SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
August 14, 2001
Date of Report
(Date of Earliest Event Reported)
SALESREPCENTRAL.COM
(Exact Name of Registrant as Specified in its Charter)
8930 E. Raintree Dr. #100
Scottsdale, AZ 85260
(Address of principal executive offices)
(480) 922-8477
Registrant's telephone number
VAN AMERICAN CAPITAL, LTD
2635 Camino Del Rio So., #211
San Diego, CA 92109
(Former name and former address)
Nevada 0-25275 91-1918742
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Under the terms and conditions of the Agreement and Plan of Merger executed
on August 14, 2001, a copy of which is attached, upon approval of the
stockholders of the Company, there will be a change in control of the
registrant.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
On August 14, 2001 SalesRepCentral.com, Inc. executed an Agreement and Plan
of Merger ("Agreement") with Interactive Motorsport Inc., a Delaware
corporation ("Interactive"), wherein Interactive will merge with SalesRep
Subsidiary Corp. and become a wholly owned subsidiary of SalesRepCentral. A
copy of the Agreement is attached to this filing. The merger is subject to a
stockholders' vote and customary terms and conditions for a transaction of
this type.
Pursuant to the Agreement, Ralph Massetti, sole officer and director of
SalesRepCentral, shall exchange 8,898,320 common and 14,525 preferred shares
held by him for 100% of Central Solutions, Inc. ("CSI"), a wholly owned
subsidiary of SalesRepCentral. As part of the Merger, CSI will acquire all of
the assets and assume all liabilities of SalesRepCentral. Additionally,
SalesRepCentral will authorize a 1 for 6 reverse stock split (ie-current SREP
stockholders will receive 1 share for every 6 shares they currently hold).
Following the reverse split, SalesRepCentral will issue 7,703,934 shares of
its 144 restricted common stock and assume all outstanding warrants and
options of Interactive in exchange for 100% of Interactive's outstanding
common stock.
The transaction, upon approval by the stockholders of SalesRepCentral, will
cause a change in control of SalesRepCentral.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Not applicable.
ITEM 7. FINANCIAL STATEMENTS
Not applicable.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
EXHIBITS
10 Agreement and Plan of Merger dated August 14, 2001 (attached)
99 Press Release August 16, 2001 (attached)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.
SALESREPCENTRAL.COM, INC.
By/s/Ralph Massetti
President, ChiefExecutive Officer
August 16, 2001
Date
ACQUISITION AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST 14, 2001
BETWEEN
SALESREPCENTRAL.COM, INC.
AND
INTERACTIVE MOTORSPORT INC.
TABLE OF CONTENTS
ARTICLE 1. The Merger 3
Section 1.1. The Merger 3
Section 1.2. Effective Time 4
Section 1.3. Closing of the Merger 4
Section 1.4. Effects of the Merger 4
Section 1.5. Board of Directors and Officers 4
Section 1.6. Conversion of Shares 4
Section 1.7. Exchange of Certificates 5
Section 1.8. Conversion of Options and Warrants 6
Section 1.9. Taking of Necessary Action; Further Action 6
Section 1.10 Cash Availability 6
ARTICLE 2. Representations and Warranties of SalesRep 6
Section 2.1. Organization and Qualification 6
Section 2.2. Capitalization of SalesRep 6
Section 2.3.Authority Relative to this Agreement; Recommendation. 7
Section 2.4. SEC Reports; Financial Statements 7
Section 2.5. Information Supplied 8
Section 2.6. Consents and Approvals; No Violations 8
Section 2.7. No Default 8
Section 2.8. No Undisclosed Liabilities; Absence of Changes 8
Section 2.9. Litigation 9
Section 2.10. Compliance with Applicable Law 9
Section 2.11. Employee Benefit Plans; Labor Matters 9
Section 2.12. Environmental Laws and Regulations 10
Section 2.13. Tax Matters 10
Section 2.14. Title To Property 11
Section 2.15. Intellectual Property 11
Section 2.16. Insurance 11
Section 2.17. Vote Required 11
Section 2.18. Tax Treatment 11
Section 2.19. Affiliates 11
Section 2.20. Certain Business Practices 11
Section 2.21. Insider Interests 12
Section 2.22. Opinion of Financial Adviser 12
Section 2.23. Brokers 12
Section 2.24. Disclosure 12
Section 2.25. No Existing Discussion 12
Section 2.26. Material Contracts 12
ARTICLE 3. Representations and Warranties of Interactive. 12
Section 3.1. Organization and Qualification 13
Section 3.2. Capitalization of Interactive 13
Section 3.3.Authority Relative to this Agreement; Recommendation 14
Section 3.4. SEC Reports; Financial Statements 14
Section 3.5. Information Supplied 14
Section 3.6. Consents and Approvals; No Violations 14
Section 3.7. No Default 14
Section 3.8 No Undisclosed Liabilities; Absence of Changes 15
Section 3.9. Litigation 15
Section 3.10. Compliance with Applicable Law 15
Section 3.11. Employee Benefit Plans; Labor Matters 15
Section 3.12. Environmental Laws and Regulations 16
Section 3.13. Tax Matters 17
Section 3.14. Title to Property 17
Section 3.15. Intellectual Property 17
Section 3.16. Insurance 17
Section 3.17. Vote Required 17
Section 3.18. Tax Treatment 17
Section 3.19. Affiliates 18
Section 3.20. Certain Business Practices 18
Section 3.21. Insider Interests 18
Section 3.22. Opinion of Financial Adviser 18
Section 3.23. Brokers 18
Section 3.24. Disclosure 18
Section 3.25. No Existing Discussions 18
Section 3.26. Material Contracts 18
ARTICLE 4. Covenants 19
Section 4.1. Conduct of Business of SalesRep 19
Section 4.2. Conduct of Business of Interactive 20
Section 4.3. Preparation of 8-K and the Proxy Statement 22
Section 4.4. Other Potential Acquirers 22
Section 4.5. Meetings of Stockholders 22
Section 4.6. OTC:BB Listing 22
Section 4.7. Access to Information 22
Section 4.8. Additional Agreements; Reasonable Efforts. 22
Section 4.9.Employee Benefits Stock Option and Employee
Purchase Plan 23
Section 4.10. Public Announcements 23
Section 4.11. Indemnification 23
Section 4.12. Notification of Certain Matters 24
ARTICLE 5. Conditions to Consummation of the Merger 24
Section 5.1. Conditions to Each Party's Obligations to
Effect the Merger 24
Section 5.2. Conditions to the Obligations of SalesRep 24
Section 5.3. Conditions to the Obligations of Interactive 25
ARTICLE 6. Termination; Amendment; Waiver 26
Section 6.1. Termination 26
Section 6.2. Effect of Termination 26
Section 6.3. Fees and Expenses 27
Section 6.4. Amendment 27
Section 6.5. Extension; Waiver 27
Section 6.6. Breakup Fee 27
ARTICLE 7. Miscellaneous 27
Section 7.1. Non survival of Representations and Warranties 27
Section 7.2. Entire Agreement; Assignment 27
Section 7.3. Validity 27
Section 7.4. Notices 28
Section 7.5. Governing Law 28
Section 7.6. Descriptive Headings 28
Section 7.7. Parties in Interest 28
Section 7.8. Certain Definitions 28
Section 7.9. Personal Liability 29
Section 7.10. Specific Performance 29
Section 7.11. Counterparts 29
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), dated as of August
14, 2001, is by and among SalesRepCentral.com, Inc., a Nevada corporation
("SalesRep"), SalesRep Subsidiary Corp., a Nevada corporation ("SSC"), and
Interactive Motorsport Inc., a Delaware corporation ("Interactive").
Whereas, the Boards of Directors of SalesRep and Interactive each have,
in light of and subject to the terms and conditions set forth herein, (i)
determined that the Merger (as defined below) is fair to their respective
stockholders and in the best interests of such stockholders and (ii) approved
the Merger in accordance with this Agreement;
Whereas, for Federal income tax purposes, it is intended that the Merger
qualify as a reorganization under the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"); and
Whereas, SalesRep and Interactive desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
Now, therefore, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, SalesRep and Interactive hereby agree
as follows:
ARTICLE 1
The Merger
Section 1.1. The Merger. Prior to the Effective Time (as defined
below), SalesRep shall take such action as is necessary to form a new
corporation, as a wholly owned subsidiary of SalesRep, SalesRep Subsidiary
Corp. ("SSC") as a Nevada corporation. At the Effective Time and upon the
terms and subject to the conditions of this Agreement and in accordance with
the General Corporation Law of the state of Nevada (the "NGCL") and the
General Corporation Law of the state of Delaware (the "DGCL"), SSC shall be
merged with and into Interactive (as defined below) (the ``Merger").
Following the Merger, Interactive shall continue as the surviving corporation
(the "Surviving Corporation"), shall continue to be governed by the laws of
the jurisdiction of its incorporation or organization and the separate
corporate existence of SSC shall cease. Interactive shall continue its
existence as a wholly owned subsidiary of SalesRep. Prior to the Effective
Time, the parties hereto shall mutually agree as to the name of the Surviving
Corporation; however, initially the Surviving Corporation shall be named
Interactive Motorsport 1Inc., a Nevada corporation. The Merger is intended
to qualify as a tax-free reorganization under Section 368 of the Code as it
relates to the non-cash exchange of stock referenced herein. Concurrent with
the Merger of Interactive and SSC, SalesRep will transfer SalesRep's other
subsidiary, Central Solutions, Inc., a Nevada corporation, to Ralph Massetti
in consideration for Ralph Massetti canceling the shares of stock of SalesRep
referenced herein. In addition, Central Solutions, Inc. will indemnify
SalesRep for all liabilities of SalesRep assumed by Central Solutions, and
will retain the assets of SalesRep, including the $250,000 being paid by
Interactive concurrent with the Effective Time. As additional consideration
for the transfer of Central Solutions, Inc. to Ralph Massetti, Ralph Massetti
will return to SalesRep 8,898,320 shares of common stock of SalesRep and
14,525 shares of Preferred Stock of SalesRep, which shares represent all of
the shares of SalesRep currently owned by Ralph Massetti.
Section 1.2. Effective Time. Subject to the terms and conditions set
forth in this Agreement, a Certificate of Merger (the "Merger Certificate")
shall be duly executed and acknowledged by each of Interactive, SSC and
SalesRep, and thereafter the Merger Certificate reflecting the Merger shall
be delivered to the Secretary of State of the State of Nevada for filing
pursuant to the NGCL and DGLC on the Closing Date (as defined in Section
1.3). The Merger shall become effective at such time as a properly executed
and certified copy of the Merger Certificate is duly filed by the Secretary
of State of the state of Nevada in accordance with the NGCL and the Secretary
of State of the state of Delaware in accordance with the DGCL or such later
time as the parties may agree upon and set forth in the Merger Certificate
(the time at which the Merger becomes effective shall be referred to herein
as the "Effective Time").
Section 1.3. Closing of the Merger. The closing of the Merger (the
"Closing") will take place at a time and on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction of the latest to occur of the conditions set forth in Article 5
(the "Closing Date"), at the offices of Sperry
Young & Stoecklein, 1850 E.
Flamingo Rd., Suite 111, Las Vegas, Nevada, unless another time, date or
place is agreed to in writing by the parties hereto.
Section 1.4. Effects of the Merger. The Merger shall have the effects
set forth in the NGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the properties, rights,
privileges, powers of SSC shall vest in the Surviving Corporation, and all
debts, liabilities and duties of SSC shall become the debts, liabilities and
duties of the Surviving Corporation. Concurrently, Interactive shall remain
a wholly owned subsidiary of SalesRep.
Section 1.5. Board of Directors and Officers.
(a) Board of Directors of SSC. At or prior to the Effective Time,
SalesRep agrees to take such action as is necessary (i) to cause the number
of directors comprising the full Board of Directors of SSC to be one (1)
person and (ii) to cause Ralph Massetti, (the "SalesRep Designee") to be
elected as director of SSC.
(b) Board of Directors of SalesRep. Subject to the provisions of
Section 5.1(e) below, at or prior to the Effective Time, each of Interactive
and SalesRep agrees to take such action as is necessary (i) to cause the
number of directors comprising the full Board of Directors of SalesRep to be
five (5) persons or such other number as determined by Interactive; (ii) to
cause Ralph Massetti to remain on the Board of Directors for a period of one
year; and (iii) to cause Joseph Chappell to become Chairman of the Board and,
Dominic Chappell, Eddie Johns and Simon Slater, (the "Interactive Designees")
to be elected as directors of SalesRep. In addition, majority stockholders
of SalesRep prior to the Effective Time shall take all action necessary to
cause, to the greatest extent practicable, the Interactive Designees to serve
on SalesRep's Board of Directors until the 2002 Annual Meeting. If an
Interactive Designee shall decline or be unable to serve as a director prior
to the Effective Time, Interactive shall nominate another person to serve in
such person's stead, which such person shall be subject to approval of the
other party. From and after the Effective Time, and until successors are
duly elected or appointed and qualified in accordance with applicable law,
Dominic Chappell shall be Chief Executive Officer and President, Eddie Johns
shall be Chief Operating Officer, Gavin Macaulay shall be Secretary, and
Simon Slater shall be Treasurer of SalesRep.
(c) Ralph Massetti Board Seat. If, during the 12-month period
following the Effective Time of the Merger, (i) Central Solutions, Inc. shall
execute a general assignment for the benefit of creditors, or file any
petition in bankruptcy or any petition for relief under the provisions of the
Federal Bankruptcy Act or any other state or federal law for the relief of
debtors and the continuation of such petition without dismissal for a period
of 20 days or more, (ii) a receiver or trustee is appointed to take
possession of any property or assets of Central Solutions, Inc., (iii)
Central Solutions, Inc. shall otherwise become insolvent, or (iv) if any
claims, actions, suits, judgments, or liens are filed or executed against
SalesRep after the Effective Time of the Merger for actions or omissions of
or by SalesRep, its directors, shareholders, officers, employees or agents
occurring prior to the Effective Time of the Merger, Ralph Massetti shall
remain on the Board of Directors of SalesRep, solely at the discretion of
SalesRep, until such time as any claims arising from any of the above shall
have been satisfied; provided, however, that should Ralph Massetti resign as
a director of SalesRep prior to such claim being satisfied or resolved,
unless otherwise agreed to in writing by the parties, the cap on Ralph
Massetti's personal liability pursuant to Section 5.3(c) hereof shall
increase from $50,000 to $100,000.
