Payments to Employees
4.12 Related Party Agreements
5.3 Buyer Consents
ii
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") is entered into this
1st day of July, 2005, among Collegiate Pacific Inc., a Delaware corporation
("BUYER"), Xxxxxxx Radio Corp., a Delaware corporation ("Xxxxxxx"), and Xxxxxxx
Radio (Hong Kong) Limited, a Hong Kong corporation (together with Xxxxxxx, the
"SELLERS").
R E C I T A L S:
WHEREAS, Buyer desires to purchase from the Sellers, and the Sellers
desire to sell to Buyer, 4,746,023 shares of Common Stock, par value $0.01 per
share (collectively, the "COMPANY COMMON STOCK"), of Sport Supply Group, Inc., a
Delaware corporation (the "COMPANY") (such common shares being referred to
herein as the "SHARES");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1. DEFINITIONS
1.1. Definitions. The capitalized terms used in this Agreement will
have the meanings set forth in Appendix A hereto.
ARTICLE 2. PURCHASE AND SALE OF SHARES
2.1. Purchase and Sale. Upon the terms and subject to the conditions of
this Agreement, at the Closing (as defined in Section 3.1), each Seller shall
sell to Buyer, and Buyer shall purchase from each Seller, all of the Shares set
forth opposite each Seller's name on Schedule 2.1, free and clear of all Liens.
2.2. Purchase Price. In consideration of the sale and transfer of all
of the Sellers' rights, title and interests in the Shares, Buyer shall pay to
the Sellers an aggregate purchase price of $32,000,000 in cash (the "PURCHASE
PRICE") in amounts to each Seller as set forth on Schedule 2.1.
2.3. Payment of Purchase Price. At the Closing, Buyer shall pay the
Purchase Price to the Sellers by wire transfer of immediately available funds to
accounts designated in writing by the Sellers prior to the Closing.
ARTICLE 3. CLOSING
3.1. Closing. The sale and delivery of the Shares to Buyer, the payment
of the Purchase Price to the Sellers, and the consummation of the other
respective obligations of the parties contemplated by this Agreement (the
"CLOSING") shall take place at the offices of Xxxxxx & Xxxxxx L.L.P., in Dallas,
Texas, at 4:00 p.m. on the date hereof or at such other time and place as may be
mutually agreed upon (the "CLOSING DATE").
3.2. Conditions to Obligation of Sellers. The obligation of Sellers to
effect the transactions contemplated hereby is subject to the satisfaction of
the following conditions unless waived, in whole or in part, by Sellers.
(a) Buyer shall have paid the Purchase Price in accordance with
Section 2.3.
(b) Buyer shall have delivered to the Sellers a certificate by the
secretary of Buyer certifying the Certificate of Incorporation and
Bylaws of Buyer, the resolutions adopted by the directors of Buyer in
connection with this Agreement, and the incumbency of certain officers
of Buyer.
(c) Buyer shall have delivered to Sellers a duly executed
counterpart of this agreement and each other Transaction Document to
which Buyer is a party.
3.3. Conditions to Obligation of Buyer. The obligation of Buyer to
effect the transactions contemplated hereby is subject to the satisfaction of
the following conditions unless waived, in whole or in part, by Buyer.
(a) The Sellers shall have delivered or caused to be delivered to
Buyer (i) the certificates representing 4,278,923 of the Shares duly
endorsed in blank or together with duly executed stock powers in favor
of Buyer and (ii) evidence in form and substance satisfactory to Buyer
of Sellers' instructions for the electronic transfer of 467,100 of the
Shares.
(b) The Sellers shall have furnished Buyer with evidence in form
and substance satisfactory to Buyer in its good faith business judgment
of the consent or approval of each person whose consent or approval
shall be required (i) to permit the consummation of the transactions
contemplated hereby or (ii) to prevent a breach of any Company Material
Contract or the creation of a right to terminate any Company Material
Contract, in either case as a result of the transactions contemplated
hereby.
(c) The Sellers shall have delivered to Buyer a certificate of the
secretary of each Seller dated as of the Closing Date and certifying
the certificate of incorporation and bylaws (or organizational
equivalents) of the Sellers, any resolutions adopted by the directors
and stockholders of the Sellers in connection with this Agreement and
the incumbency of certain officers of the Sellers.
(d) The Sellers shall have delivered, or caused to be delivered to
Buyer a certificate of the transfer agent of the Company dated as of
the Closing Date certifying (i) the number of issued shares,
outstanding shares and treasury shares of the Company as of the close
of business on the day prior to the Closing Date, and (ii) the number
of record holders of Company Common Stock at March 26, 2004, March 31,
2005 and at the close of business on the day prior to the Closing Date.
(e) The Sellers shall have delivered to Buyer certificates issued
by the appropriate Governmental Entities evidencing the good standing
of the Company and each of its subsidiaries as a corporation organized
under the laws of the state of its incorporation and as a foreign
corporation authorized to do business under the laws of the
jurisdictions listed in the schedules hereto, including with respect to
the payment of all Taxes, in each case as of a date not more than 10
days prior to Closing Date.
2
(f) The Sellers shall have delivered to Buyer (i) the action of
the Board of Directors of the Company increasing the size of such Board
from three members to five and appointing Xxxxxx X. Xxxxxxx and Xxxxxx
Xxxxxxxxxx (the "BUYER DESIGNEES") to fill the vacancies resulting from
such increase, such appointment to be effective immediately prior to
the closing, and (ii) the resignations of Xxxxxxxx X. Xxxxxx, Xxxxxx
Xxxxxxxxx and Xxxxx Xxxxxx as members of the Board of Directors of the
Company and its subsidiaries, as applicable, such resignations to be
effective simultaneous with the Closing.
(g) The Buyer Designees shall constitute a majority of the Board
of Directors of the Company effective as of the Closing.
(h) The Sellers shall have delivered to Buyer a duly executed
counterpart of this Agreement and each other Transaction Document to
which a Seller or the Company is a party.
(i) The Sellers shall deliver to Buyer evidence, in a form
reasonably satisfactory to Buyer, of the agreement of Xxxxxxxx X.
