-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HxIsxL58mqMYlhLfRaPaV3QVlOtR40OMoiSxwDes+//Px3IkCsuNdxeERf6NuFEY l42Bb0gV0IY/KJ5juGe67g== 0000921895-02-000311.txt : 20020611 0000921895-02-000311.hdr.sgml : 20020611 20020611171752 ACCESSION NUMBER: 0000921895-02-000311 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20020611 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GARBER SEAN CENTRAL INDEX KEY: 0001175207 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 3600 CHAMBERLAIN LANE STREET 2: SUITE 826 CITY: LOUISVILLE STATE: KY ZIP: 40241 BUSINESS PHONE: 5024290010 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SPORTING MAGIC INC CENTRAL INDEX KEY: 0001071991 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PERSONAL SERVICES [7200] IRS NUMBER: 954675095 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-57295 FILM NUMBER: 02676703 BUSINESS ADDRESS: STREET 1: 17337 VENTURA BLVD STREET 2: SUITE 224 CITY: ENCINO STATE: CA ZIP: 91316 BUSINESS PHONE: 8187840040 MAIL ADDRESS: STREET 1: 17337 VENTURA BLVD STREET 2: SUITE 224 CITY: ENCINO STATE: CA ZIP: 91316 FORMER COMPANY: FORMER CONFORMED NAME: ADVANCED KNOWLEDGE INC DATE OF NAME CHANGE: 19981013 SC 13D 1 sched13d05313_06112002.htm SCHEDULE 13D sec document 

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CUSIP No. 84916X 20 3             13D                          Page 1 of 8 pages
- --------------------------------------------------------------------------------



                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                 --------------

                                  SCHEDULE 13D

                 INFORMATION TO BE INCLUDED IN STATEMENTS FILED
                    PURSUANT TO RULE 13d-1(a) AND AMENDMENTS
                     THERETO FILED PURSUANT TO RULE 13d-2(a)

                               (Amendment No. )1

                              SPORTING MAGIC, INC.
                                (Name of issuer)

                     COMMON STOCK, $.001 PAR VALUE PER SHARE
- --------------------------------------------------------------------------------
                         (Title of class of securities)

                                   84916X 20 3
- --------------------------------------------------------------------------------
                                 (CUSIP number)

                            ROBERT H. FRIEDMAN, ESQ.
                 OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
                                 505 Park Avenue
                            New York, New York 10022
                                 (212) 753-7200
- --------------------------------------------------------------------------------
                  (Name, address and telephone number of person
                authorized to receive notices and communications)

                                  June 1, 2002
- --------------------------------------------------------------------------------
             (Date of event which requires filing of this statement)

            If the filing  person has  previously  filed a statement on Schedule
13G to report the acquisition  which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e),  13d-1(f) or 13d-1(g),  check the
following box / /

            Note.  Schedules  filed  in  paper  format  shall  include  a signed
original and five copies of the schedule, including all exhibits. See Rule 13d-7
for other parties to whom copies are to be sent.

                         (Continued on following pages)

                               (Page 1 of 8 Pages)
- ---------------------

            1 The  remainder  of this  cover  page  shall  be  filled  out for a
reporting person's initial filing on this form with respect to the subject class
of securities,  and for any subsequent  amendment  containing  information which
would alter disclosures provided in a prior cover page.

            The  information  required on the remainder of this cover page shall
not be deemed to be "filed"  for the  purpose  of  Section 18 of the  Securities
Exchange Act of 1934 or otherwise  subject to the liabilities of that section of
the Act but shall be subject to all other  provisions of the Act  (however,  see
the Notes).


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CUSIP No. 84916X 20 3             13D                          Page 2 of 8 pages
- --------------------------------------------------------------------------------

================================================================================
   1                  NAME OF REPORTING PERSONS
                      I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

                      Sean Garber
- --------------------------------------------------------------------------------
   2                  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
                                                                        (b) / /
- --------------------------------------------------------------------------------
   3                  SEC USE ONLY
- --------------------------------------------------------------------------------
   4                  SOURCE OF FUNDS*
                                  OO
- --------------------------------------------------------------------------------
   5                  CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
                      PURSUANT TO ITEM 2(d) OR 2(e)
- --------------------------------------------------------------------------------
   6                  CITIZENSHIP OR PLACE OR ORGANIZATION

                                  United States of America
- --------------------------------------------------------------------------------
 NUMBER OF SHARES
 BENEFICIALLY OWNED   7       SOLE VOTING POWER
 BY EACH REPORTING
 PERSON WITH                     0
                     -----------------------------------------------------------
                      8       SHARED VOTING POWER

                                 1,260,000
                     -----------------------------------------------------------
                      9       SOLE DISPOSITIVE POWER

                                 0
                     -----------------------------------------------------------
                      10      SHARED DISPOSITIVE POWER

                                 1,260,000
- --------------------------------------------------------------------------------
   11                 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

                                 1,260,000
- --------------------------------------------------------------------------------
   12                 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
                      CERTAIN SHARES*
- --------------------------------------------------------------------------------
   13                 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

                                 11.57%
- --------------------------------------------------------------------------------
   14                 TYPE OF REPORTING PERSON*

                                 IN
================================================================================

                      *SEE INSTRUCTIONS BEFORE FILLING OUT!



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CUSIP No. 84916X 20 3             13D                          Page 3 of 8 pages
- --------------------------------------------------------------------------------

================================================================================
   1                  NAME OF REPORTING PERSONS
                      I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

                      Lisa Garber
- --------------------------------------------------------------------------------
   2                  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
                                                                        (b) / /
- --------------------------------------------------------------------------------
   3                  SEC USE ONLY
- --------------------------------------------------------------------------------
   4                  SOURCE OF FUNDS*
                                  OO
- --------------------------------------------------------------------------------
   5                  CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
                      PURSUANT TO ITEM 2(d) OR 2(e)
- --------------------------------------------------------------------------------
   6                  CITIZENSHIP OR PLACE OR ORGANIZATION

                                  United States of America
- --------------------------------------------------------------------------------
 NUMBER OF SHARES
 BENEFICIALLY OWNED   7       SOLE VOTING POWER
 BY EACH REPORTING
 PERSON WITH                     0
                     -----------------------------------------------------------
                      8       SHARED VOTING POWER

                                 1,260,000
                     -----------------------------------------------------------
                      9       SOLE DISPOSITIVE POWER

                                 0
                     -----------------------------------------------------------
                      10      SHARED DISPOSITIVE POWER

                                 1,260,000
- --------------------------------------------------------------------------------
   11                 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

                                 1,260,000
- --------------------------------------------------------------------------------
   12                 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
                      CERTAIN SHARES*
- --------------------------------------------------------------------------------
   13                 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

                                 11.57%
- --------------------------------------------------------------------------------
   14                 TYPE OF REPORTING PERSON*

                                 IN
================================================================================

                      *SEE INSTRUCTIONS BEFORE FILLING OUT!


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CUSIP No. 84916X 20 3             13D                          Page 4 of 8 pages
- --------------------------------------------------------------------------------

            The following  statement  constitutes  the Schedule 13D filed by the
undersigned (the "Statement").

Item 1.     Security and Issuer.
            -------------------

            This  Statement  relates  to the common  stock,  $.001 par value per
share ("Common Stock"), of Sporting Magic, Inc. (the "Company"), whose principal
executive   offices  are  located  at  7625  Hamilton  Park  Drive,   Suite  12,
Chattanooga, Tennessee 37421.

Item 2.     Identity and Background.
            -----------------------

            2(a),  2(b) and 2(c) This  Statement is jointly filed by Sean Garber
and Lisa Garber (together,  the "Reporting  Persons").  As the Reporting Persons
own all of the shares of Common Stock  reported  hereunder as joint tenants with
the right of survivorship, each Reporting Person may be deemed, pursuant to Rule
13d-3 of the Securities  Exchange Act of 1934, as amended (the "Act"), to be the
beneficial  owner of all the shares of Common Stock held by the other  Reporting
Person.  The Reporting  Persons are filing this joint Statement,  as they may be
considered a "group" under  Section  13(d)(3) of the Act.  However,  neither the
fact of this  filing  nor  anything  contained  herein  shall be deemed to be an
admission by the Reporting Persons that such a group exists.

            Sean Garber is the Executive Vice  President and a Director  nominee
of the Company,  and Lisa Garber is an employee of CMJ Ventures,  Inc., a wholly
owned subsidiary of the Company. The principal place of business for each of the
Reporting Persons is 3600 Chamberlain Lane, Suite 826, Louisville, KY 40241.

            (d) During the last five years,  none of the Reporting  Persons have
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).

            (e) During the last five years,  none of the Reporting  Persons have
been a party to a civil  proceeding  of a  judicial  or  administrative  body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment,  decree or final order enjoining future  violations of, or prohibiting
or mandating  activities subject to, federal or state securities laws or finding
any violation with respect to such laws.

            (f) Each of the Reporting Persons is a citizen of the United States
of America.

Item 3.     Source and Amount of Funds or Other Consideration.
            -------------------------------------------------

            Pursuant  to the  terms of an  Agreement  and Plan of  Merger,  (the
"Merger  Agreement"),  dated as of March 1, 2002 and as amended on May 16, 2002,
by and among the Company,  CMJ  Acquisition  Corp.  ("Merger  Sub"),  a Delaware
corporation and wholly-owned  subsidiary of the Company,  CMJ Ventures,  Inc., a
Florida  corporation  ("CMJ"),  and Sean  Garber,  Lisa Garber and Mark  Carter,
Merger Sub was merged with and into CMJ (the  "Merger")  effective as of June 1,
2002. As a result of the Merger, the separate corporate  existence of Merger Sub
ceased,  and




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CUSIP No. 84916X 20 3             13D                          Page 5 of 8 pages
- --------------------------------------------------------------------------------
CMJ emerged as the surviving  corporation  and a wholly owned  subsidiary of the
Company. Moreover,  pursuant to the terms of the Merger Agreement, each share of
CMJ common stock was converted  into the right to receive  2,545.4545  shares of
Common Stock.

            Immediately  prior to the Merger,  the  Reporting  Persons  owned an
aggregate  of 500  shares  of  common  stock  of CMJ,  which  were  subsequently
converted,  as part of the Merger, into the right to receive 1,260,000 shares of
Common Stock.

Item 4.     Purpose of Transaction.
            ----------------------

            The Reporting Persons acquired the Common Stock  beneficially  owned
by them in connection with the Merger and for investment purposes. Nevertheless,
the  Reporting  Persons  intend to support  the  nomination  of Sean Garber as a
director  of  the  Company  at  the  Company's   upcoming   Special  Meeting  of
Stockholders,  which has yet to be  scheduled.  Except as discussed  above,  the
Reporting  Persons  currently have no specific plans or proposals that relate to
or would result in the events  described in paragraphs (a) through (j) of Item 4
of the instructions to Schedule 13D,  although they reserve the right to develop
such plans or proposals.

Item 5.     Interest in Securities of the Issuer.
            ------------------------------------

            The aggregate  percentage  of shares of Common Stock  reported to be
owned by the  Reporting  Persons is based upon  10,889,225  shares  outstanding,
which is the total number of shares of Common Stock  outstanding  as reported in
the Company's  Quarterly Report on Form 10-QSB for the period ended February 28,
2002, plus the 1,400,000 shares that were issued on June 1, 2002 pursuant to the
Merger.

            (a) As of the filing date of this Statement,  the Reporting  Persons
beneficially  owned, as joint tenants,  an aggregate  1,260,000 shares of Common
Stock, representing approximately 11.57% of the Company's issued and outstanding
Common Stock.

            (b) Each of the Reporting Persons has the shared power to direct the
vote and the shared power to direct the  disposition of the 1,260,000  shares of
Common Stock of the Company beneficially owned by each of them.