Section 1.6. Conversion of Shares.
(a) At the Effective Time, each share of common stock, par value $.01 per
share of Interactive (individually an "Interactive Share" and collectively,
the "Interactive Shares") issued and outstanding (20,849,617 - See
Subparagraph 3.2(a) "Capitalization of Interactive") immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on the
part of Interactive, SalesRep, SSC or the holder thereof, be converted into
and shall become fully paid and nonassessable SalesRep common shares
determined by multiplying (i) 20,849,617, by (ii) .3695, the "Exchange
Ratio", or 7,703,934 shares to be issued to Interactive. The holder of one
or more shares of Interactive common stock shall be entitled to receive in
exchange therefor a number of shares of SalesRep Common Stock ("SalesRep
Shares") equal to the product of (x) (the number of shares of Interactive
held by the Interactive stockholder), times (y) the Exchange Ratio. SalesRep
Shares and Interactive Shares are sometimes referred to collectively herein
as "Shares." By way of example, the number of shares of Interactive common
stock held by a stockholder (100,000) times the Exchange Ratio of .3695
equals 36,950 shares of SalesRep Shares to be issued to the Interactive
stockholder holding 100,000 shares.
(b) At the Effective Time, each Interactive Share held in the treasury
of Interactive, by Interactive, immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of
Interactive, SSC or SalesRep be canceled, retired and cease to exist and no
payment shall be made with respect thereto.
(c) At the Effective Time, Ralph Massetti, the principal shareholder of
SalesRep shall cancel 8,898,320 shares of Common Stock of SalesRep.
Section 1.7. Exchange of Certificates.
(a) Prior to the Effective Time, SalesRep shall enter into an agreement
with, and shall deposit with, the Stoecklein Law Group, or such other agent
or agents as may be satisfactory to SalesRep and Interactive (the "Exchange
Agent"), for the benefit of the holders of Interactive Shares, for exchange
through the Exchange Agent in accordance with this Article I certificates
representing the appropriate number of SalesRep Shares to be issued to
holders of Interactive Shares issuable pursuant to Section 1.6 in exchange
for outstanding Interactive Shares.
(b) As soon as reasonably practicable after the Effective Time, the Exchange
Agent shall mail to each holder of record of a certificate or certificates
which immediately prior to the Effective Time represented outstanding
Interactive Shares (the "Certificates") whose shares were converted into the
right to receive SalesRep Shares pursuant to Section 1.6: (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as Interactive and SalesRep may reasonably specify); and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing SalesRep Shares. Upon surrender of a
Certificate to the Exchange Agent, together with such letter of transmittal,
duly executed, and any other required documents, the holder of such
Certificate shall be entitled to receive in exchange therefore a certificate
representing that number of restricted whole SalesRep Shares, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Interactive Shares which are not registered in the
transfer records of Interactive, a certificate representing the proper number
of SalesRep Shares may be issued to a transferee if the Certificate
representing such Interactive Shares is presented to the Exchange Agent
accompanied by all documents required by the Exchange Agent or SalesRep to
evidence and effect such transfer and by evidence that any applicable stock
transfer or other taxes have been paid. Until surrendered as contemplated by
this Section 1.7, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
certificate representing SalesRep Shares as contemplated by this Section 1.7.
(c) No dividends or other distributions declared or made after the
Effective Time with respect to SalesRep Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the SalesRep Shares represented thereby until the holder of
record of such Certificate shall surrender such Certificate.
(d) In the event that any Certificate for Interactive Shares or
SalesRep Shares shall have been lost, stolen or destroyed, the Exchange Agent
shall issue in exchange therefore, upon the making of an affidavit of that
fact by the holder thereof such SalesRep Shares and cash in lieu of
fractional SalesRep Shares, if any, as may be required pursuant to this
Agreement; provided, however, that SalesRep or the Exchange Agent, may, in
its respective discretion, require the delivery of a suitable bond, opinion
or indemnity.
(e) All SalesRep Shares issued upon the surrender for exchange of
Interactive Shares in accordance with the terms hereof shall be deemed to
have been issued in full satisfaction of all rights pertaining to such
Interactive Shares. There shall be no further registration of transfers on
the stock transfer books of either of Interactive or SalesRep of the
Interactive Shares or SalesRep Shares which were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to SalesRep for any reason, they shall be canceled and exchanged as
provided in this Article I.
(f) No fractional SalesRep Shares shall be issued in the Merger, but in
lieu thereof each holder of Interactive Shares otherwise entitled to a
fractional SalesRep Share shall, upon surrender of its, his or her
Certificate or Certificates, be entitled to receive an additional share to
round up to the nearest round number of shares.
Section 1.8. Conversion of Options and Warrants.
(a) At the Effective Time, each outstanding stock option to purchase
Interactive Shares, if any (a "Interactive Stock Option" or collectively,
"Interactive Stock Options"), whether vested or unvested, shall be converted
into the right to convert to SalesRep Shares; however subject to the Exchange
Ratio of one Interactive share for .3695 shares of SalesRep. By way of
example, the number of shares of Interactive Stock Options held by a
stockholder (100,000) times the Exchange Ratio of .3695 equals 36,950 shares
of SalesRep Shares to be issued upon exercise of such options.
(b) At the Effective Time, each outstanding warrant to purchase
Interactive Shares, if any (a "Interactive Stock Purchase Warrant" or
collectively, "Interactive Stock Purchase Warrants") issued by Interactive,
whether vested or unvested, shall be converted into the right to convert to
SalesRep Shares; however subject to the Exchange Ratio of one Interactive
share for .3695 shares of SalesRep. By way of example, the number of shares
of Interactive Stock Purchase Warrants held by a stockholder (100,000) times
the Exchange Ratio of .3695 equals 36,950 shares of SalesRep Shares to be
issued upon exercise of such options.
Section 1.9. Taking of Necessary Action; Further Action. If, at any
time after the Effective Time, Interactive or SalesRep reasonably determines
that any deeds, assignments, or instruments or confirmations of transfer are
necessary or desirable to carry out the purposes of this Agreement and to
vest SalesRep with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of Interactive, the officers and
directors of SalesRep and Interactive are fully authorized in the name of
their respective corporations or otherwise to take, and will take, all such
lawful and necessary or desirable action.
Section 1.10. Cash Availability. At the Effective Time Interactive
shall deposit no less than $250,000 in readily available funds pursuant to
5.2(f) below, which funds shall be received from Interactive to be
distributed to Central Solutions, Inc. at the Effective Time.
ARTICLE 2
Representations and Warranties of SalesRep
Except as set forth on the Disclosure Schedule delivered by SalesRep to
Interactive (the "SalesRep Disclosure Schedule"), SalesRep hereby represents
and warrants to Interactive as follows:
Section 2.1. Organization and Qualification.
(a) SalesRep is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization and
has all requisite power and authority to own, lease and operate its
properties and to carry on its businesses as now being conducted, except
where the failure to be so organized, existing and in good standing or to
have such power and authority would not have a Material Adverse Effect (as
defined below) on SalesRep. When used in connection with SalesRep, the term
"Material Adverse Effect" means any change or effect (i) that is or is
reasonably likely to be materially adverse to the business, results of
operations, condition (financial or otherwise) or prospects of SalesRep,
other than any change or effect arising out of general economic conditions
unrelated to any business in which SalesRep is engaged, or (ii) that may
impair the ability of SalesRep to perform its obligations hereunder or to
consummate the transactions contemplated hereby.
(b) SalesRep has heretofore delivered to Interactive accurate and
complete copies of the Certificate of Incorporation and Bylaws (or similar
governing documents), as currently in effect, of SalesRep. Except as set
forth on Schedule 2.1 of the SalesRep Disclosure Schedule, SalesRep is duly
qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except in such jurisdictions where the failure to be so duly
qualified or licensed and in good standing would not have a Material Adverse
Effect on SalesRep.
Section 2.2. Capitalization of SalesRep.
(a) The authorized capital stock of SalesRep consists of: (i) Fifty
Million (50,000,000) SalesRep Common Shares, $.001 par value, of which, as of
June 30, 2001, 15,380,512 SalesRep Shares were issued and outstanding; and
(ii) Ten Million (10,000,000) SalesRep Preferred Shares, $.001 par value, of
which, as of June 30, 2001, there were 14,525 preferred outstanding, and no
SalesRep Shares were held in treasury. All of the outstanding
SalesRep
Shares have been duly authorized and validly issued, and are fully paid,
nonassessable and free of preemptive rights. Except as set forth herein, as
of the date hereof, there are no outstanding (i) shares of capital stock or
other voting securities of SalesRep, (ii) securities of SalesRep convertible
into or exchangeable for shares of capital stock or voting securities of
SalesRep, except for the preferred shares of SalesRep, (iii) options or other
rights to acquire from SalesRep and, except as described in the SalesRep SEC
Reports (as defined below), no obligations of SalesRep to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of SalesRep, and (iv) equity equivalents,
interests in the ownership or earnings of SalesRep or other similar rights
(collectively, "SalesRep Securities"). As of the date hereof, except as set
forth on Schedule 2.2(a) of the SalesRep Disclosure Schedule there are no
outstanding obligations of SalesRep or its subsidiaries to repurchase, redeem
or otherwise acquire any SalesRep Securities or stockholder agreements,
voting trusts or other agreements or understandings to which SalesRep is a
party or by which it is bound relating to the voting or registration of any
shares of capital stock of SalesRep. For purposes of this Agreement, ``Lien"
means, with respect to any asset (including, without limitation, any
security) any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.
(b) The SalesRep Shares constitute the only class of equity securities
of SalesRep registered or required to be registered under the Exchange Act.
(c) SalesRep does not own directly or indirectly more than fifty
percent (50%) of the outstanding voting securities or interests (including
membership interests) of any entity, other than as specifically disclosed in
the SEC Reports.
Section 2.3. Authority Relative to this Agreement; Recommendation.
(a) SalesRep has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement, and the consummation
of the transactions contemplated hereby, have been duly and validly
authorized by the Board of Directors of SalesRep (the "SalesRep Board") and
no other corporate proceedings on the part of SalesRep are necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby, except, as referred to in Section 2.17, the approval and adoption of
this Agreement by the holders of at least a majority of the then outstanding
SalesRep Shares. This Agreement has been duly and validly executed and
delivered by SalesRep and constitutes a valid, legal and binding agreement of
SalesRep, enforceable against SalesRep in accordance with its terms.
(b) The SalesRep Board has resolved to recommend that the stockholders
of SalesRep approve and adopt this Agreement.
Section 2.4. SEC Reports; Financial Statements.
(a) SalesRep has filed all required forms, reports and documents with
the Securities and Exchange Commission (the "SEC") since June 30, 2001, each
of which has complied in all material respects with all applicable
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and the Exchange Act (and the rules and regulations promulgated
thereunder, respectively), each as in effect on the dates such forms, reports
and documents were filed. SalesRep has heretofore delivered or promptly will
deliver prior to the Effective Date to Interactive, in the form filed with
the SEC (including any amendments thereto but excluding any exhibits), (i)
its Annual Report on Form 10-KSB for the fiscal year ended June 30, 2000,
(ii) all definitive proxy statements relating to SalesRep's meetings of
stockholders (whether annual or special) held since June 30, 2001, if any,
and (iii) all other reports or registration statements filed by SalesRep with
the SEC since June 30, 2001 (all of the foregoing, collectively, the
"SalesRep SEC Reports"). None of such SalesRep SEC Reports, including,
without limitation, any financial statements or schedules included or
incorporated by reference therein, contained, when filed, any untrue
statement of a material fact or omitted to state a material fact required to
be stated or incorporated by reference therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The audited financial statements of SalesRep included
in the SalesRep SEC Reports fairly present, in conformity with generally
accepted accounting principles applied on a consistent basis (except as may
be indicated in the notes thereto), the financial position of SalesRep as of
the dates thereof and its results of operations and changes in financial
position for the periods then ended. All material agreements, contracts and
other documents required to be filed as exhibits to any of the SalesRep SEC
Reports have been so filed.
(b) SalesRep has heretofore made available or promptly will make
available to Interactive a complete and correct copy of any amendments or
modifications which are required to be filed with the SEC but have not yet
been filed with the SEC, and any and all other agreements, documents or other
instruments which previously had been filed by SalesRep with the SEC pursuant
to the Exchange Act.
Section 2.5. Information Supplied. None of the information supplied
or to be supplied by SalesRep for inclusion or incorporation by reference in
connection with the Merger (the "Proxy Statement") will at the date mailed to
stockholders of SalesRep and at the times of the meeting or meetings of
stockholders of SalesRep to be held in connection with the Merger, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement, insofar as it relates to the meeting of
SalesRep's stockholders to vote on the Merger, will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
Section 2.6. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Securities Act, the Exchange
Act, state securities or blue sky laws, the Hart-Scott-Rodino Antitrust
Improvements Act of 1916, as amended (the ``HSR Act''), the rules of the
National Association of Securities Dealers, Inc. ("NASD"), the filing and
recordation of the Merger Certificate as required by the NGCL, and as set
forth on Schedule 2.6 of the SalesRep Disclosure Schedule no filing with or
notice to, and no permit, authorization, consent or approval of, any court or
tribunal or administrative, governmental or regulatory body, agency or
authority (a "Governmental Entity") is necessary for the execution and
delivery by SalesRep of this Agreement or the consummation by SalesRep of the
transactions contemplated hereby, except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings or
give such notice would not have a Material Adverse Effect on SalesRep.
Except as set forth in Section 2.6 of the SalesRep Disclosure Schedule,
neither the execution, delivery and performance of this Agreement by SalesRep
nor the consummation by SalesRep of the transactions contemplated hereby will
(i) conflict with or result in any breach of any provision of the respective
Certificate of Incorporation or Bylaws (or similar governing documents) of
SalesRep, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration or Lien) under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which SalesRep is a party or by which any of its properties or
assets may be bound, or (iii) violate any order, writ, injunction, decree,
law, statute, rule or regulation applicable to SalesRep or any of its
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults which would not have a Material Adverse Effect on
SalesRep.
