UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|x | Preliminary Proxy Statement
| | Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
| | Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material Under Rule 14a-12.
SALESREPCENTRAL.COM, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| | No fee required.
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, par value $.001 per share, of SalesRepCentral.com, Inc.
(2) Aggregate number of securities to which transaction applies:
7,703,942 shares of Common Stock.
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: The filing fee was calculated pursuant to
Exchange Act Rule 0-11 (c)(1), and is the product of multiplying 1/50 of 1%
by an amount equal to the sum of (x) the product of ____________
shares of Common Stock, par value $.001 per share, of SalesRepCentral.com,
Inc. multiplied by $_____________ per share, and (y) $___________ payable to
holders of outstanding options to purchase shares of Common Stock in exchange
for the cancellation of such options.
(4) Proposed maximum aggregate value of transaction: $1,032,815
(5) Total fee paid: $206.56
| | Fee paid previously with preliminary materials.
| | Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
_____________________________________________
(2) Form, Schedule or Registration Statement No.:
_____________________________________________
(3) Filing Party:
_____________________________________________
(4) Date Filed:
_____________________________________________
SALESREPCENTRAL.COM, INC.
8930 E. Raintree Dr. #100
Scottsdale, AZ 85260
(480) 922-8444
Dear SalesRepCentral Stockholder:
You are cordially invited to attend the Special meeting of stockholders
of SalesRepCentral.com, Inc., a Nevada corporation, ("SalesRepCentral") to be
held on Friday, September 28, 2001, at 9:00 a.m., local time, at The
Conference Room, Suite 115 - 1850 E. Flamingo Road, Las Vegas, Nevada 89119.
At the Special meeting, you will be asked to consider and vote upon;
1. The Merger Agreement, dated as of August 14, 2001, by and among
SalesRepCentral, SalesRep Subsidiary Corp., a Nevada corporation and a wholly
owned subsidiary of SalesRepCentral and Interactive Motorsport Inc., a
Delaware corporation, ("Interactive") providing for the Merger (the "Merger")
of Interactive into SalesRep Subsidiary Corp. Pursuant to the Merger,
7,703,942 restricted shares of SalesRepCentral will be exchanged for 100% of
the issued and outstanding shares of Interactive. SalesRepCentral shall also
assume all current outstanding stock options and warrants of Interactive,
which approximate 7.8 million shares. Following the Merger, Interactive will
have merged with SalesRep Subsidiary Corp. wherein SalesRep Subsidiary Corp.
will cease to exist and Interactive will become a wholly owned subsidiary of
SalesRepCentral. Additionally, pursuant to the Merger Agreement Ralph
Massetti, sole officer and director of SalesRepCentral, shall exchange 100%
of his SalesRepCentral shares, 8,898,320 common and 14,525 preferred shares,
for 100% of Central Solutions, Inc. ("CSI"), a wholly owned subsidiary of
SalesRepCentral. As part of the Merger, CSI will be paid $250,000 in cash
from Interactive and will acquire all of the assets and assume all
liabilities of SalesRepCentral;
2. To elect a new board of directors for SalesRepCentral to serve through
the next year, (current nominations are for Ralph Massetti, Joseph Chappell,
Dominic Chappell, Eddie Johns, and Simon Slater);
3. To change the name of SalesRepCentral to Interactive Motorsport Inc.;
4. To cause a pre-merger 6:1 reverse split of SalesRepCentral common stock;
and
5. To transact such other business as may properly come before the Special
meeting or any adjournment or postponement.
In the summer of 2000, the board of directors, consisting solely of
Ralph Massetti, determined that the viability of the Company was dependent
upon raising capital to implement its business plan. The Company proceeded to
file an SB-2 Registration with the Securities and Exchange Commission for the
purpose of raising the required capital. However, timing is everything, and
as we all know the market upset our ability to fund the recently registered
shares. As a result of continuing loan obligations and increasing costs to
remain operational, the board of directors, consisting solely of Ralph
Massetti, determined it in the best interest of the stockholders to find a
merger candidate that would provide some value to the stockholders. After
careful consideration of numerous alternatives, including current economic
conditions and the overall state of the nation's economic momentum and the
consequential decrease in overall business spending, the board of directors
concluded that a Merger proposal by Interactive wherein Interactive would
become a wholly owned subsidiary of SalesRepCentral was the only proposal
available to SalesRepCentral which would provide the stockholders with
anything of value.
The board of directors, consisting solely of Ralph Massetti, has
determined that the terms and conditions of the Merger are fair to, and in
the best interests of the SalesRepCentral stockholders. In reaching its
decision, the board of directors considered, among other things, the fact
that: (i) the stock price of SalesRepCentral had dropped to $0.08 per share,
(ii) the inability of SalesRepCentral to generate sufficient revenues to
cover costs, (iii) existing obligations, and (iv) primarily the inability to
raise equity capital. Therefore, the board of directors recommends that you
vote in favor of the Merger and the transaction contemplated thereby.
The proposed Merger is an important decision for SalesRepCentral and its
stockholders. The Merger cannot occur unless, among other things, the Merger
agreement ("Merger Agreement") is approved by the holders of a majority of
the outstanding shares of SalesRepCentral common stock entitled to vote at
the special meeting. The accompanying proxy statement explains the proposed
Merger and provides specific information concerning the Special meeting. We
encourage you to read this entire document carefully.
Whether or not you plan to attend the Special meeting, please take the
time to vote on the proposal submitted by completing and mailing the enclosed
proxy card to us. Please sign, date and mail your proxy card indicating how
you wish to vote. If you fail to return your proxy card, the effect will be a
vote against the Merger.
Sincerely,
Ralph Massetti
SOLE OFFICER AND DIRECTOR
The Merger and other matters voted upon have not been approved or disapproved
by the Securities and Exchange Commission (the "SEC") or any state securities
regulators nor has the SEC or any state securities regulator passed upon the
fairness or merits of the Merger or upon the accuracy or adequacy of the
information contained in this proxy statement. Any representation to the
contrary is unlawful.
This proxy statement is dated September ___, 2001, and is first being
mailed to SalesRepCentral stockholders on or about September 17 2001 to
stockholders of record as of August 30, 2001.
SALESREPCENTRAL.COM, INC.
8930 E. Raintree Dr. #100
Scottsdale, AZ 85260
(480) 922-8444
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, SEPTEMBER 28, 2001
Dear SalesRepCentral Stockholder:
We will hold the Special meeting of Stockholders of SalesRepCentral.com,
Inc. on Friday, September 28, 2001, at 9:00 a.m., local time, at the
Conference Room, Suite 115, 1850 E. Flamingo Rd., Las Vegas, Nevada 89119,
for the following purposes:
1. The Merger Agreement, dated as of August 14, 2001, by and among
SalesRepCentral, SalesRep Subsidiary Corp., a wholly owned subsidiary of
SalesRepCentral and Interactive Motorsport Inc., ("Interactive") providing
for the Merger (the "Merger") of Interactive into SalesRep Subsidiary Corp.
Pursuant to the Merger, 7,703,942 restricted shares of SalesRepCentral will
be exchanged for 100% of the issued and outstanding shares of Interactive.
SalesRepCentral shall also assume all current outstanding stock options and
warrants of Interactive, which approximate 7.8 million shares. Following the
Merger, Interactive will have merged with SalesRep Subsidiary Corp. wherein
SalesRep Subsidiary Corp. will cease to exist and Interactive will become a
wholly owned subsidiary of SalesRepCentral. Additionally pursuant to the
Merger Agreement Ralph Massetti, sole officer and director of
SalesRepCentral, shall exchange 100% of his SalesRepCentral shares, 8,898,320
common and 14,525 preferred shares, for 100% of Central Solutions, Inc.
("CSI"), a wholly owned subsidiary of SalesRepCentral. As part of the Merger,
CSI will be paid $250,000 in cash from Interactive and will acquire all of
the assets and assume all liabilities of SalesRepCentral;
2. To elect a new board of directors for SalesRepCentral to serve through
the next year, (current nominations are for Ralph Massetti, Joseph Chappell,
Dominic Chappell, Eddie Johns, and Simon Slater);
3. To change the name of SalesRepCentral to Interactive Motorsport Inc.;
4. To cause a pre-merger 6:1 reverse split of SalesRepCentral common stock;
5. To transact such other business as may properly come before the Special
meeting or any adjournment or postponement.
The board of directors, consisting solely of Ralph Massetti, has
determined that the terms and conditions of the Merger are fair to, and in
the best interests of, the SalesRepCentral stockholders and unanimously
recommends that you vote "FOR" the Merger.
Only SalesRepCentral stockholders of record at the close of business on
August 30, 2001, are entitled to notice of and to vote at the Special meeting
or any adjournment or postponement thereof. A complete list of the
stockholders entitled to vote at the Special meeting or any adjournments or
postponements of the Special meeting will be available at and during the
Special meeting.
YOUR VOTE IS IMPORTANT. TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT
THE SPECIAL MEETING, YOU ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED
PROXY CARD AND MAIL IT PROMPTLY TO THE COMPANY, WHETHER OR NOT YOU PLAN TO
ATTEND THE SPECIAL MEETING IN PERSON. YOU MAY REVOKE YOUR PROXY IN THE MANNER
DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT ANYTIME BEFORE IT HAS BEEN
VOTED AT THE SPECIAL MEETING. IF YOU RETURN A PROXY WITHOUT SPECIFYING A
CHOICE ON THE PROXY, THE PROXY WILL BE VOTED "FOR" THE PROPOSALS. IT MAY BE
POSSIBLE FOR YOU TO VOTE IN PERSON AT THE SPECIAL MEETING EVEN IF YOU HAVE
RETURNED A PROXY. PLEASE REVIEW THE PROXY STATEMENT FOR MORE INFORMATION.
By Order of the Board of Directors
Ralph Massetti
SECRETARY
Scottsdale, Arizona
September 10, 2001
TABLE OF CONTENTS
PAGE
SUMMARY TERM SHEET 1
Date, Time and Place 1
Purpose of the Meeting 1
Stockholders Entitled to Vote 2
Vote Required 3
Parties to the Merger 3
Terms of the Merger 4
Central Solutions, Inc. Exchange 4
Exchange of Certificates 4
Recommendation of SalesRepCentral's Board of Directors 5
Dissenters' Rights 5
Federal Income Tax Consequences 5
Interest of Certain Persons in the Merger 6
Regulatory and Third Party Approvals 6
Conditions to the Merger 6
Termination 6
Effective Time 6
Operation of Interactive after the Merger 7
QUESTIONS AND ANSWERS ABOUT THE MERGER 7
WHO CAN HELP ANSWER YOUR QUESTIONS 9
CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS 10
THE SPECIAL MEETING 11
Time, Place And Date 11
Purpose Of The Meeting 11
Record Date And Voting At The Special Meeting 12
Votes Required 12
Solicitation And Proxy Solicitor 12
Revocation And Use Of Proxies 13
Adjournments Or Postponements 13
Insider Participation in Compensation Decision 13
Board of Directors Report on Executive Compensation 13
Audit Committee (No Audit Committee Exists) 14
Independent Auditors 14
SPECIAL FACTORS OF MERGER 15
Background Of The Merger 15
Reasons For The Merger 15
Recommendation Of The Board Of Directors 16
About Interactive Motorsport Inc. 17
Certain Effects Of The Merger 19
Federal Income Tax Consequences 19
Selected Financial Information 21
THE MERGER 22
Effective Time 22
The Merger And Merger Consideration 22
Regulatory Requirements 22
Anticipated Tax and Accounting Treatment 23
Dissenter's and Appraisal Rights 23
Fees And Expenses 25
THE MERGER AGREEMENT 25
Representations And Warranties 25
Conduct Of Business Prior To The Merger 25
Additional Agreements Of SalesRepCentral 26
Director And Officer Indemnification 26
Cooperation And Reasonable Efforts 27
Conditions To The Merger 27
Termination Of The Merger Agreement 28
Termination Fee 28
Extension, Waiver And Amendment 28
Interest of Certain Persons in the Merger 29
Indemnification and Insurance 29
DIRECTORS AND EXECUTIVE OFFICERS OF SALESREPCENTRAL 30
Election of Directors 30
PRINCIPAL STOCKHOLDERS OF SALESREPCENTRAL 33
OTHER MATTERS 34
EXPENSES OF PROXY SOLICITATION 34
WHERE YOU CAN FIND MORE INFORMATION 34
APPENDICES
Appendix A - Merger Agreement A-1
Appendix B - Rights of Dissenting Owners B-1
SUMMARY TERM SHEET
Throughout this proxy statement the term "Merger" means the Merger among
Interactive Motorsport Inc., a Delaware corporation ("Interactive"),
SalesRepCentral.com, Inc., a Nevada corporation ("SalesRepCentral") and
SalesRep Subsidiary Corp., a wholly owned subsidiary of SalesRepCentral,
whereby Interactive will have merged with SalesRep Subsidiary Corp. wherein
SalesRep Subsidiary Corp. will cease to exist and Interactive will become a
wholly owned subsidiary of SalesRepCentral. The term "Merger Agreement" means
the Agreement and Plan of Merger dated as of August 14, 2001, among
Interactive, SalesRepCentral and SalesRep Subsidiary Corp. A copy of the
Merger Agreement is attached as Appendix A to this proxy statement.
In reviewing this proxy statement, please note that SalesRepCentral's board
of directors is comprised solely of Ralph Massetti.
This summary highlights selected information included in this proxy
statement. This summary may not contain all of the information that is
important to you. For a more complete understanding of the Merger and the
other information contained in this proxy statement, you should read this
entire proxy statement carefully, as well as the additional documents to
which it refers. For instructions on obtaining more information, see "Where
You Can Find More Information."