            (c) Except as  described in Item 3 above with respect to the Merger,
the Reporting Persons have not effected any transactions in the Company's Common
Stock during the past 60 days.

            (d) No person  other than the  Reporting  Persons  have the right to
receive or the power to direct the receipt of  dividends  from,  or the proceeds
from the sale of, the shares of Common Stock of the Company  beneficially  owned
by the Reporting Persons.

            (e)         Not applicable.




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CUSIP No. 84916X 20 3             13D                          Page 6 of 8 pages
- --------------------------------------------------------------------------------



Item 6.     Contracts, Arrangements, Understandings or Relationships With Respect
            ---------------------------------------------------------------------
            to Securities of the Issuer.
            ---------------------------


            The  information  set forth in Item 3 hereof  concerning  agreements
with respect to securities of the Company is incorporated herein by reference.

Item 7.     Materials to be Filed as Exhibits.
            ---------------------------------

            Exhibit No.     Description

            99.1            Joint Filing  Agreement dated as of June 11, 2002 by
                            and among the Reporting Persons.

            99.2            The Agreement and Plan of Merger,  dated as of March
                            1, 2001,  by and among  Sporting  Magic,  Inc.,  CMJ
                            Acquisition Corp., CMJ Ventures,  Inc., Sean Garber,
                            Lisa Garber and Mark Carter.

            99.3            Amendment No. 1 to the Agreement and Plan of Merger,
                            dated  as of May 16,  2002,  by and  among  Sporting
                            Magic,  Inc., CMJ Acquisition  Corp.,  CMJ Ventures,
                            Inc., Sean Garber, Lisa Garber and Mark Carter.



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CUSIP No. 84916X 20 3             13D                          Page 7 of 8 pages
- --------------------------------------------------------------------------------



                                   SIGNATURES

            After due inquiry and to the best of his knowledge and belief,  each
of the undersigned certifies that the information set forth in this statement is
true, complete and correct.

Dated:  June 11, 2002

                                   /s/ Sean Garber
                                   -------------------------------
                                   Sean Garber

                                   /s/ Lisa Garber
                                   -------------------------------
                                   Lisa Garber



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CUSIP No. 84916X 20 3             13D                          Page 8 of 8 pages
- --------------------------------------------------------------------------------



                             JOINT FILING AGREEMENT

            In accordance with Rule  13d-1(k)(1)  under the Securities  Exchange
Act of 1934,  as amended,  the persons  named below agree to the joint filing on
behalf  of each of them of a  Statement  on  Schedule  13D  dated  June 11, 2002
(including  amendments  thereto)  with  respect to the Common  Stock of Sporting
Magic, Inc.

Dated: June 11, 2002

                                   /s/ Sean Garber
                                   -------------------------------
                                   Sean Garber

                                   /s/ Lisa Garber
                                   -------------------------------
                                   Lisa Garber
EX-99 3 sced13d99205313_06112002.htm EXHIBIT 99.2 sec document 
                    ----------------------------------------

                          AGREEMENT AND PLAN OF MERGER

                    ----------------------------------------

                                  BY AND AMONG

                              SPORTING MAGIC, INC.,

                            CMJ ACQUISITION COMPANY,

                               CMJ VENTURES, INC.

                                       and

                    SEAN GARBER, LISA GARBER AND MARK CARTER









                            Dated as of March 1,2002







                          AGREEMENT AND PLAN OF MERGER

          THIS  AGREEMENT  AND PLAN OF  MERGER  (the  "Agreement"),  dated as of
March 1, 2002, by and among (i) Sporting Magic,  Inc., a Delaware  corporation
("SMI" ), (ii) CMJ Acquisition  Company, a Delaware corporation and wholly owned
subsidiary  of  SMI  ("Merger  Sub"),  (iii)  CMJ  Ventures,   Inc.,  a  Florida
corporation  ("QM") and (iv) each of Sean  Garber,  Lisa  Garber and Mark Carter
(collectively, the "Stockholders").

                               W I T N E S S E T H

          WHEREAS,  the Stockholders and each of the Boards of Directors of SMI,
Merger Sub and CMJ have approved the merger of Merger Sub with and into CMJ (the
"Mercer")  upon the  terms  and  subject  to the  conditions  set  forth in this
Agreement,  and such Merger shall  enable SMI to acquire all of the  outstanding
equity  capital of CMJ in exchange for cash,  common stock of SMI and  preferred
stock of SMI;

          WHEREAS,  after  this  transaction,  CMJ shall  become a wholly  owned
subsidiary

          WHEREAS,   prior  to  this  transaction,   SMI  acquired  all  of  the
outstanding common stock on Next, Inc., a Delaware corporation ("Next"), whereby
Next became a partially  owned  subsidiary  of SMI in its capacity as a publicly
traded holding company; and

          WHEREAS,  for federal  income tax  purposes,  it is intended  that the
Merger  qualify  as a  reorganization,  for the  benefit  of each of CMJ and the
Stockholders,  within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code").

          NOW,   THEREFORE,   in   consideration   of  the   premises   and  the
representations,  warranties,  covenants and agreements  contained  herein,  the
parties hereto intending to be legally bound, hereby agree as follows:

                                    ARTICLE I

                                   THE MERGER

          Section 1.1 The Merger. At the Effective Time (as defined in Section
1.2) and  upon  the  terms  and  subject  to the  conditions  set  forth in this
Agreement and in accordance with applicable  provisions of the Delaware  General
Corporation Law ("Delaware Law"),  Merger Sub shall be merged with and into CMJ,
with  CMJ  being  the  surviving  corporation  of the  Merger  (the  "Surviving_
Corporation")  and becoming a  wholly-owned  subsidiary  of SMI.  Following  the
Merger, the separate existence of Merger Sub shall cease.

          Section  1.2  Effective  Time.  At the  Closing (as defined in Section
1.7),  the parties  shall cause the Merger to be  consummated  by executing  and
filing  a  duly  executed  Agreement  and  Plan  of  Merger  and  duly  executed
Certificates of Merger  (collectively the "Merger  Documents"),  with respect to
the Merger,  with the Secretary of State of the State of Delaware,  in such form
as SMI and CMJ  reasonably  determine is required by and in accordance  with the
relevant  provisions  of Delaware  Law. The time upon which such filing  becomes
effective  in  accordance  with  Delaware  Law  is  referred  to  herein  as the
"Effective Time."




          Section 1.3 Merger  Consideration.  For  purposes  of this  agreement,
"Merger Consideration" shall mean, in the aggregate, (i) 1,400,000 shares of SMI
voting common stock,  $.0001 par value per share,  all unencumbered and free and
clear  of  all  liens,  charges,   pledges,  security  interests  or  any  other
restrictions  except for those as may be imposed by federal or state  securities
laws  (collectively,  the "SMI  Common  Stock")  and (ii) 3,000  shares of SMI's
Series A preferred stock,  $.0001 par value per share, all unencumbered and free
and  clear of all  liens,  charges,  pledges,  security  interests  or any other
restrictions and created pursuant to a certificate of designation  substantially
similar to the form of certificate of designation  attached  hereto as Exhibit A
(collectively,  the "SMI Preferred Stock").  At the Effective Time, by virtue of
the Merger, and without further action by any person or entity,  each issued and
outstanding  share of CMJ Stock (as defined in Section 2.2) shall  automatically
converted  into the right to receive  2,545.4545  shares of SMI Common Stock and
5.4545 shares of SMI Preferred  Stock.  Schedule  1.33 sets forth to whom and in
what  denominations  the Merger  Consideration  is to be  allocated  amongst the
Stockholders or their designees. Fractional shares of either SMI Common Stock or
SMI Preferred Stock to be issued hereunder shall be rounded to the nearest whole
number.

          Section 1.4 Effects of Merger.  The Merger  shall have the effects set
forth in the Merger Documents and applicable provisions of Delaware Law. Without
limiting the generality of the foregoing, at the Effective Time:

          (a) All of the properties,  rights, privileges,  powers and franchises
of  Merger  Sub  shall  vest  in  the  Surviving  Corporation,  and  all  debts,
liabilities  and duties of Merger Sub shall  become the debts,  liabilities  and
duties of the Surviving Corporation;

          (b) The directors and executive officers of the Surviving  Corporation
shall be comprised of those  individuals set forth on Schedule 1.4(b),  and each
such  director and executive  officer  shall hold office in accordance  with the
Certificate of  Incorporation  and Bylaws of the Surviving  Corporation or until
their successors are duly elected and qualify;

          (c) All shares of CMJ Stock  held by CMJ as  treasury  stock  shall be
cancelled and no payment shall be made with respect thereto; and

          (d) Each share of capital  stock of Merger Sub issued and  outstanding
prior to the Effective  Time shall be converted into one validly  issued,  fully
paid and nonassessable share of common stock of the Surviving  Corporation,  and
the stock of the Surviving  Corporation issued pursuant to such conversion shall
constitute  all of the issued  and  outstanding  shares of capital  stock of the
Surviving Corporation.

          Section 1.5 Certificate of Incorporation  and Bylaws. At the Effective
Time, the Bylaws and Certificate of Incorporation of CMJ shall be the Bylaws and
Certificate of Incorporation of the Surviving Corporation.

          Section 1.6 Exchange of Shares.

          (a) At  the  Closing,  each  Stockholder,  shall  deliver  to SMI  any
certificate  or  certificates  which  immediately  prior to the  Effective  Time
represented  outstanding  shares of CMJ Stock  ("CMJ  Certificates")  which were
converted into the right to receive shares of SMI Common Stock and SMI Preferred
Stock  pursuant to Section 1.3 hereof,  and SMI shall issue to

                                       2

each Stockholder immediately upon receipt of such CMJ Certificate, a certificate
representing  the number of shares of SMI Common Stock and SMI  Preferred  Stock
into which the shares represented by the CMJ Certificate were converted pursuant
to Section 1.3 hereof in connection with the Merger, and all CMJ Certificates so
surrendered shall subsequently be cancelled.

          (b) After the Effective Time,  there shall be no further  registration
of transfers on the stock transfer books of CMJ of certificates representing any
CMJ capital stock that were outstanding immediately prior to the Effective Time.
If, after the Effective Time,  certificates  representing  CMJ capital stock are
presented  for any reason,  they shall be cancelled and exchanged as provided in
this Section 1.

          Section 1.7 The Closing. The closing of the transactions  contemplated
by this  Agreement  (the  "Closing")  shall take place at the  offices of Olshan
Grundman  Frome  Rosenzweig & Wolosky LLP, 505 Park Avenue,  New York,  New York
10022  as  soon as  practicable  following  satisfaction  or  waiver  of all the
conditions  to the  obligations  of the parties to consummate  the  transactions
contemplated  hereby,  or at such  other  time  and  place  as SMI,  CMJ and the
Stockholders  shall  mutually agree (the date on which such closing occurs being
herein referred to as the "Closing_  Date");  provided,  however,  that under no
circumstances  may the Closing  Date be later than March 15, 2002 in  accordance
with Section 12.1(d).

                                   ARTICLE II

           REPRESENTATIONS AND WARRANTIES OF CMJ AND THE STOCKHOLDERS

          CMJ and each of the Stockholders, jointly and severally, represent and
warrant to SMI and Merger Sub as of the date hereof as follows:

          Section 2.1  Corporate  Organization,  Requisite  Authority to Conduct
Business;    Certificate    of    Incorporation    and   Bylaws.    CMJ   is   a
corporation duly organized, validly existing and in good standing under the laws
of the State of  Florida.  CMJ has all  corporate  power and  authority  to own,
operate and lease its properties and to carry on its business as the same is now
being  conducted.  CMJ is duly qualified or licensed to do business as a foreign
corporation  in  each  foreign   jurisdiction  listed  on  Schedule  2.1,  which
constitute all of the foreign jurisdictions in which the conduct of its business
or the ownership or leasing of its  properties  require it to be so qualified or
licensed.