Section 2.7. No Default. Except as set forth in Section 2.7 of the
SalesRep Disclosure Schedule, SalesRep is not in breach, default or violation
(and no event has occurred which with notice or the lapse of time or both
would constitute a breach default or violation) of any term, condition or
provision of (i) its Certificate of Incorporation or Bylaws (or similar
governing documents), (ii) any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which
SalesRep is now a party or by which any of its respective properties or
assets may be bound or (iii) any order, writ injunction, decree, law,
statute, rule or regulation applicable to SalesRep or any of its respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults that would not have a Material Adverse Effect on
SalesRep. Except as set forth in Section 2.7 of the SalesRep Disclosure
Schedule, each note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which SalesRep is now a party
or by which its respective properties or assets may be bound that is material
to SalesRep and that has not expired is in full force and effect and is not
subject to any material default thereunder of which SalesRep is aware by any
party obligated to SalesRep thereunder.
Section 2.8. No Undisclosed Liabilities; Absence of Changes. Except
as set forth in Section 2.8 of the SalesRep Disclosure Schedule and except as
and to the extent publicly disclosed by SalesRep in the SalesRep SEC Reports,
as of March 31, 2001, SalesRep does not have any liabilities or obligations
of any nature, whether or not accrued, contingent or otherwise, that would be
required by generally accepted accounting principles to be reflected on a
balance sheet of SalesRep (including the notes thereto) or which would have a
Material Adverse Effect on SalesRep. Except as publicly disclosed by
SalesRep, since March 31, 2001, SalesRep has not incurred any liabilities of
any nature, whether or not accrued, contingent or otherwise, which could
reasonably be expected to have, and there have been no events, changes or
effects with respect to SalesRep having or which reasonably could be expected
to have, a Material Adverse Effect on SalesRep. Except as and to the extent
publicly disclosed by SalesRep in the SalesRep SEC Reports and except as set
forth in Section 2.8 of the SalesRep Disclosure Schedule, since March 31,
2001, there has not been (i) any material change by SalesRep in its
accounting methods, principles or practices (other than as required after the
date hereof by concurrent changes in generally accepted accounting
principles), (ii) any revaluation by SalesRep of any of its assets having a
Material Adverse Effect on SalesRep, including, without limitation, any
write-down of the value of any assets other than in the ordinary course of
business or (iii) any other action or event that would have required the
consent of any other party hereto pursuant to Section 4.1 of this Agreement
had such action or event occurred after the date of this Agreement.
Section 2.9. Litigation. Except as publicly disclosed by SalesRep in
the SalesRep SEC Reports, there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of SalesRep, threatened against
SalesRep or any of its subsidiaries or any of their respective properties or
assets before any Governmental Entity which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on
SalesRep or could reasonably be expected to prevent or delay the consummation
of the transactions contemplated by this Agreement except as set forth in
Section 2.9 of the Disclosure Schedule. Except as publicly disclosed by
SalesRep in the SalesRep SEC Reports, SalesRep is not subject to any
outstanding order, writ, injunction or decree which, insofar as can be
reasonably foreseen in the future, could reasonably be expected to have a
Material Adverse Effect on SalesRep or could reasonably be expected to
prevent or delay the consummation of the transactions contemplated hereby.
Section 2.10. Compliance with Applicable Law. Except as publicly
disclosed by SalesRep in the SalesRep SEC Reports, SalesRep holds all
permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary for the lawful conduct of their respective
businesses (the "SalesRep Permits"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals which would
not have a Material Adverse Effect on SalesRep. Except as publicly disclosed
by SalesRep in the SalesRep SEC Reports, SalesRep is in compliance with the
terms of the SalesRep Permits, except where the failure so to comply would
not have a Material Adverse Effect on SalesRep. Except as publicly disclosed
by SalesRep in the SalesRep SEC Reports, the business of SalesRep is not
being conducted in violation of any law, ordinance or regulation of any
Governmental Entity except that no representation or warranty is made in this
Section 2.10 with respect to Environmental Laws (as defined in Section 2.12
below) and except for violations or possible violations which do not, and,
insofar as reasonably can be foreseen, in the future will not, have a
Material Adverse Effect on SalesRep. Except as publicly disclosed by
SalesRep in the SalesRep SEC Reports, no investigation or review by any
Governmental Entity with respect to SalesRep is pending or, to the knowledge
of SalesRep, threatened, nor, to the knowledge of SalesRep, has any
Governmental Entity indicated an intention to conduct the same, other than,
in each case, those which SalesRep reasonably believes will not have a
Material Adverse Effect on SalesRep.
Section 2.11. Employee Benefit Plans; Labor Matters.
(a) Except as set forth in Section 2.11(a) of the SalesRep Disclosure
Schedule with respect to each employee benefit plan, program, policy,
arrangement and contract (including, without limitation, any "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), maintained or contributed to at
any time by SalesRep or any entity required to be aggregated with SalesRep
pursuant to Section 414 of the Code (each, a "SalesRep Employee Plan"), no
event has occurred and to the knowledge of SalesRep, no condition or set of
circumstances exists in connection with which SalesRep could reasonably be
expected to be subject to any liability which would have a Material Adverse
Effect on SalesRep.
(b) (i) No SalesRep Employee Plan is or has been subject to Title IV of
ERISA or Section 412 of the Code; and (ii) each SalesRep Employee Plan
intended to qualify under Section 401(a) of the Code and each trust intended
to qualify under Section 501(a) of the Code is the subject of a favorable
Internal Revenue Service determination letter, and nothing has occurred which
could reasonably be expected to adversely affect such determination.
(c) Section 2.11(c) of the SalesRep Disclosure Schedule sets forth a
true and complete list, as of the date of this Agreement, of each person who
holds any SalesRep Stock Options, together with the number of SalesRep Shares
which are subject to such option, the date of grant of such option, the
extent to which such option is vested (or will become vested as a result of
the Merger), the option price of such option (to the extent determined as of
the date hereof), whether such option is a nonqualified stock option or is
intended to qualify as an incentive stock option within the meaning of
Section 422(b) of the Code, and the expiration date of such option. Section
2.11(c) of the SalesRep Disclosure Schedule also sets forth the total number
of such incentive stock options and such nonqualified options. SalesRep has
furnished Interactive with complete copies of the plans pursuant to which the
SalesRep Stock Options were issued. Other than the automatic vesting of
SalesRep Stock Options that may occur without any action on the part of
SalesRep or its officers or directors, SalesRep has not taken any action that
would
result in any SalesRep Stock Options that are unvested becoming vested
in connection with or as a result of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(d) SalesRep has made available to Interactive (i) a description of the
terms of employment and compensation arrangements of all officers of SalesRep
and a copy of each such agreement currently in effect; (ii) copies of all
agreements with consultants who are individuals obligating SalesRep to make
annual cash payments in an amount exceeding $60,000; (iii) a schedule listing
all officers of SalesRep who have executed a non-competition agreement with
SalesRep and a copy of each such agreement currently in effect; (iv) copies
(or descriptions) of all severance agreements, programs and policies of
SalesRep with or relating to its employees, except programs and policies
required to be maintained by law; and (v) copies of all plans, programs,
agreements and other arrangements of SalesRep with or relating to its
employees which contain change in control provisions all of which are set
forth in Section 2.11(d) of the SalesRep Disclosure Schedule.
(e) There shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any SalesRep
Employee Plan or any agreement or arrangement disclosed under this Section
2.11 solely by reason of entering into or in connection with the transactions
contemplated by this Agreement.
(f) There are no controversies pending or, to the knowledge of
SalesRep, threatened, between SalesRep and any of their employees, which
controversies have or could reasonably be expected to have a Material Adverse
Effect on SalesRep. Neither SalesRep nor any of its subsidiaries is a party
to any collective bargaining agreement or other labor union contract
applicable to persons employed by SalesRep or any of its subsidiaries (and
neither SalesRep nor any of its subsidiaries has any outstanding material
liability with respect to any terminated collective bargaining agreement or
labor union contract), nor does SalesRep know of any activities or
proceedings of any labor union to organize any of its or employees. SalesRep
has no knowledge of any strike, slowdown, work stoppage, lockout or threat
thereof, by or with respect to any of its employees.
Section 2.12. Environmental Laws and Regulations.
(a) Except as publicly disclosed by SalesRep in the SalesRep SEC
Reports, (i) SalesRep is in material compliance with all applicable federal,
state, local and foreign laws and regulations relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata)
(collectively, "Environmental Laws"), except for non-compliance that would
not have a Material Adverse Effect on SalesRep, which compliance includes,
but is not limited to, the possession by SalesRep of all material permits and
other governmental authorizations required under applicable Environmental
Laws, and compliance with the terms and conditions thereof; (ii) SalesRep has
not received written notice of, or, to the knowledge of SalesRep, is the
subject of, any action, cause of action, claim, investigation, demand or
notice by any person or entity alleging liability under or non-compliance
with any Environmental Law (an "Environmental Claim") that could reasonably
be expected to have a Material Adverse Effect on SalesRep; and (iii) to the
knowledge of SalesRep, there are no circumstances that are reasonably likely
to prevent or interfere with such material compliance in the future.
(b) Except as publicly disclosed by SalesRep, there are no
Environmental Claims which could reasonably be expected to have a Material
Adverse Effect on SalesRep that are pending or, to the knowledge of SalesRep,
threatened against SalesRep or, to the knowledge of SalesRep, against any
person or entity whose liability for any Environmental Claim SalesRep has or
may have retained or assumed either contractually or by operation of law.
Section 2.13. Tax Matters.
(a) Except as set forth in Section 2.13 of the SalesRep Disclosure
Schedule: (i) SalesRep has filed or has had filed on its behalf in a timely
manner (within any applicable extension periods) with the appropriate
Governmental Entity all income and other material Tax Returns (as defined
herein) with respect to Taxes (as defined herein) of SalesRep and all Tax
Returns were in all material respects true, complete and correct; (ii) all
material Taxes with respect to SalesRep have been paid in full or have been
provided for in accordance with GAAP on SalesRep's most recent balance sheet
which is part of the SalesRep SEC Documents; (iii) there are no outstanding
agreements or waivers extending the statutory period of limitations
applicable to any federal, state, local or foreign income or other material
Tax Returns required to be filed by or with respect to SalesRep; (iv) to the
knowledge of SalesRep none of the Tax Returns of or with respect to SalesRep
is currently being audited or examined by any
Governmental Entity; and (v) no
deficiency for any income or other material Taxes has been assessed with
respect to SalesRep which has not been abated or paid in full.
(b) For purposes of this Agreement, (i) "Taxes" shall mean all taxes,
charges, fees, levies or other assessments, including, without limitation,
income, gross receipts, sales, use, ad valorem, goods and services, capital,
transfer, franchise, profits, license, withholding, payroll, employment,
employer health, excise, estimated, severance, stamp, occupation, property or
other taxes, customs duties, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority, and (ii) "Tax Return"
shall mean any report, return, documents declaration or other information or
filing required to be supplied to any taxing authority or jurisdiction with
respect to Taxes.
Section 2.14. Title to Property. SalesRep has good and defensible
title to all of its properties and assets, free and clear of all liens,
charges and encumbrances except liens for taxes not yet due and payable and
such liens or other imperfections of title, if any, as do not materially
detract from the value of or interfere with the present use of the property
affected thereby or which, individually or in the aggregate, would not have a
Material Adverse Effect on SalesRep; and, to SalesRep's knowledge, all leases
pursuant to which SalesRep leases from others real or personal property are
in good standing, valid and effective in accordance with their respective
terms, and there is not, to the knowledge of SalesRep, under any of such
leases, any existing material default or event of default (or event which
with notice of lapse of time, or both, would constitute a default and in
respect of which SalesRep has not taken adequate steps to prevent such a
default from occurring) except where the lack of such good standing, validity
and effectiveness, or the existence of such default or event, would not have
a Material Adverse Effect on SalesRep.
Section 2.15. Intellectual Property.
(a) SalesRep owns, or possesses adequate licenses or other valid rights
to use, all existing United States and foreign patents, trademarks, trade
names, service marks, copyrights, trade secrets and applications therefor
that are material to its business as currently conducted (the "SalesRep
Intellectual Property Rights").
(b) The validity of the SalesRep Intellectual Property Rights and the
title thereto of SalesRep are not being questioned in any litigation to which
SalesRep is a party.
(c) Except as set forth in Section 2.15(c) of the SalesRep Disclosure
Schedule, the conduct of the business of SalesRep as now conducted does not,
to SalesRep's knowledge, infringe any valid patents, trademarks, trade names,
service marks or copyrights of others. The consummation of the transactions
completed hereby will not result in the loss or impairment of any SalesRep
Intellectual Property Rights.
(d) SalesRep has taken steps it believes appropriate to protect and
maintain its trade secrets as such, except in cases where SalesRep has
elected to rely on patent or copyright protection in lieu of trade secret
protection.
Section 2.16. Insurance. SalesRep currently does not maintain general
liability and other business insurance.
Section 2.17. Vote Required. The affirmative vote of the holders of at
least a majority of the outstanding SalesRep Shares is the only vote of the
holders of any class or series of SalesRep's capital stock necessary to
approve and adopt this Agreement and the Merger.
Section 2.18. Tax Treatment. Neither SalesRep nor, to the knowledge of
SalesRep, any of its affiliates has taken or agreed to take action that would
prevent the Merger from constituting a reorganization qualifying under the
provisions of Section 368(a) of the Code.
Section 2.19. Affiliates. Except for Principal SalesRep Stockholder
and the directors and executive officers of SalesRep, each of whom is listed
in Section 2.19 of the SalesRep Disclosure Schedule, there are no persons
who, to the knowledge of SalesRep, may be deemed to be affiliates of SalesRep
under Rule 1-02(b) of Regulation S-X of the SEC (the "SalesRep Affiliates").