Xxxxxx to transfer the share of common stock of Sport Supply (Asia)
held of record by him to the Company or its designee as provided in
Section 6.5.
(j) Buyer shall have received a properly completed and executed
certificate from (i) each Seller to the effect that such Seller is not
a foreign person (such certificate in the form required by Treasury
Regulation Section 1.1445-2(b)(2)) or (ii) the Company to the effect
that the Company Common Stock is not a U.S. real property interest
(such certificate in the form required by Treasury Regulation Section
1.1445-2(c)(3)).
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller, jointly and severally, represents and warrants to Buyer as
of the date hereof as follows:
4.1. Organization; Authority.
(a) The Sellers are corporations duly organized, validly existing
and in good standing under the laws of Delaware and Hong Kong, as
appropriate. The Sellers have all necessary corporate power and
authority to enter into and deliver this Agreement and the other
Transaction Documents to which either Seller is a party, to perform
their obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the other Transaction Documents to which
either Seller is a party and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized
by all necessary corporate action on the part of the Sellers and no
other corporate proceedings on the part of the Sellers are necessary to
authorize the execution or delivery of this Agreement or the other
Transaction Documents to which either Seller is a party or to
consummate the transactions contemplated hereby or thereby. This
Agreement and the other Transaction Documents to which either Seller is
a party have been duly and validly executed and delivered by the
Sellers and, assuming the due authorization, execution and delivery of
Buyer, constitute the legal and binding obligations of the Sellers in
accordance with their respective terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity.
3
(b) 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. The Company and its subsidiaries
have all power and authority to own or lease all of their respective
Assets and to carry on their respective businesses as currently
conducted, and are duly qualified and in good standing in each
jurisdiction in which the nature of the business conducted by them or
the character or location of the Assets owned or leased by them makes
such qualification necessary, except where the failure to be so
qualified would not have a Material Adverse Effect.
4.2. Capital Structure of the Company and its Subsidiaries.
(a) The authorized capital stock of the Company consists of
100,000 shares of preferred stock, par value $0.01 per share, none of
which are outstanding, and 20,000,000 shares of Company Common Stock.
As of the date of this Agreement, 9,362,364 shares of Company Common
Stock were issued, of which 8,917,211 shares are outstanding and
445,153 shares are held in the treasury of the Company. All outstanding
shares of Company Common Stock have been duly authorized, validly
issued and are fully paid, non-assessable and free of preemptive
rights. Other than options to purchase 560,742 shares of Company Common
Stock issued pursuant to the Company's Amended and Restated Stock
Option Plan, there are no authorized or outstanding options,
subscriptions, warrants, rights (preemptive or other), commitments or
other agreements obligating the Company to repurchase, issue or
transfer any shares of Company Common Stock or any securities
convertible into or exchangeable for any shares of Company Common
Stock.
(b) The authorized capital stock of Sport Supply (Asia) consists
of 1,000 shares of common stock, par value HK$10.00 per share, all of
which are issued and outstanding. All of the issued and outstanding
shares of common stock of Sport Supply (Asia) are held by the Company,
except for one share owned by Xxxxxxxx X. Xxxxxx. All outstanding
shares of Sport Supply (Asia) common stock have been duly authorized,
validly issued and are fully paid, non-assessable and free of
preemptive rights. There are no authorized or outstanding options,
subscriptions, warrants, rights (preemptive or other), commitments or
other agreements obligating Sport Supply (Asia) to repurchase, issue or
transfer any shares of common stock of Sport Supply (Asia) or any
securities convertible into or exchangeable for any shares of common
stock of Sport Supply (Asia).
(c) The authorized capital stock of xxxxxxxxxxxxx.xxx consists of
1,000 shares of common stock, par value $0.01 per share, 1,000 of which
are issued and outstanding. All of the issued and outstanding shares of
common stock of xxxxxxxxxxxxx.xxx are held by the Company. All
outstanding shares of xxxxxxxxxxxxx.xxx common stock have been duly
authorized, validly issued and are fully paid, non-assessable and free
of preemptive rights. There are no authorized or outstanding options,
subscriptions, warrants, rights (preemptive or other), commitments or
other agreements obligating xxxxxxxxxxxxx.xxx to repurchase, issue or
transfer any shares of common stock of xxxxxxxxxxxxx.xxx or any
securities convertible into or exchangeable for any shares of common
stock of xxxxxxxxxxxxx.xxx.
4
(d) Other than Sport Supply (Asia) and xxxxxxxxxxxxx.xxx, the
Company has no other subsidiaries and does not own or control, directly
or indirectly, any interest in any other corporation, partnership,
limited liability company, trust, joint venture, association or other
entity. The Company is not a participant in any joint venture,
partnership or similar arrangement.
4.3. No Conflict or Violations. Subject to obtaining the consents
contemplated by Schedule 4.4, the execution and delivery of this Agreement and
each other Transaction Document to which either Seller is a party by the Sellers
do not, and the performance by the Sellers of their obligations hereunder and
thereunder will not (a) result in the creation of any Lien on the Shares, (b)
conflict with or violate the certificate of incorporation or bylaws (or
organizational equivalents) of either Seller or the Company, (c) conflict with
or violate in any material respect any Legal Requirements applicable to the
Sellers, the Company or the Shares or (d) to the Knowledge of Sellers, conflict
with or violate, or result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
materially impair the Company's rights or alter the rights or obligations of any
third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any Company Material Contract to which the
Company is a party or by which the Company is bound or subject.
4.4. Consents. The execution and delivery of this Agreement and each
other Transaction Document to which either Seller is a party by the Sellers do
not, and the performance by the Sellers of their obligations hereunder and
thereunder shall not, require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Entity. Except as set forth
on Schedule 4.4, no consent of, or notice to, any person who is a party to any
Company Material Contract is necessary for the execution and delivery of this
Agreement and each other Transaction Document to which either Seller is a party
by the Sellers and the consummation of the transactions contemplated hereby or
thereby.