          Section 2.2 Capitalization  and Stockholdings.  The authorized capital
stock of CMJ  consists  of 1,000  shares  of common  stock,  $1.00 par value per
share,  of which 550 shares are issued and  outstanding  (the "CMJ Stock").  The
Stockholders,  beneficially  and of  record,  own all of the CMJ Stock  free and
clear of all liens,  claims or  encumbrances  of any nature,  in the  respective
amounts set forth on Schedule 2.2. Each of the  Stockholders has the full right,
power,  legal  capacity  and  authority  to  transfer  and deliver the CMJ Stock
pursuant  to this  Agreement.  The CMJ Stock has been duly  authorized,  validly
issued and is fully paid and non-assessable and free of preemptive rights. There
are no subscriptions,  options, warrants, calls, rights, contracts, commitments,
agreements, understandings or arrangements to sell or issue any capital stock of
CMJ,  including  any right of  conversion  or  exchange  under  any  outstanding
security or other  instrument,  and no shares are  reserved for issuance for any
purpose.

                                       3



          Section  2.3  Subsidiaries,   etc.  CMJ  does  not  own  (directly  or
indirectly)  any  equity  interest  in  any  corporation,  partnership,  limited
liability company, joint venture, affiliate, association or other entity.

          Section 2.4 Authority Relative to and Validity of this Agreement.  CMJ
and the  Stockholders  have all requisite  power,  corporate or  otherwise,  and
authority  to enter into this  Agreement,  to perform  all of their  obligations
hereunder and to consummate  the  transactions  contemplated  hereby without the
approval of any third party.  The execution and delivery of this Agreement,  the
performance  by  CMJ  and  the  Stockholders  of  their  respective  obligations
hereunder and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part of CMJ
including,  without limitation,  approval of CMJ's Board of Directors. There are
no corporate, contractual,  statutory or other restrictions of any kind upon the
power and  authority  of CMJ or the  Stockholders  to execute and  deliver  this
Agreement and to consummate the transactions  contemplated hereby and no action,
waiver or consent by any government or any agency,  bureau,  board,  commission,
court,   department,   official,   political  subdivision,   tribunal  or  other
instrumentality of any government,  whether federal, state or local, domestic or
foreign  (collectively,  a  "Governmental  Entity")  is  necessary  to make this
Agreement a valid instrument binding upon CMJ and the Stockholders in accordance
with its terms.  This  Agreement has been duly executed and delivered by CMJ and
the Stockholders,  and constitutes the legal,  valid and binding  obligations of
CMJ and the Stockholders, enforceable against each such party in accordance with
its terms, except (i) as such enforceability may be limited by or subject to any
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
affecting  creditors' rights generally,  (ii) as such obligations are subject to
general  principles of equity and (iii) as rights to indemnity may be limited by
federal or state securities laws or by public policy.

          Section 2.5 No Conflict.  The execution,  delivery and  performance of
this  Agreement  by CMJ  and  the  Stockholders,  and  the  consummation  of the
transactions  contemplated  hereby  (a) will not  result  in any  violation  of,
conflict with, constitute a breach, violation or default (with or without notice
or  lapse  of  time,  or  both)  under,  give  rise to a right  of  termination,
cancellation,  forfeiture  or  acceleration  of any  obligation  or  loss of any
benefit under, or result in the creation or encumbrance on any of the properties
or assets of CMJ or the  Stockholders  pursuant  to (i) any  provision  of CMJ's
Bylaws  or  Certificate  of  Incorporation  or  (ii)  any  agreement,  contract,
understanding,  note, mortgage,  indenture, lease, franchise, license, permit or
other  instrument to which CMJ or the  Stockholders  are a party or by which the
properties or assets of CMJ or the Stockholders are bound, or (b), conflict with
or result in any breach or violation of any statute,  judgment,  decree,  order,
rule or governmental  regulation  applicable to CMJ or the Stockholders or their
respective properties or assets.

          Section 2.6  Governmental  Consents.  No consent,  approval,  order or
authorization  of, or  registration,  declaration of, or qualification or filing
with,  any  Governmental  Entity,  is required by or with  respect to CMJ or the
Stockholders in connection with the execution,  delivery and performance of this
Agreement or the consummation of the transactions  contemplated  hereby,  except
for   such   consents,   approvals,   orders,   authorizations,   registrations,
declarations,  qualifications  or filings as may be  required  under  federal or
state securities laws in connection with the transactions contemplated hereby.

                                       4



          Section  2.7  Financial  Statements.  CMJ has  delivered  to SMI true,
correct and complete copies of its unaudited financial  statements for the years
ended December 31, 2000 and 2001 (collectively, the "CMJ Financial Statements"),
a copy of which is attached hereto as Schedule 2.7. The CMJ Financial Statements
have been prepared in conformity with generally accepted  accounting  principles
("GAAP") and present fairly, in accordance with GAAP, the financial condition of
CMJ as at the  respective  dates thereof and the results of operations  and cash
flows for the respective  periods covered.  Since December 31, 2001, CMJ has not
sold or otherwise  disposed of or  encumbered  any of the  properties  or assets
reflected on the CMJ  Financial  Statements,  or other assets owned or leased by
it, except in the ordinary course of business.

          Section 2.8 Liabilities.  CMJ has no liability,  debt or obligation of
any  nature  (whether  liquidated,   unliquidated,  direct,  accrued,  absolute,
contingent or otherwise,  and whether due or to become due), except  liabilities
that are (i) reflected on the CMJ Financial Statements, or (ii) were incurred in
the ordinary  course of business  and do not  individually  or in the  aggregate
exceed $15,000.

          Section 2.9 Absence of Certain Changes and Events.  Since December 31,
2001,  there has not been,  with respect to CMJ, (a) any damage,  destruction or
loss  (whether  or not  covered  by  insurance)  with  respect  to any assets or
properties; (b) any entry into any commitment or transaction (including, without
limitation,  any borrowing or capital expenditure) other than commitments and/or
transactions  (i)  described  in Schedule  2.9(a)(i),  (ii)  entered into in the
ordinary  course of business in an amount not to exceed $15,000 in the aggregate
or (iii) as contemplated by this Agreement; (c) any transfer, assignment or sale
of, or rights granted under, any material leases, licenses, agreements, patents,
trademarks,   trade  names,   copyrights   or  other  assets  other  than  those
transferred,  assigned,  sold or granted in the ordinary  course of business and
consistent with past practice;  (d) any mortgage,  pledge,  security interest or
imposition of any other  encumbrance  on any assets or properties  except in the
ordinary  course of  business;  (e) any payment of any  liabilities  of any kind
other than  liabilities  currently  due;  (f) any  cancellation  of any debts or
claims or  forgiveness  of amounts  owed to CMJ;  (g) any  change in  accounting
principles or methods  (except  insofar as may have been required by a change in
GAAP); (h) to the best of CMJ's and the Stockholders'  knowledge and belief, any
change in any state or local law,  rule or  regulation  applicable to or binding
upon the business of CMJ; (i) any dividend or distribution to the  Stockholders;
or G) any  increase  in the  compensation  payable  to  any  Stockholder  or any
executive  employee of CMJ.  Since  December 31,  2001,  CMJ has  conducted  its
business  only in the  ordinary  course  and in a manner  consistent  with  past
practice and has not made any material  change in the conduct of its business or
operations.

          Section 2.10 Taxes and Tax Returns.

          (a) To the best of CMJ's and the  Stockholders'  knowledge and belief,
CMJ and any  affiliated,  consolidated,  combined,  unitary or similar  group of
which it is or has been a member  have  filed or  caused to be filed in a timely
manner all returns,  declarations,  reports, estimates,  information returns and
statements with respect to Taxes  (collectively,  the "Tax Returns") required to
be filed  under any United  States  federal,  state or local or any  foreign law
pertaining  to Taxes and such Tax Returns are, in all material  respects,  true,
complete and correct. CMJ has paid, within the time and in the manner prescribed
by law or,  alternatively,  will pay in a

                                       5



timely manner on or before the Closing Date,  all Taxes  required to be shown on
such Tax  Returns.  To the best of CMJ's  and the  Stockholders'  knowledge  and
belief, no claim has ever been made by an authority in a jurisdiction  where CMJ
does not file Tax  Returns  that CMJ is or may be  subject to  taxation  by that
jurisdiction.  "Tax" or "Taxes" shall mean,  collectively,  all taxes,  charges,
fees, levies or other assessments including, without limitation, all net income,
gross income,  gross receipts,  sales,  use, value added, ad valorem,  transfer,
franchise,  profits,  alternative  (or add-on)  minimum,  license,  withholding,
employment,  environmental,  payroll, disability, excise, estimated,  severance,
stamp, occupation, property or other taxes, customs duties, fees, assessments or
charges of any kind  whatsoever,  whether  computed on a consolidated,  unitary,
combined,  separate  or any other  basis,  together  with any  interest  and any
penalties,  additions  to tax  or  additional  amounts  imposed  by  any  taxing
authority.

          (b) To the best of CMJ's and the  Stockholders'  knowledge and belief,
CMJ has paid or accrued on its books and records  amounts  that are adequate for
the payment of all Taxes, whether or not required to be shown on any Tax Return,
not yet due and payable,  including  Taxes for any period that ends on or before
the Closing Date and for any period that begins before the Closing Date and ends
after the Closing Date to the extent such Taxes are  attributable to the portion
of any such period ending on the Closing Date.

          (c) To the best of CMJ's and the  Stockholders'  knowledge and belief,
CMJ has complied, in all material respects,  with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes and has, within the
time and in the manner  prescribed by law, withheld from employees and any other
third parties and paid over to the proper governmental authorities,  all amounts
required to be so withheld and paid under all applicable laws.

          (d) To the best of CMJ's and the  Stockholders'  knowledge and belief;
there  are  no  outstanding   waivers  or  comparable   consents  regarding  the
application  of the  statute  of  limitations  with  respect to any Taxes or Tax
Returns  that  have  been  given  by CMJ and CMJ is not the  beneficiary  of any
extension to file any Tax Return.

          (e) No federal, state, local or foreign audits or other administrative
or court  proceedings  are  presently  pending  with  regard to any Taxes or Tax
Returns of CMJ and,  to the best of CMJ's and the  Stockholders'  knowledge  and
belief,  no deficiencies  for any Taxes have been asserted against CMJ that have
not  been  resolved  or  paid  in  full.  There  are no  tax  liens  or  similar
encumbrances  with respect to any of the assets of CMJ that arose in  connection
with any  failure (or  alleged  failure)  to pay any Tax.  No material  issue is
currently  being asserted by the Internal  Revenue  Service (the "IRS") or other
relevant taxing authority in any audit or examination of the Tax Returns of CMJ.
CMJ has not filed, with respect to any item, a disclosure  statement pursuant to
Section 6662 of the Code, or any comparable  disclosure with respect to federal,
state and/or local tax statutes.

          (f)  No currently effective power of attorney has been granted by CMJ
with respect to any matter relating to Taxes that is currently in force.

          (g)  CMJ  has  not  at  any  time  been  included  in a  consolidated,
affiliated,  combined,  unitary or similar Tax Return nor was any such inclusion
required nor has any

                                       6



liability on Taxes of any other person as a transferee,  successor,  by contract
or otherwise, been assessed against CMJ.

          (h) CMJ's  combined  federal  and state tax income  liability  for the
fiscal year ended December 31, 2001 shall not exceed $60,000.

          Section 2.11 Title to Property.