Section 2.20. Certain Business Practices. None of SalesRep or any
directors, officers, agents or employees of SalesRep has (i) used any funds
for unlawful contributions, gifts, entertainment or other unlawful
expenses
relating to political activity, (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended (the "FCPA"), or (iii) made any
other unlawful payment.
Section 2.21. Insider Interests. Except as set forth in Section 2.21
of the SalesRep Disclosure Schedule, neither the SalesRep principal
shareholder nor any officer or director of SalesRep has any interest in any
material property, real or personal, tangible or intangible, including
without limitation, any computer software or SalesRep Intellectual Property
Rights, used in or pertaining to the business of SalesRep, expect for the
ordinary rights of a stockholder or employee stock optionholder.
Section 2.22. Opinion of Financial Adviser. No advisers, as of the
date hereof, have delivered to the SalesRep Board a written opinion to the
effect that, as of such date, the exchange ratio contemplated by the Merger
is fair to the holders of SalesRep Shares.
Section 2.23. Brokers. No broker, finder or investment banker (other
than the SalesRep Financial Adviser, a true and correct copy of whose
engagement agreement has been provided to Interactive) is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of SalesRep.
Section 2.24. Disclosure. No representation or warranty of SalesRep in
this Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to Interactive pursuant hereto or in connection
herewith contains, as of the date of such representation, warranty or
instrument, or will contain any untrue statement of a material fact or, at
the date thereof, omits or will omit to state a material fact necessary to
make any statement herein or therein, in light of the circumstances under
which such statement is or will be made, not misleading.
Section 2.25. No Existing Discussions. As of the date hereof, SalesRep
is not engaged, directly or indirectly, in any discussions or negotiations
with any other party with respect to any Third Party Acquisition (as defined
in Section 4.4).
Section 2.26. Material Contracts.
(a) SalesRep has delivered or otherwise made available to Interactive
true, correct and complete copies of all contracts and agreements (and all
amendments, modifications and supplements thereto and all side letters to
which SalesRep is a party affecting the obligations of any party thereunder)
to which SalesRep is a party or by which any of its properties or assets are
bound that are, material to the business, properties or assets of SalesRep
taken as a whole, including, without limitation, to the extent any of the
following are, individually or in the aggregate, material to the business,
properties or assets of SalesRep taken as a whole, all: (i) employment,
product design or development, personal services, consulting,
non-competition, severance, golden parachute or indemnification contracts
(including, without limitation, any contract to which SalesRep is a party
involving employees of SalesRep); (ii) licensing, publishing, merchandising
or distribution agreements; (iii) contracts granting rights of first refusal
or first negotiation; (iv) partnership or joint venture agreements; (v)
agreements for the acquisition, sale or lease of material properties or
assets or stock or otherwise entered into since December 31, 2000; (vi)
contracts or agreements with any Governmental Entity; and (vii) all
commitments and agreements to enter into any of the foregoing (collectively,
together with any such contracts entered into in accordance with Section 4.1
hereof, the "SalesRep Contracts"). SalesRep is not a party to or bound by
any severance, golden parachute or other agreement with any employee or
consultant pursuant to which such person would be entitled to receive any
additional compensation or an accelerated payment of compensation as a result
of the consummation of the transactions contemplated hereby.
(b) Each of the SalesRep Contracts is valid and enforceable in
accordance with its terms, and there is no default under any SalesRep
Contract so listed either by SalesRep or, to the knowledge of SalesRep, by
any other party thereto, and no event has occurred that with the lapse of
time or the giving of notice or both would constitute a default thereunder by
SalesRep or, to the knowledge of SalesRep, any other party, in any such case
in which such default or event could reasonably be expected to have a
Material Adverse Effect on SalesRep.
(c) No party to any such SalesRep Contract has given notice to SalesRep
of or made a claim against SalesRep with respect to any breach or default
thereunder, in any such case in which such breach or default could reasonably
be expected to have a Material Adverse Effect on SalesRep.
ARTICLE 3
Representations and Warranties of Interactive
Except as set forth on the Disclosure Schedule delivered by Interactive
to SalesRep (the "Interactive Disclosure Schedule"), Interactive hereby
represents and warrants to SalesRep as follows:
Section 3.1. Organization and Qualification.
(a) Each of Interactive and its subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite power and authority to
own, lease and operate its properties and to carry on its businesses as now
being conducted, except where the failure to be so organized, existing and in
good standing or to have such power and authority would not have a Material
Adverse Effect (as defined below) on Interactive. When used in connection
with Interactive, the term "Material Adverse Effect'' means any change or
effect (i) that is or is reasonably likely to be materially adverse to the
business, results of operations, condition (financial or otherwise) or
prospects of Interactive and its subsidiaries, taken as a whole, other than
any change or effect arising out of general economic conditions unrelated to
any businesses in which Interactive and its subsidiaries are engaged, or (ii)
that may impair the ability of Interactive to consummate the transactions
contemplated hereby.
(b) Interactive has heretofore delivered to SalesRep accurate and
complete copies of the Certificate of Incorporation and Bylaws (or similar
governing documents), as currently in effect, of Interactive. Each of
Interactive and its subsidiaries is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary except in such jurisdictions where
the failure to be so duly qualified or licensed and in good standing would
not have a Material Adverse Effect on Interactive.
Section 3.2. Capitalization of Interactive.
(a) As of July 5, 2001, the authorized capital stock of Interactive consists
of Two Hundred Fifty Million (250,000,000) Interactive common Shares, $.01
par value, Twenty Million Eight Hundred Forty Nine Thousand Six Hundred and
Seventeen (20,849,617) Shares of Common Stock were issued and outstanding.
All of the outstanding Interactive Shares of Common Stock have been duly
authorized and validly issued, and are fully paid, nonassessable and free of
preemptive rights.
(b) Except as set forth in Section 3.2(b) of the Interactive Disclosure
Schedule, Interactive is the record and beneficial owner of all of the issued
and outstanding shares of capital stock of its subsidiaries.
(c) Except as set forth in Section 3.2(c) of the Interactive Disclosure
Schedule, between July 5, 2001 and the date hereof, no shares of
Interactive's capital stock have been issued and no Interactive Stock Options
have been granted. Except as set forth in Section 3.2(a) above, as of the
date hereof, there are no outstanding (i) shares of capital stock or other
voting securities of Interactive, (ii) securities of Interactive or its
subsidiaries convertible into or exchangeable for shares of capital stock or
voting securities of Interactive, (iii) options or other rights to acquire
from Interactive or its subsidiaries, or obligations of Interactive or its
subsidiaries to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of
Interactive, or (iv) equity equivalents, interests in the ownership or
earnings of Interactive or its subsidiaries or other similar rights
(collectively, "Interactive Securities"). As of the date hereof, there are
no outstanding obligations of Interactive or any of its subsidiaries to
repurchase, redeem or otherwise acquire any Interactive Securities. There
are no stockholder agreements, voting trusts or other agreements or
understandings to which Interactive is a party or by which it is bound
relating to the voting or registration of any shares of capital stock of
Interactive.
(d) Except as set forth in Section 3.2(d) of the Interactive Disclosure
Schedule, there are no securities of Interactive convertible into or
exchangeable for, no options or other rights to acquire from Interactive, and
no other contract, understanding, arrangement or obligation (whether or not
contingent) providing for the issuance or sale, directly or indirectly, of
any capital stock or other ownership interests in, or any other securities
of, any subsidiary of Interactive.
(e) The Interactive Shares constitute the only class of equity
securities of Interactive or its subsidiaries.
(f) Except as set forth in Section 3.2(f) of the Interactive Disclosure
Schedule, Interactive does not own directly or indirectly more than fifty
percent (50%) of the outstanding voting securities or interests (including
membership interests) of any entity.
Section 3.3. Authority Relative to this Agreement; Recommendation.
(a) Interactive has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of Interactive (the "Interactive Board"), and no other
corporate proceedings on the part of Interactive are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby, except,
as referred to in Section 3.17, the approval and adoption of this Agreement
by the holders of at least a majority of the then outstanding Interactive
Shares. This Agreement has been duly and validly executed and delivered by
Interactive and constitutes a valid, legal and binding agreement of
Interactive, enforceable against Interactive in accordance with its terms.
(b) The Interactive Board has resolved to recommend that the
stockholders of Interactive approve and adopt this Agreement.
Section 3.4. SEC Reports; Financial Statements. Interactive is not
required to file forms, reports and documents with the SEC.
Section 3.5. Information Supplied. None of the information supplied
or to be supplied by Interactive for inclusion or incorporation by reference
to (i) the 8-K will, at the time the 8-K is filed with the SEC and at the
time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not misleading
and (ii) the Proxy Statement will, at the date mailed to stockholders of
SalesRep, if any, and at the times of the meeting or meetings of stockholders
of SalesRep to be held in connection with the Merger, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. The
Proxy Statement, insofar as it relates to the meeting of Interactive's
stockholders to vote on the Merger, will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and
regulations thereunder, and the 8-K will comply as to form in all material
respects with the provisions of the Securities Act and the rules and
regulations thereunder.
Section 3.6. Consents and Approvals; No Violations. Except as set
forth in Section 3.6 of the Interactive Disclosure Schedule, and for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the HSR Act, the rules of the NASD, and the
filing and recordation of the Merger Certificate as required by the NGCL, no
filing with or notice to, and no permit, authorization, consent or approval
of, any Governmental Entity is necessary for the execution and delivery by
Interactive of this Agreement or the consummation by Interactive of the
transactions contemplated hereby, except where the failure to obtain such
permits, authorizations consents or approvals or to make such filings or give
such notice would not have a Material Adverse Effect on Interactive.
Neither the execution, delivery and performance of this Agreement by
Interactive nor the consummation by Interactive of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of the respective Certificate of Incorporation or Bylaws (or
similar governing documents) of Interactive or any of Interactive's
subsidiaries, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration or Lien) under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which Interactive or any of Interactive's subsidiaries is a
party or by which any of them or any of their respective properties or assets
may be bound or (iii) violate any order, writ, injunction, decree, law,
statute, rule or regulation applicable to Interactive or any of Interactive's
subsidiaries or any of their respective properties or assets, except in the
case of (ii) or (iii) for violations, breaches or defaults which would not
have a Material Adverse Effect on Interactive.
Section 3.7. No Default. None of Interactive or any of its
subsidiaries is in breach, default or violation (and no event has occurred
which with notice or the lapse of time or both would constitute a breach,
default or violation) of any term, condition or provision of (i) its
Certificate of Incorporation or Bylaws (or similar governing documents), (ii)
any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which Interactive or any of its
subsidiaries is now a party or by which any of them or any of their
respective properties or assets may be bound, or (iii) any order, writ,
injunction, decree, law, statute, rule or regulation applicable to
Interactive, its subsidiaries or any of their respective properties or
assets, except in the case of (ii) or (iii) for violations, breaches or
defaults that would not have a Material Adverse Effect on Interactive. Each
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which Interactive or any of its subsidiaries is
now a party or by which any of them or any of their respective properties or
assets may be bound that is material to Interactive and its subsidiaries
taken as a whole and that has not expired is in full force and effect and is
not subject to any material default thereunder of which Interactive is aware
by any party obligated to Interactive or any subsidiary thereunder.
Section 3.8. No Undisclosed Liabilities; Absence of Changes. Except
as and to the extent disclosed by Interactive in the Interactive, none of
Interactive or its subsidiaries had any liabilities or obligations of any
nature, whether or not accrued, contingent or otherwise, that would be
required by generally accepted accounting principles to be reflected on a
consolidated balance sheet of Interactive and its consolidated subsidiaries
(including the notes thereto) or which would have a Material Adverse Effect
on Interactive. Except as disclosed by Interactive, none of Interactive or
its subsidiaries has incurred any liabilities of any nature, whether or not
accrued, contingent or otherwise, which could reasonably be expected to have,
and there have been no events, changes or effects with respect to Interactive
or its subsidiaries having or which could reasonably be expected to have, a
Material Adverse Effect on Interactive. Except as and to the extent
disclosed by Interactive there has not been (i) any material change by
Interactive in its accounting methods, principles or practices (other than as
required after the date hereof by concurrent changes in generally accepted
accounting principles), (ii) any revaluation by Interactive of any of its
assets having a Material Adverse Effect on Interactive, including, without
limitation, any write-down of the value of any assets other than in the
ordinary course of business or (iii) any other action or event that would
have required the consent of any other party hereto pursuant to Section 4.2
of this Agreement had such action or event occurred after the date of this
Agreement.
Section 3.9. Litigation. Except as set forth in Schedule 3.9 of the
Interactive Disclosure Schedule there is no suit, claim, action, proceeding
or investigation pending or, to the knowledge of Interactive, threatened
against Interactive or any of its subsidiaries or any of their respective
properties or assets before any Governmental Entity which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect
on Interactive or could reasonably be expected to prevent or delay the
consummation of the transactions contemplated by this Agreement. Except as
disclosed by Interactive, none of Interactive or its subsidiaries is subject
to any outstanding order, writ, injunction or decree which, insofar as can be
reasonably foreseen in the future, could reasonably be expected to have a
Material Adverse Effect on Interactive or could reasonably be expected to
prevent or delay the consummation of the transactions contemplated hereby.
Section 3.10. Compliance with Applicable Law. Except as disclosed by
Interactive, Interactive and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities
necessary for the lawful conduct of their respective businesses (the
"Interactive Permits"), except for failures to hold such permits, licenses,
variances, exemptions, orders and approvals which would not have a Material
Adverse Effect on Interactive. Except as disclosed by Interactive,
Interactive and its subsidiaries are in compliance with the terms of the
Interactive Permits, except where the failure so to comply would not have a
Material Adverse Effect on Interactive. Except as disclosed by Interactive,
the businesses of Interactive and its subsidiaries are not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity
except that no representation or warranty is made in this Section 3.10 with
respect to Environmental Laws and except for violations or possible
violations which do not, and, insofar as reasonably can be foreseen, in the
future will not, have a Material Adverse Effect on Interactive. Except as
disclosed by Interactive no investigation or review by any Governmental
Entity with respect to Interactive or its subsidiaries is pending or, to the
knowledge of Interactive, threatened, nor, to the knowledge of Interactive,
has any Governmental Entity indicated an intention to conduct the same, other
than, in each case, those which Interactive reasonably believes will not have
a Material Adverse Effect on Interactive.