IN ADDITION TO CERTAIN OTHER MATTERS WHICH WILL BE VOTED ON, THE MERGER IS OF
GREAT IMPORTANCE TO THE STOCKHOLDERS OF SALESREPCENTRAL BECAUSE, IF THE
MERGER AND EXCHANGE OF SHARES ARE CONSUMMATED, THE STOCKHOLDER'S EQUITY
INVESTMENT IN SALESREPCENTRAL WILL BE DILUTED FOR AN EQUITY INVESTMENT IN
INTERACTIVE. ACCORDINGLY, STOCKHOLDERS ARE URGED TO READ AND CAREFULLY
CONSIDER THE INFORMATION SUMMARIZED BELOW AND PRESENTED ELSEWHERE IN THIS
PROXY STATEMENT.
Date, Time and Place of the
Special meeting of
SalesRepCentral Stockholders Friday, September 28, 2001, at 9:00 a.m.,
Las Vegas time, at the Conference Room,
Suite 115, 1850 East Flamingo Rd., Las
Vegas, Nevada, ("the Special Meeting").
(See "INTRODUCTION")
Purpose of the Meeting 1. To consider and vote upon the Merger
Agreement, dated as of August 14, 2001,
by and among SalesRepCentral, SalesRep
Subsidiary Corp., a wholly owned
subsidiary of SalesRepCentral and
Interactive Motorsport Inc.,
("Interactive") providing for the Merger
(the "Merger") of Interactive into
SalesRep Subsidiary Corp. Pursuant to the
Merger, 7,703,942 restricted shares of
SalesRepCentral will be exchanged for
100% of the issued and outstanding shares
of Interactive. SalesRepCentral shall
also assume all current outstanding stock
options and warrants of Interactive,
which approximate 7.8 million shares.
Following the Merger, Interactive will
have merged with SalesRep Subsidiary
Corp. wherein SalesRep Subsidiary Corp.
will cease to exist and Interactive will
become a wholly owned subsidiary of
SalesRepCentral. Additionally pursuant to
the Merger Agreement Ralph Massetti, sole
officer and director of SalesRepCentral,
shall exchange 100% of his
SalesRepCentral shares, 8,898,320 common
and 14,525 preferred shares, for 100% of
Central Solutions, Inc. ("CSI"), a wholly
owned subsidiary of SalesRepCentral. As
part of the Merger, CSI will be paid
$250,000 in cash from Interactive and
will acquire all of the assets and assume
all liabilities of SalesRepCentral;
2. To elect a new board of directors
for SalesRepCentral to serve through the
next year, (current nominations are for
Ralph Massetti, Joseph Chappell, Dominic
Chappell, Eddie Johns, and Simon Slater);
3. To change the name of
SalesRepCentral to Interactive Motorsport
Inc.;
4. To cause a pre-merger 6:1 reverse
split of the Company's common stock; and
5. To transact such other business as
may properly come before the Special
meeting or any adjournment or
postponement.
Stockholders Entitled to Vote Only SalesRepCentral stockholders of
record at 5:00 p.m., Las Vegas time on
August 30, 2001 are entitled to notice of
and to vote at the Special Meeting.
Vote Required Under Nevada law, the approval and
adoption of the Merger Agreement requires
the affirmative vote of the holders of a
majority of the SalesRepCentral Common
Stock outstanding and entitled to vote.
SalesRepCentral anticipates that Ralph
Massetti, the current sole officer and
director of SalesRepCentral and principal
stockholder, will abstain his vote due to
conflicts inherent in the transaction. As
of August 14, 2001, Ralph Massetti owned
8,898,320 shares of SalesRepCentral
Common Stock representing 57.85% of the
15,380,512 outstanding shares of
SalesRepCentral Common Stock. See
"Introduction," and "The Merger-Vote
Required."
Parties to the Merger:
SalesRepCentral SalesRepCentral.com, Inc., a Nevada
corporation was formed in May of 1999, is
an online sales community and content
provider of online B2B Internet resources
for the corporate sales team. The
Company's content was specifically
designed to provide comprehensive sales
resources, daily training articles, and
other features that meet the needs of the
sales-professional. The Company's web
portal was developed exclusively for the
sales community including professional
sales-representatives, sales-managers and
corporate executives.
The principal executive offices of
SalesRepCentral are located at 8930 E.
Raintree Dr. #100, Scottsdale, AZ 85260.
(480) 922-8444
Interactive Motorsport Inc. Interactive Motorsport Inc., along with
its wholly owned subsidiary Interactive
Motorsport Holdings Limited, is a
producer of digital interactive motor
racing video content generated from
contracted live feed video equipment
installed in racing cars. The Company
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.
The principal executive offices of
Interactive Motorsport Inc. are located
at 59 Earls Court Square, London, SW5
9DG. (0)20 7244 8553.
SalesRep Subsidiary Corp. SalesRep Subsidiary Corp., a Nevada
corporation and wholly owned subsidiary
of SalesRepCentral, was formed solely to
merge with and into Interactive and
consequentially cease to exist.
Terms of the Merger As a result of the Merger Interactive
shareholders will receive 7,703,942
shares of common stock, $0.001 par value,
of SalesRepCentral ("SalesRepCentral
Common Stock") following a pre-merger 6:1
reverse split. Additionally,
SalesRepCentral shall assume all current
outstanding stock options and warrants of
Interactive, which approximate 7.8
million shares. See "The Merger-
Capitalization of SalesRepCentral and
Exchange of Shares."
Central Solutions, Inc. Exchange Pursuant to the Merger 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 be paid $250,000 in cash
from Interactive and will acquire all of
the assets and assume all liabilities of
SalesRepCentral.
Exchange of Certificates If the Merger is consummated, exchange of
certificates formerly representing shares
of Interactive Common Stock for
certificates representing the appropriate
number of shares of SalesRepCentral
Common Stock will be made upon surrender
to Sperry Young & Stoecklein, ("Exchange
Agent") 1850 E. Flamingo Rd., Suite 111,
Las Vegas, Nevada, 89119, of the
certificates formerly representing 100%
of Interactive Common Stock.
Recommendation of SalesRepCentral
Board of Directors; Reasons for
the Merger; Fairness The board of directors of SalesRepCentral
has duly approved and executed the Merger
Agreement and recommends a vote in favor
of it in the belief that the Merger is in
the best interest of SalesRepCentral
stockholders. Before giving this
approval, the SalesRepCentral board
reviewed a number of factors, including
the terms of the Merger Agreement, the
shares being issued to Interactive, and
information regarding the financial
condition, operations and prospects of
both Interactive and SalesRepCentral. The
SalesRepCentral board also found that the
value of the Interactive Common Stock to
be issued pursuant to the Merger
Agreement compared favorably with the
value of SalesRepCentral Common Stock, in
light of the technology being acquired as
the result of the Interactive Merger and
the current financial condition and state
of the technology of SalesRepCentral. See
"Special Factors of the Merger -
Recommendation of Board of Directors."
Dissenters' Rights Holders of SalesRepCentral Common Stock
who perfect dissenters' rights pursuant
to Sections 78.471 through 78.502 of the
Nevada General Corporation Law will be
entitled to receive cash for their shares
in accordance with such sections. TO
PERFECT DISSENTERS' RIGHTS, IT IS
IMPORTANT TO FOLLOW THE PROCEDURES SET
FORTH IN THE NEVADA STATUTE. See "The
Merger - Dissenters' Rights."
Federal Income Tax Consequences For federal income tax purposes, it is
intended that the Merger constitute a
"reorganization" under Section
368(a)(2)(E) of the Internal Revenue Code
so that no gain or loss will be
recognized by SalesRepCentral. See
"Special Factors of the Merger - Federal
Income Tax Consequences."
Interests of Certain Persons in
the Merger The Merger agreement provides that
indemnification and insurance will be
maintained for SalesRepCentral officers
and directors, and indemnification
provisions in SalesRepCentral current
articles of incorporation and bylaws will
be continued, for six years after the
Merger. However, no indemnification will
be provided for the transfer of assets
in, or stock of, Central Solutions, Inc.
See "The Merger Agreement-Director and
Officer Indemnification" and "Interests
of Certain Persons in the Merger-
Indemnification" for further information.
Regulatory and Third Party
Approvals Other than compliance with the Hart-Scott-
Rodino Antitrust Improvements Act of
1976, no material regulatory approvals
are required. Failure to obtain non-
material governmental consents will not
prevent completion of the Merger. See
"The Merger - Regulatory Requirements."
Conditions to the Merger;
Termination Notwithstanding approval of the Merger
Agreement by SalesRepCentral
stockholders, consummation of the Merger
is subject to a number of conditions
which, if not fulfilled or waived, permit
termination of the Merger Agreement,
including the absence of any temporary
restraining order, preliminary or
permanent injunction, or other order
preventing consummation of the Merger or
any transaction contemplated by the
Merger Agreement. The Merger Agreement
will terminate by its terms if the Merger
has not occurred on or prior to the
earlier of October 1, 2001 or five
business days following the
SalesRepCentral stockholder approval of
the Merger Agreement. The Merger may also
be abandoned by mutual consent, and in
certain other circumstances. See "The
Merger - Conditions to the Merger."
Effective Time If the Merger Agreement is adopted and
approved at the Special Meeting, and all
other conditions to the Merger have been
met or waived, the parties expect the
Merger to be effective as soon as
possible following the Special Meeting.
See "The Merger - Conditions to the
Merger." If all conditions are not met or
waived, there could be a delay in the
Effective Time or the Merger Agreement
could be terminated.
Operation of SalesRepCentral
(Interactive Post Merger) after
the Merger It is contemplated that, after the
Merger, SalesRepCentral (Interactive Post
Merger after name change) will operate
through the current facilities of
Interactive. See "The Merger."
QUESTIONS AND ANSWERS ABOUT THE MERGER
WHY SHOULD SALESREPCENTRAL MERGE WITH INTERACTIVE?
In the summer of 2000, the board of directors determined that the
viability of the Company was dependent upon raising capital to implement its
business plan. The Company proceeded to file an SB-2 Registration with the
Securities and Exchange Commission for the purpose of raising the required
capital. However, timing is everything, and as we all know the market upset
our ability to fund the recently registered shares. As a result of continuing
loan obligations and increasing costs to remain operational, the board of
directors determined it in the best interest of the stockholders to find a
merger candidate that would provide some value to the stockholders. After
careful consideration of numerous alternatives, including current economic
conditions and the overall state of the nation's economic momentum and the
consequential decrease in overall business spending, the board of directors
concluded that a Merger proposal by Interactive wherein Interactive would
become a wholly owned subsidiary of SalesRepCentral was the only proposal
available to SalesRepCentral which would provide the stockholders with
anything of value.
Although the board considered other proposals, most proposals included a
major reverse split in the stock with companies without assets, contracts, or
revenues. Even though Interactive Motorsport is a new company, with assets of
approximately $2.5 million and liabilities of approximately $1.04 million, it
has the rights to digital interactive motor sport content derived from the
Interactive Sportscar Championship with contracts with the Pi Group, leaders
in the field of race car digital technology component design and system
integration.
The board of directors has determined that the terms and conditions of
the Merger are fair to, and in the best interests of the SalesRepCentral
stockholders. In reaching its decision, the board of directors considered,
among other things, the fact that: (i) Interactive is a company with greater
net worth than SalesRepCentral and greater perceived value, (ii) the stock
price of SalesRepCentral had dropped to $0.08 per share, (iii) the inability
of SalesRepCentral to generate sufficient revenues to cover costs, (iv)
existing obligations, and (v) primarily the inability to raise equity
capital. Therefore, the board of directors recommends that you vote in favor
of the Merger and the transaction contemplated thereby.
WHAT WILL HAPPEN TO SALESREPCENTRAL AFTER THE MERGER?
If the Merger is approved by SalesRepCentral stockholders,
SalesRepCentral will reverse split its stock on the basis of 1 share for each
6 shares owned, and will concurrently issue 7,703,942 shares in exchange for
100% of the shares of Interactive. SalesRepCentral shall also assume all
current outstanding stock options and warrants of Interactive, which
approximate 7.8 million shares. Interactive's board of directors are being
concurrently elected to act as the board of directors until the next
stockholders meeting of SalesRepCentral. Further, concurrently with the
merger closing, SalesRepCentral will change its name to Interactive
Motorsport Inc., and will move its offices to the offices of Interactive.
Additionally, pursuant to the Merger Agreement Ralph Massetti, sole
officer and director of SalesRepCentral, shall exchange 100% of his
SalesRepCentral shares, 8,898,320 common and 14,525 preferred shares, for
100% of Central Solutions, Inc. ("CSI"), a wholly owned subsidiary of
SalesRepCentral. As part of the Merger, CSI will be paid $250,000 in cash
from Interactive and will acquire all of the assets and assume all
liabilities of SalesRepCentral.
ARE THERE RISKS TO BE CONSIDERED?
The Merger is contingent upon, among other things, stockholder approval
and governmental approvals. If any of these or other conditions are not
satisfied, or for some other reason the transaction does not close,
SalesRepCentral's stock would be subject to market risks.
IF MY SHARES OF SALESREPCENTRAL COMMON STOCK ARE HELD IN "STREET NAME" BY MY
BROKER, WILL MY BROKER VOTE MY SHARES FOR ME?
No. The law does not allow your broker to vote your shares of
SalesRepCentral common stock on the Merger at the Special meeting without
your direction. You should follow the instructions from your broker on how to
vote your shares. Shares that are not voted because you do not instruct your
broker are called "broker non-votes," and will have the effect of a vote
"AGAINST" the Merger.