          (a) CMJ has good and  marketable  title  to,  or in the case of leased
assets and  properties,  valid  leasehold  interests  in, all tangible  real and
personal  assets and property that it owns or leases or is used in the operation
of its business  (collectively,  the  "Property"),  free and clear of all liens,
claims and  encumbrances  of any  nature,  except  those  identified  in the CMJ
Financial  Statements.  Schedule 2.11(a) sets forth a complete and accurate list
of all such owned or leased  property  including,  without  limitation,  (i) all
inventory,  machinery,  equipment,  tooling, parts, furniture,  supplies, office
equipment, (ii) all leases of equipment or other property used in the conduct of
CMJ's  business  and (iii) all other  owned or  leased  property.  No  financing
statement  under the  Uniform  Commercial  Code or any similar law naming CMJ as
debtor  has been filed in any  jurisdiction  in  respect  of the  Property,  and
neither CMJ nor the  Stockholders are a party to or bound under any agreement or
legal  obligation  authorizing  a party to file any  such  financing  statement,
except those financing statements that will be terminated at Closing.

          (b) Each lease identified on Schedule 2.11(a) is valid and enforceable
in accordance with its terms, in all material respects, and is in full force and
effect.  Except as set forth on Schedule 2.11(b),  no consent or approval of any
landlord or other third party in connection with any such lease is necessary for
CMJ or the  Stockholders to enter into and execute this Agreement and consummate
the transactions contemplated hereby. To the best of CMJ's and the Stockholders'
knowledge  and  belief,  no  other  party  to any  lease  is in  default  of its
obligations  thereunder,  and CMJ (or any other party to any such lease) has not
at any time  delivered or received any notice of default which  remains  uncured
under any such lease and no event has occurred which,  with the giving of notice
or the  passage of time,  or both,  would  constitute  a default  under any such
lease.

          (c) All  material  items of  equipment  owned or  leased by CMJ are in
adequate  operating  condition,  regularly and properly  maintained,  subject to
normal wear and tear.

          Section 2.12 Intellectual Property.

          (a) CMJ owns, or holds adequate licenses or other legally  enforceable
rights to use all patents, patent applications, trademarks, brand marks, service
marks,  logos, brand names, domain names, trade names,  copyrights,  proprietary
software,  know-how, trade secrets arising from any proprietary processes or any
similar proprietary  intellectual property (collectively,  the "CMJ Intellectual
Property") that are used in its business as it is presently being conducted. CMJ
owns or has the right to use, sell or license all CMJ Intellectual  Property and
such CMJ  Intellectual  Property is believed to be sufficient  for it to conduct
its business as it is currently being conducted.  Schedule 2.12 hereto lists, as
may be applicable,  each patent,  patent right, patent  application,  trade name
registration,  trademark application and/or registration,  copyright application
and/or  registration,  domain name, source and object code owned or

                                       7


possessed  by CMJ.  Such list  specifies,  as  applicable:  (i) the title of the
patent,  trademark trade name, service mark, copyright or application  therefor;
(ii) the jurisdiction by or in which such patent, trademark, trade name, service
mark or  copyright  exists  and has been  issued  or  registered  or in which an
application has been filed,  including the registration or application  numbers;
and (iii) all Licenses  (copies of which have been  delivered  to SMI).  For the
purposes  of this  Agreement,  "Licenses",  collectively,  means  all  licenses,
sub-licenses,  agreements, permissions, undertakings and understandings pursuant
to which any third party is licensed or authorized  to use any CMJ  Intellectual
Property or pursuant to which CMJ is authorized to use any patents,  trademarks,
trade secrets, service marks, trade names, copyrights,  inventions, products and
processes under development,  databases, drawings, designs, proprietary know-how
or information,  other  confidential  information,  or other rights with respect
thereto of any third party.

          (b) The execution, delivery and performance of this Agreement, and the
consummation  of the  transactions  contemplated  hereby will not  constitute  a
material  breach of any instrument or agreement  governing any CMJ  Intellectual
Property,  will not cause the  forfeiture or termination or give rise to a right
of  forfeiture or  termination  of any CMJ  Intellectual  Property or impair the
right  of CMJ to use,  sell or  license  any CMJ  Intellectual  Property  or any
portion thereof.

          (c) Neither the manufacture,  marketing, license, sale or intended use
of any product currently  licensed or sold by CMJ or currently under development
by CMJ  violates  any  license  or  agreement  between  CMJ and any third  party
relating to such product, nor infringes upon any intellectual  property right of
any  other  party.  There  are no  pending  or,  to the  best of  CMJ's  and the
Stockholders'  knowledge and belief,  threatened claims or litigation contesting
the validity and ownership by CMJ or its right to use, sell,  license or dispose
of any CMJ Intellectual  Property,  nor is there any basis for such a claim. CMJ
has not received any actual notice asserting that any CMJ Intellectual  Property
or its proposed use,  sale,  license or  disposition  conflicts or will conflict
with  the  rights  of any  other  party,  nor is  there  any  basis  for such an
assertion.

          (d) No current or prior officers, employees or consultants of CMJ have
asserted an ownership  interest in any CMJ Intellectual  Property as a result of
having been involved in the  development  of such property  while employed by or
consulting to CMJ or otherwise.

          Section 2.13 Legal Proceedings, Claims, Investigations,  etc. There is
no  legal,  administrative,   arbitration  or  other  action  or  proceeding  or
governmental   investigation   pending   or,  to  the  best  of  CMJ's  and  the
Stockholders'  knowledge and belief,  threatened,  against CMJ (or any director,
officer or employee of CMJ)  relating to the business or assets of CMJ.  Neither
CMJ nor the Stockholders have been informed of, or have any actual knowledge of,
any violation of or default under, any laws, ordinances, regulations, judgments,
injunctions,  orders or decrees (including without  limitation,  any immigration
laws or regulations) of any court, governmental department,  commission, agency,
instrumentality  or  arbitrator  applicable  to CMJ or it  business.  CMJ is not
currently  subject to any  judgment,  order,  injunction or decree of any court,
arbitration authority, administrative agency or other Governmental Entity.

                                       8



          Section  2.14  Insurance.  Schedule  2.14 hereto sets forth a list and
brief  description  of  all  existing  insurance  policies   maintained  by  CMJ
pertaining  to its  business  properties,  personnel  and assets.  CMJ is not in
default with respect to any provision contained in any insurance policy, and has
not failed to give any notice or present any claim under any insurance policy in
a timely  fashion.  Copies of all such policies have been  delivered to SMI. All
such  policies are in full force and effect and  following the Closing Date will
continue to be in full force and effect to the extent as may be paid for by SMI.
All payments  with respect to such policies are current and will remain so up to
the Closing  Date.  CMJ has not received any notice  threatening  a  suspension,
revocation, modification or cancellation of any such policy.

          Section 2.15 Material  Contracts.  Schedule 2.15 sets forth a complete
and accurate  list,  as of the Closing  Date,  of all contracts or agreements to
which  CMJ is a party  (collectively,  the  "Contracts").  Any  purchase  order,
written or oral, in receipt of CMJ requiring the provision by CMJ of products or
services,  the value of which exceeds $2,000  constitutes a Contract.  Copies of
all written  contracts and a description of the terms of all other oral contacts
to which CMJ is a party,  including  any and all  amendments  and  modifications
thereto,  have  been  delivered  to SMI  prior to the date  hereof.  Each of the
Contracts is valid and binding, in full force and effect and enforceable against
the parties  thereto in accordance  with its  provisions.  CMJ has not assigned,
mortgaged,  pledged,  encumbered,  or otherwise  hypothecated  any of its right,
title or  interest  under  any of the  Contracts.  To the best of CMJ's  and the
Stockholders'  knowledge and belief,  neither CMJ nor any other party thereto is
in  violation  of, in default in respect of, nor has there  occurred an event or
condition which,  with the passage of time or giving of notice (or both),  would
constitute a violation of, or a default  under any Contract.  No written or oral
notice has been received by either CMJ or the Stockholders  claiming any default
by CMJ of, or  indicating  the desire or intention of any other party thereto to
amend, modify, rescind or terminate, any Contract.

          Section  2.16  Inventories.  All  inventories  reflected  in  the  CMJ
Financial   Statements  are  stated  at  the  lower  of  cost  or  market  on  a
first-in-first-out  basis in accordance  with GAAP,  with adequate  reserves for
obsolete,  obsolescent and slow moving items consistently  applied in conformity
with past  practices.  Schedule  2.16  contains a true and complete  list of all
inventory  (including  work in progress)  of CMJ as of December  31,  2001.  All
inventory of CMJ is in good and marketable  condition and otherwise fit for sale
unless  otherwise  designated as obsolete in Schedule  2.16.  Since December 31,
2001,  none of such  Inventory has been sold or otherwise  disposed of except in
the  ordinary  course  of  business.  On the  Closing  Date,  SMI,  in its  sole
discretion,  will  determine  whether  CMJ will  have  inventory  sufficient  in
quantity,  type and quality for the conduct of its business in  accordance  with
past practice.

          Section 2.17  Customers.  Except as set forth on Schedule 2.17,  there
are no  pending  or, to the best of CMJ's and the  Stockholders'  knowledge  and
belief,  threatened  disputes  between  CMJ and any of its  locations,  vendors,
suppliers, customers or other parties that in any way relate to the operation of
the business of CMJ.  Schedule  2.17 lists all  locations,  vendors,  suppliers,
customers or other parties that have commercial  dealings with CMJ and relate to
the business of CMJ, and a description of the nature of such dealings.

          Section 2.18 Accounts Receivable. All accounts receivables of CMJ have
arisen from bona fide transactions by CMJ in the ordinary course of business and
are, to the best

                                       9



of CMTs and the Stockholders' knowledge and belief, deemed collectible by CMJ in
the ordinary course of business  (without,  however,  CMJ giving any warranty to
SMI as to any  extent  of  collectability  whatsoever).  Except  as set forth on
Schedule 2.18, there are no defenses, claims of disabilities,  offsets, refusals
to pay or other  rights of offset  against  any such  accounts  receivable.  Any
allowances that CMJ has established specifically for doubtful accounts have been
established on a basis consistent with CMJ's prior practice,  credit  experience
and GAAP consistently  applied. CMJ has delivered to SMI a complete and accurate
aging list of all accounts receivables of CMJ as of December 31, 2001.

          Section  2.19  Certain  Transactions.  Except as set forth on Schedule
2.19, none of the Stockholders, officers, directors or employees of CMJ, nor any
member of any such person's or Stockholder's  family is presently a party to any
transaction  with  CMJ  relating  to the  business  of  CMJ,  including  without
limitation,  any contract,  agreement or other arrangement (i) providing for the
furnishing  of services  by, (ii)  providing  for the rental of real or personal
property from, or (iii) otherwise requiring payments to (other than for services
as officers, directors or employees of CMJ), any such person or any corporation,
partnership,  trust or other  entity in which any such person has a  substantial
interest as a stockholder, officer, director, trustee or partner.

          Section  2.20  Broker.  No  broker,  finder  or  investment  banker is
entitled to any  brokerage,  finder's or similar  fees or other  commissions  in
connection with the transactions  contemplated hereby, based on the arrangements
made by or on behalf of CMJ or the Stockholders.

          Section  2.21 Environmental Matters.

          (a) Except as set forth on Schedule  2.21,  CMJ is not the subject of,
or, to the best of CMJ's  and the  Stockholders'  knowledge  and  belief,  being
threatened  to be the  subject of (i) any  enforcement  proceeding,  or (ii) any
investigation,  brought  in  either  case  under  any  federal,  state  or local
environmental law, rule, regulation, or ordinance at any time in effect or (iii)
any  third  party  claim  relating  to  environmental  conditions  on or off the
properties  of CMJ. CMJ has not been notified that it must obtain any permits or
licenses or file  documents  for the  operation of its business  under  federal,
state and local  laws  relating  to  pollution  protection  of the  environment.
Neither CMJ nor the Stockholders  have been notified of any conditions on or off
the properties of CMJ that would give rise to any material liabilities, known or
unknown,  under any federal,  state or local environmental law, rule, regulation
or ordinance, or as the result of any claim of any third party. For the purposes
of this Section 2.22, an investigation shall include, but is not limited to, any
written notice received by CMJ or the Stockholders that relates to the onsite or
offsite  disposal,  release,  discharge  or spill  of any  waste,  waste  water,
pollutant or contaminants.

