Asset Purchase Agreement - Continental Sports Management LLC and Paragon Sports Group Inc.
Dated as of May 31, 2001
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of May 31, 2001 by and between
Continental Sports Management LLC, a Delaware limited liability company
("Seller) and Paragon Sports Group, Inc., a Delaware corporation (the "Buyer").
W I T N E S S E T H :
WHEREAS, the Seller is a full service professional athlete
representation agency (the "Business"); and
WHEREAS, the Seller owns certain assets comprising the Assets (as
hereinafter defined) which are related to the conduct of the Business; and
WHEREAS, the Seller wishes to sell, and the Buyer wishes to purchase,
the Assets; and
NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein, the Seller and the Buyer hereby agree as
follows:
ARTICLE I
PURCHASE OF THE ASSETS;
PURCHASE PRICE; CLOSING ADJUSTMENTS; CONDITION OF ASSETS
1.1 Transfer of the Assets. Subject to the terms and conditions set
forth in this Agreement, the Seller agrees that, on the date hereof (the
"Closing Date"), the Seller shall sell, transfer, assign, convey and deliver to
the Buyer, without recourse, representation or warranty except as otherwise
expressly provided herein and Buyer shall purchase from the Seller, all of the
assets (the "Assets") set forth on Schedule 1.1 attached hereto free and clear
of all Liens. "Liens" means any lien, pledge, hypothecation, mortgage, security
interest, claim, lease, charge, option, right of first refusal, easement,
servitude, transfer, restriction under any stockholder or similar agreement,
encumbrance or any other restrictions or limitations whatsoever.
1.2 Non-Assumed Liabilities. The Buyer shall not assume nor be
responsible for any liabilities or obligations of the Seller.
1.3 Purchase Price for the Assets . The purchase price for the Assets
shall be the issuance of Eight Hundred Thousand (800,000) shares of common stock
of Buyer (the "Shares") at the time of the Closing.
1.4 Issuance of Stock. Said Shares of common stock of Buyer may be
transferred to the Seller in accordance with written instructions provided to
counsel for Buyer by counsel for Seller. The shares of common stock of Buyer
transferred to Seller, pursuant to this Agreement, will be restricted securities
and will contain the following restrictive legend:
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"The securities which are represented by this
certificate have not been registered under the
Securities Act of 1933, as amended (the "Act"). The
securities have been acquired for investment purposes
only and not with a view to distribution or resale,
and may not be sold, transferred, made subject to a
security interest, mortgaged, pledged, hypothecated
or otherwise disposed unless and until registered
under the Act or an opinion of counsel for the
Company is received that registration is not required
under such Act or an exemption from registration is
available."
1.5 Closing Adjustments. Any errors or omissions in computing closing
adjustments discovered after Closing Date shall be corrected promptly upon
discovery. The obligation of the parties under this Section shall survive the
Closing.
ARTICLE II
CLOSING
2.1 The Closing.
(a) The consummation of the transactions contemplated by this Agreement
(the "Closing") shall be held simultaneous with the execution of this Agreement
at the offices of Continental Sports Management LLC.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
The Seller represents and warrants to the Buyer as follows:
3.1 Organization and Qualification. Seller is a limited liability
company validly existing and in good standing under the laws of the State of
Delaware.
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3.2 Validity and Execution of Agreement. Seller has the full legal
right, capacity and power and all requisite corporate authority and approval
required to enter into, execute and deliver this Agreement and any other
agreement or instrument contemplated hereby, and to perform fully its
obligations hereunder and thereunder. The members of Seller have approved the
transactions contemplated pursuant to this Agreement and each of the other
agreements required to be entered into pursuant hereto by Seller. This Agreement
and such other agreements and instruments have been duly executed and delivered
by Seller and each constitutes the valid and binding obligation of Seller
enforceable against it in accordance with its terms, except as may be limited by
any bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other laws (whether statutory, regulatory or decisional), now or hereafter in
effect, relating to or affecting the rights of creditors generally or by
equitable principles (regardless of whether considered in a proceeding at law or
in equity).
3.3. No Conflict. Neither the execution and delivery of this Agreement
nor the performance by the Seller of the transactions contemplated hereby will
violate or conflict with (a) any of the provisions of the Articles of
Organizations or Operating Agreement or other organizational documents of the
Seller; (b) result in the acceleration of, or entitle any party to accelerate
the maturity or the cancellation of the performance of any obligation under, or
result in the creation or imposition of any lien in or upon the Assets or
constitute a default (or an event which might, with the passage of time or the
giving of notice, or both, constitute a default) under any material contract to
which Seller is a party.
3.4 The Assets. The Seller owns outright and has good title to all of
the owned Assets free and clear of any lien.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller as follows:
4.1 Organization and Qualification . The Buyer is a corporation validly
existing and in good standing under the laws of the State of Delaware.
4.2 Validity and Execution of Agreement. The Buyer has the full legal
right, capacity and power and all requisite corporate authority and approval
required to enter into, execute and deliver this Agreement and any other
agreement or instrument contemplated hereby, and to perform fully its respective
obligations hereunder and thereunder. The board of directors of the Buyer has
approved to the extent required by law the transactions contemplated by this
Agreement and each of the other agreements required to be entered into pursuant
hereto by the Buyer and no other corporate or shareholder approvals are
required. This Agreement and such other agreements and instruments have been
duly executed and delivered by the Buyer and each constitutes the valid and
binding obligation of the Buyer enforceable against it in accordance with their
respective terms, except as may be limited by any bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other laws (whether
statutory, regulatory or decisional), now or hereafter in effect, relating to or
affecting the rights of creditors generally or by equitable principles
(regardless of whether considered in a proceeding at law or in equity).