4.5. Title to Shares. The Sellers own, beneficially and of record and
free and clear of any Lien, all of the Shares and such Shares represent 100% of
the shares of capital stock of the Company owned beneficially or of record by
Sellers, and Sellers have no options, warrants or other rights to purchase or
subscribe for any shares of capital stock of the Company. Sellers are not party
to any Contract that prohibits or restricts the sale, transfer or disposition of
the Shares. Upon the sale of the Shares to Buyer at the Closing, Buyer will
acquire the good and marketable title to, and sole and unrestricted voting power
and power of disposition with respect to, all of the Shares, free and clear of
any Lien except for Liens created by or on behalf of Buyer or those imposed by
applicable securities laws.
5
4.6. SEC Documents; Financial Statements.
(a) Xxxxxxx has made available to Buyer all Company SEC Documents.
To the Knowledge of the Sellers, the Company is not currently required
to file periodic reports with the SEC pursuant to the Exchange Act. As
of their respective effective dates (in the case of Company SEC
Documents that are registration statements filed pursuant to the
requirements of the Securities Act) and of their respective filing
dates and the date of each amendment thereto filed with the SEC (in the
case of all other Company SEC Documents), the Company SEC Documents
complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as the case may be, each as in
effect on the applicable date referred to above, applicable to such
Company SEC Document, and none of the Company SEC Documents as of such
respective dates contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company
SEC Documents include all documents, reports or registration statements
required to be filed by the Company with the SEC under the Securities
Act and the Exchange Act since March 28, 2003.
(b) Xxxxxxx has made available to Buyer all Seller SEC Documents.
As of their respective effective dates (in the case of Seller SEC
Documents that are registration statements filed pursuant to the
requirements of the Securities Act) and of their respective filing
dates and the date of each amendment thereto filed with the SEC (in the
case of all other Seller SEC Documents), the disclosure in the Seller
SEC Documents with respect to the Company and its operations (taking
into account the consolidated presentation of Company information with
the other operations of Sellers, where applicable) complied in all
material respects with the requirements of the Securities Act and the
Exchange Act, as the case may be, each as in effect on the applicable
date referred to above, applicable to such Seller SEC Document, and
none of the Seller SEC Documents as of such respective dates contained
any untrue statement of a material fact with respect to the Company or
its operations or omitted to state a material fact with respect to the
Company or its operations required to be stated therein or necessary in
order to make the statements therein with respect to the Company or its
operations, in light of the circumstances under which they were made
(taking into account the consolidated presentation of Company
information with the other operations of Sellers, where applicable),
not misleading. The Seller SEC Documents include all Reports on Form
8-K required to be filed by the Sellers with the SEC under the Exchange
Act with respect to the Company and its operations since March 5, 2004.
(c) The Company Financial Statements have been prepared in
accordance with GAAP applied on a consistent basis during the period
involved (except as may be indicated in the notes thereto) and fairly
present in all material respects the consolidated financial position of
the Company as of the dates thereof and the consolidated results of its
operations and cash flows for the periods then ended. Neither the
Company nor any of its subsidiaries is a party to any off-balance sheet
arrangement (as defined in Item 303 of Regulation S-K promulgated under
the Securities Act). The Company has not had any dispute with any of
its auditors regarding accounting matters or policies during any of its
past three full fiscal years or during the current fiscal year.
6
(d) Since July 30, 2002, (i) neither the Sellers, the Company, nor
any of their respective subsidiaries, nor to the Knowledge of the
Sellers, any director, officer, employee, auditor, accountant or
representative of the Sellers, the Company or any of their respective
subsidiaries has received or otherwise had or obtained knowledge of any
material Claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or methods of the Company
or any of its subsidiaries or their respective internal accounting
controls, including any material Claim that the Company or any of its
subsidiaries has engaged in questionable accounting or auditing
practices, and (ii) no attorney representing the Sellers, the Company
or any of their respective subsidiaries, whether or not employed by the
Sellers, the Company or any of their respective subsidiaries, has
reported evidence of a material violation of securities laws, breach of
fiduciary duty or similar violation by the Company or any of its
subsidiaries or any of their officers, directors, employees or agents
to the Board of Directors of the Company or any of its subsidiaries or
any committee thereof or to any director or officer of the Company or
any of its subsidiaries.
4.7. Absence of Undisclosed Liabilities. There are no liabilities or
obligations of any nature (known or unknown, fixed, absolute, accrued,
contingent or otherwise) of the Company or any of its subsidiaries required to
be disclosed on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with GAAP except (a) those reflected
in the Company Financial Statements, (b) those reflected in the Sellers' Annual
Report on Form 10-K for the year ended March 31, 2005 filed with the SEC, (c)
those listed on Schedule 4.7 and (d) those incurred in the Ordinary Course of
Business since March 31, 2005 or other undisclosed liabilities, which, in either
case, individually or in the aggregate, have not resulted in or could not
reasonably be expected to result in a Material Adverse Effect.
4.8. Absence of Changes. Since March 31, 2005, the Company and each of
its subsidiaries has conducted its business only in the Ordinary Course of
Business and there has not been (a) any event or circumstance that has had or
could reasonably be expected to have a Material Adverse Effect, (b) any material
change by the Company or any of its subsidiaries in its accounting methods,
principles or practices, (c) any entry by the Company, any of its subsidiaries
or the Sellers into any commitment or transaction material to the Company or any
of its subsidiaries, except in the Ordinary Course of Business, (d) any
declaration, setting aside or payment of any dividend or distribution in respect
of any capital stock of the Company or any redemption, purchase or other
acquisition of any of the Company's securities, (e) any material increase in,
amendment to or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option, stock purchase
or other employee benefit plan of the Company or any of its subsidiaries, (f)
any increase in compensation, bonus or other benefits payable to the employees
of the Company or any of its subsidiaries, except for increases occurring in the
Ordinary Course of Business, (g) any bonus paid or accrued to the directors,
officers or employees of the Company or any of its subsidiaries, (h) any
incurrence, assumption or guaranty of any indebtedness by the Company or any of
its subsidiaries, or the grant of any Lien on the material Assets of the Company
or any of its subsidiaries to secure any indebtedness, other than Liens (i) for
Taxes not yet due and payable, (ii) such minor imperfections of title, if any,
as do not materially interfere with the present use of the property affected
thereby or which would not, individually or in the aggregate, have a Material
Adverse Effect, (iii) the Liens identified on Schedule 4.8, or (iv) Liens
incurred in the Ordinary Course of Business which do not or would not
individually or in the aggregate, have a Material Adverse Effect, (i) any sale
or transfer of any material Assets of the Company or any of its subsidiaries, or
(j) any loan, advance or Investment in any person by the Company or any of its
subsidiaries (excluding any loan, advance or capital contribution to, or
investment in, the Company or any of its subsidiaries).