          (b) To the best of CMJ's and the  Stockholders'  knowledge and belief,
there are no toxic wastes or other toxic or hazardous  substances  or materials,
pollutants or contaminants  that CMJ (or any previous occupant of the facilities
of CMJ) has used,  stored or otherwise  held in or on any of the  facilities  of
CMJ,  that are  present  at or have  migrated  from  CMJ's  facilities,  whether
contained in ambient air, surface water, groundwater, land surface or subsurface
strata. The facilities of CMJ have been maintained by CMJ in compliance with all
environmental

                                       10



protection,  occupational,  health  and  safety  or  similar  laws,  ordinances,
restrictions, licenses, and regulations. CMJ has not disposed of or arranged (by
contract,  agreement or otherwise) for the disposal of any material or substance
that was  generated or used by CMJ at any off-site  location that has been or is
listed  or, to the best of CMJ's and the  Stockholders'  knowledge  and  belief,
proposed for inclusion on any list  promulgated by any  Governmental  Entity for
the purpose of identifying sites which pose a danger to health and safety. There
have been no environmental studies, reports and analyses made or prepared in the
last five years  relating to the  facilities  of CMJ. CMJ has not  installed any
underground  storage tanks in any of its facilities and none of such  facilities
contains any underground storage tanks.

          Section 2.22 Illegal Payments.  Neither CMJ nor the Stockholders have,
directly or  indirectly,  paid or delivered any fee,  commission or other sum of
money  or  item  of  property,  however  characterized,  to any  finder,  agent,
government  official or other party,  in the United States or any other country,
which is in any manner  related to the business or  operations  of CMJ, that the
Stockholders  know or have  reason to  believe  to have been  illegal  under any
federal,  state  or  local  laws  or  the  laws  of  any  other  country  having
jurisdiction. CMJ has not participated,  directly or indirectly, in any boycotts
affecting any of its actual or potential customers.

          Section  2.23  Licenses.  To the best of CMJ's  and the  Stockholders'
knowledge  and  belief,  CMJ is the  holder  of all  federal,  state  and  local
licenses,  permits  and  approvals  required  to conduct  its  business as it is
presently  being  conducted.  All such licenses are in good standing,  valid and
effective,  and free and clear of any liens,  conditions or  restrictions  which
might limit their full  utilization  as authorized by any  Governmental  Entity.
Schedule 2.23 lists each License so held and its date of expiration.

          Section  2.24  Compliance  with  Law.  To the  best of  CMJ's  and the
Stockholders'  knowledge  and belief,  CMJ has complied in all respects with all
laws, rules,  regulations,  arbitral determinations,  orders, writs, decrees and
injunctions  that are  applicable  to or  binding  upon CMJ,  its  business  and
properties,  and neither CMJ nor the  Stockholders  have  received any notice or
have any knowledge of any violations thereof.

          Section  2.25 Labor  Matters.  Neither CMJ nor the  Stockholders  have
received any notice from any labor union or group that it  represents or intends
to represent  the  employees  of CMJ. CMJ has complied in all material  respects
with all applicable laws affecting  employment and employment  practices,  terms
and  conditions  of  employment  and wages and hours.  CMJ has not  received any
notice of and there are no  complaints  against  it  pending  or, to the best of
CMJ's  and the  Stockholders'  knowledge  and  belief,  threatened,  before  the
National Labor Relations Board, the Equal Employment Opportunity Commission, any
state or local Human  Rights  Commission  or any other state or local  agency in
respect of labor or  employment  matters.  No labor  strike,  material  dispute,
slowdown or stoppage has occurred with respect to the employees of CMJ and there
is no labor strike,  material  dispute,  slowdown or stoppage pending or, to the
best of CMJ's  and the  Stockholders'  knowledge  and  belief,  threatened  with
respect  to its  employees.  There  are no  pending  grievances  or  arbitration
proceedings against CMJ with respect to the operation of its business.

          Section 2.26 Books of Account;  Records. The general ledgers, books of
account and other  records of CMJ in respect of its  business  are  complete and
correct in all

                                       11



material  respects and have been  maintained  in  accordance  with good business
practices and on a consistent basis from period to period reflected therein.

          Section 2.27 Investments in Competitors.  Neither the Stockholders nor
any of their affiliates own,  directly or indirectly,  any interests or have any
investment in any person that is a competitor  of CMJ other than the  securities
of any issuer that are listed for trading on a national  securities  exchange or
are  traded  in the  over-the-counter  market  which do not,  in the case of any
Stockholder,  constitute  more than 2.0% of the total amount of such  securities
that are outstanding.

                                   ARTICLE III

            ADDITIONAL REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS

          In  addition  to those  representations  made by the  Stockholders  in
Article II, the Stockholders,  jointly and severally, also represent and warrant
to SMI and Merger Sub as of the date hereof as follows:

          Section 3.1 Investment Representations.

          (a) The Stockholders are acquiring the Merger Consideration solely for
their own account as an investment  and not with a view to any  distribution  or
resale  thereof  within the meanings of such terms under the  Securities  Act of
1933, as amended (the "Securities Act").

          (b) Each of the Stockholders has such knowledge,  experience and skill
in business and financial  matters that each of the  Stockholders  is capable of
evaluating the merits and risks of an investment in the Merger Consideration.

          (c) Each of the  Stockholders  (i) has received all  information  that
each  of the  Stockholders  deems  reasonably  necessary  to  make  an  informed
investment  decision with respect to an investment in the Merger  Consideration;
(ii)  has  had  the  opportunity  to  make  such  investigation  as  each of the
Stockholders  desires regarding SMI and an investment  therein and (iii) has had
the opportunity to ask questions of representatives of SMI concerning SMI.

          (d) Each of the Stockholders  understands that he or she must bear the
economic risk of an  investment  in SMI for an uncertain  period of time because
(i) the Merger  Consideration  has not been registered  under the Securities Act
and applicable state securities laws and (ii) the Merger  Consideration  may not
be sold,  transferred or otherwise  disposed of without  registration  under the
Securities  Act  or an  exemption  therefrom,  and  that  in the  absence  of an
effective  registration  statement  covering  the  Merger  Consideration  or  an
available  exemption  from  registration  under the  Securities  Act, the Merger
Consideration  must be held  indefinitely.  In particular,  each  Stockholder is
aware  that  the  Merger  Consideration  may not be sold  pursuant  to Rule  144
promulgated  under the  Securities Act unless all of the conditions of that Rule
are  met.  In  this  connection,  each  Stockholder  represents  that  he or she
understands  that under Rule 144, the Merger  Consideration  must be held for at
least one year after purchase thereof from SMI prior to resale (two years in the
absence  of  public  current  information  about  SMI) and that,  under  certain
circumstances,  the conditions for use of Rule 144 include the  availability  of
public current information about SMI, that sales be effected through a "broker's

                                       12



transaction"  or in  transactions  with a "market maker," and that the number of
shares  being  sold  not  exceed  specified  limitations.  Such  public  current
information  about SMI for purposes of Rule 144 is presently not available,  and
may not be publicly available in the future.

          (e) Each Stockholder  understands that the certificates evidencing the
Merger Consideration may bear one or all of the following legends:

              (i) "The  shares  represented  by this  certificate  have not been
              registered  under the United States  Securities Act of 1933.  They
              may not be  sold,  offered  for  sale,  pledged,  hypothecated  or
              otherwise  transferred in the absence of a registration  statement
              in effect with respect to such shares under such Act or an opinion
              of counsel or other evidence  satisfactory to Sporting Magic, Inc.
              and its counsel that such registration is not required."

              (ii) Any legend required by any other jurisdiction.


                                   ARTICLE IV

              REPRESENTATIONS AND WARRANTIES OF SMI AND MERGER SUB

          Each of SMI and Merger Sub,  jointly and severally,  hereby  represent
and  warrant  to each  of CMJ and the  Stockholders  as of the  date  hereof  as
follows:

          Section  4.1  Corporate  Organization.  SMI,  Merger  Sub and Next are
corporations  duly  organized,  validly  existing and in good standing under the
laws of the  State of  Delaware  and  have all  necessary  corporate  power  and
authority  to own,  operate  and lease  their  properties  and to carry on their
business as the same are now being conducted.

          Section 4.2 Authority. SMI and Merger Sub have all requisite corporate
power  and  authority  to  enter  into  this  Agreement  and  to  perform  their
obligations  hereunder and consummate the transactions  contemplated hereby. The
execution and delivery of this Agreement,  the performance by SMI and Merger Sub
of  their  obligations  hereunder  and  the  consummation  of  the  transactions
contemplated  hereby  have been duly and  validly  authorized  by all  necessary
corporate  action on the part of SMI and Merger Sub.  This  Agreement is a valid
and  binding  obligation  of SMI and Merger  Sub,  enforceable  against  them in
accordance with its terms,  except (i) as such  enforceability may be limited by
or subject to any bankruptcy,  insolvency,  reorganization,  moratorium or other
similar laws affecting creditors' rights generally, (ii) as such obligations are
subject to general  principles of equity and (iii) as rights to indemnity may be
limited by federal or state securities laws or by public policy.

          Section  4.3  Capitalization.  The  authorized  capital  stock  of SMI
consists of 25,000,000 shares of SMI Common Stock, of which 9,489,225 shares are
issued  and  outstanding.  In  addition,  SMI is  obligated  to issue,  upon the
occurrence of certain events,  80,435 shares of SMI Preferred  Stock. The issued
and outstanding SMI Common Stock has been duly authorized, validly issued and is
fully paid and nonassessable and free of preemptive rights.  Except as set forth
on Schedule 4.3 hereto, there are no subscriptions,  options,  warrants,  calls,
rights, contracts, commitments, understandings,  restrictions or arrangements of
any kind  relating  to any shares of

                                       13



either SMI Common Stock or SMI Preferred  Stock, and there are no voting trusts,
buy-sell  agreements  or other  agreements  or  understandings  of any kind with
respect to either of SMI Common Stock or SMI Preferred Stock.  When issued,  the
Merger  Consideration  shall be duly issued,  fully paid, and non-assessable and
comprise 23.3% and 4.3%, respectively, of the aggregate SMI Common and Preferred
Stock  issued to Danny F. Cooke,  William B.  Hensley and the William B. III and
Cindy S. Hensley Living Trust (together,  the "Next  Stockholders")  pursuant to
that certain Exchange Agreement, dated as of December 21, 2001 and as amended on
January 18, 2002 and February 1, 2002,  by and among,  SMI,  Buddy Young and the
Next Stockholders.  The authorized capital stock of Merger Sub consists of 1,000
shares of common  stock,  par value  $0.001 per  share,  of which 100 shares are
validly issued and  outstanding  and owned solely by SMI.  Merger Sub was formed
solely for the purpose of participating in the Merger,  has no assets other than
that amount of cash that is required  for it to be  organized  as a  corporation
under Delaware Law and has conducted no activities other than in connection with
its incorporation.

          Section 4.4 SMI and Next Financial Statements.  SMI has delivered to
CMJ and the  Stockholders,  true,  correct  and  complete  copies of its audited
financial  statements for the year ended August 31, 2001 and unaudited financial
statements for the three month period ended November 30, 2001 (collectively, the
"SMI  Financial  Statements").  Next has delivered to CMJ and the  Stockholders,
true, correct and complete copies of its unaudited  financial  statement for the
year ended November 30, 2001 (the "Next Financial Statements", and together with
the SMI Financial  Statements  referred to collectively as the "Joint  Financial
Statements").  The Joint  Financial  Statements have been prepared in accordance
with GAAP, and fairly present,  in accordance with GAAP, the financial condition
of each of SMI and Next, as the case may be, as at the respective dates thereof,
and the results of  operations  and cash flows of SMI and Next,  as the case may
be, for the  periods  covered.  At  November  30,  2001,  there were no material
liabilities,  absolute  or  contingent  of SMI and Next,  that were not shown or
reserved  against on the  balance  sheets as of such date  included in the Joint
Financial Statements,  except obligations under the contracts set forth therein.
Since November 30, 2001, SMI and Next have not sold or otherwise  disposed of or
encumbered  any of the  properties  or assets  reflected on the Joint  Financial
Statements as of such date,  or other assets owned or leased by them,  except in
the ordinary course of business.