IF I SEND IN MY PROXY CARD BUT DO NOT INDICATE MY VOTE, HOW WILL MY SHARES BE
VOTED?
If you sign and return your proxy card but do not indicate how to vote
your shares at the Special meeting, the shares represented by your proxy will
be voted "FOR" the Proposals.
WHAT IF I DON'T RETURN MY PROXY CARD?
Since it takes a majority of the shares outstanding to approve the
Proposals, not returning your proxy card is the same as voting against the
Merger.
WHAT SHOULD I DO NOW TO VOTE AT THE SPECIAL MEETING?
Sign, mark and mail your proxy card indicating your vote on the Merger
in the enclosed return envelope as soon as possible, so that your shares of
SalesRepCentral common stock can be voted at the Special meeting.
MAY I CHANGE MY VOTE AFTER I MAIL MY PROXY CARD?
Yes. You may change your vote at any time before your proxy is voted at
the Special meeting. You can do this in three ways:
* You can send SalesRepCentral a written statement that you revoke your
proxy, which to be effective must be received prior to the vote at the
Special meeting;
* You can send SalesRepCentral a new proxy card prior to the vote at the
Special meeting, which to be effective must be received by SalesRepCentral
prior to the vote at the Special meeting; or
* You can attend the Special meeting and vote in person. Your attendance
alone will not revoke your proxy. You must attend the Special meeting and
cast your vote at the Special meeting.
Send any revocation of a proxy or new proxy card to the attention of the
Corporate Secretary at SalesRepCentral, 8930 E. Raintree Dr. #100,
Scottsdale, AZ 85260. (480) 922-8444. If your shares are held in street name,
you must follow the directions provided by your broker to vote your shares or
to change your instructions.
WHO CAN HELP ANSWER YOUR QUESTIONS
If you have more questions about the Merger or would like additional
copies of the proxy statement, you should contact:
SalesRepCentral.com, Inc.
8930 E. Raintree Dr. #100
Scottsdale, AZ 85260
Attention: Ralph Massetti
President, and Secretary
Telephone Number: (480) 922-8444
CAUTIONARY STATEMENT CONCERNING
FORWARD LOOKING STATEMENTS
This proxy statement and the documents to which we refer you to in this
proxy statement contain forward-looking statements. In addition, from time to
time, we or our representatives may make forward-looking statements orally or
in writing. We base these forward-looking statements on our expectations and
projections about future events, which we derive from the information
currently available to us. Such forward-looking statements relate to future
events or our future performance, including:
* our financial performance and projections;
* our growth in revenue and earnings; and
* our business prospects and opportunities.
You can identify forward-looking statements by those that are not
historical in nature, particularly those that use terminology such as "may,"
"will," "should," "expects," "anticipates," "contemplates," "estimates,"
"believes", "plans," "projected," "predicts," "potential" or "continue" or
the negative of these or similar terms. In evaluating these forward-looking
statements, you should consider various factors, including
* our ability to retain the business of our significant customers;
* our ability to keep pace with new technology and changing market needs;
* our ability, upon completion of the merger, to obtain capital; and
* the competitive environment of our business.
These and other factors may cause our actual results to differ
materially from any forward-looking statement.
Forward-looking statements are only predictions. The forward-looking
events discussed in this proxy statement, the documents to which we refer you
and other statements made from time to time by us or our representatives, may
not occur, and actual events and results may differ materially and are
subject to risks, uncertainties and assumptions about us. We are not
obligated to publicly update or revise any forward-looking statement, whether
as a result of uncertainties and assumptions, the forward-looking events
discussed in this proxy statement, the documents to which we refer you and
other statements made from time to time by us or our representatives, might
not occur.
THE SPECIAL MEETING
TIME, PLACE AND DATE
We are furnishing this proxy statement to SalesRepCentral stockholders
in connection with the solicitation of proxies by the SalesRepCentral board
of directors for use at the Special meeting of stockholders of
SalesRepCentral to be held on Friday, September 28, 2001, at 9:00 a.m., local
time, at the Conference Room, Suite 115, 1850 East Flamingo Rd., Las Vegas,
Nevada, or any adjournment or postponement thereof, pursuant to the enclosed
Notice of Special Meeting of Stockholders.
PURPOSE OF THE MEETING
At the Special meeting, holders of SalesRepCentral common stock of
record as of the close of business on August 30, 2001 will be eligible to
vote upon:
1. The Merger Agreement, dated as of August 14, 2001, by and among
SalesRepCentral, SalesRep Subsidiary Corp., a wholly owned subsidiary of
SalesRepCentral and Interactive Motorsport Inc., ("Interactive") providing
for the Merger (the "Merger") of Interactive into SalesRep Subsidiary Corp.
Pursuant to the Merger, 7,703,942 restricted shares of SalesRepCentral will
be exchanged for 100% of the issued and outstanding shares of Interactive.
SalesRepCentral shall also assume all current outstanding stock options and
warrants of Interactive, which approximate 7.8 million shares. Following the
Merger, Interactive will have merged with SalesRep Subsidiary Corp. wherein
SalesRep Subsidiary Corp. will cease to exist and Interactive will become a
wholly owned subsidiary of SalesRepCentral. Additionally pursuant to the
Merger Agreement Ralph Massetti, sole officer and director of
SalesRepCentral, shall exchange 100% of his SalesRepCentral shares, 8,898,320
common and 14,525 preferred shares, for 100% of Central Solutions, Inc.
("CSI"), a wholly owned subsidiary of SalesRepCentral. As part of the Merger,
CSI will be paid $250,000 in cash from Interactive and will acquire all of
the assets and assume all liabilities of SalesRepCentral;
2. To elect a new board of directors for SalesRepCentral to serve through
the next year, (current nominations are for Ralph Massetti, Joseph Chappell,
Dominic Chappell, Eddie Johns, and Simon Slater);
3. To change the name of SalesRepCentral to Interactive Motorsport Inc.;
4. To cause a pre-merger 6:1 reverse split of the Company's common stock;
5. To transact such other business as may properly come before the Special
meeting or any adjournment or postponement.
RECORD DATE AND VOTING AT THE SPECIAL MEETING
The board of directors has fixed the close of business on August 30,
2001, as the record date for the determination of the stockholders entitled
to notice of, and to vote at, the Special meeting and any adjournments and
postponements of the Special meeting. On that day, there were 15,380,512
shares of SalesRepCentral common stock outstanding, which shares were held by
approximately 100 stockholders of record. Holders of SalesRepCentral common
stock are entitled to one vote per share. SalesRepCentral anticipates that
Ralph Massetti, the current sole officer and director of SalesRepCentral and
principal stockholder, will abstain his vote due to conflicts inherent in the
transaction. As of August 30, 2001, Ralph Massetti owned 8,898,320 shares of
Common Stock representing 57.85% of the outstanding shares.
A majority of the issued and outstanding shares of SalesRepCentral
common stock on the record date, represented in person or by proxy, will
constitute a quorum for the transaction of business at the Special meeting.
If a quorum is not present, the Special meeting may be adjourned from time to
time, until a quorum is present. Abstentions and broker non-votes are counted
as present for purposes of determining the presence of a quorum at the
Special meeting for the transaction of business.
Any stockholder of SalesRepCentral has the right to vote against approval of
the Merger and the Merger agreement. However, under Nevada law, because
SalesRepCentral is a publicly traded corporation, SalesRepCentral
stockholders have no statutory dissenters' rights of appraisal. See "Merger-
Rights of Dissenting Stockholders."
VOTES REQUIRED
Approval of any Proposal requires the affirmative vote of holders of a
majority of the outstanding shares of SalesRepCentral common stock entitled
to vote at the Special meeting. A failure to vote or a broker non-vote will
have the same legal effect as a vote cast against approval of any Proposal.
Brokers, and in many cases nominees, will not have discretionary power
to vote on the proposals to be presented at the Special meeting. Accordingly,
beneficial owners of shares must instruct their brokers or nominees how to
vote their shares at the Special meeting.
SOLICITATION AND PROXY SOLICITOR
SalesRepCentral will bear all expenses of the solicitation of proxies in
connection with this proxy statement, including the cost of preparing and
mailing this proxy statement. SalesRepCentral will reimburse brokers,
fiduciaries, custodians and their nominees for reasonable out-of-pocket
expenses incurred in sending this proxy statement and other proxy materials
to, and obtaining instructions relating to such materials from, beneficial
owners of SalesRepCentral common stock. SalesRepCentral stockholder proxies
may be solicited by directors, officers and employees of SalesRepCentral in
person or by telephone, facsimile or by other means of communication.
However, they will not be paid for soliciting proxies.
REVOCATION AND USE OF PROXIES
The enclosed proxy card is solicited on behalf of the SalesRepCentral
board of directors. A stockholder giving a proxy has the power to revoke it
at any time before it is exercised by (i) delivering a written notice
revoking the proxy to SalesRepCentral before the vote at the Special meeting;
(ii) executing a proxy with a later date and delivering it to SalesRepCentral
before the vote at the Special meeting; or (iii) attending the Special
meeting and voting in person. Any written notice of revocation should be
delivered to the attention of the Corporate Secretary at SalesRepCentral,
8930 E. Raintree Dr. #100, Scottsdale, AZ 85260. Attendance at the Special
meeting without casting a ballot will not, by itself, constitute revocation
of a proxy.
Subject to proper revocation, all shares of SalesRepCentral common stock
represented at the Special meeting by properly executed proxies received by
SalesRepCentral will be voted in accordance with the instructions contained
in such proxies. Executed, but unmarked, proxies will be voted "FOR" approval
of the Proposals.
ADJOURNMENTS OR POSTPONEMENTS
Although it is not expected, the Special meeting may be adjourned or
postponed for the purpose of soliciting additional proxies. Any adjournment
or postponement of the Special meeting may be made without notice, other than
by an announcement made at the Special meeting, by approval of the holders of
a majority of the votes present in person or represented by proxy at the
Special meeting, whether or not a quorum exists. Any signed proxies received
by SalesRepCentral will be voted in favor of an adjournment or postponement
of the Special meeting in these circumstances, unless either a written note
on the proxy delivered by the stockholder directs otherwise or the
stockholder has voted against the Merger agreement. Thus, proxies voting
against the Merger agreement will not be used to vote for adjournment of the
Special meeting for the purpose of providing additional time to solicit votes
to approve the Merger agreement. Any adjournment or postponement of the
Special meeting for the purpose of soliciting additional proxies will allow
SalesRepCentral stockholders who have already sent in their proxies to revoke
them at any time prior to their use.
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
The Company has no separate Compensation Committee; the entire board of
directors makes decisions regarding executive compensation. Ralph Massetti
is the President, Secretary/Treasurer and sole Director.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
The board of directors has no existing policy with respect to the specific
relationship of corporate performance to executive compensation. The Board
has set executive compensation at what the Board considered to be the minimal
levels necessary to retain and compensate the officers of the company for
their activities on the Company's behalf.
AUDIT COMMITTEE
The board of directors, consisting of Ralph Massetti, its sole director,
elected not to incur the expense of an Audit Committee. Therefore, at this
time the Company does not have an Audit Committee.
INDEPENDENT AUDITORS
SalesRepCentral has not selected an independent auditor for its fiscal year
ended June 30, 2001. It is anticipated that Interactive, if the Merger is
consummated, will select an independent auditor for the year ended June 30,
2001.
Semple & Cooper, LLP ("S&C") was selected as the independent auditors by a
unanimous vote of SalesRepCentral's board of directors, to audit its accounts
for and during its fiscal year ending June 30, 2000. SalesRepCentral does not
know of any direct or indirect financial interest of S&C in SalesRepCentral.
Audit Fees
For professional services rendered with respect to the audit of
SalesRepCentral's annual financial statements for the year ended June 30,
2000, SalesRepCentral paid to S&C fees in the amount of $13,965.55
Financial Information Systems Design and Implementation Fees
SalesRepCentral did not pay to S&C any fees in its fiscal year ended June 30,
2000 for information systems design and implementation.
All Other Fees
SalesRepCentral did not pay to S&C any fees in its fiscal year ended June 30,
2000 for services other than those described above.
In view of the fact that SalesRepCentral did not pay to S&C any fees in its
fiscal year ended June 30, 2000 other than fees for audit services, the board
of directors was not required to consider whether the provision of services
other than audit services by S&C is compatible with maintaining S&C's
independence in performing audit services.
A representative of S&C is not expected to be present at the Special meeting.
SPECIAL FACTORS OF MERGER
BACKGROUND OF THE MERGER
At a board meeting on July 1, 2001, the board of directors of
SalesRepCentral determined that it was in the best interest of the Company
and its stockholders to pursue a merger candidate interested in pursuing new
business.
At the July 1, 2001 board meeting, the board of directors authorized the
President of SalesRepCentral to pursue the Merger with Interactive.
REASONS FOR THE MERGER
In the summer of 2000, the board of directors determined that the viability
of the Company was dependent upon raising capital to implement its business
plan. The Company proceeded to file an SB-2 Registration with the Securities
and Exchange Commission for the purpose of raising the required capital.
However, timing is everything, and as we all know the market upset our
ability to fund the recently registered shares. As a result of continuing
loan obligations and increasing costs to remain operational, the board of
directors determined it in the best interest of the stockholders to find a
merger candidate that would provide some value to the stockholders. After
careful consideration of numerous alternatives, including current economic
conditions and the overall state of the nation's economic momentum and the
consequential decrease in overall business spending, the board of directors
concluded that a Merger proposal by Interactive wherein Interactive would
become a wholly owned subsidiary of SalesRepCentral was the only proposal
available to SalesRepCentral which would provide the stockholders with
anything of value.