7
4.9. Litigation. There is no Claim pending or, to the Knowledge of the
Sellers, threatened against or affecting the Sellers, the Company or any of its
subsidiaries or any of the Assets of the Sellers, the Company or any of its
subsidiaries before or by any Governmental Entity or any other person that,
individually or in the aggregate, could reasonably be expected to prevent or
materially delay or impair the ability of the Sellers to consummate the
transactions contemplated by this Agreement or any other Transaction Document to
which either Seller is a party, nor is there any Order of any Governmental
Entity or arbitrator outstanding against the Sellers, the Company or any of its
subsidiaries that, individually or in the aggregate, could reasonably be
expected to prevent or materially delay or impair the ability of the Sellers to
consummate the transactions contemplated by this Agreement or any other
Transaction Document to which either Seller is a party.
4.10. Contracts. Set forth on Schedule 4.10 is a list as of the date of
this Agreement of each of the following Contracts (collectively, the "COMPANY
MATERIAL CONTRACTS"): (a) Contracts that, if the Company were filing an Annual
Report on Form 10-K under the Exchange Act on the date hereof, would be required
to be filed as exhibits to such Form 10-K; (b) Contracts between the Company or
any of its subsidiaries and any stockholder of the Company, including the
Sellers; (c) Contracts between the Sellers and any other stockholder of the
Company relating to the Company or the capital stock of the Company; (d)
partnership or joint venture agreements to which the Company or any of its
subsidiaries is a party or under which the Company or any of its subsidiaries
has any rights or obligations; (e) loan or credit agreement, mortgage,
indenture, note or other Contract or instrument evidencing indebtedness for
borrowed money or any Guarantee by the Company or any of its subsidiaries, or
any Contract or instrument pursuant to which indebtedness for borrowed money or
any Guarantee may be incurred by the Company or any of its subsidiaries; and (f)
any Contract limiting in any respect the right of the Company or any of its
subsidiaries to engage or participate, or compete with any person, in any line
of business, market or geographic area. The Company and each of its subsidiaries
have complied in all material respects with all of the terms and conditions of
the Company Material Contracts to which they are a party and have not done or
performed any act which would invalidate or impair in any material respect their
rights under any Company Material Contract. There are no pending Claims that the
Company or any of its subsidiaries have breached, violated or defaulted under
any Company Material Contract in any material respect. True, correct and
complete copies of all Company Material Contracts have been made available to
Buyer.
8
4.11. Employment Arrangements. Except as set forth on Schedule 4.11,
neither the execution and delivery of this Agreement or any other Transaction
Document to which either Seller is a party nor the consummation of the
transactions contemplated hereby or thereby will (a) result in any payment due
to any employee under any Employee Benefit Plan, (b) 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 under any
such Employee Benefit Plan. Except as set forth on Schedule 4.11, (x) neither
the Company nor any of its subsidiaries maintains any compensation plans,
programs or arrangements the payments under which would not be deductible by the
Company or any of its subsidiaries as a result of the limitations under Section
162(m) of the Code and the regulations issued thereunder, and (y) neither the
Company nor any of its subsidiaries will, as a result, directly or indirectly,
of the transactions contemplated by this Agreement or any other Transaction
Document to which either Seller is a party, be obligated to make a payment that
would be characterized as an "excess parachute payment" to an individual who is
a "disqualified individual" (as such terms are defined in Section 280G of the
Code or any corresponding provision of state, local or foreign Tax law) of the
Company on a consolidated basis, without regard to whether such payment is
reasonable compensation for personal services performed or to be performed in
the future.
4.12. Related Party Agreements. Set forth on Schedule 4.12 is a list as
of the date of this Agreement of each Contract entered into between (a) either
Seller and the Company or any of its subsidiaries, (b) either Seller and any
director, officer or employee of the Company or any of its subsidiaries, (c) the
Company or any of its subsidiaries and any director, officer or employee of
either Seller, (d) the Company or any of its subsidiaries and any Affiliate of
the Company or any Affiliate of the Sellers, and (e) the Company or any of its
subsidiaries and any officer, director or employee of the Company (collectively,
the "RELATED PARTY AGREEMENTS"). Except as set forth on Schedule 4.12, neither
the Company nor any of its subsidiaries has any obligations to make any
payments, loan or borrow any funds or property or make any credit arrangement or
accommodation with either Seller, any director, officer or employee of either
Seller, or any director, officer or employee of the Company.
4.13. Company Claims. From and after the Closing, neither Sellers nor,
to the Knowledge of Sellers, any of their Affiliates shall have any Claim
against or owe any amount to, or be owed any amounts from, the Company or any of
its subsidiaries other than (a) intercompany payables arising under the
Management Services Agreement, dated March 7, 1997, as amended, between the
Company and Xxxxxxx, or (b) as reflected in the Company Financial Statements or
(c) Claims of Affiliates of Sellers arising solely in their capacity as
employees of the Company of any of its subsidiaries, and Sellers hereby waive
and release all Claims of Sellers against the Company and its subsidiaries
(other than those described in clauses (a) and (b) of this Section 4.13).
4.14. Brokers. No person is or will become entitled to receive any
brokerage, finder's or financial advisory fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Sellers or the Company.
4.15. Disclosure. Neither this Agreement nor any of the schedules,
exhibits, attachments, certificates or other instruments prepared for or
furnished to Buyer by or on behalf of the Sellers with respect to the
transactions contemplated hereby contains any untrue statement of a material
fact or omits a material fact necessary to make each statement contained herein
or therein not misleading. The Sellers do not have Knowledge of any fact or
condition which could reasonably be expected to have a Material Adverse Effect.