          Section 4.5  Governmental  Consents.  No consent,  approval,  order or
authorization  of; or  registration,  declaration of, or qualification or filing
with,  any  Governmental  Entity is required by or with respect to SMI or Merger
Sub in  connection  with the  execution  and  delivery of this  Agreement or the
consummation of the transactions  contemplated hereby,  except for the filing of
the Merger  Documents  and such  consents,  approvals,  orders,  authorizations,
registrations,  declarations, qualifications or filings as may be required under
federal or state  securities laws in connection with the  transactions set forth
herein.

          Section 4.6 No Conflicts,  Absence of Defaults, No Third Party Consent
Required.  The execution,  delivery and  performance of this Agreement by either
SMI or Merger Sub, and the consummation of the transactions  contemplated hereby
will not (a) result in any violation  of,  conflict  with,  constitute a breach,
violation or default  (with or without  notice or lapse of time, or both) under,
give rise to a right of termination, cancellation, forfeiture or acceleration of
any  obligation  or loss of any  benefit  under,  or result in the  creation  or

                                       14



encumbrance  on any of the properties or assets of SMI or Merger Sub pursuant to
(i)  any  provision  of  SMI's  or  Merger  Sub's  Bylaws  or   Certificate   of
Incorporation or (ii) any agreement,  contract,  understanding,  note, mortgage,
indenture, lease, franchise, license, permit or other instrument to which SMI or
Merger Sub is a party or by which the  properties or assets of SMI or Merger Sub
are  bound,  (b)  conflict  with or result in any  breach  or  violation  of any
statute,  judgment, decree, order, rule or governmental regulation applicable to
SMI, Merger Sub or their  properties or assets,  or (c) will require the consent
of any third party.

          Section 4.7 Legal Proceedings,  Claims, Investigations,  etc. There is
no material legal, administrative,  arbitration or other action or proceeding or
governmental  investigation  pending, or to the best of knowledge of SMI, Merger
Sub and Next,  threatened,  against  SMI,  Merger Sub or Next (or any  director,
officer,  agent,  representative  and/or  employee  of SMI,  Merger Sub or Next)
relating to the business or assets of SMI,  Merger Sub or Next.  SMI, Merger Sub
and Next have not been informed of any violation of or default under,  any laws,
ordinances,  regulations,  judgments,  injunctions, orders or decrees (including
without  limitation,   any  immigration  laws  or  regulations)  of  any  court,
governmental  department,  commission,  agency,  instrumentality  or  arbitrator
applicable  to SMI,  Merger  Sub or Next or their  respective  businesses.  SMI,
Merger Sub and Next are not currently subject to any judgment, order, injunction
or decree  of any  court,  arbitral  authority,  administrative  agency or other
governmental authority.

          Section  4.8  SEC  Documents.  SMI  has  furnished  to  CMJ  and  each
Stockholder   complete  and   accurate   copies  of  the   following   documents
(collectively,  "SMI's SEC Filings") that have been filed with the United States
Securities  and  Exchange   Commission  (the  "SEC")  under  the  United  States
Securities  Exchange  Act of 1934  and the  rules  and  regulations  promulgated
thereunder (the "Exchange Act"): SMI's Annual Report on Form 10-KSB for the year
ended August 31,  2001,  SMI's  Quarterly  Report on Form 10-QSB for the quarter
ended November 30, 2001 and SMI's Proxy  Statement for its action to be taken by
written consent in lieu of a meeting of stockholders  dated June 1, 2002. Except
as set forth on Schedule 4.8, as of their  respective  filing  dates,  SMI's SEC
Filings complied in all material  respects with the requirements of the Exchange
Act and, as of their respective filing dates,  SMI's SEC Filings did not contain
any  untrue  statement  of a  material  fact or omit to  state a  material  fact
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.

          Section  4.9 Broker.  Except as set forth on Schedule  4.9, no broker,
finder or investment  banker is entitled to any  brokerage,  finder's or similar
fees or other  commissions  in  connection  with the  transactions  contemplated
hereby, based on the arrangements made by or on behalf of SMI or Merger Sub.

          Section 4.10 Taxes and Tax Returns.

          (a) To the  best of SMI's  knowledge  and  belief,  SMI and any of its
affiliated,  consolidated,  combined, unitary or similar group of which it is or
has been a member  has filed or caused  to be filed in a timely  manner  all Tax
Returns required to be filed under any United States federal,  state or local or
any foreign law  pertaining  to Taxes and such Tax Returns  are, in all material
respects, true, complete and correct.

                                       15



          (b) To the best of SMI's  knowledge  and  belief,  SMI has paid and/or
accrued on its books and records  amounts  that are  adequate for the payment of
all Taxes,  whether or not  required to be shown on any Tax Return,  not yet due
and payable,  including  Taxes for any period that ends on or before the Closing
Date and for any period that begins  before the Closing  Date and ends after the
Closing  Date to the extent  such Taxes are  attributable  to the portion of any
such period ending on the Closing Date.

          (c) To the best of SMI's  knowledge and belief,  SMI has complied,  in
all material respects,  with all applicable laws, rules and regulations relating
to the  payment  and  withholding  of Taxes and has,  within the time and in the
manner  prescribed by law,  withheld from  employees and any other third parties
and paid over to the proper governmental authorities, all amounts required to be
so withheld and paid under all applicable laws.

          (d)  To  the  best  of  SMI's  knowledge  and  belief,  there  are  no
outstanding  waivers or comparable  consents  regarding the  application  of the
statute of  limitations  with respect to any Taxes or Tax Returns that have been
given by SMI and SMI is not the  beneficiary  of any  extension  to file any Tax
Return.

          (e) No federal, state, local or foreign audits or other administrative
or court  proceedings  are  presently  pending  with  regard to any Taxes or Tax
Returns of SMI and, to the best of SMI's  knowledge and belief,  no deficiencies
for any Taxes have been asserted against SMI that have not been resolved or paid
in full.

          (f) No currently  effective  power of attorney has been granted by SMI
with respect to any matter relating to Taxes that is currently in force.

          (g)  SMI  has  not  at  any  time  been  included  in a  consolidated,
affiliated,  combined,  unitary or similar Tax Return nor was any such inclusion
required nor has any  liability  on Taxes of any other  person as a  transferee,
successor, by contract or otherwise, been assessed against SMI.

                                    ARTICLE V

                    COVENANTS OF THE PARTIES PRIOR TO CLOSING

          Section  5.1  Access.  The  Stockholders  shall and shall cause CMJ to
authorize  and permit SMI and its  representatives,  including  its  independent
accountants,  financial  advisers,  agents and counsel to have reasonable access
during normal business hours,  upon reasonable notice and in such manner as will
not unreasonably  interfere with the conduct of CMJ's business,  to all of CMJ's
properties,  books, records, operating instructions and procedures and all other
information  with  respect to the  business  of CMJ as SMI may from time to time
request,  and to make copies of such books,  records and other  documents and to
discuss the business  with CMJ's  directors  and  officers,  in each case, as is
reasonably  necessary or appropriate  for the purposes of  familiarizing  itself
with CMJ and with  obtaining  any  necessary  approvals  of or  permits  for the
transactions contemplated by this Agreement;  provided,  however, that CMJ shall
not be  required  to  provide  SMI or its  representatives  with  access  to any
information or materials required to be kept confidential pursuant to agreements
with third  parties or by a provision,  statute,  ordinance,  judicial  order or
other law, rule or regulation.

                                       16



          Section 5.2 Conduct of  Business.  During the period  beginning on the
date hereof and ending on the Closing Date, the Stockholders shall not and shall
cause CMJ not to, without the prior written  consent of SMI, which consent shall
not be unreasonably withheld or delayed:

          (a) conduct its business in any manner except in the ordinary course;

          (b)  terminate,  or fail to renew or preserve,  any material  license,
permit,  franchise,  certificate  of authority,  or order,  or any waiver of the
foregoing, required to be issued by any Governmental Entity;

          (c) make any loan,  guaranty or other  extension  of credit,  or enter
into any commitment to make any loan,  guaranty or other extension of credit, to
or for the benefit of any director,  officer,  employee,  stockholder  or any of
their respective affiliates;

          (d) grant  any  general  or  uniform  increase  in the rates of pay or
benefits to  officers,  directors  or  employees  (or a class  thereof),  or any
increase in salary or benefits of any  officer,  director or employee or pay any
bonus to any person in excess of $2,500;

          (e)  terminate,   transfer  or  hire  any   additional   employees  or
consultants;

          (f) sell,  transfer,  mortgage,  encumber or otherwise  dispose of any
assets or properties except  dispositions of inventory in the ordinary course of
business  consistent with past practices and other dispositions of assets not to
exceed  $10,000 in the aggregate in the ordinary  course of business  consistent
with past practices;

          (g)  issue,  grant,  sell,  redeem or acquire  for value,  or agree to
issue,  sell,  redeem or  acquire  for  value,  or amend or  modify,  any equity
securities or debt obligations of CMJ;

          (h) change or amend its Certificate of Incorporation or Bylaws;

          (i)  terminate,  amend  or  fail to use  its  commercially  reasonable
efforts to renew any existing insurance coverage;

          (j) other than in the ordinary  course of business and consistent with
past practice,  voluntarily  incur or agree to incur any obligation or liability
(absolute or contingent) that individually or in the aggregate calls for payment
by CMJ or the Stockholders of more than $10,000;

          (k)  make any  material  investment,  by  purchase,  contributions  to
capital,  property  transfers,  or otherwise,  in any association,  corporation,
limited liability company, individual, partnership, trust or any other entity or
organization (collectively, a "Person");

          (1) other than as expressly provided herein,  make any Tax election or
make any  change in any  method or period  of  accounting  or in any  accounting
policy, practice or procedure;

          (m)  dispose of or fail to  preserve  any CMJ  Intellectual  Property,
trade secrets or any rights to the use thereof, or

          (n) agree to or make any commitment to take any actions  prohibited by
this

          Section 5.3 Preservation of Business Prior to Closing Date. During the
period  beginning on the date hereof and ending on the Closing Date, (a) CMJ and
the Stockholders  shall and shall cause CMJ to use its  commercially  reasonable
efforts to preserve its  business  and to preserve  the  goodwill of  customers,
suppliers  and others  having  business  relations  with CMJ and (b) CMJ and the
Stockholders  shall consult with SMI  concerning,  and CMJ and the  Stockholders
shall use commercially  reasonable  efforts to cooperate with SMI, in connection
with SMI's  efforts to keep the services of the  officers  and  employees of CMJ
that SMI may wish CMJ to  retain.  Except as set forth in  Section  8.4  hereof,
nothing  in this  Section  5.3 shall  obligate  SMI or CMJ after the  Closing to
retain or offer employment to any officer or employee of CMJ.

          Section 5.4 Exclusivity.