Section 3.11. Employee Benefit Plans; Labor Matters.
(a) With respect to each employee benefit plan, program, policy, arrangement
and contract (including, without limitation, any "employee benefit plan," as
defined in Section 3(3) of ERISA), maintained or contributed to at any
time
by Interactive, any of its subsidiaries or any entity required to be
aggregated with Interactive or any of its subsidiaries pursuant to Section
414 of the Code (each, a "Interactive Employee Plan"), no event has occurred
and, to the knowledge of Interactive, no condition or set of circumstances
exists in connection with which Interactive or any of its subsidiaries could
reasonably be expected to be subject to any liability which would have a
Material Adverse Effect on Interactive.
(b) (i) No Interactive Employee Plan is or has been subject to Title IV
of ERISA or Section 412 of the Code; and (ii) each Interactive Employee Plan
intended to qualify under Section 401(a) of the Code and each trust intended
to qualify under Section 501(a) of the Code is the subject of a favorable
Internal Revenue Service determination letter, and nothing has occurred which
could reasonably be expected to adversely affect such determination.
(c) Section 3.11(c) of the Interactive Disclosure Schedule sets forth a
true and complete list, as of the date of this Agreement, of each person who
holds any Interactive Stock Options, together with the number of Interactive
Shares which are subject to such option, the date of grant of such option,
the extent to which such option is vested (or will become vested as a result
of the Merger), the option price of such option (to the extent determined as
of the date hereof), whether such option is a nonqualified stock option or is
intended to qualify as an incentive stock option within the meaning of
Section 422(b) of the Code, and the expiration date of such option. Section
3.11(c) of the Interactive Disclosure Schedule also sets forth the total
number of such incentive stock options and such nonqualified options.
Interactive has furnished SalesRep with complete copies of the plans pursuant
to which the Interactive Stock Options were issued. Other than the automatic
vesting of Interactive Stock Options that may occur without any action on the
part of Interactive or its officers or directors, Interactive has not taken
any action that would result in any Interactive Stock Options that are
unvested becoming vested in connection with or as a result of the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(d) Interactive has made available to SalesRep (i) a description of the
terms of employment and compensation arrangements of all officers of
Interactive and a copy of each such agreement currently in effect; (ii)
copies of all agreements with consultants who are individuals obligating
Interactive to make annual cash payments in an amount exceeding $60,000;
(iii) a schedule listing all officers of Interactive who have executed a
non-competition agreement with Interactive and a copy of each such agreement
currently in effect; (iv) copies (or descriptions) of all severance
agreements, programs and policies of Interactive with or relating to its
employees, except programs and policies required to be maintained by law; and
(v) copies of all plans, programs, agreements and other arrangements of the
Interactive with or relating to its employees which contain change in control
provisions.
(e) Except as disclosed in Section 3.11(e) of the Interactive
Disclosure Schedule there shall be no payment, accrual of additional
benefits, acceleration of payments, or vesting in any benefit under any
Interactive Employee Plan or any agreement or arrangement disclosed under
this Section 3.11 solely by reason of entering into or in connection with the
transactions contemplated by this Agreement.
(f) There are no controversies pending or, to the knowledge of
Interactive threatened, between Interactive or any of its subsidiaries and
any of their respective employees, which controversies have or could
reasonably be expected to have a Material Adverse Effect on Interactive.
Neither Interactive nor any of its subsidiaries is a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by Interactive or any of its subsidiaries (and neither Interactive
nor any of its subsidiaries has any outstanding material liability with
respect to any terminated collective bargaining agreement or labor union
contract), nor does Interactive know of any activities or proceedings of any
labor union to organize any of its or any of its subsidiaries' employees.
Interactive has no knowledge of any strike, slowdown, work stoppage, lockout
or threat thereof by or with respect to any of its or any of its
subsidiaries' employees.
Section 3.12. Environmental Laws and Regulations.
(a) Except as disclosed by Interactive, (i) each of Interactive and its
subsidiaries is in material compliance with all Environmental Laws, except
for non-compliance that would not have a Material Adverse Effect on
Interactive, which compliance includes, but is not limited to, the possession
by Interactive and its subsidiaries of all material permits and other
governmental authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof; (ii) none of Interactive or
its subsidiaries has received written notice of, or, to the knowledge of
Interactive, is the subject of, any Environmental Claim that could reasonably
be expected to have a
Material Adverse Effect on Interactive; and (iii) to
the knowledge of Interactive, there are no circumstances that are reasonably
likely to prevent or interfere with such material compliance in the future.
(b) Except as disclosed by Interactive, there are no Environmental
Claims which could reasonably be expected to have a Material Adverse Effect
on Interactive that are pending or, to the knowledge of Interactive,
threatened against Interactive or any of its subsidiaries or, to the
knowledge of Interactive, against any person or entity whose liability for
any Environmental Claim Interactive or its subsidiaries has or may have
retained or assumed either contractually or by operation of law.
Section 3.13. Tax Matters. Except as set forth in Section 3.13 of the
Interactive Disclosure Schedule: (i) Interactive and each of its subsidiaries
has filed or has had filed on its behalf in a timely manner (within any
applicable extension periods) with the appropriate Governmental Entity all
income and other material Tax Returns with respect to Taxes of Interactive
and each of its subsidiaries and all Tax Returns were in all material
respects true, complete and correct; (ii) all material Taxes with respect to
Interactive and each of its subsidiaries have been paid in full or have been
provided for in accordance with GAAP on Interactive's most recent balance
sheet; (iii) there are no outstanding agreements or waivers extending the
statutory period of limitations applicable to any federal, state, local or
foreign income or other material Tax Returns required to be filed by or with
respect to Interactive or its subsidiaries; (iv) to the knowledge of
Interactive none of the Tax Returns of or with respect to Interactive or any
of its subsidiaries is currently being audited or examined by any
Governmental Entity; and (v) no deficiency for any income or other material
Taxes has been assessed with respect to Interactive or any of its
subsidiaries which has not been abated or paid in full.
Section 3.14. Title to Property. Interactive and each of its
subsidiaries have good and defensible title to all of their properties and
assets, free and clear of all liens, charges and encumbrances except liens
for taxes not yet due and payable and such liens or other imperfections of
title, if any, as do not materially detract from the value of or interfere
with the present use of the property affected thereby or which, individually
or in the aggregate, would not have a Material Adverse Effect on Interactive;
and, to Interactive's knowledge, all leases pursuant to which Interactive or
any of its subsidiaries lease from others real or personal property are in
good standing, valid and effective in accordance with their respective terms,
and there is not, to the knowledge of Interactive, under any of such leases,
any existing material default or event of default (or event which with notice
or lapse of time, or both, would constitute a material default and in respect
of which Interactive or such subsidiary has not taken adequate steps to
prevent such a default from occurring) except where the lack of such good
standing, validity and effectiveness, or the existence of such default or
event of default would not have a Material Adverse Effect on Interactive.
Section 3.15. Intellectual Property.
(a) Each of Interactive and its subsidiaries owns, or possesses adequate
licenses or other valid rights to use, all existing United States and foreign
patents, trademarks, trade names, services marks, copyrights, trade secrets,
and applications therefore that are material to its business as currently
conducted (the "Interactive Intellectual Property Rights").
(b) Except as set forth in Section 3.15(b) of the Interactive
Disclosure Schedule, the validity of the Interactive Intellectual Property
Rights and the title thereto of Interactive or any subsidiary, as the case
may be, are not being questioned in any litigation to which Interactive or
any subsidiary is a party.
(c) The conduct of the business of Interactive and its subsidiaries as
now conducted does not, to Interactive's knowledge, infringe any valid
patents, trademarks, tradenames, service marks or copyrights of others. The
consummation of the transactions contemplated hereby will not result in the
loss or impairment of any Interactive Intellectual Property Rights.
(d) Each of Interactive and its subsidiaries has taken steps it
believes appropriate to protect and maintain its trade secrets as such,
except in cases where Interactive has elected to rely on patent or copyright
protection in lieu of trade secret protection.
Section 3.16. Insurance. Interactive and its subsidiaries maintain
general liability and other business insurance that Interactive believes to
be reasonably prudent for its business.
Section 3.17. Vote Required. The affirmative vote of the holders of at
least a majority of the outstanding Interactive Shares is the only vote of
the holders of any class or series of Interactive's capital stock necessary
to approve and adopt this Agreement and the Merger.
Section 3.18. Tax Treatment. Neither Interactive nor, to the knowledge
of Interactive, any of its affiliates has taken or agreed to take any action
that would prevent the Merger from constituting a reorganization qualifying
under the provisions of Section 368(a) of the Code.
Section 3.19. Affiliates. Except for the directors and executive
officers of Interactive, each of whom is listed in Section 3.19 of the
Interactive Disclosure Schedule, there are no persons who, to the knowledge
of Interactive, may be deemed to be affiliates of Interactive under Rule 1-
02(b) of Regulation S-X of the SEC (the "Interactive Affiliates").
Section 3.20. Certain Business Practices. None of Interactive, any of
its subsidiaries or any directors, officers, agents or employees of
Interactive or any of its subsidiaries has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties
or campaigns or violated any provision of the FCPA, or (iii) made any other
unlawful payment.
Section 3.21. Insider Interests. Except as set forth in Section 3.21
of the Interactive Disclosure Schedule, no officer or director of Interactive
has any interest in any material property, real or personal, tangible or
intangible, including without limitation, any computer software or
Interactive Intellectual Property Rights, used in or pertaining to the
business of Interactive or any subsidiary, except for the ordinary rights of
a stockholder or employee stock option holder.
Section 3.22. Opinion of Financial Adviser. No advisers, as of the
date hereof, have delivered to the Interactive Board a written opinion to the
effect that, as of such date, the exchange ratio contemplated by the Merger
is fair to the holders of Interactive Shares.
Section 3.23. Brokers. No broker, finder or investment banker (other
than the Interactive Financial Adviser, a true and correct copy of whose
engagement agreement has been provided to SalesRep) is entitled to any
brokerage, finders or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Interactive.
Section 3.24. Disclosure. No representation or warranty of Interactive
in this Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to SalesRep pursuant hereto or in connection
herewith contains, as of the date of such representation, warranty or
instrument, or will contain any untrue statement of a material fact or, at
the date thereof, omits or will omit to state a material fact necessary to
make any statement herein or therein, in light of the circumstances under
which such statement is or will be made, not misleading.
Section 3.25. No Existing Discussions. As of the date hereof,
Interactive is not engaged, directly or indirectly, in any discussions or
negotiations with any other party with respect to any Third Party Acquisition
(as defined in Section 5.4).
Section 3.26. Material Contracts.
(a) Interactive has delivered or otherwise made available to SalesRep
true, correct and complete copies of all contracts and agreements (and all
amendments, modifications and supplements thereto and all side letters to
which Interactive is a party affecting the obligations of any party
thereunder) to which Interactive or any of its subsidiaries is a party or by
which any of their properties or assets are bound that are, material to the
business, properties or assets of Interactive and its subsidiaries taken as a
whole, including, without limitation, to the extent any of the following are,
individually or in the aggregate, material to the business, properties or
assets of Interactive and its subsidiaries taken as a whole, all: (i)
employment, product design or development, personal services, consulting,
non-competition, severance, golden parachute or indemnification contracts
(including, without limitation, any contract to which Interactive is a party
involving employees of Interactive); (ii) licensing, publishing,
merchandising or distribution agreements; (iii) contracts granting rights of
first refusal or first negotiation; (iv) partnership or joint venture
agreements; (v) agreements for the acquisition, sale or lease of material
properties or assets or stock or otherwise; (vi) contracts or agreements with
any Governmental Entity; and (vii) all commitments
and agreements to enter
into any of the foregoing (collectively, together with any such contracts
entered into in accordance with Section 5.2 hereof, the "Interactive
Contracts"). Neither Interactive nor any of its subsidiaries is a party to
or bound by any severance, golden parachute or other agreement with any
employee or consultant pursuant to which such person would be entitled to
receive any additional compensation or an accelerated payment of compensation
as a result of the consummation of the transactions contemplated hereby.
(b) Each of the Interactive Contracts is valid and enforceable in
accordance with its terms, and there is no default under any Interactive
Contract so listed either by Interactive or, to the knowledge of Interactive,
by any other party thereto, and no event has occurred that with the lapse of
time or the giving of notice or both would constitute a default thereunder by
Interactive or, to the knowledge of Interactive, any other party, in any such
case in which such default or event could reasonably be expected to have a
Material Adverse Effect on Interactive.
(c) No party to any such Interactive Contract has given notice to
Interactive of or made a claim against Interactive with respect to any breach
or default thereunder, in any such case in which such breach or default could
reasonably be expected to have a Material Adverse Effect on Interactive.
ARTICLE 4
Covenants
Section 4.1. Conduct of Business of SalesRep. Except as contemplated
by this Agreement or as described in Section 4.1 of the SalesRep Disclosure
Schedule, during the period from the date hereof to the Effective Time,
SalesRep will conduct its operations in the ordinary course of business
consistent with past practice and, to the extent consistent therewith, with
no less diligence and effort than would be applied in the absence of this
Agreement, seek to preserve intact its current business organization, keep
available the service of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings
with it to the end that goodwill and ongoing businesses shall be unimpaired
at the Effective Time. Without limiting the generality of the foregoing,
except as otherwise expressly provided in this Agreement or as described in
Section 4.1 of the SalesRep Disclosure Schedule, prior to the Effective Time,
SalesRep will not, without the prior written consent of Interactive:
(a) amend its Certificate of Incorporation or Bylaws (or other similar
governing instrument);
(b) amend the terms of any stock of any class or any other securities
(except bank loans) or equity equivalents.