9
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE BUYER
Buyer represents and warrants to each Seller as follows:
5.1. Organization; Authority. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all necessary corporate power and authority to enter into and deliver
this Agreement and each other Transaction Document to which Buyer is a party, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and each other Transaction Document to which Buyer is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of Buyer
and no other corporate proceedings on the part of the Buyer are necessary to
authorize the execution or delivery of this Agreement or any other Transaction
Document to which Buyer is a party or to consummate the transactions
contemplated hereby or thereby. This Agreement and each other Transaction
Document to which Buyer is a party has been duly and validly executed and
delivered by the Buyer and, assuming the due authorization, execution and
delivery of the Sellers and the Company, as applicable, constitute the legal and
binding obligations of Buyer in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, moratorium or other similar laws relating
to creditors' rights and general principles of equity.
5.2. No Conflicts or Violations. Subject to obtaining the consents
contemplated by Schedule 5.3, the execution and delivery of this Agreement and
each other Transaction Document to which Buyer is a party by Buyer do not, and
the performance by Buyer of its obligations hereunder and thereunder will not
(a) conflict with or violate in any material respect any Legal Requirements
applicable to Buyer, (b) conflict with or result in a violation or breach of the
certificate of incorporation or bylaws of Buyer, or (c) result in a material
breach of, or constitute a default under, any material Contract to which Buyer
is a party or by which any of its properties is bound or subject.
5.3. Consents. The execution and delivery of this Agreement and each
other Transaction Document to which Buyer is a party by Buyer do not, and the
performance by Buyer of its obligations hereunder and thereunder shall not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity. Except as set forth on Schedule 5.3,
no consent of, or notice to, any person under any material Contract to which
Buyer is a party or by which any of its properties is bound or subject is
necessary for the execution and delivery of this Agreement by the Buyer and the
consummation of the transactions contemplated hereby or thereby.
5.4. Litigation. There is no Claim pending or, to the Knowledge of
Buyer, threatened against or affecting Buyer before or by any Governmental
Entity or any other person that, individually or in the aggregate, could
reasonably be expected to prevent or materially delay or impair the ability of
Buyer to consummate the transactions contemplated by this Agreement or any other
Transaction Document to which Buyer is a party, nor is there any Order of any
Governmental Entity or arbitrator outstanding against Buyer that, individually
or in the aggregate, could reasonably be expected to prevent or materially delay
or impair the ability of Buyer to consummate the transactions contemplated by
this Agreement or any other Transaction Document to which Buyer is a party.
10
5.5. Intentions with Respect to the Company. Buyer has no current plan
or intention to make an offer to or acquire the Company pursuant to a merger,
tender offer, exchange offer or other extraordinary corporate transaction.
5.6. Brokers. No person is or will become entitled to receive any
brokerage, finder's or financial advisory fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements made on
or on behalf of Buyer.
5.7. Purchase Entirely for Own Account. The Shares to be acquired by
Buyer hereunder will be acquired for Buyer's own account, not as nominee or
agent, and not with a view to the resale or distribution of any part thereof in
violation of the Securities Act, and Buyer has no present intention of selling,
granting any participation in or otherwise distributing the same in violation of
the Securities Act.
5.8. Restricted Securities. Buyer understands that the Shares are
characterized as "restricted securities" under the Securities Act and that under
the Securities Act and applicable regulations under the Securities Act such
securities may be resold without registration under the Securities Act only in
certain limited circumstances.
5.9. Disclosure of Information. Buyer has had an opportunity to receive
the information related to the Company, and to ask questions of and receive
answers from the Sellers and the Company regarding the Company and its business,
as it deems necessary for it to make its decision to purchase the Shares.
5.10. Legends. It is understood that, except as provided below,
certificates evidencing the Shares may bear the following or any similar legend:
(a) "The securities represented hereby may not be transferred
unless (i) such securities have been registered for sale pursuant to
the Securities Act of 1933, as amended, (ii) such securities may be
sold pursuant to Rule 144(k), or (iii) the Company has received an
opinion of counsel reasonably satisfactory to it that such transfer may
lawfully be made without registration under the Securities Act of 1933
or qualification under applicable state securities laws."
(b) If required by the authorities of any state in connection
with the issuance of sale of the Securities, the legend required by
such state authority.
ARTICLE 6. COVENANTS AND AGREEMENTS
6.1. Notification of Certain Matters. Each of the Sellers and Buyer
shall give prompt notice to the other parties of the occurrence, or failure to
occur, of any event, which occurrence or failure to occur would be likely to
cause any material failure of the Sellers or Buyer, as the case may be, or of
any officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement. Notwithstanding the foregoing, the delivery of any notice
pursuant to this Section 6.1 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
11
6.2. Noncompetition; Nonsolicitation.
(a) As additional consideration for Buyer, and as a material
inducement for Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, each of the Sellers agrees that it
shall not, during the five-year period beginning on the Closing Date,
in any manner, directly or indirectly:
(i) Own, engage in, manage, operate, join, control or
participate in the ownership, management, operation or control of,
or be connected as a stockholder, director, officer, employee,
agent, partner, joint venturer, member, beneficiary or otherwise
with, any person which conducts Company Activities in the
Protected Area; provided, however, that each Seller may own,
directly or indirectly, securities of any entity traded on any
national securities exchange or listed on any National Association
of Securities Dealers Automated Quotation System if the Seller
does not, directly or indirectly, individually own 5% or more of
any class of equity securities, or securities convertible into or
exercisable or exchangeable for 5% or more of any class of equity
securities, of such entity;
(ii) Solicit or attempt to solicit, any business from any
customers of Buyer or the Company or any of their Affiliates for
purposes of engaging in any Company Activities in any Protected
Area;
(iii) Recruit or hire away or attempt to recruit or hire away,
on its behalf or on behalf of any other person, any employee of
Buyer, the Company or any of their Affiliates, or induce or
attempt to influence any such employee to terminate his or her
employment with Buyer, the Company or any of their Affiliates; or
(iv) Interfere with or otherwise attempt to affect Buyer's or
the Company's relationship with any vendor or customer of Buyer,
the Company or any of their Affiliates.