The board of directors has determined that the terms and conditions of
the Merger are fair to, and in the best interests of the SalesRepCentral
stockholders. In reaching its decision, the board of directors considered,
among other things, the fact that: (i) the stock price of SalesRepCentral had
dropped to $0.08 per share, (ii) the inability of SalesRepCentral to generate
sufficient revenues to cover costs, (iii) existing obligations, and (iv)
primarily the inability to raise equity capital. Therefore, the board of
directors recommends that you vote in favor of the Merger and the transaction
contemplated thereby.
In evaluating this potential course of action, the board of directors
determined that there was a significant risk that SalesRepCentral would be
unsuccessful in implementing this course of action and that, even if
successful, there was no assurance that these efforts would result in a
meaningful increase in the price of SalesRepCentral common stock.
As a result, due to the board of directors' belief that the prospect of
increasing stockholder value through the pursuit of a strategic plan to
reposition SalesRepCentral involved a significant degree of uncertainty as
well as significant time to achieve, the board of directors determined in
July 2001 to consider the possible merger with Interactive as an alternative
means of providing some stockholder value. After careful consideration, the
board of directors concluded that a proposal for SalesRepCentral to merge
with Interactive was in the best interests of the SalesRepCentral's
stockholders and, accordingly, approved the Merger. On August 13, 2001, the
day prior to the announcement of the signing of the Merger agreement with
Interactive, the closing market price of SalesRepCentral's common stock was
$0.09 per share.
This discussion of the information and factors considered by
SalesRepCentral's board of directors is not intended to be exhaustive. In
view of the variety of factors considered in connection with its evaluation
of the Merger, SalesRepCentral's board did not find it practicable to, and
did not quantify or otherwise assign relative weight to, the specific factors
considered in reaching its determination.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The board of directors, consisting solely of Ralph Massetti, has
unanimously approved the Merger Agreement, the Merger and the transactions
contemplated by the Merger agreement and recommends that the stockholders
vote "FOR" approval and adoption of the Merger agreement and the Merger. The
board of directors believes that the consideration to be received by
SalesRepCentral stockholders is fair and in the best interests of
SalesRepCentral stockholders.
The recommendation of the board of directors is based upon the following
factors:
(i) reviewed the Merger agreement and discussed with the principal
stockholder of SalesRepCentral the course of negotiations with purchaser;
(ii) reviewed certain internal financial and operating information, including
financial forecasts and projections that were provided by SalesRepCentral,
taking into account (a) the growth prospects of SalesRepCentral and the
various market segments in which it competes, (b) the relation of projected
trends to SalesRepCentral's historical performance and track record of
meeting its forecasts, and (c) changes in management, organization structure
and management practices;
(iii) considered the current and historical market prices of the
SalesRepCentral common stock, as well as the limited trading volume and
public float of the SalesRepCentral common stock;
(iv) compared the valuation in the public market of companies similar to that
of SalesRepCentral in market, product types, and size; and,
(v) considered current economic conditions
(vi) contemplated the sudden and continuing deterioration of the nation's
economic momentum and the consequential decrease in overall business
spending.
ABOUT INTERACTIVE MOTORSPORT INC.
The following discussion relating to Interactive Motorsport Inc. contains
forward-looking statements. Forward-looking statements are only predictions.
The forward-looking events discussed in this section may not occur, and
actual events and results may differ materially and are subject to risks,
uncertainties and assumptions about Interactive Motorsport Inc. We are not
obligated to publicly update or revise any forward-looking statement, whether
as a result of uncertainties and assumptions, the forward-looking events
discussed in this section made from time to time by us or our
representatives, might not occur.
Interactive Motorsport Inc., a Delaware corporation ("Interactive"), along
with its wholly owned subsidiary Interactive Holdings Limited, a United
Kingdom corporation, were incorporated to exploit the opportunities to
present motor racing and other action sports through the media of interactive
television, games and packaged software.
The business was conceived by Dominic Chappell, who is well known in
motor racing circles. A Formula 3000 team, set up by Dominic and owned by the
Chappell family, won the British Championship in 1994/5. Dominic is a well-
established racing driver experienced in all aspects of Formula racing, F1
test driver, CART, F3000, sports car racing, and 24-hour races such as Le
Mans. Dominic organized the liaison with British teams and all logistics for
the first Formula 3000 race held at the Kyalami circuit in South Africa in
1995. He has also taken teams to Madras, India and Nova Scotia, Canada.
Interactive is investigating the possibilities of using digital television
with various forms of motorsport including:
Motorsport Applications
1. Sports car racing;
2. Superbikes - Interactive is considering the development of a
championship similar to the model of the ISC;
3. Motocross and scooter racing - These are other mainstream motorsport
events which could be greatly enhanced by the application of out technology;
and
4. Powerboating - Interactive has had discussions with the Royal Yachting
Association with regard to taking over the broadcast rights for this sport
from The British Powerboat Federation.
Extreme Motorsport Applications
1. Aerobatics / Air Racing - Discussions have taken place with the
organizers of the Reno Air show to arrange a showcasing of the technology and
allow this event to be televised in a digital format as opposed to being
filmed from stationery ground cameras.
2. Snowcross - This is another sport which lacks an appropriate broadcast
platform and Interactive has made preliminary contact with the Candian and
American snowcross governing bodies regarding the possibility of applying
Interative's technology to this sport.
3. Other sports - Interactive is continuing to consider other areas where
Interactive's technology could be applied and where the possibilities and the
technology exists could allow broadcasting sports such as speedskiing,
downhill skiing and sailing.
The Lead Product
The lead product is intended to be a sports car championship featuring races
in the UK and Europe, the Interactive Sportscar Championship (ISC), and
possible involving preliminary races in the United States.
Interactive intends to use a new generation of digital video equipment which
can make effective use of available bandwidth to capture and transmit a large
amount of live data and moving images.
The ISC Broadcast, once developed, should allow viewers to be able to select
and follow any eight of the following monitored data streams from the cars to
create their own 'Virtual Dashboard':
Speed RPM Oil Temperature
Water Temperature Engine Oil Pressure Gearbox Oil Pressure
G-Load Suspension Front Left Suspension Front Right
Gear in use Suspension Rear Left Suspension Rear Right
Cockpit Temperature Gearbox Temperature Outside Temperature
Track Position Overall Position Drivers Heart Rate
Lap Time Split Time Fuel Consumption
Interactive intends to use a fixed forward-mounted camera on each car that
should show the driver and forward views in addition to a wide-angle camera,
that should be switchable from front to back and side to side, and should
provide a 180-degree view. Interactive anticipates that these perspectives
may be displayed on a split screen to show 360 degrees simultaneously.
Interactive intends to install cameras covering the pit lane and selectable
cameras around the circuit perimeter.
Once Interactive's lead product is fully developed, it is anticipated that
there will be as many as 120 alternative camera views and data statistics
from which a viewer's selection may be made. It is anticipated that the
camera angles selected by a viewer may be assembled in the desired format on
the viewer's screen.
The business is intended to operate in the following interrelated consumer
markets:
* Motor sport event spectators
* Interactive TV subscribers
* Interactive and networked game players
* Purchasers of branded sports clothing and memorabilia
CERTAIN EFFECTS OF THE MERGER
Pursuant to the Merger Agreement, following approval of the Merger
Agreement and subject to the fulfillment or waiver of certain conditions,
which include: the transfer of all assets and liabilities of SalesRepCentral
to Central Solutions, Inc. (a wholly owned subsidiary of SalesRepCentral);
the payment of $250,000 to Central Solutions by Interactive; and the exchange
of 100% of Central Solutions, Inc. for all common and preferred shares
currently held by Ralph Massetti, Interactive will be merged into
SalesRepCentral, and SalesRepCentral will issue 7,703,942 restricted shares
of its Common Stock and SalesRepCentral shall assume all current outstanding
stock options and warrants of Interactive, which approximate 7.8 million
shares. As a result of the Merger SalesRepCentral will own the business of
Interactive, and SalesRepCentral will change its name to Interactive.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a general summary of the material United
States federal income tax consequences of the Merger. This discussion is
based upon the Internal Revenue Code of 1986, as amended (the "Code"),
regulations promulgated by the United States Treasury Department, judicial
authorities, and current rulings and administrative practice of the Internal
Revenue Service (the "Service"), as currently in effect, all of which are
subject to change at anytime, possibly with retroactive effect. This
discussion does not address all aspects of federal income taxation that might
be relevant to particular holders of SalesRepCentral common stock in light of
their status or personal investment circumstances; nor does it discuss the
consequences to such holders who are subject to Special treatment under the
federal income tax laws such as foreign persons, dealers in securities,
regulated investment companies, life insurance companies, other financial
institutions, tax-exempt organizations, pass-through entities, taxpayers who
hold SalesRepCentral common stock as part of a "straddle," "hedge" or
"conversion transaction" or who have a "functional currency" other than the
United States dollar or to persons who have received their SalesRepCentral
common stock as compensation. Further, this discussion does not address the
state, local or foreign tax consequences of the Merger.
YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX
CONSEQUENCES OF THE MERGER, INCLUDING THE APPLICABILITY TO YOUR PARTICULAR
SITUATION OF THE TAX CONSIDERATIONS CONTAINED IN THIS SUMMARY AND THE
APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
SalesRepCentral has not requested an opinion, nor does SalesRepCentral intend
to request an opinion to the effect that the Merger will be treated as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code. However, SalesRepCentral has attempted to structure the Merger as a
reorganization for tax purposes. Since SalesRepCentral stockholders will not
be receiving shares in the Merger, management determined that it would not
request such an opinion.
If the Merger qualifies as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code, then, subject to the assumptions,
limitations and qualifications referred to herein, the Merger should result
in the following federal income tax consequence:
No gain or loss will be recognized by Interactive in receipt of
SalesRepCentral shares as the result of Interactive exchanging Interactive
shares for SalesRepCentral shares.
A successful Internal Revenue Service challenge to the reorganization status
of the Merger would result in Interactive stockholders recognizing taxable
gain or loss with respect to each share of Interactive stock surrendered
equal to the difference between Interactive's basis in such share and the
fair market value, as of the effective time of the Merger, of the
SalesRepCentral common stock received in exchange therefore. In such event,
Interactive's aggregate basis in the SalesRepCentral common stock so received
would equal its fair market value as of the effective time of the Merger, and
Interactive's holding period for such stock would begin the day after the
Merger. The gain or loss generally will be a capital gain or loss.
(THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK)
SELECTED FINANCIAL DATA
The summary financial information set forth below is derived from the
unaudited financial statements of (i) SalesRepCentral for the period ending
March 31, 2001 and (ii) unaudited Non-GAAP financial statements for
Interactive for the period ending April 30, 2001.
CONDENSED CONSOLIDATED BALANCE SHEET
Historical Historical
SalesRepCentr Interactive
al Motorsport
Unaudited as Inc.
of Unaudited as
March 31, of
2001 April 30,
2001
ASSETS
Current assets:
Cash and cash equivalents 36,121 97,005
Accounts Receivable - trade 516,092
Due from related parties or entities 78,050 181,686
Other assets 8,413 259,725
----------- -----------
Total current assets 638,676 538,416
----------- -----------
Unamortized patent costs/Intangibles 1,859,780
Property and equipment, net tangible 118,742 31,918
----------- -----------
Total non-current assets 118,742 1,891,698
----------- -----------
Certificate of Deposit 20,000
----------- -----------
Total assets 777,418 2,430,114
=========== ===========
Current liabilities
Accounts payable 247,495 743,526
PAYE/NIC 49,660
V.A.T. Repayable 247,188
Accrued liabilities 300
Capitalized lease obligations
----------- -----------
Total current liabilities 358,752 1,040,374
Long-term debt, officer/director 6,075 356,925
----------- -----------
Total Liabilities 364,827 1,397,299
----------- -----------
Stockholders' equity
Common stock, $.001 par value, 15,117,512 15,117
Additional paid in capital 1,757,979
Accumulated (deficit) (1,360,520)
------------ -----------
Total stockholders' equity (deficit) 412,591 1,032,815
------------ -----------
Total liabilities and stockholders'
equity 777,418 2,430,114
============ ===========
THE MERGER
THE FOLLOWING IS A BRIEF SUMMARY OF MERGER AGREEMENT, A COPY OF WHICH IS
ATTACHED AS APPENDIX A TO THIS PROXY STATEMENT AND INCORPORATED BY REFERENCE
IN THIS PROXY STATEMENT. YOU SHOULD READ THE MERGER AGREEMENT IN ITS ENTIRETY
FOR A MORE COMPLETE DESCRIPTION OF THE MERGER. IN THE EVENT OF ANY
DISCREPANCY BETWEEN THE TERMS OF THE MERGER AGREEMENT AND THE FOLLOWING
SUMMARY, THE MERGER AGREEMENT WILL CONTROL.
EFFECTIVE TIME
The Merger agreement provides that the Merger will become effective upon
the filing of the Certificate of Merger with the Secretary of State of the
State of Nevada and the Secretary of State of the State of Delaware or at
such other time as the parties may agree and specify in the Certificate of
Merger (the "Effective Time"). If the Merger is approved at the Special
meeting by the holders of a majority of all outstanding shares of common
stock entitled to vote at the Special meeting, and the other conditions to
the Merger are satisfied or waived, it is currently anticipated that the
Merger will become effective as soon as practicable after the Special
meeting; however, there can be no assurance as to the timing of the
consummation of the Merger or that the Merger will be consummated.