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, make any other actual, constructive or deemed distribution in respect
of its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of SalesRep (other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or issue any
debt securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person;
(iii) make any loans, advances or capital contributions to, or investments
in, any other person; (iv) pledge or otherwise encumber shares of capital
stock of SalesRep; or (v) mortgage or pledge any of its material assets,
tangible or intangible, or create or suffer to exist any material Lien
thereupon (other than tax Liens for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit,
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided,
however, that this
paragraph (f) shall not prevent SalesRep from (i) entering into employment
agreements or severance agreements with employees in the ordinary course of
business and consistent with past practice, or (ii) increasing annual
compensation and/or providing for or amending bonus arrangements for
employees for fiscal 2001 in the ordinary course of year-end compensation
reviews consistent with past practice and paying bonuses to employees for
fiscal 2001 in amounts previously disclosed to Interactive (to the extent
that such compensation increases and new or amended bonus arrangements do not
result in a material increase in benefits or compensation expense to
SalesRep);
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions (other than in the ordinary
course of business);
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets including,
without limitation, writing down the value of inventory or writing-off notes
or accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein; (ii) enter into any contract
or agreement other than in the ordinary course of business consistent with
past practice which would be material to SalesRep; (iii) authorize any new
capital expenditure or expenditures which, individually is in excess of
$1,000 or, in the aggregate, are in excess of $5,000; provided, however that
none of the foregoing shall limit any capital expenditure required pursuant
to existing contracts;
(k) make any tax election or settle or compromise any income tax
liability material to SalesRep;
(l) settle or compromise any pending or threatened suit, action or
claim which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on
SalesRep;
(m) commence any material research and development project or terminate
any material research and development project that is currently ongoing, in
either case, except pursuant to the terms of existing contracts or in the
ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1(a) through 4.1(m) or any action which would make
any of the representations or warranties of contained in this Agreement
untrue or incorrect.
Section 4.2. Conduct of Business of Interactive. Except as
contemplated by this Agreement or as described in Section 4.2 of the
Interactive Disclosure Schedule during the period from the date hereof to the
Effective Time, Interactive will conduct its operations in the ordinary
course of business consistent with past practice and, to the extent
consistent therewith, with no less diligence and effort than would be applied
in the absence of this Agreement, seek to preserve intact its current
business organization, keep available the service of its current officers and
employees and preserve its relationships with customers, suppliers and others
having business dealings with it to the end that goodwill and ongoing
businesses shall be unimpaired at the Effective Time. Without limiting the
generality of the foregoing, except as otherwise expressly provided in this
Agreement or as described in Section 4.2 of the Interactive Disclosure
Schedule, prior to the Effective Time, Interactive will not, without the
prior written consent of:
(a) amend its Certificate of Incorporation or Bylaws (or other similar
governing instrument);
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any
stock of any class or any other securities (except bank loans) or equity
equivalents (including, without limitation, any stock options or stock
appreciation rights;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock,
make any other actual, constructive or deemed distribution in respect
of its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger consolidation, restructuring, re-capitalization or other
reorganization of Interactive (other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or issue any
debt securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person;
(iii) make any loans, advances or capital contributions to or investments in,
any other person; (iv) pledge or otherwise encumber shares of capital stock
of Interactive or its subsidiaries; or (v) mortgage or pledge any of its
material assets, tangible or intangible, or create or suffer to exist any
material Lien thereupon (other than tax Liens for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (f) shall not prevent Interactive or its subsidiaries from (i)
entering into employment agreements or severance agreements with employees in
the ordinary course of business and consistent with past practice or (ii)
increasing annual compensation and/or providing for or amending bonus
arrangements for employees for fiscal 2001 in the ordinary course of yearend
compensation reviews consistent with past practice and paying bonuses to
employees for fiscal 2001 in amounts previously disclosed to (to the extent
that such compensation increases and new or amended bonus arrangements do not
result in a material increase in benefits or compensation expense to
Interactive);
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions other than in the ordinary
course of business;
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory of writing-off notes
or accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership, or other business organization or
division thereof or any equity interest therein; (ii) enter into any contract
or agreement other than in the ordinary course of business consistent with
past practice which would be material to Interactive; (iii) authorize any new
capital expenditure or expenditures which, individually, is in excess of
$1,000 or, in the aggregate, are in excess of $5,000: provided, however that
none of the foregoing shall limit any capital expenditure required pursuant
to existing contracts;
(k) make any tax election or settle or compromise any income tax
liability material to Interactive and its subsidiaries taken as a whole;
(l) settle or compromise any pending or threatened suit, action or
claim which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on
Interactive;
(m) commence any material research and development project or terminate
any material research and development project that is currently ongoing, in
either case, except pursuant to the terms of existing contracts or except in
the ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.2(a) through 4.2(m) or any action which would make
any of the representations or warranties of SalesRep contained in this
Agreement untrue or incorrect.
Section 4.3. Preparation of 8-K and the Proxy Statement. Immediately
upon execution of this Agreement, SalesRep shall promptly prepare and file
with the SEC an 8-K with the Agreement attached, and within thirty days
hereof prepare and file a preliminary Proxy Statement, provided, however,
that Interactive shall have had an opportunity to review and comment on the 8-
K and the Proxy Statement prior to filing of such documents with the SEC.
Section 4.4. Other Potential Acquirers. Interactive, its affiliates
and their respective officers, directors, employees, representatives and
agents shall immediately cease any existing discussions or negotiations, if
any, with any parties conducted heretofore with respect to any Third Party
Acquisition.
Section 4.5. Meetings of Stockholders. Each of Interactive and SalesRep
shall take all action necessary, in accordance with the respective General
Corporation Law of its respective state, and its respective certificate of
incorporation and bylaws, to duly call, give notice of, convene and hold a
meeting of its stockholders as promptly as practicable, to consider and vote
upon the adoption and approval of this Agreement and the transactions
contemplated hereby. The stockholder votes required for the adoption and
approval of the transactions contemplated by this Agreement shall be the vote
required by the NGCL and its charter and bylaws, in the case of SalesRep and
the General Corporation Law of its respective state, and its charter and
bylaws, in the case of Interactive. SalesRep and Interactive will, through
their respective Boards of Directors, recommend to their respective
stockholders approval of such matters. Notwithstanding anything to the
contrary contained in this Section 4.5, Interactive may, pursuant to DGCL,
solicit the approval of this Agreement or the transactions contemplated
hereby with the written consent of its stockholders.
Section 4.6. OTC:BB Listing. The parties shall use all reasonable
efforts to cause the SalesRep Shares, subject to Rule 144, to continue to be
traded on the Over The Counter Bulletin Board (OTC:BB).
Section 4.7. Access to Information.
(a) Between the date hereof and the Effective Time, SalesRep will give
Interactive and its authorized representatives, and Interactive will give
SalesRep and its authorized representatives, reasonable access to all
employees, plants, offices, warehouses and other facilities and to all books
and records of itself and its subsidiaries, will permit the other party to
make such inspections as such party may reasonably require and will cause its
officers and those of its subsidiaries to furnish the other party with such
financial and operating data and other information with respect to the
business and properties of itself and its subsidiaries as the other party may
from time to time reasonably request.
(b) Between the date hereof and the Effective Time, SalesRep shall
furnish to Interactive, and Interactive will furnish to SalesRep, within 25
business days after the end of each quarter, quarterly statements prepared by
such party in conformity with its past practices) as of the last day of the
period then ended.
(c) Each of the parties hereto will hold and will cause its consultants
and advisers to hold in confidence all documents and information furnished to
it in connection with the transactions contemplated by this Agreement.
Section 4.8. Additional Agreements, Reasonable Efforts. Subject to
the terms and conditions herein provided, each of the parties hereto agrees
to use all reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things reasonably necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, (i) cooperating in the preparation and filing of the Proxy
Statement and the 8-K, any filings that may be required, and any amendments
to any thereof; (ii) obtaining consents of all third parties and Governmental
Entities necessary, proper or advisable for the consummation of the
transactions contemplated by this Agreement; (iii) contesting any legal
proceeding relating to the Merger; and (iv) the execution of any additional
instruments necessary to consummate the transactions contemplated hereby.
Subject to the terms and conditions of this Agreement, Interactive and
SalesRep agree to use all reasonable efforts to cause the Effective Time to
occur as soon as practicable after the stockholder votes with respect to the
Merger. In case at any time after the Effective Time any further action is
necessary to carry out the purposes of this Agreement, the proper officers
and directors of each party hereto shall take all such necessary action.
Section 4.9. Employee Benefits; Stock Option and Employee Purchase
Plans. Subject to the provisions of Section 1.6(d) hereof, prior to the
Effective Time, SalesRep will take or cause to be taken all action necessary
to adopt and or revise the employment agreements of Ralph Massetti with
SalesRep. It is the parties' present intent to provide after the Effective
Time to employees of Interactive employee benefit plans (other than stock
option or other plans involving the potential issuance of securities of
SalesRep) which, in the aggregate, are not less favorable than those
currently provided by Interactive. Notwithstanding the foregoing, nothing
contained herein shall be construed as requiring the parties to continue any
specific employee benefit plans.
Section 4.10. Public Announcements. Interactive, and SalesRep will
consult with one another before issuing any press release or otherwise making
any public statements with respect to the transactions contemplated by this
Agreement, including, without limitation, the Merger, and shall not issue any
such press release or make any such public statement prior to such
consultation, except as may be required by applicable law or by obligations
pursuant to any listing agreement with the NASD Over The Counter Bulletin
Board (OTC:BB) as determined by Interactive or SalesRep.
Section 4.11. Indemnification.
(a) To the extent, if any, not provided by an existing right under one of
the parties' directors and officers liability insurance policies, from and
after the Effective Time, SalesRep shall, to the fullest extent permitted by
applicable law, indemnify, defend and hold harmless each person who is now,
or has been at any time prior to the date hereof, or who becomes prior to the
Effective Time, a director, officer or employee of the parties hereto or any
subsidiary thereof (each an "Indemnified Party" and, collectively, the
``Indemnified Parties") against all losses, expenses (including reasonable
attorneys' fees and expenses), claims, damages or liabilities or, subject to
the proviso of the next succeeding sentence, amounts paid in settlement
arising out of actions or omissions occurring at or prior to the Effective
Time and whether asserted or claimed prior to, at or after the Effective Time
that are in whole or in part (i) based on, or arising out of the fact that
such person is or was a director, officer or employee of such party or a
subsidiary of such party, or (ii) based on, arising out of or pertaining to
the transactions contemplated by this Agreement. In the event of any such
loss expense, claim, damage or liability (whether or not arising before the
Effective Time), (i) SalesRep shall pay the reasonable fees and expenses of
counsel selected by the Indemnified Parties, which counsel shall be
reasonably satisfactory to SalesRep, promptly after statements therefor are
received and otherwise advance to such Indemnified Party upon request
reimbursement of documented expenses reasonably incurred, in either case to
the extent not prohibited by the NGCL or its certificate of incorporation or
bylaws, (ii) SalesRep will cooperate in the defense of any such matter, and
(iii) any determination required to be made with respect to whether an
Indemnified Party's conduct complies with the standards set forth under the
NGCL and SalesRep's certificate of incorporation or bylaws shall be made by
independent counsel mutually acceptable to SalesRep and the Indemnified
Party; provided, however, that SalesRep shall not be liable for any
settlement effected without its written consent (which consent shall not be
unreasonably withheld). The Indemnified Parties as a group may retain only
one law firm with respect to each related matter except to the extent there
is, in the opinion of counsel to an Indemnified Party, under applicable
standards of professional conduct, a conflict on any significant issue
between positions of any two or more Indemnified Parties.
(b) Notwithstanding anything to the contrary contained in this Section
4.11, SalesRep shall not indemnify, defend or hold harmless any Indemnified
Party against any losses, expenses (including reasonable attorneys' fees and
expenses), claims, damages or liabilities, or any amounts paid in settlement
arising out of actions or omissions occurring prior to, at or after the
Effective Time and whether asserted or claimed prior to, at or after the
Effective Time that are in whole or in part based on, or arising out of the
transfer of assets in, or stock of, Central Solutions, Inc. to Ralph
Massetti.
(c) In the event SalesRep or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity or such consolidation or
merger, or (ii) transfers all or substantially all of its properties and
assets to any person, then and in either such case, proper provision shall be
made so that the successors and assigns of SalesRep shall assume the
obligations set forth in this Section 4.11.
(d) To the fullest extent permitted by law, from and after the
Effective Time, all rights to indemnification now existing in favor of the
employees, agents, directors or officers of SalesRep and Interactive and
their subsidiaries with respect to their activities as such prior to the
Effective Time, as provided in SalesRep's and Interactive's certificate of
incorporation or bylaws, in effect on the date thereof or otherwise in effect
on the date
hereof, shall survive the Merger and shall continue in full force
and effect for a period of not less than six years from the Effective Time.
(e) The provisions of this Section 4.11 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her representatives.
Section 4.12. Notification of Certain Matters. The parties hereto
shall give prompt notice to the other parties, of (i) the occurrence or
nonoccurrence of any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect at or prior to the Effective
Time, (ii) any material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder, (iii) any notice of, or other communication relating to, a default
or event which, with notice or lapse of time or both, would become a default,
received by such party or any of its subsidiaries subsequent to the date of
this Agreement and prior to the Effective Time, under any contract or
agreement material to the financial condition, properties, businesses or
results of operations of such party and its subsidiaries taken as a whole to
which such party or any of its subsidiaries is a party or is subject, (iv)
any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement, or (v) any material adverse
change in their respective financial condition, properties, businesses,
results of operations or prospects taken as a whole, other than changes
resulting from general economic conditions; provided, however, that the
delivery of any notice pursuant to this Section 4.12 shall not cure such
breach or non-compliance or limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
ARTICLE 5
Conditions to Consummation of the Merger
Section 5.1. Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party hereto to effect the Merger
are subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) this Agreement shall have been approved and adopted by the requisite
vote or written consent of the stockholders of SalesRep and Interactive;
(b) this Agreement shall have been approved and adopted by the Board of
Directors of SalesRep and Interactive;
(c) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
United States court or United States governmental authority which prohibits,
restrains, enjoins or restricts the consummation of the Merger;
(d) any waiting period applicable to the Merger under the HSR Act shall
have terminated or expired, and any other governmental or regulatory notices
or approvals required with respect to the transactions contemplated hereby
shall have been either filed or received; and
(e) each party shall take any and all necessary actions to comply with
the provisions of Rule 16(b)-3 promulgated under Section 16 of the Securities
Act of 1934, as amended, including, but not limited to delaying the
appointment of the Interactive Designees to the Board of Directors of
SalesRep until after the Effective Time.