(b) Each Seller understands and acknowledges that the Company and
Buyer have made substantial investments to develop their respective
business interests and goodwill. Each Seller agrees that such
investments are worthy of protection, and that the Company's and
Buyer's need for the protection afforded by this Section 6.2 is greater
than any hardship the Seller might experience by complying with its
terms. Each Seller agrees that the limitations as to time, geographic
area and scope of activity to be restrained contained in this Agreement
are reasonable and are not greater than necessary to protect the
Company Activities and/or the goodwill or other business interests of
Buyer and the Company.
12
(c) Although Buyer and the Sellers believe the limitations as to
time, geographic area and scope of activity contained in this Section
6.2 are reasonable and do not impose a greater restraint than necessary
to protect the Company Activities, goodwill and other business
interests of Buyer and the Company, if this is judicially determined
not to be the case, Buyer and the Sellers specifically request that,
notwithstanding Section 7.5, the limitations contained in this Section
6.2 be reformed to the extent necessary to make this Agreement
enforceable. It is the express intent of Buyer and the Sellers that the
terms of this Section 6.2 be enforced to the full extent permitted by
law.
(d) Sellers acknowledge that Buyer would be irreparably damaged
and would not have an adequate remedy at law for money damages in the
event that any of the covenants of Sellers in this Section 6.2 were not
performed in accordance with its terms or otherwise were materially
breached. Sellers therefore agree that Buyer will be entitled to an
injunction or injunctions to prevent breaches of such performance and
to specific enforcement of such covenants in addition to any other
remedy to which it may be entitled, at law or in equity.
6.3. Officers' and Directors' Indemnification. Buyer agrees that all
rights to indemnification now existing in favor of the directors or officers of
the Company as provided in its Certificate of Incorporation or bylaws or in any
indemnification agreement, will survive the Closing and stay in effect in
accordance with their respective terms as presently in effect. For purposes of
this Section 6.3, the officers and directors of the Company shall be deemed to
be third party beneficiaries of this Agreement and each such person shall be
entitled to enforce the terms of this Section 6.3 against the Company to its
full extent and seek and obtain remedies from the Company for non-performance of
this Section 6.3 as if such person was a named party to this Agreement.
6.4. Transfer of Share of Capital Stock of Sport Supply (Asia) Seller
shall cause Xxxxxxxx X. Xxxxxx to take all actions necessary to transfer for no
more than nominal consideration the legal and beneficial ownership of the share
of capital stock of Sport Supply (Asia) held by Xx. Xxxxxx to the Company or its
designee no later than 60 days following the Closing, including, but not limited
to, executing an Instrument of Transfer and Bought and Sold Notes and delivering
the certificate representing such share of capital stock of Sport Supply (Asia)
held by him.
6.5. Public Disclosure. Except as required by Legal Requirements or the
rules or regulations of, or listing agreement entered into with, AMEX, neither
Buyer nor either Seller shall issue any press release or otherwise make any
public statement with respect to this Agreement, any Transaction Document or the
transactions contemplated hereby or thereby without the consent of the other
parties. Buyer and Sellers agree to provide the other with a copy of any such
press release or statement prior to disclosing such release or statement to the
public.
ARTICLE 7. GENERAL PROVISIONS
7.1. Survival of Representations, Warranties, and Covenants. The
parties hereto acknowledge and agree that other than the representations and
warranties contained in Articles 4 and 5, neither the Buyer nor the Sellers
makes any express or implied representation or warranty. Other than the
representations and warranties contained in Section 4.1 (relating to the
existence and authority of the Sellers and the Company and its subsidiaries),
Section 4.2 (relating to the capitalization of the Company and its
subsidiaries), Section 4.5 (relating to ownership of the Shares), Section 4.13
(relating to Company Claims), Section 5.1 (relating to the existence and
authority of the Buyer), Section 5.5 (relating to intentions with respect to the
Company) and Sections 5.7 through 5.10 (relating to exemption from the
registration requirements of the Securities Act), which representations and
warranties shall survive until the expiration of the applicable statute of
limitations, none of the representations and warranties of the Sellers or Buyer
shall survive the Closing. Following the date of termination of a representation
or warranty, no claim can be brought with respect to a breach of such
representation or warranty. Each of the covenants and agreements contained in
this Agreement that by their terms survive the Closing shall survive the
Closing.
13
7.2. No Waiver Relating to Claims for Common Law Fraud. None of the
provisions set forth in this Agreement shall be deemed a waiver by any party to
this Agreement of any right or remedy which such party may have based on any
other party's acts or omissions which constitute common law fraud, nor shall any
such provisions limit, or be deemed to limit, (a) the amounts of recovery sought
or awarded in any such claim for common law fraud, (b) the time period during
which a claim for common law fraud may be brought, except for periods that
exceed the statute of limitations for claims for common law fraud, or (c) the
recourse which any such party may seek against another party with respect to a
claim for common law fraud; provided, that with respect to such rights and
remedies at law or equity, the parties further acknowledge and agree that none
of the provisions of this Section 7.2 shall be deemed a waiver of any defenses
which may be available in respect of actions or claims for common law fraud,
including but not limited to, defenses of statutes of limitations or limitations
of damages.
7.3. Amendment and Modification. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
7.4. Waiver of Compliance. Any failure of Buyer on the one hand, or a
Seller, on the other hand, to comply with any obligation, covenant, agreement or
condition contained herein may be waived only if set forth in an instrument in
writing signed by the party or parties to be bound by such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any other failure.
7.5. Severability. If any term or other provision of this Agreement is
determined by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced under any rule of applicable law or public policy,
all other conditions and provisions of this Agreement shall nevertheless remain
in full force and effect so long as the economic or legal substance of the
transactions contemplated herein are not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated herein are consummated as originally
contemplated to the fullest extent possible.
7.6. Expenses and Obligations. Except as otherwise expressly provided
in this Agreement, all costs and expenses incurred by the Company and the
Sellers, on the one hand, and Buyer, on the other, in connection with this
Agreement and the other Transaction Documents shall be borne by each
respectively; provided, however, that, in the event of a dispute between the
parties in connection with this Agreement and the transactions contemplated
hereby, each of the parties hereto hereby agrees that the prevailing party shall
be entitled to reimbursement by the other party or parties of reasonable legal
fees and expenses incurred in connection with any such action or proceeding.