          (a) Unless SMI or Merger Sub is in breach of this  Agreement  prior to
the  Closing,  and such  breach has not been cured  within 15 days of CMJ or the
Stockholders providing SMI with written notice of such breach, the Stockholders,
CMJ and any of the directors, officers, employees,  representatives or agents of
CMJ shall not,  directly  or  indirectly,  (i)  discuss,  negotiate,  undertake,
authorize,  recommend,  propose or enter into, either as the proposed surviving,
merged,  acquiring or acquired corporation,  any transaction involving a merger,
consolidation,  business  combination,  purchase or disposition of any amount of
assets  or  capital  stock  or  other  equity  interest  in CMJ  other  than the
transactions contemplated by this Agreement (an "Acquisition Transaction"), (ii)
facilitate,   encourage,  solicit  or  initiate  discussions,   negotiations  or
submissions  of  proposals or offers in respect of an  Acquisition  Transaction,
(iii) furnish or cause to be furnished, to any Person any information concerning
the  business  operations,  properties  or assets of CMJ in  connection  with an
Acquisition Transaction,  or (iv) otherwise cooperate in any way with, or assist
or participate in,  facilitate or encourage,  any effort or attempt by any other
Person to do or seek any of the foregoing.  The Stockholders  will inform SMI in
writing  immediately  following the receipt by the Stockholders,  CMJ or any CMJ
representative  of any  proposal  or inquiry  with  respect  to any  Acquisition
Transaction.

          (b) Should the  parties  hereto  fail to  consummate  the Closing as a
direct or indirect result of any breach,  whatsoever, of the covenants contained
in this Section 5.4, CMJ and the Stockholders,  jointly and severally,  agree to
reimburse SMI and Merger Sub for all costs and expenses actually incurred by SMI
and Merger Sub in furtherance of the transactions contemplated by this Agreement
unless SMI or Merger Sub is in breach of this Agreement.

          Section 5.5 Reasonable Efforts. Subject to the terms and conditions of
this Agreement, each of the parties hereto shall use all commercially reasonable
efforts to take promptly, or cause to be taken promptly,  all actions, and to do
promptly, or cause to be done promptly all things reasonably  necessary,  proper
or advisable  under  applicable  laws and  regulations  to  consummate  and make
effective the transactions contemplated hereby, to obtain all necessary waivers,
consents and approvals, to effect all necessary registrations and filings and to
remove any injunctions or other  impediments or delays,  legal or otherwise,  in
order to

                                       17



consummate and make effective the  transactions  contemplated  by this Agreement
for the purpose of securing to the parties hereto the benefits  contemplated  by
this Agreement.

          Section 5.6 Conduct,  Notification  of Certain  Matters.  Each of SMI,
Merger  Sub,  CMJ and the  Stockholders  shall use all  commercially  reasonable
efforts  not to take,  or fail to take,  any  action  that from the date  hereof
through the Closing would cause or constitute a breach of any of its  respective
representations,   warranties,  agreements  and  covenants  set  forth  in  this
Agreement. The Stockholders and CMJ shall give prompt written notice to SMI, and
SMI shall give  prompt  written  notice to CMJ and the  Stockholders  of (a) the
occurrence or  non-occurrence  of any event, the occurrence or non-occurrence of
which  causes  or is  likely  to cause any  representation  or  warranty  of the
Stockholders  or CMJ,  on the one hand,  or SMI and/or  Merger Sub, on the other
hand,  contained in this  Agreement to be untrue or  inaccurate  in any material
respect at or prior to the Closing and (b) any failure of the Stockholders, CMJ,
SMI or Merger Sub, as the case may be, to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it hereunder;  provided,  however,  that the delivery of any notice  pursuant to
this Section 5.6 shall not limit or otherwise  affect the other party's right to
rely on the  representations  and  warranties  herein or any the other  remedies
available to the party receiving such notice.

                                   ARTICLE VI

                         ADDITIONAL CONTINUING COVENANTS

          Section 6.1  Expenses.  All costs and expenses  incurred in connection
with this Agreement and the  transactions  contemplated  hereby shall be paid by
the party  incurring  such costs and expenses  regardless of the  termination of
this  Agreement  or the  failure to  consummate  the  transactions  contemplated
hereby.

          Section 6.2 Taxes.

          (a) Without the prior written  consent of SMI, which consent shall not
be unreasonably  withheld or delayed,  neither the  Stockholders nor CMJ, or any
affiliate  of CMJ or the  Stockholders  shall,  to the  extent it may  affect or
relate to CMJ, make or change any tax election, change any annual tax accounting
period, adopt or change any method of tax election, change any annual accounting
period,  adopt or change  any method of tax  accounting,  file any  amended  Tax
Return,  enter into any closing  agreement,  settle any Tax claim or assessment,
surrender any right to claim a Tax refund, consent to any extension or waiver of
the limitation  period applicable to any Tax claim or assessment or take or omit
to take any other action,  if any such action or omission  would have the effect
of materially increasing the Tax liability or reducing any Tax Asset of CMJ, SMI
or any affiliate of SMI.

          (b) For  purposes of this  Agreement,  "Tax Asset"  shall mean any net
operating loss, net capital loss,  investment tax credit, or any other credit or
tax  attribute  which  could  reduce  Taxes  (including,   without   limitation,
deductions and credits related to alternative minimum taxes).

                                       18



          (c) For purposes of this Agreement, "Tax Liability" shall mean any net
operating income,  net capital income, or any other debit or tax attribute which
could  increase  Taxes  (including,  without  limitation,  additions  and debits
related to alternative minimum taxes).

          (d) Any and all  existing  tax  sharing  agreements  or  arrangements,
written or unwritten,  binding CMJ,  shall be terminated as of the Closing Date.
After the Closing Date, CMJ shall not have any rights or liabilities thereunder.

          Section 6.3 Public Disclosure.  All public  announcements,  statements
and press releases  concerning the  transactions  contemplated by this Agreement
shall be mutually  agreed upon by CMJ and SMI in writing  before the issuance or
the making thereof and,  subject to the advice of counsel,  no party shall issue
any such press releases or make any such public  statement  prior to such mutual
agreement, except as may be required by law (including federal securities laws).
Notwithstanding  the foregoing,  the parties hereto  acknowledge that SMI may be
required to describe  transactions  contemplated by this Agreement and/or file a
copy of this Agreement,  including all exhibits and schedules  hereto,  with the
Securities  and  Exchange  Commission  in  connection  with  related  disclosure
obligations under applicable securities laws.

          Section 6.4 Additional Documents and Further Assurances.  At, and from
time to time after the date first written  above,  at the request and expense of
SMI but without further  consideration,  CMJ and the Stockholders  shall execute
and deliver such other  instruments of  conveyance,  assignment,  transfer,  and
delivery  and take such other action as SMI  reasonably  may request in order to
more  effectively  convey,  transfer,   assign  and  deliver  to  the  Surviving
Corporation,  and to place the Surviving  Corporation  in possession and control
of, any of the  rights,  properties,  assets and  business  intended to be sold,
conveyed,  transferred,  assigned and delivered  hereunder,  or to assist in the
collection or reduction to possession of any and all of such rights, properties,
and assets or to enable the  Surviving  Corporation  to  exercise  and enjoy all
rights and benefits of CMJ or the Stockholders with respect thereto.

          Section  6.5 Blue Sky Laws.  SMI,  Merger  Sub and CMJ shall take such
steps as may be necessary to comply with the securities and blue sky laws of all
jurisdictions  which are applicable to the issuance of the Merger  Consideration
and/or  the  conversion  of the CMJ  Stock.  The  parties  hereto  shall use all
reasonable  efforts  to  assist  each  other in  complying  with all  applicable
securities and blue sky laws.

          Section 6.6 Confidentiality, Non-Competition.

          (a) In the course of operation  of the  business of all  parties,  all
parties  shall have  received,  and will continue to receive,  information  that
gives  the  other  parties  an  advantage  over its  competitors,  and  which is
confidential  and  proprietary,  relating to each parties'  respective names and
preferences of customers,  the costs and profits of particular  lines,  products
and  markets,   technological  data,  computer  programs,   know-how,  potential
acquisitions,   sources  of   financing,   corporate   operating  and  financing
strategies,  expansion plans and similar related information (collectively,  the
"Confidential  Material").  At no time during the period  commencing on the date
first written above shall any party to this Agreement, whether individually,  or
jointly  with  others,  for the benefit of himself,  herself or any third party,
publish,  disclose,  use, or authorize anyone else to publish,  disclose, or use
any Confidential Material of

                                       19



the other parties; provided, however, that any such Confidential Material may be
disclosed only as required by law (by oral questions, interrogatories,  requests
for  information or documents,  subpoena,  civil  investigative  demand,  or any
informal or formal investigation by any Governmental  Entity). In the event that
any  party is  requested  pursuant  to, or is  required  by,  applicable  law or
regulation or by legal process to disclose any Confidential Material, such party
shall promptly notify the other parties of any anticipated disclosure obligation
and cooperate with the other parties,  at such other  parties'  expense,  in its
efforts to seek an appropriate protective order or other reliable assurance that
confidential  treatment  will be  accorded to that  portion of the  Confidential
Material  that is required to be  disclosed.  The parties  acknowledge  that any
disclosure of any  Confidential  Material would cause  material and  irrevocable
harm to the other parties and their respective business.

          (b)  In  addition  to,  and  without  limitation  of,  the  terms  and
conditions set forth in the  Employment  Agreements (as defined in Section 8.4),
Lisa  Garber  and Mark  Carter  hereby  acknowledge  and  recognize  the  highly
competitive  nature of the business of SMI and its affiliates and,  accordingly,
agree that, in consideration for the Merger Consideration to be received by them
in connection with the consummation of the transactions contemplated herein, and
for other good and valuable consideration,  the receipt and adequacy of which is
hereby  acknowledged,  and to induce SMI to enter into this  Agreement,  neither
they, nor any of their  affiliates,  shall, from and after the Closing until the
fifth  anniversary  thereof,  individually  or jointly with others,  directly or
indirectly,  own, manage, operate, join, control,  participate in, invest in, or
otherwise be connected  with,  in any manner,  whether as an officer,  director,
employee, partner, investor or otherwise, any business entity that is engaged or
otherwise involved in any business similar to the business of SMI, Next, CMJ, or
any affiliates thereof, whether through ownership,  leasing or other operations,
or  operate  any  businesses  under a name  using  any  derivative  of the  name
"Sporting  Magic," "Next" or "CMJ  Ventures,"  without first obtaining the prior
written consent of SMI, which may be withheld for any reason,  or no reason,  in
the sole  discretion of SMI;  provided,  however,  that such provision shall not
apply to the  ownership  by Lisa  Garber  or Mark  Carter,  solely  as a passive
investment,  of the  securities  of any issuer  that are listed for trading on a
national securities exchange or are traded in the over-the-counter  market which
do not, in the case of Lisa Garber or Mark Carter,  constitute more than 2.0% of
the total amount of such securities that are outstanding.

          (c) It is the  desire  and intent of the  parties  that the  foregoing
provisions  of  this  Section  6.6  shall  be  enforced  to the  fullest  extent
permissible  under the laws and public policies applied in each  jurisdiction in
which enforcement is sought.  Accordingly,  if any particular  provision of this
Section shall be  adjudicated  to be invalid or  unenforceable,  such  provision
shall be deemed amended to delete  therefrom the portion thus  adjudicated to be
invalid or  unenforceable,  with such deletion only to apply with respect to the
operation of such provision of this Section 6.6 in the  particular  jurisdiction
in which such  adjudication  is made.  In addition,  in the event of a breach or
threatened  breach by any  Stockholder  of any of the provisions of this Section
6.6,  SMI and the  Surviving  Corporation  shall be  entitled  to an  injunction
restraining  them,  him or her,  as the case may be, from such  breach.  Nothing
contained  herein  shall  be  construed  as  prohibiting  SMI or  the  Surviving
Corporation  from  pursuing  any other  remedies  available  for such  breach or
threatened breach.

                                       20



          Section 6.7 Reorganization. None of the parties hereto shall knowingly
take or fail to take any action,  which action or failure would  jeopardize  the
qualification  of the Merger as a  reorganization  within the meaning of Section
368(a) of the Code, whether prior to or after the Closing.