Section 5.2. Conditions to the Obligations of SalesRep. The
obligation of SalesRep to effect the Merger is subject to the satisfaction at
or prior to the Effective Time of the following conditions:
(a) the representations of Interactive contained in this Agreement or in any
other document delivered pursuant hereto shall be true and correct (except to
the extent that the breach thereof would not have a Material Adverse Effect
on Interactive) at and as of the Effective Time with the same effect as if
made at and as of the Effective Time (except to the extent such
representations specifically related to an earlier date, in which case such
representations shall be true and correct as of such earlier date), and at
the Closing Interactive shall have delivered to SalesRep a certificate to
that effect;
(b) each of the covenants and obligations of Interactive to be
performed at or before the Effective Time pursuant to the terms of this
Agreement shall have been duly performed in all material respects at or
before the Effective Time and at the Closing Interactive shall have delivered
to SalesRep a certificate to that effect;
(c) Interactive shall have obtained the consent or approval of each
person whose consent or approval shall be required in order to permit the
Merger as relates to any obligation, right or interest of Interactive under
any loan or credit agreement, note, mortgage, indenture, lease or other
agreement or instrument, except those for which failure to obtain such
consents and approvals would not, in the reasonable opinion of SalesRep,
individually or in the aggregate, have a Material Adverse Effect on
Interactive;
(d) there shall have been no events, changes or effects with respect to
Interactive or its subsidiaries having or which could reasonably be expected
to have a Material Adverse Effect on Interactive;
(e) Interactive shall have deposited, or caused a deposit of $250,000
into the SalesRep general account to be immediately released to Central
Solutions, Inc.; and
(f) SalesRep shall have caused the transfer of Central Solutions, Inc.
to Ralph Massetti, with all liabilities of SalesRep being assumed by Central
Solutions, Inc., and all assets of SalesRep, including the $250,000
referenced in paragraph (e) above in exchange for Ralph Massetti canceling
8,898,320 shares of SalesRep common stock and 14,525 of SalesRep preferred
stock, currently held by Ralph Massetti.
Section 5.3. Conditions to the Obligations of Interactive. The
respective obligations of Interactive to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) the representations of SalesRep contained in this Agreement or in any
other document delivered pursuant hereto shall be true and correct (except to
the extent that the breach thereof would not have a Material Adverse Effect
on SalesRep) at and as of the Effective Time with the same effect as if made
at and as of the Effective Time (except to the extent such representations
specifically related to an earlier date, in which case such representations
shall be true and correct as of such earlier date), and at the Closing
SalesRep shall have delivered to Interactive a certificate to that effect;
(b) each of the covenants and obligations of SalesRep to be performed
at or before the Effective Time pursuant to the terms of this Agreement shall
have been duly performed in all material respects at or before the Effective
Time and at the Closing SalesRep shall have delivered to Interactive a
certificate to that effect;
(c) SalesRep shall have received an indemnification agreement executed
by Central Solutions, Inc. and Ralph Massetti, indemnifying SalesRep for any
and all outstanding liabilities of SalesRep at the Effective Time, in a form
acceptable to Interactive, as determined by Interactive in its sole
discretion, which agreement shall provide, among other things, that (i) Ralph
Massetti's personal liability for indemnification will be capped at $50,000,
subject to the provisions of Section 1.5(c) above; (ii) Ralph Massetti shall
remain personally liable without regard to the $50,000 cap for claims,
liabilities or damages against SalesRep arising out of, from, or relating to
the intentional misrepresentation or fraud by, or gross negligence of, Ralph
Massetti occurring prior to the Effective Time of the Merger; and (iii) any
claim for indemnification that Interactive may have against Ralph Massetti
shall be in addition to any claim for indemnification that Interactive may
have against Central Solutions, Inc.;
(d) SalesRep shall have caused a 1:6 reverse split of its common stock
wherein one share would be exchanged for each six shares of SalesRep;
(e) there shall have been no events, changes or effects with respect to
SalesRep having or which could reasonably be expected to have a Material
Adverse Effect on SalesRep;
(f) SalesRep and Interactive shall have used reasonable efforts to
obtain general liability insurance and directors and officers liability
insurance covering all acts and omissions of directors, officers and
employees of SalesRep occurring prior to the Effective Time;
(g) Interactive shall entered into the Investment Agreement and all
related documents with Swartz Private Equity, LLC; and
(h) SalesRep shall terminate the Investment Agreement and all related
documents with Swartz Private Equity, LLC. All warrants (the "SalesRep
Warrants") received by Swartz Private Equity, LLC pursuant to the Investment
Agreement by and between Swartz Private Equity, LLC and SalesRep dated June
9,2000 (the "SalesRep Investment Agreement") shall survive the termination.
(i) Interactive shall have received a legal opinion from Stoecklein Law
Group, legal counsel for SalesRep, in a form satisfactory to Interactive.
ARTICLE 6
Termination; Amendment; Waiver
Section 6.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether
before or after approval and adoption of this Agreement by SalesRep's or
Interactive's stockholders:
(a) by mutual written consent of SalesRep and Interactive;
(b) by Interactive or SalesRep if (i) any court of competent
jurisdiction in the United States or other United States Governmental Entity
shall have issued a final order, decree or ruling or taken any other final
action restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action is or shall have become nonappealable,
or (ii) the Merger has not been consummated by October 1, 2001; provided,
however, that no party may terminate this Agreement pursuant to this clause
(ii) if such party's failure to fulfill any of its obligations under this
Agreement shall have been the reason that the Effective Time shall not have
occurred on or before said date;
(c) by SalesRep if (i) there shall have been a breach of any
representation or warranty on the part of Interactive set forth in this
Agreement, or if any representation or warranty of Interactive shall have
become untrue, in either case such that the conditions set forth in Section
5.2(a) would be incapable of being satisfied by September 15, 2001 (or as
otherwise extended), (ii) there shall have been a breach by Interactive of
any of their respective covenants or agreements hereunder having a Material
Adverse Effect on Interactive or materially adversely affecting (or
materially delaying) the consummation of the Merger, and Interactive, as the
case may be, has not cured such breach within 20 business days after notice
by SalesRep thereof, provided that SalesRep has not breached any of its
obligations hereunder, (iii) SalesRep shall have convened a meeting of its
stockholders to vote upon the Merger and shall have failed to obtain the
requisite vote of its stockholders, or (iv) SalesRep shall have convened a
meeting of its Board of Directors to vote upon the Merger and shall have
failed to obtain the requisite vote;
(d) by Interactive if (i) there shall have been a breach of any
representation or warranty on the part of SalesRep set forth in this
Agreement, or if any representation or warranty of SalesRep shall have become
untrue, in either case such that the conditions set forth in Section 5.3(a)
would be incapable of being satisfied by September 15, 2001 (or as otherwise
extended), (ii) there shall have been a breach by SalesRep of its covenants
or agreements hereunder having a Material Adverse Effect on SalesRep or
materially adversely affecting (or materially delaying) the consummation of
the Merger, and SalesRep, as the case may be, has not cured such breach
within twenty business days after notice by Interactive thereof, provided
that Interactive has not breached any of its obligations hereunder, (iii) the
SalesRep Board shall have recommended to SalesRep's stockholders a Superior
Proposal, (iv) the SalesRep Board shall have withdrawn, modified or changed
its approval or recommendation of this Agreement or the Merger or shall have
failed to call, give notice of, convene or hold a stockholders' meeting to
vote upon the Merger, or shall have adopted any resolution to effect any of
the foregoing, (v) Interactive shall have convened a meeting of its
stockholders to vote upon the Merger or solicited the written consent of its
stockholders to approve the Merger and shall have failed to obtain the
requisite vote or written consents of its stockholders, or (vi) SalesRep
shall have convened a meeting of its stockholders to vote upon the Merger and
shall have failed to obtain the requisite vote of its stockholders.
Section 6.2. Effect of Termination. In the event of the termination
and abandonment of this Agreement pursuant to Section 6.1, this Agreement
shall forthwith become void and have no effect, without any liability on the
part of any party hereto or its affiliates, directors, officers or
stockholders, other than the provisions of this Section 6.2 and Sections
4.7(c), 6.3 and 6.6 hereof. Nothing contained in this Section 6.2 shall
relieve any party from liability for any breach of this Agreement.
Section 6.3. Fees and Expenses. Except as specifically provided in
this Section 6.3, each party shall bear its own expenses in connection with
this Agreement and the transactions contemplated hereby.
Section 6.4. Amendment. This Agreement may be amended by action taken
by SalesRep and Interactive at any time before or after approval of the
Merger by the stockholders of SalesRep and Interactive (if required by
applicable law) but, after any such approval, no amendment shall be made
which requires the approval of such stockholders under applicable law without
such approval. This Agreement may not be amended except by an instrument in
writing signed on behalf of the parties hereto.
Section 6.5. Extension; Waiver. At any time prior to the Effective
Time, each party hereto may (i) extend the time for the performance of any of
the obligations or other acts of any other party, (ii) waive any inaccuracies
in the representations and warranties of any other party contained herein or
in any document, certificate or writing delivered pursuant hereto, or (iii)
waive compliance by any other party with any of the agreements or conditions
contained herein. Any agreement on the part of any party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such
rights.
Section 6.6. Breakup Fee. If SalesRep or Interactive shall terminate
this Agreement under circumstances other than those permitted in Section
6.1(a), (b), (c) or (d), SalesRep or Interactive shall promptly pay to the
other party a fee equal to $100,000, which amount shall be payable in same
day funds. If not paid when due, amounts payable pursuant to this Section
6.6 shall bear interest at the rate of 12% per annum. SalesRep or
Interactive acknowledges that the agreement contained in this Section 6.6,
(i) reflect reasonable compensation to Interactive or SalesRep for
undertaking the Merger and risking the loss of benefits of the Merger under
the circumstances contemplated by this Section 6.6, (ii) were agreed for the
purpose of inducing SalesRep and Interactive to execute this Agreement and
undertake their respective obligations hereunder, and (iii) are an integral
part of the transactions contemplated by the parties in this Agreement, and
without this agreement, neither SalesRep nor Interactive would have entered
into this Agreement.
ARTICLE 7
Miscellaneous
Section 7.1. Nonsurvival of Representations and Warranties. The
representations and warranties made herein shall not survive beyond the
Effective Time or a termination of this Agreement. This Section 7.1 shall
not limit any covenant or agreement of the parties hereto which by its terms
requires performance after the Effective Time.
Section 7.2. Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings both written and oral, between the parties with respect to the
subject matter hereof and (b) shall not be assigned by operation of law or
otherwise.
Section 7.3. Validity. If any provision of this Agreement, or the
application thereof to any person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby,
and to such end, the provisions of this Agreement are agreed to be severable.
Section 7.4. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person,
by facsimile or by registered or certified mail (postage prepaid, return
receipt requested), to each other party as follows:
If to Interactive:
Interactive Motorsport Inc.
Dominic Chappell, President
if to SalesRep:
SALESREPCENTRAL.COM, INC.
Ralph Massetti, President
7025 E. 1st Avenue, Suite 5
Scottsdale, Arizona 85251
with a copy to:
Donald J. Stoecklein, Esq.
Suite 400
402 West Broadway
San Diego, California 92101
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Section 7.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada, without regard
to the principles of conflicts of law thereof.
Section 7.6. Descriptive Headings. The descriptive headings herein
are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
Section 7.7. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and its successors
and permitted assigns, and except as provided in Sections 4.9 and 4.11,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.
Section 7.8. Certain Definitions. For the purposes of this Agreement,
the term:
(a) "affiliate" means (except as otherwise provided in Sections 2.19, 3.19
and 4.13) a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
the first mentioned person;
(b) "business day" means any day other than a day on which Nasdaq is
closed;
(c) "capital stock" means common stock, preferred stock, partnership
interests, limited liability company interests or other ownership interests
entitling the holder thereof to vote with respect to matters involving the
issuer thereof;
(d) "knowledge" or "known" means, with respect to any matter in
question, if an executive officer of SalesRep or Interactive or its
subsidiaries, as the case may be, has actual knowledge of such matter;
(e) "person" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization or other
legal entity; and
(f) "subsidiary" or "subsidiaries" of SalesRep, Interactive or any
other person, means any corporation, partnership, limited liability company,
association, trust, unincorporated association or other legal entity of which
SalesRep, Interactive or any such other person, as the case may be (either
alone or through or together with any other subsidiary), owns, directly or
indirectly, 50% or more of the capital stock, 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 legal entity.
Section 7.9. Personal Liability. This Agreement shall not create or
be deemed to create or permit any personal liability or obligation on the
part of any direct or indirect stockholder of SalesRep, Interactive or any
officer, director, employee, agent, representative or investor of any party
hereto.
Section 7.10. Specific Performance. The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the Merger, will cause irreparable injury to the
other parties for which damages, even if available, will not be an adequate
remedy. Accordingly, each party hereby consents to the issuance of
injunctive relief by any court of competent jurisdiction to compel
performance of such party's obligations and to the granting by any court of
the remedy of specific performance of its obligations hereunder; provided,
however, that, if a party hereto is entitled to receive any payment or
reimbursement of expenses pursuant to Sections 6.3(a), (b) or (c), it shall
not be entitled to specific performance to compel the consummation of the
Merger.
Section 7.11. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
In Witness Whereof, each of the parties has caused this Agreement to be duly
executed on its behalf as of the day and year first above written.
Interactive Motorsport Inc.
By:/s/ Dominic Chappell
Name: Dominic Chappell
Title: President
SalesRepCentral.com, Inc.
By:/s/Ralph Massetti
Name: Ralph Massetti
Title: President
SALESREPCENTRAL DISCLOSURE SCHEDULE
Schedule 2.1 Organization See Amended
Articles/Bylaws/Minutes
Schedule 2.2 Capitalization/Subsidiaries Subsidiary - Central
Solutions, Inc.