THE MERGER AND MERGER CONSIDERATION
At the Effective Time, Interactive will be merged into SalesRep
Subsidiary Corp. and will become a wholly owned subsidiary of
SalesRepCentral. Pursuant to the Merger agreement and at the Effective Time:
* SalesRepCentral will reverse split its shares, 1 for 6, and will issue
7,703,942 restricted shares of its Common Stock to Interactive stockholders
in exchange for 100% of Interactive. SalesRepCentral shall also assume all
current outstanding stock options and warrants of Interactive, which
approximate 7.8 million shares; and
* SalesRepCentral will assign to Central Solutions, Inc. all of the assets
and liabilities of SalesRepCentral, along with $250,000 from Interactive, in
exchange for 100% of Ralph Massetti's SalesRepCentral's shares, approximately
8,898,320 common shares and 14,525 preferred shares, who will in turn receive
100% of Central Solutions.
REGULATORY REQUIREMENTS
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), certain Merger transactions may not be consummated
unless notice has been given and certain information furnished to the
Antitrust Division of the United States Department of Justice (the "Antitrust
Division") and the Federal Trade Commission (the "FTC") and specified waiting
period requirements have been satisfied, unless earlier termination has been
granted.
SalesRepCentral and Interactive have each made their respective
determination that the approval of the Department of Justice and the Federal
Trade Commission will not be required. Thus, the applicable waiting period
will not be required. The Department of Justice and the Federal Trade
Commission, as well as a state or private person, may challenge the Merger at
any time before or after its completion. Neither SalesRepCentral nor
Interactive is aware of any other material governmental or regulatory
approval required for completion of the Merger, other than compliance with
applicable corporate law of Nevada.
ANTICIPATED TAX AND ACCOUNTING TREATMENT
For federal income tax purposes, it is intended that the Merger
constitute a "reorganization" under Section 368(a)(2)(E) of the Internal
Revenue Code so that no gain or loss will be recognized by Interactive
stockholders who exchange their shares of Interactive Common Stock in the
Merger (except with respect to cash received in lieu of fractional shares and
for shares as to which stockholders exercise dissenters' rights).
Additionally, the Merger is anticipated to be accounted for as a purchase of
SalesRepCentral by Interactive (more commonly referred to as a reverse
acquisition).
DISSENTER'S AND APPRAISAL RIGHTS
SalesRepCentral stockholders are entitled to dissenters rights in the
proposed merger under Nevada Revised Statutes ("NRS") 92A.300 - 92A.500. A
copy of the statute is attached to this proxy statement as Appendix B.
SalesRepCentral stockholders who are considering exercising dissenters rights
should review NRS 92A.300 - 92A.500 carefully, particularly the steps
required to perfect dissenters rights. No provision under Nevada law provides
a stockholder the right to later withdraw a dissent and demand for payment.
Set forth below is a summary of the steps to be taken by a holder of record
to exercise the right to appraisal. This summary should be read in
conjunction with the full text of NRS 92A.410 to 92A.480.
Under Nevada Revised Statute 92A.380, stockholders may dissent from some
corporate actions and the corporation must buy their shares. Stockholders may
dissent if a corporation wants to merge with another corporation.
To exercise your right to dissent:
* before the vote is taken, you must deliver written notice to the
SalesRepCentral Secretary stating that you intend to demand payment for your
shares if the merger with Interactive is completed; and
* you must NOT vote your shares in favor of the Merger either by proxy or
in person.
If you send written notice of your intent to dissent before the vote on the
Merger, SalesRepCentral must send you a written dissenter's notice within 10
days after the merger is effective telling you:
* where your demand for payment must be sent and where your stock
certificates must be deposited;
* the date by which SalesRepCentral must receive the demand form, which
must be between 30 and 60 days after notice delivery, and providing you;
* a form to demand payment, including the date by which you must
have acquired beneficial ownership of your shares in order to dissent; and
* the applicable sections of the Nevada Revised Statutes.
YOUR FAILURE TO DEMAND PAYMENT IN THE PROPER FORM OR DEPOSIT YOUR
CERTIFICATES AS DESCRIBED IN THE DISSENTER'S NOTICE WILL TERMINATE YOUR RIGHT
TO RECEIVE PAYMENT FOR YOUR SHARES. YOUR RIGHTS AS A STOCKHOLDER WILL
CONTINUE UNTIL THOSE RIGHTS ARE CANCELED OR MODIFIED BY THE COMPLETION OF THE
MERGER.
Within 30 days of receipt of a properly executed demand for payment,
SalesRepCentral must pay you what it determines to be the fair market value
for your shares. Payment must be accompanied by specific financial records of
SalesRepCentral, a statement of SalesRepCentral's fair value estimate,
information regarding your right to challenge the fair value estimate, and
copies of relevant portions of the Nevada Revised Statutes.
Within 30 days from the receipt of the fair value payment, you may notify
SalesRepCentral in writing of your own fair value estimate and demand the
difference. Failure to demand the difference within 30 days of receipt of
payment terminates your right to challenge SalesRepCentral's calculation of
fair value.
If we cannot agree on fair market value within 60 days after SalesRepCentral
receives a stockholder demand, SalesRepCentral must commence legal action
seeking court determination of fair market value. If SalesRepCentral fails to
commence a legal action within the 60 day period, it must pay each dissenter
whose demand remains unsettled the amount they demanded. Proceedings
instituted by SalesRepCentral will be in the district court in Las Vegas,
Nevada. Costs of legal action will be assessed against SalesRepCentral,
unless the court finds that the dissenters acted arbitrarily, in which case
costs will be equitably distributed. Attorneys fees may be divided in the
court's discretion among the parties.
FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 92A-400 THROUGH 92A-480 FOR
PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF SUCH RIGHTS (IN WHICH
EVENT A STOCKHOLDER WILL BE ENTITLED TO RECEIVE THE CONSIDERATION RECEIVABLE
WITH RESPECT TO SUCH APPRAISAL SHARES IN ACCORDANCE WITH THE MERGER
AGREEMENT). IN VIEW OF THE COMPLEXITY OF THE PROVISIONS OF SECTION 92A,
SALESREPCENTRAL STOCKHOLDERS WHO ARE CONSIDERING OBJECTING TO THE MERGER
SHOULD CONSULT THEIR OWN LEGAL ADVISORS.
FEES AND EXPENSES
We estimate that Merger-related fees and expenses, consisting primarily
of SEC filing fees, fees and expenses of attorneys and accountants and other
related charges, will total approximately $27,206.56 assuming the Merger is
completed. This amount consists of the following estimated fees:
DESCRIPTION AMOUNT
Legal fees and expenses 25,000.00
Accounting fees and expenses 1,000.00
SEC filing fee 206.56
Printing, solicitation and mailing costs 1,000.00
---------------
Total $27,206.56
SalesRepCentral will be responsible for paying all of its expenses
incurred in connection with the Merger, except fees relating to Interactive
attorneys fees which are unknown to SalesRepCentral.
THE MERGER AGREEMENT
THE FOLLOWING IS A BRIEF SUMMARY OF CERTAIN MATERIAL PROVISIONS OF THE
MERGER AGREEMENT THAT HAVE NOT BEEN PREVIOUSLY DISCUSSED. THIS SUMMARY DOES
NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE MERGER AGREEMENT, WHICH IS ATTACHED TO THIS PROXY STATEMENT AS APPENDIX A
AND IS INCORPORATED HEREIN BY REFERENCE.
REPRESENTATIONS AND WARRANTIES
In the Merger agreement, SalesRepCentral made customary representations
and warranties to the other parties with respect to its business,
organization, operations and financial condition and other matters. The
Merger agreement also contains customary representations and warranties of
Interactive relating to their business. The representations and warranties in
the Merger agreement do not survive after the Effective Time, except certain
covenants and agreements which by their terms contemplate performance
following the Effective Time.
CONDUCT OF BUSINESS PRIOR TO THE MERGER
Interactive has agreed that, until the completion or termination of the
Merger, unless SalesRepCentral consents in writing, Interactive will conduct
their businesses in the ordinary course of business in substantially the
manner conducted prior to the date of the Merger agreement. SalesRepCentral
has also agreed to, and cause its subsidiaries to, use reasonable efforts
consistent with past practice and policies to preserve intact its present
business organizations, keep available the services of its present officers
and key employees and preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings with
it.
ADDITIONAL AGREEMENTS OF SALESREPCENTRAL
SalesRepCentral has further agreed, among other things specifically
identified in the Merger agreement:
* to provide Interactive reasonable access to its facilities, records and
all other information as Interactive may reasonably request;
* prepare and file the proxy statement with the SEC as soon as it is
reasonably practicable and use reasonable best efforts to have the proxy
statement cleared by the SEC under the Exchange Act;
* take all reasonable action to comply with the state blue sky or federal
or state securities laws in connection with the transactions contemplated by
the Merger agreement;
* cooperate with Interactive to remove any injunction or other impediment
to the consummation of the Merger;
* to make all necessary filings and obtain any consents and approvals as
may be required in connection with the Merger agreement and the Merger; and
* to consult with Interactive and obtain prior approval of Interactive
before issuing any press release or making any other public disclosure
regarding the Merger agreement or the transactions contemplated thereby,
except as may be required by law, by obligations of SalesRepCentral pursuant
to any listing agreement with any national securities exchange or relating to
consultation with its legal counsel, financial advisor or accountants
relating to the transaction contemplated by the Merger agreement.
DIRECTOR AND OFFICER INDEMNIFICATION
Pursuant to the terms of the Merger agreement, and subject to any
limitation imposed from time to time under applicable law, all rights of
indemnification available to the present and former officers and directors of
SalesRepCentral and its subsidiaries in respect of acts or omissions
occurring prior to the Effective Time, shall remain available for six years
following the Effective Time, to the maximum extent provided under
SalesRepCentral's articles of incorporation and bylaws, as in effect on the
date of the execution of the Merger agreement.
Pursuant to the Merger agreement, for six years after the Effective
Time, SalesRepCentral will indemnify and hold harmless SalesRepCentral's and
Interactive's present and former officers and directors for acts or omissions
occurring before the Effective Time of the Merger to the extent provided
under SalesRepCentral's articles of incorporation and bylaws in effect on the
date of the Merger agreement. See "Interests of Certain Persons in the Merger-
Indemnification and Insurance."
However, SalesRepCentral (Interactive following effectiveness of the
Merger) shall not indemnify, defend or hold harmless any party 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.
COOPERATION AND REASONABLE EFFORTS
Pursuant to the Merger agreement, and subject to certain conditions and
limitations described therein, the parties have agreed to cooperate with each
other and to use their respective reasonable best efforts to take all action
under the terms of the Merger agreement and to do all things necessary,
proper or advisable in order to consummate and make effective the
transactions contemplated by the Merger agreement.
CONDITIONS TO THE MERGER
SalesRepCentral's and Interactive's respective obligations to complete
the Merger and the related transactions are subject to the satisfaction or
waiver of each of the following conditions before completion of the Merger:
* the representations and warranties of each party must be true and
correct when made and as of the closing of the Merger, except for changes
contemplated by the Merger agreement, or where such representation or
warranty speaks of a different date or the failure to be true and correct
could not reasonably be expected to have a material adverse effect on such
party;
* each party has complied in all material respects with all of its
covenants in the Merger agreement, except where the failure to perform or
comply with such covenants could not reasonably be expected to have a
material adverse effect on such party;
* each party has received a certificate executed on behalf of the other
party's chairman of the board and chief executive officer or vice president
to the effect that the conditions set forth in the immediately preceding
bullet points have been satisfied;
* the Merger agreement and the Merger have been approved by the
affirmative vote of a majority of the holders of the issued and outstanding
shares of SalesRepCentral's common stock;
* no order, writ, injunction or decree is in force or pending that makes
the Merger illegal or otherwise prohibits completion of the Merger; and
* all consents, approvals and authorization legally required to consummate
the Merger and the other transactions contemplated by the Merger agreement
must have been obtained from all governmental entities, including such
approvals, waivers and consents as may be required under the antitrust laws.
TERMINATION OF THE MERGER AGREEMENT
The Merger agreement may be terminated at any time before the completion
of the Merger, whether before or after approval of the matters presented in
connection with the Merger by the stockholders of SalesRepCentral, as
summarized below:
* the Merger agreement may be terminated by mutual written consent of
Interactive and SalesRepCentral;
* the Merger agreement may be terminated by either SalesRepCentral or
Interactive if the conditions to completion of the Merger would not be
satisfied because of either (a) a material breach of an agreement or
obligation in the Merger agreement by the other party or (b) a material
breach of a representation, warranty or covenant of the other party in the
Merger agreement, and such breach shall not have been cured within 30
business days following receipt of written notice by the non-breaching party
or is otherwise incapable of being cured;
* the Merger agreement may be terminated by either SalesRepCentral or
Interactive if the Merger is not completed, without the fault of the
terminating party, by October 1, 2001,
* the Merger agreement may be terminated by either SalesRepCentral or
Interactive if (a) a statute, rule, regulation or executive order shall have
been enacted, entered or promulgated prohibiting the consummation of the
Merger or (b) a final court or governmental order prohibiting the Merger is
issued and is final and not appealable; provided that, the party seeking to
terminate the agreement has used reasonable best efforts to remove such
order; or
* the Merger agreement may be terminated by Interactive if the Merger
fails to receive requisite stockholder approval.
The party desiring to terminate the Merger agreement shall give written
notice of such termination to the other party in accordance with the terms
thereof. In the event of termination of the Merger agreement, no party shall
have any liability or further obligation to any other party.