14
7.7. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied or
mailed by registered or certified mail (return receipt requested), or sent by
Federal Express or other recognized overnight courier, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) If to the Sellers:
Xxxxxxx Radio Corp.
0 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Fax: 000.000.0000
Attention: Law Department
with a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Fax: 000.000.0000
Attention: Xxxx X. Xxxxxxxx
00
xxx
Xxxxxxx Xxxxx (Xxxx Xxxx) Limited
705-711 Tower 0
Xxx Xxxxxxx
00-00 Xxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
Fax: 000.000.0000.0000
Attention: Managing Director
with a copy to:
Xxxxxxx Radio Corp.
0 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Fax: 000.000.0000
Attention: Law Department
and
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Fax: 000.000.0000
Attention: Xxxx X. Xxxxxxxx
(b) If to Buyer, to:
Collegiate Pacific Inc.
00000 Xxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Fax: 000.000.0000
Attention: Xxxxxxx X. Xxxxxxxxxx
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Fax: 000.000.0000
Attention: Xxxx X. Xxxxxxxx
16
Any of the above addresses may be changed at any time by notice given
as provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered, on the date of receipt, if telecopied, three business days
after the date of mailing, if mailed by registered or certified mail, return
receipt requested, and one business day after the date of sending, if sent by
Federal Express or other recognized overnight courier.
7.8. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, whether by operation of law or otherwise; provided, however, that upon
notice to the Sellers and without releasing Buyer from any of its obligations or
liabilities hereunder Buyer may assign or delegate any or all of its rights or
obligations under this Agreement to any Affiliate of Buyer or any person with or
into which Buyer or any parent company of Buyer merges or consolidates. In the
event of such an assignment, the provisions of this Agreement shall inure to the
benefit of and be binding on Buyer's assigns. Any attempted assignment in
violation of this Section 7.8 shall be null and void.
7.9. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.
7.10. Entire Agreement. This Agreement (which term shall be deemed to
include the exhibits and schedules hereto and the other certificates, documents
and instruments delivered hereunder) constitutes the entire agreement of the
parties hereto and supersedes all prior agreements, letters of intent and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. There are no representations or warranties, agreements or
covenants other than those expressly set forth in this Agreement.
7.11. Governing Law. This Agreement shall be construed in accordance
with and governed by the internal law of the State of Delaware (without
reference to its rules as to conflicts of law).
7.12. Headings. The headings of this Agreement are for convenience of
reference only and are not part of the substance of this Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
17
IN WITNESS WHEREOF, the Sellers and Buyer have caused this Agreement to
be executed as of the date first above written.
COLLEGIATE PACIFIC INC.
By: /s/ Xxxx Xxxxxxxxxx
Name: Xxxx Xxxxxxxxxx
Title: President
XXXXXXX RADIO CORP.
By: /s/ Xxxxxxxxx X. Xxxxxxxxx
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Senior Vice President, HR and Corporate
Secretary
XXXXXXX RADIO (HONG KONG) LIMITED
By: /s/ Xxxx Xxxx
Name: Xxxx Xxxx
Title: Director
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
APPENDIX A
Certain Defined Terms
"AFFILIATE" means, with respect to any person, any other person
controlling, controlled by or under common control with such person. For
purposes of this definition and this Agreement, the term "control" (and
correlative terms) means the power, whether by contract, equity ownership or
otherwise, to direct the policies or management of a person.
"ASSETS" shall mean all assets or properties of every kind, nature,
character and description, including all tangible, intangible, personal, real or
mixed of the Company.
"BUYER" has the meaning set forth in the first paragraph of this
Agreement and includes its permitted successors and assigns.
"BUYER DESIGNEES" has the meaning set forth in Section 3.3(f).
"CLAIM" means any action, suit, claim, lawsuit, charge, complaint,
demand, inquiry, hearing, investigation, notice of violation or noncompliance,
litigation, proceeding, arbitrations, appeal or other dispute, whether civil,
criminal, administrative or otherwise.
"CLOSING" has the meaning set forth in Section 3.1.
"CLOSING DATE" has the meaning set forth in Section 3.1.
"CODE" shall mean the United States Internal Revenue Code of 1986, as
amended. All references to the Code, U.S. Treasury regulations or other
governmental pronouncements shall be deemed to include references to any
applicable successor regulations or amending pronouncement.
"COMPANY" has the meaning set forth in the recitals.
"COMPANY ACTIVITIES" means manufacturing, distributing, designing,
selling or installing sports equipment or sporting goods or related parts or
supplies that are competitive with those manufactured, distributed, designed,
sold or installed by Buyer, the Company or their Affiliates.
"COMPANY COMMON STOCK" has the meaning set forth in the recitals.
"COMPANY FINANCIAL STATEMENTS" means the audited consolidated balance
sheets, statements of operations, statements of stockholders' equity and
statements of cash flows of the Company and its subsidiaries as of March 31,
2005 and March 26, 2004 and for the fiscal years then ended.
"COMPANY MATERIAL CONTRACT" has the meaning set forth in Section 4.10.
"COMPANY SEC DOCUMENTS" means (a) all Reports on Form 10-K and Form
10-Q filed by the Company with the XXX xxxxx Xxxxx 00, 0000, (x) all Reports on
Form 8-K filed by the Company with the SEC since March 28, 2003, (c) all
amendments and supplements to all such reports filed by the Company with the SEC
since March 28, 2003 and (d) all other documents, reports or registration
statements filed by the Company with the SEC (and viewable by the general public
on the XXXXX database) since January 1, 2002.
A-1
"CONTRACTS" means, with respect to a party, all agreements, contracts,
or other binding commitments, arrangements or plans, written or oral (including
any amendments and other modifications thereto), to which such party is a party
or is otherwise bound.