SalesRep Subsidiary, Corp.
Attached to this Disclosure Schedule is a
list of outstanding options/warrants
Schedule 2.6 Consents & Approvals Directors & Shareholders
Schedule 2.7 No Default Not Applicable
Schedule 2.8 No Undisclosed Liability None Exist
Schedule 2.9 Litigation Transportation Media, Inc. v.
SalesRepCentral.com - Case No. 00L01152
Copy Provided
Schedule 2.10 Compliance with Applicable Law Not Applicable - full
disclosed in 10KSB
Schedule 2.11 Employee Benefit Plans Section 2.11(a) Not Applicable -
None Exist
Section 2.11(b) No Benefit Plan Exist
Section 2.11( c)No Options Exist
Section 2.11(d) No Agreements Exist
Schedule 2.12 Environmental Laws and Regs Not Applicable
Schedule 2.13 Tax Matters None Exist
Schedule 2.14 Title to Property None Exist
Schedule 2.15 Intellectual Property Transferred to Central
Solutions
Schedule 2.16 Insurance None Exist
Schedule 2.17 Vote Required See Shareholder Meeting
Certificate
Schedule 2.18 Tax Treatment Not Applicable
Schedule 2.19 Affiliates Ralph Massetti
___________________
Schedule 2.20 Certain Business Practices None Exist
Schedule 2.21 Insider Interest None Exist
Schedule 2.22 Opinion of Financial Adviser Waived - None Exist
Schedule 2.23 Broker None Exist
Schedule 4.1 Conduct of Business See Amended & Restated Articles
INTERACTIVE DISCLOSURE SCHEDULE
The exceptions listed in this Schedule are specific exceptions to the
representations and warranties of Interactive Motorsport, Inc. (the "Company")
contained in Section 3 of the Acquisition Agreement and Plan of Merger (the
"Agreement") dated as of August 13, 2001, between SaleRepCentral.com, Inc. and
the Company. Capitalized terms not defined herein shall have the meanings
ascribed to them in the Agreement.
1. Schedule 3.2(b) Subsidiary Stock
The Company owns 100% of the outstanding common stock of Interactive
Motor Holdings, Ltd, which is in turn owns 100 % of each of the following UK
entities:
A. Interactive Motorsport Championship Limited (3889058)
B. Interactive Motorsport Team Limited (3889056)
C. Interactive Motorsport Developments Limited (3889047)
D. Interactive Motorsport Marketing Limited (3889066)
E. Interactive Motorsport Productions Limited (3889060)
2. Schedule 3.2(c) Capital Stock Rights
The Company has issued and outstanding options to purchase 1,922,172
shares of Common Stock at an exercise price of 10.14 cents per share and
options to purchase 226,955 shares of Common Stock at an exercise price of
22.72 cents per share. The Company has reserved for issuance to employees
options to purchase 1,535,938 shares of Common Stock at an exercise price of
10.14 cents per share. The Company has reserved for issuance to directors
options to purchase 5,085,986 shares of Common Stock at an exercise price of
22.72 cents per share.
The Company has issued and outstanding warrants to purchase 1,478,592
shares of Common Stock at an exercise price of 10.14 cents per share and
warrants to purchase 3,057,000 shares of Common Stock at an exercise price of
22.72 cents per share.
The Company has issued to A Clements a warrant to purchase up to 2,957,000 of
Common Stock of the Company. The Company has reserved 6,727,384 shares of
Common Stock for issuance upon exercise of this warrant and for future stock
issuances.
The Company has issued to Swartz Private Equity, LLC, a private investment
company ("Swartz"), a warrant to purchase 1,307,815 shares of equity of the
Company, which represents 3.5% of the outstanding shares of the Company's Common
Stock, on a fully diluted basis. Upon consummation of the Merger, Swartz will
receive an additional warrant to purchase shares of Common Stock in such amounts
as to result in an ownership percentage equal to 7% of the outstanding shares of
Common Stock of SalesRepCentral.com, Inc., on a fully diluted basis (including
the warrant issued to Swartz by the Company prior to the Merger).
The Company issued to Dunwoody Brokerage Services, Inc., d/b/a Swartz
Institutional Finance ("Dunwoody"), 560,492 shares of Common Stock, which
represents 1.5% of the outstanding shares of the Company's Common Stock, on a
fully diluted basis. Upon consummation of the Merger, the Company will issue to
Dunwoody shares of Common Stock in such amounts as to result in an ownership
percentage equal to 3% of the outstanding shares of Common Stock of
SalesRepCentral.com, Inc., on a fully diluted basis (including the shares of
Common Stock issued to Dunwoody by the Company prior to the Merger).
3. Schedule 3.2(d) Securities conversions
See Schedule 3.2(c) above.
4. Schedule 3.2 (f) Subsidiaries
See Schedule 3.2(b) above.
5. Schedule 3.6 Consents & Approvals
None Required
6. Schedule 3.7 No Default
Not Applicable
7. Schedule 3.8 No Undisclosed Liability
Interactive Motorsport Holdings, Ltd. ("IMH"), a wholly-owned subsidiary of
the Company, has the following undisclosed liabilities:
A. Dispute: IMH entered into a contract for the provision of
services during the course of 2001 that IMH cancelled prior to any material
work being performed. The claim is for less than 20,000(U.K. pound) which is
disputed by IMH.
B. Property Rates.There is a liability order against IMH,dated July
13, 2001,in the amount of 2304.57(U.K. pound) relating to office lease rates
at the office of IMH in Wareham, Dorsent. IMH closed this office in May. The
amount owed relates to the business rates for the period January 2001 -
January 2002, so less than the full amount will be payable. IMH is awaiting
official confirmation of the amount sought.
C. Payables. IMH has account payables in the amount of 244,969
(U.K. pound) plus interest.
D. Loans to IMH.
1) Ben Anderson made a loan to IMH in the amount of
150,000(U.K.pounds). The Company has set aside a sufficient number of
shares of Common Stock to be issued upon conversion in full satisfaction
of this loan. The Company believes that Ben Anderson will convert his loan.
2) Dominic Chappell made a loan IMH in the amount of
225,000(U.K.pounds)(the "Loan"). Dominic subsequently converted 194,908
(U.K.pounds) of this Loan into an option to purchase 1,922,172 shares of
Common Stock at an exercise price of 10.14 cents per share.
The remaining 30,902(U.K.pound) will remain outstanding.
E. Litigation. IMH recently received a claim form (formal
demand) from a provider of advertising services in an amount that is less
than 10,000 (U.K. pound).
F. Material Contracts. IMH has an open contract with Pi group in
technical development services. IMH paid 75,000(U.K. pound) to the Pi group
in October 2000 and all ofthe equipment is awaiting delivery and continued
development upon receipt of additional funds. The contract is currently
active but is on hold for the time being. No amounts are due and owing at
this time. IMH has a non-binding contract with British Racing & Sports Car
Club, a management company that provides IMH with racing circuit access.
Pursuant to this contract, IMH is able to showcase its product. No amounts
are due and owing at this time. IMH has an office lease in Earl's
Court, London that is month to month at the monthly rate of 3,900(U.K. pound).
All rent is current.
8. Schedule 3.9 Litigation
See Schedule 3.8(E) above.
9. Schedule 3.10 Compliance with Applicable Law
Not Applicable
10. Schedule 3.11 Employee Benefit Plans
The Company on occasion grants options to purchase shares of Common
Stock to its employees, officers, directors and consultants. Pursuant to
Section 3.11(c) of the Merger Agreement, below is a list of all holders of
the Company's Stock Options:
Number of Date of Number Exercise Expiration
Name Options Grant Vested Price on Date
Dominic
Chappell 1,922,172 6/6/01 1,922,172 10.14 6/6/11
cents
Gavin
Macaulay 113,478 6/6/01 113,478 22.72 6/6/11
cents
Eddie Johns 113,477 6/6/01 113,477 22.72 6/6/11
cents
Total 2,149,127
11. Schedule 3.12 Environmental Laws and Regulations
Not Applicable
12. Schedule 3.13 Tax Matters
IMH accrues employment taxes on a quarterly basis and pays such tax one
month after each quarter ends. IMH accrues a value added tax on goods and
services (VAT) on a quarterly basis and pays such tax one month after each
quarter ends. The VAT is 17.5% of the price of the goods or services.
13. Schedule 3.15(b) Intellectual Property
Not Applicable
14. Schedule 3.19 Affiliates
The Company believes that the following individuals may be affiliates of
the Company:
Dominic Chappell
Simon Slater
Eddie Johns
Joseph Chappell
15. Schedule 3.20 Certain Business Practices
None Exist
16. Schedule 3.21 Insider Interest
Dominic Chappell made a loan IMH in the amount of 225,000
(U.K.pound)(the"Loan"). Dominic subsequently converted 194,908
(U.K.pound)of this Loan into an option to purchase 1,922,172 shares of
Common Stock at an exercise price of 10.14 cents per share. The remaining
30,902(U.K.pound)will remain outstanding.
17. Schedule 2.23 Broker
The Company issued to Dunwoody Brokerage Services, Inc., d/b/a Swartz
Institutional Finance ("Dunwoody"), 560,492 shares of Common Stock, which
represents 1.5% of the outstanding shares of the Company's Common Stock, on a
fully diluted basis. Upon consummation of the Merger, the Company will issue to
Dunwoody shares of Common Stock in such amounts as to result in an ownership
percentage equal to 3% of the outstanding shares of Common Stock of
SalesRepCentral.com, Inc., on a fully diluted basis (including the shares of
Common Stock issued to Dunwoody by the Company prior to the Merger).
18. Schedule 4.2 Conduct of Business
Not Applicable
SALESREPCENTRAL.COM SIGNS AGREEMENT AND PLAN OF MERGER WITH INTERACTIVE
MOTORSPORT, INC.
August 17, 2001, SCOTTSDALE, AZ - SalesRepCentral.com, Inc. (OTC:BB-
"SREP") announced today that the Company executed an Agreement and Plan of
Merger (the "Merger Agreement") with Interactive Motorsport Inc.
("Interactive").
Pursuant to the Merger Agreement Ralph Massetti, sole officer and director of
SREP, shall exchange 8,898,320 common and 14,525 preferred shares held by him
for 100% of Central Solutions, Inc. ("CSI"), a wholly owned subsidiary of
SREP. As part of the Merger, CSI will acquire all of the assets and assume
all liabilities of SREP. Additionally, SREP will authorize a 1 for 6 reverse
stock split (ie-current SREP stockholders will receive 1 share for every 6
shares they currently hold).
"The choice to merge SREP with Interactive was a difficult one for the
management team and was decided after a thorough study of our options and
serious consideration of current economic factors." Massetti reported. It is
clear that the Internet Segment has, and will remain a challenging market to
maintain revenue and profitability. Adding to the struggle is the sudden and
continuing deterioration of the nation's economic momentum and the
consequential decrease in overall business spending."
"Given the cost and resources required to stay and maintain compliance by a
public company it was clear that our only option was to merge with a company
we felt could carry the task and ultimately provide adequate return to our
current valued shareholders," said Massetti.
Following the reverse split, SREP will issue 7,703,934 shares of its 144
restricted common stock and assume all outstanding warrants and options of
Interactive in exchange for 100% of Interactive's outstanding common stock.
The merger is intended to be a tax-free reorganization accounted for as a
purchase whereby Interactive will merge with a subsidiary of SREP and become
a wholly owned subsidiary of SREP. The merger is subject to regulatory
review, stockholder approval and the satisfaction of other customary
conditions. The merger is anticipated to close on or before September 14,
2001.
Interactive is a producer of digital interactive motorsport video content
generated from contracted live feed video equipment installed in racing cars and
generated from other forms of motorsport. Interactive intends to exploit the use
of the digital video content in real time broadcast through TV and Internet
channels in addition to selling rights for electronic games.
Dominic Chappell, an experienced racing driver and organizer of motorsports
events and winner of the British Championship in 1994/95, CEO of Interactive,
indicated that the merger with SREP provided Interactive with the ability to
capitalize its motorsport opportunities.
SREP's board of directors considered numerous alternatives to the merger with
Interactive. Upon completion of its review, the board determined that the merger
with Interactive is in the best interest of and fair to its stockholders.
SREP urges investors and security holders to read its Proxy Statement and any
other relevant documents relating to the merger transaction described above,
when they become available. When these and other documents relating to the
merger are filed with the SEC, investors and security holders may obtain a
free copy at the SEC's website at www.sec.gov. Stockholders and investors are
urged to read the Definitive Proxy Statement carefully before making a
decision concerning the merger.
Safe Harbor Statement: The statements in this press release regarding the
expected date of closing of the merger, benefits of the merger, tax and
accounting treatment of the merger, Interactive's ability to market its video
content, benefits of the merger on SREP, future opportunities and any other
effect, result or aspect of the proposed transaction and any other
statements, which are not historical facts, are forward looking statements.
Such statements involve risks and uncertainties, including, but not limited
to, costs and difficulties related to the integration of acquired businesses,
costs, delays, and any other difficulties related to the merger, failure of
the parties to satisfy closing conditions, risks and effects of legal and
administrative proceedings and governmental regulation, future financial and
operational results, competition, general economic conditions, and the
ability to manage and continue growth. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect,
actual outcomes may vary materially from those indicated. We undertake no
obligation to revise or update such statements to reflect current events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
SREP plans to file with the SEC a Definitive Proxy Statement in connection
with the merger and mail the Definitive Proxy Statement to its stockholders
of record as of August 20, 2001. The Definitive Proxy Statement will contain
important information about SREP, Interactive, the merger and related matters
that should be considered by stockholders before making any decision
regarding the merger and related transactions. Stockholders of SREP are urged
to read the Definitive Proxy Statement when it is filed and any other
relevant documents filed with the SEC. Once it is filed with the SEC, the
Definitive Proxy Statement and other documents will be available free of
charge on the SEC's website at www.sec.gov. In addition to the Definitive
Proxy Statement, SREP files annual, quarterly and special reports and other
information with the SEC that are also available free of charge at the SEC's
website.
Contact:
SalesRepCentral.com, Inc
(877)-808-7737