TERMINATION FEE
In accordance with the terms of the Merger Agreement, there is a
$100,000 termination fee involved in the transaction. Each party to the
Merger Agreement has agreed to cover their own expenses.
EXTENSION, WAIVER AND AMENDMENT
The Merger agreement may be amended or its conditions precedent to
closing waived at any time before or after the Special meeting, but after the
Special meeting no amendment or waiver shall be made without the further
approval of SalesRepCentral's stockholders which reduces the consideration
payable to the stockholders, or changes the form of such consideration. Any
amendment to the Merger agreement must be in writing and signed by all of the
parties.
Either SalesRepCentral or Interactive may, in writing, extend the
other's time for the performance of any of the obligations or other acts
under the Merger agreement, waive any inaccuracies in the other's
representations and warranties and waive compliance by the other with any of
the agreements or conditions contained in the Merger agreement.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In considering the recommendation of the board of directors, you should
be aware that the sole officer and director of SalesRepCentral has interests
in the Merger described below, that present actual or potential conflicts of
interest in connection with the Merger. Specifically, Ralph Massetti, sole
officer and director of SalesRepCentral, shall continue as a director of
SalesRepCentral after the merger. However, Mr. Massetti will not participate
in the Merger as a stockholder of SalesRepCentral. Mr. Massetti has no stock
options or other rights to acquire stock in SalesRepCentral.
In addition, Ralph Massetti is exchanging 100% of his equity interest held in
SalesRepCentral, 8,898,320 shares of common stock, and 14,525 shares of
preferred stock, for 100% of the stock of Central Solutions, Inc., which as
part of the merger will be assigned all assets and assume all liabilities of
SalesRepCentral. Additionally, Central Solutions, Inc. will be paid $250,000
from Interactive. SalesRepCentral stockholders will not receive any
ownership or other interest in Central Solutions, Inc.
Central Solutions, Inc. and Ralph Massetti shall enter into an
indemnification agreement with SalesRepCentral, which will indemnify
SalesRepCentral for any and all outstanding liabilities of SalesRepCentral at
the effective time of the Merger. The indemnification agreement shall provide
that (i) Ralph Massetti's personal liability will be capped at $50,000,
unless he resigns from the board of directors prior to rectifying a claim,
which would result in the cap being raised to $100,000; (ii) Ralph Massetti
shall remain personally liable without regard to the cap for claims,
liabilities or damages against SalesRepCentral 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.
SalesRepCentral anticipates that Ralph Massetti will abstain his vote due to
the conflicts described above.
INDEMNIFICATION AND INSURANCE
Pursuant to the Merger agreement, for six years after the Effective
Time, SalesRepCentral will indemnify and hold harmless SalesRepCentral's
present and former officers and directors for acts or omissions occurring
before the Effective Time of the Merger to the extent provided under
SalesRepCentral's articles of incorporation and bylaws in effect on the date
of the Merger agreement.
However, SalesRepCentral (Interactive following effectiveness of the
Merger) shall not indemnify, defend or hold harmless any party 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.
ELECTION OF DIRECTORS
The directors are to be elected to the board of directors, effective
concurrently with the close of the Merger, for one year to serve until the
2002 Annual meeting of stockholders and until their successors are elected
and qualified.
In addition to the nomination of new directors, Ralph Massetti will remain
as a director, if elected.
If one or more of the nominees should at the time of the meeting be unable or
unwilling to serve, the stockholders may vote for other nominees and for any
substitute nominee or nominees designated by the board of directors. At this
time, SalesRepCentral is not aware of any reason why the nominees named would
be unavailable to serve. The following table sets forth information
regarding each nominee.
Positions and Offices
With SalesRepCentral
Name Age Post Merger
Joseph Chappell 63 Chairman
Dominic Chappell 34 CEO, President, Director
Ralph Massetti 35 Director
William E. Johns 46 Director, Chief Operating Officer
Simon Slater 46 Director, Treasurer
Gavin Macaulay 28 Secretary
Joseph Chappell (Age 63), Chairman IMI. Joseph worked between 1966 and 1976
as the owner and manager of a supply company in the Middle East and as a
negotiator for oil concessions in the Sudan, Egypt and Libya. As a founder
member and chairman of Keith Collins Petroleum Corp (KCPC), Joseph oversaw
the public offering in Denver on the OTC market, and was responsible for the
successful concession awards in Egypt and the Sudan and for the KCPC
flotation on the London Stock Exchange in 1980. In 1983 Joseph retired as
chairman to act as managing director of a supply and consulting company in
the Middle East. Joseph has assisted Dominic in his racing career as a driver
and team owner culminating in winning the British F2 team championship in
1994/5. He currently acts as an advisor to Black Sea Oil Inc and several
international corporations for the Middle East and Georgia areas.
Dominic Chappell (Age 34), Chief Executive Officer of IMH, and subsidiaries,
Commercial Director IMT, IMC: Dominic stated his race career in 1980 in the
100cc British Kart championship, progressing to the Formula Ford 2000 British
Championship, being runner-up in 1988. In 1989 Dominic started a Formula 3
team, and in 1990 was the runner-up in the British Championship. The Formula
3 team under Dominic's management was invited to enter two cars in the
Madras, India, Formula 3 Championship in 1990. In 1991, Dominic ran a four-
car team, finishing second in the Championship. In 1992 Dominic competed in
selected rounds of the Indy lights Championship in America. In 1992 Dominic,
as lead driver, set up and managed his two car F3000 team with Harvey
Spencer, with the team finishing as runner up in the 1993 British
Championship. Dominic has competed four times in the La Mans 24 hour race
and has competed regularly in Sports-GT racing. Dominic also organized twenty-
four Formula 3000 cars, 125 personnel and 12 teams and equipment to go
Kyalami, and produced the first ever F3000 race in South Africa.
Ralph Massetti (age 35), Director, has served in the capacity of CEO,
President, and Chairman of SalesRepCentral since founding the Company in
1999. Previously, from March 1998 through May 1999 he was a Consulting
Marketing Specialist for Computer Associates, Inc. marketing enterprise level
management software solutions at the executive level. He was a stockbroker
for Dean Witter Reynolds, Inc. from March 1997 to March 1998, and was an
Account Executive for Commerce Clearing House from September 1994 through
September 1996. He holds a Bachelor of Science Degree in Management and is
currently pursuing both an MBA and Master Degree in Finance with a
specialization in High Technology.
William Edward Johns (Age 46), Managing Director IMH. `Eddie' Johns was a
senior legal executive with a number of City solicitors specializing in debt
recovery and general litigation. Throughout his career in the legal
profession he has had particular responsibility in areas relating to
litigation and business crime. He has operated a specialist white-collar
fraud unit dealing with all areas of City and Revenue crime as well as having
acted independently through Liquidators/Receivers for Customs and Excise and
the Inland Revenue. He has dealt with a number of `high profile' cases
including Intellectual Property/parallel trading. He has also liaised with
the press on behalf of Clients. Eddie has had significant exposure to general
business and general company commercial matters. In the mid 1980's he was
Managing Director of a group of companies in the entertainment and
construction industries and remains a non-executive director of the group.
He has managed business involved in overseas construction, duty free retail,
restaurants and property.
Simon Slater (Age 46) Finance Director IMH. On graduating from Oxford
University in 1976, Simon joined Courtyards as a graduate trainee working in
UK, Europe, Middle East and African markets. He took an MBA at London
University in 1982 and joined Racal Electronics as a strategic planning
manager. He was a management consultant with Coopers & Lybrand from 1986 to
1991 after which he joined a private business under exclusive contract with
Bank of Scotland. As General Manager his principal responsibilities were
risk marketing the Bank's products, principally credit cards, to UK affinity
groups and their members. He maintained a Joint role with MD for maintaining
core Bank, affinity group and US stockholder relations. Responsibilities for
existing product sales, service levels to Affinity Groups, new business
development and marketing services functions; 20 staff reports. Annual
direct marketing spend of 8 million, full profit responsibility. In 1996 he
set up Simon Slater Associates, a management consultancy offering
organization development, strategic and marketing advice; also operating on
an interim management basis. An active associate of Intermedia Partners
(telephony and New Media Venture Capital advisers) and an associate
consultant of Affinity Solutions (Partnership Marketing Consultancy)
specializing in the provision of affinity and co-branded credit cards and
other financial services. Over the 21 month period to November 2000, as
interim FD for a start up Telecoms voice quality monitoring business, he
successfully built a multi-million pound turnover by integrating state of the
art measuring devices with advanced database services to served the
international wholesale carrier market.
Gavin Macaulay (Age 28), Company Secretary of IMI, IMH and subsidiaries.
Gavin was trained and qualified as a solicitor in the City of London and
worked for three years for Cannings Connolly Solicitors through whom he was
introduced to the business. Gavin has been Company Secretary of the UK group
since incorporation and became an employee of the Company in May 2001.
There are no family relationships between any of the above persons, except as
to Joseph Chappell and Dominic Chappell. Joseph Chappell is the father of
Dominic Chappell.
Executive officers are to be elected by the board of directors of
SalesRepCentral at its meeting of directors held immediately following the
Special meeting of stockholders to serve for the ensuing year or until their
successors have been elected. There are no arrangements or understandings
between any officer and any other person pursuant to which the officer is to
be elected.
BOARD OF DIRECTORS MEETING
The board of directors of SalesRepCentral met twice during the fiscal
year ended June 30, 2001.
SUMMARY COMPENSATION
The compensation which the Company accrued or paid to the Officers for
services in all capacities and for the fiscal years indicated, was as
follows:
Long Term
Special Compensation Compensation
Other Special Restricted
Name Year Salary Bonus Compensation Stock Options
Ralph Massetti 2001 -0- -0- -0- -0- -0-
2000 108,000 -0- -0- -0- -0-
1999 -0- -0- -0- 100,000 -0-
DIRECTORS AND EXECUTIVE OFFICERS OF SALESREPCENTRAL
EXECUTIVE OFFICERS AT PRESENT
Ralph Massetti (age 35), Director, has served in the capacity of CEO,
President, and Chairman of SalesRepCentral since founding the Company in
1999. Previously, from March 1998 through May 1999 he was a Consulting
Marketing Specialist for Computer Associates, Inc. marketing enterprise level
management software solutions at the executive level. He was a stockbroker
for Dean Witter Reynolds, Inc. from March 1997 to March 1998, and was an
Account Executive for Commerce Clearing House from September 1994 through
September 1996. He holds a Bachelor of Science Degree in Management and is
currently pursuing both an MBA and Master Degree in Finance with a
specialization in High Technology.
PRINCIPAL STOCKHOLDERS OF SALESREPCENTRAL
The following table sets forth pre-merger and as of the day after
closing, the beneficial ownership of the SalesRepCentral common stock of each
director, officer, proposed officer and director, and all directors and
officers of SalesRepCentral as a group:
Number Percent Number Percent
of Shares Of Class of Shares Of Class
Name of Owner (1) (Pre- (Pre- (Post- (Post-
Merger) Merger) Merger) Merger)
(2) (2)
Joseph Chappell,
Proposed director -0- 0% -0- 0%
Dominic Chappell,
Proposed director -0- 0% 2,946,763 34%
Ralph Massetti, (3)
Sole officer & director 8,898,320 58% -0- 0%
Eddie Johns,
Proposed director -0- 0% 434,163 5%
Simon Slater,
Proposed director -0- 0% 175,513 2%
Gavin Macaulay,
Proposed director -0- 0% 221,700 3%
--------- -------- --------- ----------
All as a Group 8,898,320 58% 3,778,139 44%
========= ======== ========= ==========
(1) As used in this table, "beneficial ownership" means the sole or shared
power to vote, or to direct the voting of, a security, or the sole or shared
investment power with respect to a security (i.e., the power to dispose of,
or to direct the disposition of, a security). Other than Ralph Massetti,
sole officer and director of SalesRepCentral, no other person or entity owns,
or will own post-merger, more than 5% of SalesRepCentral's common stock.
(2) Figures are rounded to the nearest percentage.
(3) As part of the merger, Ralph Massetti shall exchange 100% of his common
and preferred shares for 100% of Central Solutions, Inc., a wholly owned
subsidiary of SalesRepCentral that will be assigned all assets and assume all
liabilities of SalesRepCentral and be paid $250,000 from Interactive.
OTHER MATTERS
As of the date of this proxy statement, the board of directors does not
intend to bring any other business before the Special meeting of
SalesRepCentral stockholders and, so far as is known to the board of
directors, no matters are to be brought before the Special meeting except as
specified in the notice of Special meeting. However, as to any other business
that may properly come before the Special meeting, the proxy holders intend
to vote the proxies in respect thereof in accordance with the recommendation
of the board of directors.
EXPENSES OF PROXY SOLICITATION
The principal solicitation of proxies will be made by mail. However, certain
officers of the Company, none of whom will be compensated therefore, may
solicit proxies by letter, telephone or personal solicitation. Expense of
distributing this Proxy Statement to stockholders, which may include
reimbursements to banks, brokers, and other custodians for their expenses in
forwarding this Proxy Statement, will be borne exclusively by
SalesRepCentral.
WHERE YOU CAN FIND MORE INFORMATION
SalesRepCentral files Special, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any reports, statements or other information that
SalesRepCentral files with the Securities and Exchange Commission at the
Securities and Exchange Commission's public reference room at the following
location:
Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the public reference room. These Securities and
Exchange Commission filings are also available to the public from commercial
document retrieval services and at the Internet world wide web site
maintained by the Securities and Exchange Commission at "http://www.sec.gov."
The Securities and Exchange Commission allows SalesRepCentral to "incorporate
by reference" information into this proxy statement, which means that the
SalesRepCentral can disclose important information to you by referring you to
other documents filed separately with the Securities and Exchange Commission.