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4.3 No Conflict. Neither the execution and delivery of this Agreement
nor the performance by the Buyer of the transactions contemplated herein will
violate or conflict with (a) any of the provisions of their respective
Certificates of Incorporation or By-Laws or other organizational documents of
Buyer; or (b) result in the acceleration of, or entitle any party to accelerate
the maturity or the cancellation of the performance of any obligation under, or
result in the creation or imposition of any Lien or constitute a default (or an
event which might, with the passage of time or the giving of notice, or both,
constitute a default) under any material contract to which Buyer is a party.
ARTICLE V
MISCELLANEOUS
5.1 Sales and Transfer Taxes. All required filings under any applicable
Federal, state, foreign or local sales tax, stamp tax or similar laws or
regulations shall be made in a timely manner by the party responsible therefor
under such laws and regulations, and, within ten (10) days following the
Closing, such party shall deliver to the other parties either (a) proof of the
payment of any sales tax assessed pursuant to such filings or (b) statements of
no sales tax due, as the case may be. Buyer shall pay any and all transfer,
sales or stamp taxes and any similar taxes or assessments imposed on the
transfer of the Assets in accordance with the terms of this Agreement, including
but not limited to any New York state real property transfer tax.
5.2 Post-Closing Further Assurances. At any time and from time to time
after the Closing Date at the request of either party, and without further
consideration, the other party will execute and deliver, or cause the execution
and delivery of, such other instruments of sale, transfer, conveyance,
assignment and confirmation and take or cause to be taken such other action as
the party requesting the same may reasonably deem necessary or desirable in
order to transfer, convey and assign more effectively to the requesting party
all of the property and rights intended to be conveyed to such party pursuant to
the provisions of this Agreement.
5.3 Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
given personally, sent by facsimile transmission or sent by prepaid air courier
or certified, registered or express mail, postage prepaid. Any such notice shall
be deemed to have been given (a) when received, if delivered in person, sent by
facsimile transmission and confirmed in writing within three (3) business days
thereafter or sent by prepaid air courier or (b) two (2) business days following
the mailing thereof, if mailed by certified first class mail, postage prepaid,
return receipt requested, in any such case as follows (or to such other address
or addresses as a party may have advised the other in the manner provided in
this Section 5.4):
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If to Seller, to:
Mr. William Davis
Continental Sports Management LLC
5580 Monroe Street, Suite 100
Sylvania, Ohio 43560
If to Buyer, to:
Mr. Shep Messing
Paragon Sports Group, Inc.
5580 Monroe Street, Suite 100
Sylvania, Ohio 43560
5.4 Publicity. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be made without advance
approval thereof by the Buyer and the Seller.
5.5 Entire Agreement. This Agreement (including any Exhibits and
Schedules) and the agreements, certificates and other documents delivered
pursuant to this Agreement contain the entire agreement among the parties with
respect to the transactions described herein, and supersede all prior
agreements, written or oral, with respect thereto.
5.6 Waivers and Amendments. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties hereto or, in the case of a waiver, by
the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof.
5.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
5.8 Binding Effect; No Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors, assigns
and legal representatives. This Agreement is not assignable except by operation
of law and any other purported assignment shall be null and void.
5.9 Variations in Pronouns. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the context
may require.
5.10 Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
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5.11 Exhibits and Schedules. The Exhibits and Schedules are a part of
this Agreement as if fully set forth herein. All references herein to Sections,
subsections, clauses, Exhibits and Schedules shall be deemed references to such
parts of this Agreement, unless the context shall otherwise require.
5.12 Effect of Disclosure on Schedules. Any item disclosed on any
Schedule shall be deemed to be disclosed in connection with (a) the specific
representation and warranty to which such Schedule is expressly referenced, (b)
any specific representation and warranty which expressly cross-references such
Schedule and (c) any specific representation and warranty to which any other
Schedule to this Agreement is expressly referenced if such other Schedule
expressly cross-references such Schedule.
5.13 Headings. The headings in this agreement are for reference only,
and shall not affect the interpretation of this Agreement.
5.14 Severability of Provisions. . If any provision or any portion of
any provision of this Agreement or the application of such provision or any
portion thereof to any Person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of this Agreement, or the application of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affect thereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONTINENTAL SPORTS MANAGEMENT LLC
By: /s/ William Davis
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Name: William Davis
Title: General Member
PARAGON SPORTS GROUP, INC.
By:/s/ Shep Messing
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Name: Shep Messing
Title: President and Chief Executive Officer
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SCHEDULE 1.1
ASSETS
1) Account Receivables of Continental Sports Management LLC equal to One
Hundred Eleven Thousand Dollars ($111,000).
2) Player Contracts
Football:
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Name of Player Expiration Date of Player Contract (Day/Month/Year)
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Alexis Alexandrias 4/10/01
Nicki Bull 6/1/02
Wayne Carlisle 24/7/02
Peter Clark 12/4/02
Ashley Dodd 15/11/02
John Doolan 11/11/01
Alex Haddow 18/11/01
Greg Lincoln 5/11/02
Adam Locke 4/2/02
Peter McCann 10/8/01
Paul McVeigh 22/11/01
Hayden Mullins 21/12/01
Danny Naisbitt 27/10/01
John Piercy 14/11/01
Isaiah Rankin 26/6/02
Andy Scott 16/11/02
Chris Smith 29/11/02
Marieanne Spacey 3/1/03
John Still 3/5/02
Rugby:
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Name of Player Expiration Date of Player Contract (Day/Month/Year)
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Paul Hull 21/12/02
Josh Lewsky 15/1/03
Simon Shaw 26/10/02