"EMPLOYEE BENEFIT PLANS" means as to the Company all employee benefit
plans as defined in Section 3(3) of ERISA and all bonus, stock option, stock
purchase, stock appreciation right, restricted stock, phantom stock, incentive,
deferred compensation, medical, disability or life insurance, cafeteria benefit,
dependent care, disability, director or employee loan, fringe benefit,
sabbatical, supplemental retirement, severance or other benefit plans, programs
or arrangements, and all employment, termination, severance or other contracts
or agreements sponsored, maintained, contributed to or agreed to by the Company
or any of its subsidiaries for the benefit of employees, former employees,
independent contractors or agents of the Company or any of its subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"XXXXXXXXXXXXX.XXX" means xxxxxxxxxxxxx.xxx, Inc., a Texas corporation,
a wholly owned subsidiary of the Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles in the United
States.
"GUARANTEE" means any guarantee or other contingent liability (other
than any endorsement for collection or deposit in the Ordinary Course of
Business), direct or indirect, with respect to any obligations of another
person, through a Contract or otherwise, including, without limitation, (a) any
endorsement or discount with recourse or undertaking substantially equivalent to
or having economic effect similar to a guarantee in respect of any such
obligations and (b) any Contract (i) to purchase, or to advance or supply funds
for the payment or purchase of, any such obligations, (ii) to purchase, sell or
lease property, products, materials or supplies, or transportation or services,
in respect of enabling such other person to pay any such obligation or to assure
the owner thereof against loss regardless of the delivery or non-delivery of the
property, products, materials or supplies or transportation or services or (iii)
to make any loan, advance or capital contribution to or other Investment in, or
to otherwise provide funds to or for, such other person in respect of enabling
such person to satisfy an obligation (including any liability for a dividend,
stock liquidation payment or expense) or to assure a minimum equity, working
capital or other balance sheet condition in respect of any such obligation.
"GOVERNMENTAL ENTITY" means any governmental department, commission,
board, bureau, agency, court or other instrumentality of the United States or
any state, county, parish or municipality, jurisdiction or other political
subdivision thereof.
A-2
"INVESTMENT" means (a) any direct or indirect ownership, purchase or
other acquisition by a person of any notes, obligations, instruments, capital
stock, options, warrants, securities or ownership interests (including
partnership interests and joint venture interests) of any other person, and (b)
any capital contribution or similar obligation by a person to any other person.
"KNOWLEDGE" means, with respect to a specified party hereto, the actual
knowledge of such party (including, but not limited to, the actual knowledge of
any officers, directors, employees, consultants or counsel of such party),
together with such additional knowledge as would be acquired by a reasonable
inquiry concerning the subject matter in question.
"LEGAL REQUIREMENTS" means any federal, state, local, municipal,
foreign or other law, statute, legislation, constitution, principle or common
law, resolution, ordinance, code, edict, Order, regulation or requirement
issued, enacted, adopted, promulgated, implemented or otherwise put into effect
by or under the authority of any Governmental Entity.
"LIENS" means all liens, pledges, voting agreements, voting trusts,
proxy agreements, claims, security interests, restrictions, mortgages, deeds of
trust, tenancies and other possessory interests, conditional sale or other title
retention agreements, assessments, easements, rights of way, covenants,
restrictions, rights of first refusal, defects in title, encroachments and other
burdens, options or encumbrances of any kind.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, operations, condition (financial or otherwise), results of operations,
Assets or liabilities of the Company and its subsidiaries, taken as a whole.
"ORDER" means any writ, decree, order, judgment, injunction, rule,
ruling, Lien, voting right, consent of or by a Governmental Entity.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of the
operations of the Company and its subsidiaries consistent with past practices
since the earliest time covered by the Company Financial Statements.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization, or other
entity.
"PROTECTED AREA" means any jurisdiction in the United States in which
Buyer, the Company or any Affiliate of either of them conducts or conducted, as
the case may be, Company Activities at any time during the period beginning on
the Closing Date and ending on the fifth anniversary of the Closing Date.
"PURCHASE PRICE" has the meaning set forth in Section 2.2.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SELLERS" has the meaning set forth in the first paragraph of this
Agreement.
A-3
"SELLER SEC DOCUMENTS" means (a) all Reports on Form 10-K and Form 10-Q
filed by the Sellers with the XXX xxxxx Xxxxx 0, 0000, (x) all Reports on Form
8-K filed by the Sellers with the SEC since March 5, 2004, (c) all amendments
and supplements to all such reports filed by the Sellers with the SEC since
March 5, 2004 and (d) all other documents, reports or registration statements
filed by the Sellers with the SEC (and viewable by the general public on the
XXXXX database) since January 1, 2002.
"SHARES" has the meaning set forth in the recitals.
"SPORT SUPPLY (ASIA)" means Sport Supply Group Asia Limited, a Hong
Kong corporation, a wholly owned subsidiary of the Company.
"SUBSIDIARY" or "SUBSIDIARIES" of any person means any corporation,
partnership, joint venture or other entity of which such person (either alone or
through or together with any other subsidiary), owns, directly or indirectly,
50% or more of the capital stock or other equity interests the holders of which
are generally entitled to vote for the election of the board of directors or
other governing body of such corporation or other entity.
"TAX" (or "TAXES") means (a) any net income, alternative or add-on
minimum, gross income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, profits, license, withholding on amounts paid by the
Company, payroll, employment, excise, production, severance, stamp, occupation,
premium, property, environmental or windfall profit tax, custom, duty or other
tax, governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest and/or any penalty, addition to tax or additional
amount imposed by any taxing authority, (b) any liability of the Company for the
payment of any amounts of the type described in clause (a) as a result of being
a member of an affiliated or consolidated group or arrangement whereby liability
of the Company for the payment of such amounts was determined or taken into
account with reference to the liability of any other person for any period and
(c) liability of the Company with respect to the payment of any amounts of the
type described in clause (a) or (b) as a result of any express or implied
obligation to indemnify any other person.
"TRANSACTION DOCUMENTS" means this Agreement, the Transition Services
Agreement and each other document to be executed by any of the Sellers, the
Company, or Buyer in connection with the consummation of the transactions
contemplated by this Agreement.
"TRANSITION SERVICES AGREEMENT" means the Amended and Restated
Management Services Agreement, dated July 1, 2005, by and between Sport Supply
Group, Inc. and Xxxxxxx Radio Corp.
A-4