The information incorporated by reference is considered part of this proxy
statement, except for any information superseded by information contained
directly in this proxy statement or in later filed documents incorporated by
reference in this proxy statement.
This proxy statement incorporates by reference the documents set forth below
that SalesRepCentral previously filed with the Securities and Exchange
Commission. These documents contain important business and financial
information about SalesRepCentral that is not included in or delivered with
this proxy statement.
SALESREPCENTRAL FILINGS PERIOD
(FILE NO. 0-30234
Registration Statement Form 10SB Filed January 19, 1999 and amended
(filed under the name Van American April 22, 1999
Capital, Ltd.)
Annual Report on Form 10-KSB Fiscal Year ended June 30, 2000
Quarterly Reports on Form 10-QSB Quarters ended March 31, 2001, December
31, 2000, September 30, 2000
Current Reports on Form 8-K Filed December 1, 2000, and August 20,
2001
SalesRepCentral also incorporates by reference additional documents that may
be filed with the Securities and Exchange Commission under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act between the date of this proxy
statement and the date of the Special meeting. These include periodic
reports, such as Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-
QSB and Current Reports on Form 8-K, as well as proxy statements.
SalesRepCentral has supplied all information contained or incorporated by
reference in this proxy statement relating to SalesRepCentral and Interactive
has supplied all such information relating to Interactive.
You can obtain any of the documents incorporated by reference through
SalesRepCentral, the Securities and Exchange Commission or the Securities and
Exchange Commission's Internet web site as described above. Documents
incorporated by reference are available from SalesRepCentral without charge,
excluding all exhibits, except that if SalesRepCentral has specifically
incorporated by reference an exhibit in this proxy statement, the exhibit
will also be provided without charge. Stockholders may obtain documents
incorporated by reference in this proxy statement by requesting them in
writing or by telephone from the SalesRepCentral at the following address:
SALESREPCENTRAL.COM, INC.
8930 E. Raintree Dr. #100
Scottsdale, AZ 85260
(480) 922-8444
You should rely only on the information contained or incorporated by
reference in this proxy statement. We have not authorized anyone to provide
you with information that is different from what is contained in this proxy
statement. This proxy statement is dated September _____, 2001. You should
not assume that the information contained in this proxy statement is accurate
as of any date other than that date. Neither the mailing of this proxy
statement to stockholders nor the issuance of SalesRepCentral common stock in
the merger creates any implication to the contrary.
FRONT SIDE OF PROXY
PROXY
SALESREPCENTRAL.COM, INC.
8930 E. Raintree Dr. #100
Scottsdale, AZ 85260
(480) 922-8444
SPECIAL MEETING OF STOCKHOLDERS
FRIDAY, SEPTEMBER 28, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF SALESREPCENTRAL.COM, INC.
The undersigned stockholder of SALESREPCENTRAL.COM, INC., a Nevada
corporation (the "Company"), hereby appoints Ralph Massetti, as proxies, with
the power to appoint his or her substitute, and hereby authorizes either of
them to represent, and to vote as designated on the reverse side, all the
shares of common stock of SalesRepCentral.com, Inc. held of record by the
undersigned on August 30, 2001, at the Special Meeting of Stockholders of
SalesRepCentral.com, Inc., to be held at The Conference Room, Suite 115 -
1850 E. Flamingo Road, Las Vegas, Nevada 89119, on Friday, September 28,
2001, at 9:00 a.m. local time and at all adjournments or postponements
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE BOARD OF DIRECTORS AS NOMINATED, THE APPROVAL OF THE
ACCOUNTING FIRM OF WEAVER AND MARTIN, AND THE APPROVAL OF THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY.
[X] PLEASE MARK YOUR VOTES AS INDICATED IN THIS EXAMPLE
THE BOARD OF DIRECTORS OF SALESREPCENTRAL.COM, INC. RECOMMENDS A VOTE FOR THE
AGREEMENT AND PLAN OF MERGER.
1. Proposal to approve and adopt the Merger Agreement, dated as of August
14, 2001, by and among SalesRepCentral.com, Inc., Interactive Motorsport Inc.
and SalesRep Subsidiary Corp., a wholly owned subsidiary of
SalesRepCentral.com, Inc. as heretofore and hereinafter amended, and the
transactions contemplated thereby:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be dated, and signed on reverse side)
<PAGE.
2. Proposal to approve the following Directors to serve effective upon
closing of the Merger: Joseph Chappell, Dominic Chappell, Eddie Johns, Simon
Slater, and Ralph Massetti:
Joseph Chappell [ ] FOR [ ] AGAINST [ ] ABSTAIN
Dominic Chappell [ ] FOR [ ] AGAINST [ ] ABSTAIN
Eddie Johns [ ] FOR [ ] AGAINST [ ] ABSTAIN
Simon Slater [ ] FOR [ ] AGAINST [ ] ABSTAIN
Ralph Massetti [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To change the name of SalesRepCentral to Interactive Motorsport Inc., to
be effective upon closing of the Merger:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To cause a pre-merger 6:1 reverse split of SalesRepCentral's common
stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Proposal to transact such other business as may properly come before the
Special meeting or any adjournment or postponement:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY ALSO DELEGATES DISCRETIONARY AUTHORITY WITH RESPECT TO ANY OTHER
BUSINESS, WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR
POSTPONEMENT THEREOF AND MATTERS INCIDENT TO THE CONDUCT OF THE SPECIAL
MEETING. THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL
MEETING AND PROXY STATEMENT.
Date: ___________________, 2001
_______________________________ ____________________________________
(Signature) (Joint Owner's Signature)
Please sign exactly as your name appears on proxy. When signing as attorney,
guardian, executor, administrator or trustee, please give title. If the
signer is a corporation, give the full corporate name and sign by a duly
authorized officer, showing the officer's title. EACH joint owner is
requested to sign.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
APPENDIX A
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 3
Section 1.3. Closing of the Merger 3
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 5
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 7
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 8
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 11
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 12
Section 3.2. Capitalization of Interactive 13
Section 3.3. Authority Relative to this Agreement; Recommendation 13
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 16
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 17
Section 3.20. Certain Business Practices 17
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 18
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 21
Section 4.4. Other Potential Acquirers 21
Section 4.5. Meetings of Stockholders 21
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 Plans 22
Section 4.10. Public Announcements 22
Section 4.11. Indemnification 22
Section 4.12. Notification of Certain Matters 23
ARTICLE 5. Conditions to Consummation of the Merger 23
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 24
ARTICLE 6. Termination; Amendment; Waiver 25
Section 6.1. Termination 25
Section 6.2. Effect of Termination 26
Section 6.3. Fees and Expenses 26
Section 6.4. Amendment 26
Section 6.5. Extension; Waiver 26
Section 6.6. Breakup Fee 26
ARTICLE 7. Miscellaneous 26
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 27
Section 7.5. Governing Law 27
Section 7.6. Descriptive Headings 27
Section 7.7. Parties in Interest 27
Section 7.8. Certain Definitions 27
Section 7.9. Personal Liability 28
Section 7.10. Specific Performance 28
Section 7.11. Counterparts 28
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 Inc., 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 a "Interactive Share" and collectively,
the "Interactive Shares") issued and outstanding 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 dividing (i) Fourteen Million Four Hundred Ninety Eight
Thousand Six Hundred and Sixty Six (14,498,666), by (ii) the total number of
shares of Interactive on a fully diluted basis, Thirty-Nine Million Two
Hundred Thirty-Four Thousand Four Hundred Fifty-Nine (39,234,459) outstanding
immediately prior to the Effective Time (such quotient, the "Exchange
Ratio"). The holder of one or more shares of Interactive common stock shall
be entitled to receive in exchange therefore a number of shares of SalesRep
Common Stock ("SalesRep Shares") equal to the product of (x) (the number of
shares of Interactive common stock, on a fully diluted basis 39,234,459,
times (y) the Exchange Ratio. SalesRep Shares and Interactive Shares are
sometimes referred to collectively herein as "Shares." By way of example,
14,498,666/ 34,234,459 = .3695 (the Exchange Ratio). 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.
(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 therefore 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 therefore 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.
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 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 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 plus
interest.
D. Loans to IMH.
1) Ben Anderson made a loan to IMH in the amount of 150,000. 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 (the "Loan").
Dominic subsequently converted 194,908 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 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.
F. Material Contracts. IMH has an open contract with Pi group for
technical development services. IMH paid 75,000 to the Pi group in October
2000 and all of the 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. 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 Date
Dominic Chappell 1,922,172 6/6/01 1,922,172 10.14 cents 6/6/11
Gavin Macaulay 113,478 6/6/01 113,478 22.72 cents 6/6/11
Eddie Johns 113,477 6/6/01 113,477 22.72 cents 6/6/11
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 (the "Loan").
Dominic subsequently converted 194,908 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 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.
APPENDIX B
RIGHTS OF DISSENTING OWNERS
NRS 92A.300 DEFINITIONS. As used in NRS 92A.300 to 92A.500, inclusive,
unless the context otherwise requires, the words and terms defined in NRS
92A.305 to 92A.335, inclusive, have the meanings ascribed to them in those
sections. (Added to NRS by 1995, 2086)
NRS 92A.305 "BENEFICIAL STOCKHOLDER" DEFINED. "Beneficial stockholder"
means a person who is a beneficial owner of shares held in a voting trust or
by a nominee as the stockholder of record. (Added to NRS by 1995, 2087)
NRS 92A.310 "CORPORATE ACTION" DEFINED. "Corporate action" means the
action of a domestic corporation. (Added to NRS by 1995, 2087)
NRS 92A.315 "DISSENTER" DEFINED. "Dissenter" means a stockholder who is
entitled to dissent from a domestic corporation's action under NRS 92A.380
and who exercises that right when and in the manner required by NRS 92A.400
to 92A.480, inclusive. (Added to NRS by 1995, 2087; A 1999, 1631)
NRS 92A.320 "FAIR VALUE" DEFINED. "Fair value," with respect to a
dissenter's shares, means the value of the shares immediately before the
effectuation of the corporate action to which he objects, excluding any
appreciation or depreciation in anticipation of the corporate action unless
exclusion would be inequitable. (Added to NRS by 1995, 2087)
NRS 92A.325 "STOCKHOLDER" DEFINED. "Stockholder" means a stockholder of
record or a beneficial stockholder of a domestic corporation. (Added to NRS
by 1995, 2087)
NRS 92A.330 "STOCKHOLDER OF RECORD" DEFINED. "Stockholder of record"
means the person in whose name shares are registered in the records of a
domestic corporation or the beneficial owner of shares to the extent of the
rights granted by a nominee's certificate on file with the domestic
corporation. (Added to NRS by 1995, 2087)
NRS 92A.335 "SUBJECT CORPORATION" DEFINED. "Subject corporation" means
the domestic corporation which is the issuer of the shares held by a
dissenter before the corporate action creating the dissenter's rights becomes
effective or the surviving or acquiring entity of that issuer after the
corporate action becomes effective. (Added to NRS by 1995, 2087)
NRS 92A.340 COMPUTATION OF INTEREST. Interest payable pursuant to NRS
92A.300 to 92A.500, inclusive, must be computed from the effective date of
the action until the date of payment, at the average rate currently paid by
the entity on its principal bank loans or, if it has no bank loans, at a rate
that is fair and equitable under all of the circumstances. (Added to NRS by
1995, 2087)
NRS 92A.350 RIGHTS OF DISSENTING PARTNER OF DOMESTIC LIMITED
PARTNERSHIP. A partnership agreement of a domestic limited partnership or,
unless otherwise provided in the partnership agreement, an agreement of
merger or exchange, may provide that contractual rights with respect to the
partnership interest of a dissenting general or limited partner of a domestic
limited partnership are available for any class or group of partnership
interests in connection with any merger or exchange in which the domestic
limited partnership is a constituent entity. (Added to NRS by 1995, 2088)
NRS 92A.360 RIGHTS OF DISSENTING MEMBER OF DOMESTIC LIMITED-LIABILITY
COMPANY. The articles of organization or operating agreement of a domestic
limited-liability company or, unless otherwise provided in the articles of
organization or operating agreement, an agreement of merger or exchange, may
provide that contractual rights with respect to the interest of a dissenting
member are available in connection with any merger or exchange in which the
domestic limited-liability company is a constituent entity. (Added to NRS by
1995, 2088)
NRS 92A.370 RIGHTS OF DISSENTING MEMBER OF DOMESTIC NONPROFIT CORPORATION.
1. Except as otherwise provided in subsection 2, and unless otherwise
provided in the articles or bylaws, any member of any constituent domestic
nonprofit corporation who voted against the merger may, without prior notice,
but within 30 days after the effective date of the merger, resign from
membership and is thereby excused from all contractual obligations to the
constituent or surviving corporations which did not occur before his
resignation and is thereby entitled to those rights, if any, which would have
existed if there had been no merger and the membership had been terminated or
the member had been expelled.
2. Unless otherwise provided in its articles of incorporation or
bylaws, no member of a domestic nonprofit corporation, including, but not
limited to, a cooperative corporation, which supplies services described in
chapter 704 of NRS to its members only, and no person who is a member of a
domestic nonprofit corporation as a condition of or by reason of the
ownership of an interest in real property, may resign and dissent pursuant to
subsection 1. (Added to NRS by 1995, 2088)
NRS 92A.380 RIGHT OF STOCKHOLDER TO DISSENT FROM CERTAIN CORPORATE ACTIONS
AND TO OBTAIN PAYMENT FOR SHARES.
1. Except as otherwise provided in NRS 92A.370 and 92A.390, a
stockholder is entitled to dissent from, and obtain payment of the fair value
of his shares in the event of any of the following corporate actions:
(a) Consummation of a plan of merger to which the domestic
corporation is a party:
(1) If approval by the stockholders is required for the
merger by NRS 92A.120 to 92A.160, inclusive, or the articles of incorporation
and he is entitled to vote on the merger; or (2) If the domestic corporation
is a subsidiary and is merged with its parent under NRS 92A.180.
(b) Consummation of a plan of exchange to which the domestic
corporation is a party as the corporation whose subject owner's interests
will be acquired, if he is entitled to vote on the plan.
(c) Any corporate action taken pursuant to a vote of the
stockholders to the event that the articles of incorporation, bylaws or a
resolution of the board of directors provides that voting or nonvoting
stockholders are entitled to dissent and obtain payment for their shares.
2. A stockholder who is entitled to dissent and obtain payment under
NRS 92A.300 to 92A.500, inclusive, may not challenge the corporate action
creating his entitlement unless the action is unlawful or fraudulent with
respect to him or the domestic corporation. (Added to NRS by 1995, 2087)
NRS 92A.390 LIMITATIONS ON RIGHT OF DISSENT: STOCKHOLDERS OF CERTAIN CLASSES
OR SERIES; ACTION OF STOCKHOLDERS NOT REQUIRED FOR PLAN OF MERGER.
1. There is no right of dissent with respect to a plan of merger or
exchange in favor of stockholders of any class or series which, at the record
date fixed to determine the stockholders entitled to receive notice of and to
vote at the meeting at which the plan of merger or exchange is to be acted
on, were either listed on a national securities exchange, included in the
national market system by the National Association of Securities Dealers,
Inc., or held by at least 2,000 stockholders of record, unless:
(a) The articles of incorporation of the corporation issuing the shares
provide otherwise; or
(b) The holders of the class or series are required under the plan of merger
or exchange to accept for the shares anything except:
(1) Cash, owner's interests or owner's interests and cash in lieu of
fractional owner's interests of:
(I) The surviving or acquiring entity; or
(II) Any other entity which, at the effective date of the plan of merger or
exchange, were either listed on a national securities exchange, included in
the national market system by the National Association of Securities Dealers,
Inc., or held of record by a least 2,000 holders of owner's
interests of record; or
(2) A combination of cash and owner's interests of the kind described in sub-
subparagraphs (I) and (II) of subparagraph (1) of paragraph (b).
2. There is no right of dissent for any holders of stock of the surviving
domestic corporation if the plan of merger does not require action of the
stockholders of the surviving domestic corporation under NRS 92A.130. (Added
to NRS by 1995, 2088)
NRS 92A.400 LIMITATIONS ON RIGHT OF DISSENT: ASSERTION AS TO PORTIONS ONLY TO
SHARES REGISTERED TO STOCKHOLDER; ASSERTION BY BENEFICIAL STOCKHOLDER.
1. A stockholder of record may assert dissenter's rights as to fewer than
all of the shares registered in his name only if he dissents with respect to
all shares beneficially owned by any one person and notifies the subject
corporation in writing of the name and address of each person on whose behalf
he asserts dissenter's rights. The rights of a partial dissenter under this
subsection are determined as if the shares as to which he dissents and his
other shares were registered in the names of different stockholders.
2. A beneficial stockholder may assert dissenter's rights as to shares held
on his behalf only if:
(a) He submits to the subject corporation the written consent of the
stockholder of record to the dissent not later than the time the beneficial
stockholder asserts dissenter's rights; and
(b) He does so with respect to all shares of which he is the beneficial
stockholder or over which he has power to direct the vote. (Added to NRS by
1995, 2089)
NRS 92A.410 NOTIFICATION OF STOCKHOLDERS REGARDING RIGHT OF DISSENT.
1. If a proposed corporate action creating dissenters' rights is submitted
to a vote at a stockholders' meeting, the notice of the meeting must state
that stockholders are or may be entitled to assert dissenters' rights under
NRS 92A.300 to 92A.500, inclusive, and be accompanied by a copy of those
sections.
2. If the corporate action creating dissenters' rights is taken by written
consent of the stockholders or without a vote of the stockholders, the
domestic corporation shall notify in writing all stockholders entitled to
assert dissenters' rights that the action was taken and send them the
dissenter's notice described in NRS 92A.430. (Added to NRS by 1995, 2089; A
1997, 730)
NRS 92A.420 PREREQUISITES TO DEMAND FOR PAYMENT FOR SHARES.
1. If a proposed corporate action creating dissenters' rights is submitted
to a vote at a stockholders' meeting, a stockholder who wishes to assert
dissenter's rights:
(a) Must deliver to the subject corporation, before the vote is taken,
written notice of his intent to demand payment for his shares if the proposed
action is effectuated; and
(b) Must not vote his shares in favor of the proposed action.
2. A stockholder who does not satisfy the requirements of subsection 1 and
NRS 92A.400 is not entitled to payment for his shares under this chapter.
(Added to NRS by 1995, 2089; 1999, 1631)
NRS 92A.430 DISSENTER'S NOTICE: DELIVERY TO STOCKHOLDERS ENTITLED TO ASSERT
RIGHTS; CONTENTS.
1. If a proposed corporate action creating dissenters' rights is authorized
at a stockholders' meeting, the subject corporation shall deliver a written
dissenter's notice to all stockholders who satisfied the requirements to
assert those rights.
2. The dissenter's notice must be sent no later than 10 days after the
effectuation of the corporate action, and must:
(a) State where the demand for payment must be sent and where and when
certificates, if any, for shares must be deposited;
(b) Inform the holders of shares not represented by certificates to what
extent the transfer of the shares will be restricted after the demand for
payment is received;
(c) Supply a form for demanding payment that includes the date of the first
announcement to the news media or to the stockholders of the terms of the
proposed action and requires that the person asserting dissenter's rights
certify whether or not he acquired beneficial ownership of the shares before
that date;
(d) Set a date by which the subject corporation must receive the demand for
payment, which may not be less than 30 nor more than 60 days after the date
the notice is delivered; and
(e) Be accompanied by a copy of NRS 92A.300 to 92A.500, inclusive. (Added to
NRS by 1995, 2089)
NRS 92A.440 DEMAND FOR PAYMENT AND DEPOSIT OF CERTIFICATES; RETENTION OF
RIGHTS OF STOCKHOLDER.
1. A stockholder to whom a dissenter's notice is sent must:
(a) Demand payment;
(b) Certify whether he acquired beneficial ownership of the shares before
the date required to be set forth in the dissenter's notice for this
certification; and
(c) Deposit his certificates, if any, in accordance with the terms of the
notice.
2. The stockholder who demands payment and deposits his certificates, if
any, before the proposed corporate action is taken retains all other rights
of a stockholder until those rights are canceled or modified by the taking of
the proposed corporate action.
3. The stockholder who does not demand payment or deposit his certificates
where required, each by the date set forth in the dissenter's notice, is not
entitled to payment for his shares under this chapter. (Added to NRS by 1995,
2090; A 1997, 730)
NRS 92A.450 UNCERTIFICATED SHARES: AUTHORITY TO RESTRICT TRANSFER AFTER
DEMAND FOR PAYMENT; RETENTION OF RIGHTS OF STOCKHOLDER.
1. The subject corporation may restrict the transfer of shares not
represented by a certificate from the date the demand for their payment is
received.
2. The person for whom dissenter's rights are asserted as to shares not
represented by a certificate retains all other rights of a stockholder until
those rights are canceled or modified by the taking of the proposed corporate
action. (Added to NRS by 1995, 2090)
NRS 92A.460 PAYMENT FOR SHARES: GENERAL REQUIREMENTS.
1. Except as otherwise provided in NRS 92A.470, within 30 days after
receipt of a demand for payment, the subject corporation shall pay each
dissenter who complied with NRS 92A.440 the amount the subject corporation
estimates to be the fair value of his shares, plus accrued interest. The
obligation of the subject corporation under this subsection may be enforced
by the district court:
(a) Of the county where the corporation's registered office is located; or
(b) At the election of any dissenter residing or having its registered
office in this state, of the county where the dissenter resides or has its
registered office. The court shall dispose of the complaint promptly.
2. The payment must be accompanied by:
(a) The subject corporation's balance sheet as of the end of a fiscal year
ending not more than 16 months before the date of payment, a statement of
income for that year, a statement of changes in the stockholders' equity for
that year and the latest available interim financial statements, if any;
(b) A statement of the subject corporation's estimate of the fair value of
the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's rights to demand payment under NRS
92A.480; and
(e) A copy of NRS 92A.300 to 92A.500, inclusive. (Added to NRS by 1995,
2090)
NRS 92A.470 PAYMENT FOR SHARES: SHARES ACQUIRED ON OR AFTER DATE OF
DISSENTER'S NOTICE.
1. A subject corporation may elect to withhold payment from a dissenter
unless he was the beneficial owner of the shares before the date set forth in
the dissenter's notice as the date of the first announcement to the news
media or to the stockholders of the terms of the proposed action.
2. To the extent the subject corporation elects to withhold payment, after
taking the proposed action, it shall estimate the fair value of the shares,
plus accrued interest, and shall offer to pay this amount to each dissenter
who agrees to accept it in full satisfaction of his demand. The subject
corporation shall send with its offer a statement of its estimate of the fair
value of the shares, an explanation of how the interest was calculated, and a
statement of the dissenters' right to demand payment pursuant to NRS 92A.480.
(Added to NRS by 1995, 2091)
NRS 92A.480 DISSENTER'S ESTIMATE OF FAIR VALUE: NOTIFICATION OF SUBJECT
CORPORATION; DEMAND FOR PAYMENT OF ESTIMATE.
1. A dissenter may notify the subject corporation in writing of his own
estimate of the fair value of his shares and the amount of interest due, and
demand payment of his estimate, less any payment pursuant to NRS 92A.460, or
reject the offer pursuant to NRS 92A.470 and demand payment of the fair value
of his shares and interest due, if he believes that the amount paid pursuant
to NRS 92A.460 or offered pursuant to NRS 92A.470 is less than the fair value
of his shares or that the interest due is incorrectly calculated.
2. A dissenter waives his right to demand payment pursuant to this section
unless he notifies the subject corporation of his demand in writing within 30
days after the subject corporation made or offered payment for his shares.
(Added to NRS by 1995, 2091)
NRS 92A.490 LEGAL PROCEEDING TO DETERMINE FAIR VALUE: DUTIES OF SUBJECT
CORPORATION; POWERS OF COURT; RIGHTS OF DISSENTER.
1. If a demand for payment remains unsettled, the subject corporation shall
commence a proceeding within 60 days after receiving the demand and petition
the court to determine the fair value of the shares and accrued interest. If
the subject corporation does not commence the proceeding within the 60-day
period, it shall pay each dissenter whose demand remains unsettled the amount
demanded.
2. A subject corporation shall commence the proceeding in the district
court of the county where its registered office is located. If the subject
corporation is a foreign entity without a resident agent in the state, it
shall commence the proceeding in the county where the registered office of
the domestic corporation merged with or whose shares were acquired by the
foreign entity was located.
3. The subject corporation shall make all dissenters, whether or not
residents of Nevada, whose demands remain unsettled, parties to the
proceeding as in an action against their shares. All parties must be served
with a copy of the petition. Nonresidents may be served by registered or
certified mail or by publication as provided by law.
4. The jurisdiction of the court in which the proceeding is commenced under
subsection 2 is plenary and exclusive. The court may appoint one or more
persons as appraisers to receive evidence and recommend a decision on the
question of fair value. The appraisers have the powers described in the order
appointing them, or any amendment thereto. The dissenters are entitled to the
same discovery rights as parties in other civil proceedings.
5. Each dissenter who is made a party to the proceeding is entitled to a
judgment:
(a) For the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the subject corporation; or
(b) For the fair value, plus accrued interest, of his after-acquired shares
for which the subject corporation elected to withhold payment pursuant to NRS
92A.470. (Added to NRS by 1995, 2091)
NRS 92A.500 LEGAL PROCEEDING TO DETERMINE FAIR VALUE: ASSESSMENT OF COSTS AND
FEES.
1. The court in a proceeding to determine fair value shall determine all of
the costs of the proceeding, including the reasonable compensation and
expenses of any appraisers appointed by the court. The court shall assess the
costs against the subject corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable,
to the extent the court finds the dissenters acted arbitrarily, vexatiously
or not in good faith in demanding payment.
2. The court may also assess the fees and expenses of the counsel and
experts for the respective parties, in amounts the court finds equitable:
(a) Against the subject corporation and in favor of all dissenters if the
court finds the subject corporation did not substantially comply with the
requirements of NRS 92A.300 to 92A.500, inclusive; or
(b) Against either the subject corporation or a dissenter in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously or not in good faith
with respect to the rights provided by NRS 92A.300 to 92A.500, inclusive.
3. If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the subject
corporation, the court may award to those counsel reasonable fees to be paid
out of the amounts awarded to the dissenters who were benefited.
4. In a proceeding commenced pursuant to NRS 92A.460, the court may assess
the costs against the subject corporation, except that the court may assess
costs against all or some of the dissenters who are parties to the
proceeding, in amounts the court finds equitable, to the extent the court
finds that such parties did not act in good faith in instituting the
proceeding.
5. This section does not preclude any party in a proceeding commenced
pursuant to NRS 92A.460 or 92A.490 from applying the provisions of N.R.C.P.
68 or NRS 17.115. (Added to NRS by 1995, 2092)