          Section 6.8 Lock-Up Agreements. For a period commencing on the Closing
Date hereof and  terminating  on the two year  anniversary  of the Closing Date,
each  of  the  Stockholders  shall  enter  into  lock-up  agreements  with  SMI,
substantially  similar  in form to any  lock-up  agreement  entered  into by all
stockholders of SMI that  beneficially own 5% or more of all the outstanding SMI
Common Stock on the date of such lock-up agreements.

          Section 6.9 Stockholder Rights. For a period commencing on the Closing
Date hereof and terminating on the two (2) year  anniversary of the Closing Date
(the "Rights Period"), SMI shall grant each of the Stockholders, with respect to
the shares of SMI Common  Stock and SMI  Preferred  Stock being  acquired by the
Stockholders hereunder, rights on substantially similar terms to any such rights
granted by SMI to the Next Stockholders during the Rights Period.


                                   ARTICLE VII

                            CONDITIONS TO THE CLOSING

          The  obligations of the parties to effect the Closing shall be subject
to the  following  conditions  unless  waived in writing by each of the  parties
hereto:

          Section 7.1 Illegality. There shall not have been any statute, rule or
regulation  enacted,  promulgated  or  deemed  applicable  to  the  transactions
contemplated  by this  Agreement by any  Governmental  Entity that  prevents the
consummation  of the Closing or that has the effect of making the  conversion of
the CMJ Stock and/or  transfer of the SMI Common Stock and SMI  Preferred  Stock
illegal.

          Section  7.2  Absence of  Litigation.  No action,  suit or  proceeding
concerning SMI, Merger Sub, CMJ or any of the  Stockholders  shall be threatened
or pending  by or before any court of  competent  jurisdiction  or  Governmental
Entity wherein an unfavorable judgment, order, decree, stipulation or injunction
would (i) prevent  consummation of any of the transactions  contemplated by this
Agreement or (ii) cause any of the  transactions  contemplated by this Agreement
to be rescinded following consummation.

          Section 7.3  Consents  and  Approvals.  All filings and  registrations
with, and notifications to, all federal,  state,  local and foreign  authorities
required for  consummation  of the  transactions  contemplated by this Agreement
shall have been made,  and all  consents,  approvals and  authorizations  of all
federal,  state,  local and foreign  authorities  and third  parties to material
contracts,  licenses, agreements or instruments required for consummation of the
transactions  contemplated  by this Agreement shall have been received and shall
be in full force and effect.

                                       21



                                  ARTICLE VIII

              CONDITIONS TO OBLIGATIONS OF CMJ AND THE STOCKHOLDERS

          The obligations of CMJ and the  Stockholders  under this Agreement are
subject to the  satisfaction,  on or prior to the Closing Date, unless waived in
writing by CMJ and the Stockholders, of each of the following conditions:

          Section 8.1 Representations and Warranties of SMI. The representations
and warranties of SMI and Merger Sub contained in this  Agreement  shall be true
and correct on the date hereof and on and as of the Closing Date, as though made
on and as of the Closing Date (except for representations and warranties made as
of a specified  date,  which need only be true and  correct as of the  specified
date.

          Section 8.2  Performance of Agreement.  All covenants,  conditions and
other  obligations  under this  Agreement  which are to be performed or complied
with by SMI or Merger Sub shall have been  performed  and  complied  with in all
material respects on or prior to the Closing in accordance with this Agreement.

          Section 8.3  Certificates.  SMI shall have furnished the  Stockholders
and CMJ with a certificate  dated the Closing Date signed by the Chief Executive
Officer or  President  of SMI to the  effect  that the  conditions  set forth in
Sections 8.1 and 8.2 have been satisfied.

          Section 8.4  Employment.  SMI shall have  entered  into an  employment
agreement with Sean Garber, substantially in the form attached hereto as Exhibit
B-1 (the "Employment Agreement").

          Section  8.5  Opinion of Counsel to SMI.  CMJ shall have  received  an
opinion of 01shan Grundman Frome  Rosenzweig  &  Wolosky LLP, counsel to SMI
and  Merger  Sub  dated  the  Closing  Date,  in form and  substance  reasonably
satisfactory to CMJ and the  Stockholders,  and their counsel,  substantially in
the form attached hereto as Exhibit C.

          Section  8.6  No  Material  Adverse  Change.   Each  of  CMJ  and  the
Stockholders shall have determined, in their sole discretion,  that there are no
facts or circumstances that materially and adversely affect the value of the SMI
Common Stock and SMI Preferred Stock.

          Section 8.7 Stockholder  Liabilities.  SMI, to the extent practicable,
at or prior to the Closing Date, and in no event later than 45 days  thereafter,
shall have satisfied all current charges directly related to the business of CMJ
that have (i) been placed on any and all  personal  credit  cards  issued in the
name of Sean  Garber  and/or Lisa Garber and (ii) that are set forth on Schedule
8.7.  Moreover,  within  45 days of the  Closing  Date,  SMI  shall use its best
efforts  to procure  the  absolute  and final  release  of the  Stockholders  as
guarantors on any obligations,  directly  relating to the business of CMJ, which
are also set forth on  Schedule  8.7.  To the extent SMI is unable to obtain any
such a  release,  it shall  indemnify  the  Stockholders  for the  corresponding
personal guarantee.

          Section 8.8 Due Diligence. Each of CMJ and the Stockholders shall have
completed, to their satisfaction and up to the Closing Date, their due diligence
review of SMI's and Next's legal,  accounting and financial records with respect
to SMI's and Next's business.

                                   ARTICLE IX

                 CONDITIONS TO OBLIGATIONS OF SMI AND MERGER SUB

          The  obligations  of SMI  under  this  Agreement  are  subject  to the
satisfaction on or prior to the Closing Date, unless waived in writing by SMI or
Merger Sub, of each of the following conditions:

          Section   9.1   Representations   and   Warranties   of  CMJ  and  the
Stockholders.  The  representations  and warranties of CMJ and the  Stockholders
contained in this Agreement  shall be true and correct on the date hereof and on
and as of the Closing Date, as though made on and as of the Closing Date (except
for  representations and warranties made as of a specified date, which need only
be true and correct as of the specified date).

          Section 9.2  Performance of Agreement.  All covenants,  conditions and
other  obligations  under this Agreement to be performed or complied with by CMJ
and the Stockholders shall have been performed and complied with in all material
respects on or prior to the Closing in accordance with this Agreement.

          Section  9.3  Certificates.   Each  of  the  Stockholders  shall  have
furnished  SMI and Merger Sub with a  certificate  dated the Closing Date to the
effect that each of the  conditions set forth in Sections 9.1 and 9.2 applicable
to such person have been  satisfied and CMJ shall have  furnished SMI and Merger
Sub with a  certificate  dated the Closing  Date  signed by its Chief  Executive
Officer or  President  to the effect  that each of the  conditions  set forth in
Sections 9.1 and 9.2 applicable to CMJ have been satisfied.

          Section  9.4 Opinion of Counsel to CMJ and the  Stockholders.  SMI and
Merger Sub shall have received an opinion of Goldberg & Simpson, P.S.C., counsel
to each of CMJ and  the  Stockholders,  dated  the  Closing  Date,  in form  and
substance reasonably satisfactory to SMI and Merger Sub and substantially in the
form attached hereto as Exhibit D.

          Section 9.5  Employment.  Sean Garber  shall have  entered  into the
Employment Agreement.

          Section 9.6 No Material Adverse Change.  SMI and Merger Sub shall have
determined,  in their sole discretion,  that there are no facts or circumstances
that materially and adversely affect the value of the CMJ Stock.

          Section 9.7 Due Diligence. SMI and Merger Sub shall have completed, to
their  satisfaction  and up to the Closing Date,  their due diligence  review of
CMJ's properties and CMJ's legal,  accounting and financial records with respect
to the business of CMJ.

                                     22



          Section 9.8 Resignation.  The present directors and executive officers
of CMJ shall have  resigned  and caused the  individuals  set forth on  Schedule
1.4(b) to succeed them in such capacity.

                                    ARTICLE X

                                   TAX MATTERS

          Section  10.1   Allocation   of  Tax   Liabilities.   Indemnification.

          (a) The  Stockholders  hereby  indemnify  and hold  harmless  SMI with
respect to any and all Taxes that may be imposed on SMI, if any,  (i)  resulting
from a breach of any  representation  or warranty  set forth in Section  2.10 or
this Article X (a  "Breach"),  (ii) with  respect to all taxable  periods of CMJ
ending on or prior to December  31,  2001,  for amounts less than or equal to an
aggregate of $45,000.00 of Tax Liability or greater than an aggregate of $60,000
of Tax  Liability  or (iii)  allocated to the  Stockholders  pursuant to Section
10.1(b) hereof.  SMI hereby  indemnifies the  Stockholders for any and all Taxes
that  may  be  imposed  on the  Stockholders  for  all  taxable  periods  of CMJ
commencing  after December 31, 2001 to the extent such taxes are attributable to
events  occurring  after December 31, 2001 and for any and all Taxes that may be
imposed on the  Stockholders  in excess of  $45,000.00,  up to an  aggregate  of
$15,000 of Tax Liability,  for all taxable  periods of CMJ ending on or prior to
December 31, 2001.

          (b) CMJ and the  Stockholders  covenant  and agree that they have duly
included,  or will duly  include,  in their own Tax Returns  their own allocable
share of items of income,  gain, loss,  deduction or credit attributable to that
taxable  year or other  taxable  period that ends on or before the Closing  Date
and, in the case of any taxable year or other  taxable  period that includes the
Closing Date, that part of the taxable year or other taxable period that ends at
the close of business on the Closing Date.

          (c) The  Stockholders  shall make any  payments  under this  Article X
within thirty (30) days after the final  determination  (as such term is defined
in Section  1313(a) of the Code) of any Tax  Liability  provided that whenever a
taxing authority asserts a claim,  makes an assessment or otherwise disputes the
amounts  of Taxes  payable  with  respect  to tax  periods  ending  on or before
December  31,  2001 and the  amount(s)  in  question is less than or equal to an
aggregate of  $45,000.00  or greater  than an  aggregate  of $60,000,  SMI shall
notify the  Stockholders  within ten (10) days and thereafter  the  Stockholders
shall have the right to control any resulting proceedings and to determine when,
whether  and to what  extent to settle any such  claim,  assessment  or dispute.
Notwithstanding  the  foregoing,  the  failure of SMI to give  notice  under the
preceding  sentence  shall  not  relieve  the  Stockholders  of any  obligations
hereunder  unless such failure  shall  preclude  the defense of such claim.  The
Stockholders  shall not agree to any adjustment or  adjustments  that would have
the effect of increasing  the Tax Liability with respect to any period after the
Closing Date without obtaining the prior written consent of SMI.

          (d) If, for any United  States  federal,  state,  local or foreign tax
purposes,  the taxable  period of CMJ does not  terminate  on the Closing  Date,
Taxes,  if any,  attributable  to the taxable  period of CMJ that  includes  the
Closing Date shall be  allocated,  subject to Section 10.1 (a) hereof to (i) the
Stockholders  for the period up to and including the Closing Date,  and (ii)

                                       22



SMI for the period subsequent to the Closing Date. For purposes of the preceding
sentence,  Taxes for the period up to and including the Closing Date and for the
period  subsequent  to the Closing Date shall be  determined  on the basis of an
interim  closing of the books as of the close of business on the Closing Date as
if such taxable period consists of one taxable period ending on the Closing Date
followed by a taxable  period  beginning on the day  following the Closing Date.
For purposes of this subparagraph (d), exemptions, allowances or deductions that
are calculated on an annual basis, such as the deduction for depreciation, shall
be apportioned on a daily basis.

          (e) The Stockholders  shall prepare or cause to be prepared,  and file
or cause to be filed, all Tax Returns of CMJ for all taxable periods of CMJ that
end on or prior to the Closing  Date.  All such  returns  shall be prepared on a
basis that is consistent with the manner in which the  Stockholders  prepared or
filed such Tax Returns for prior periods.

          (f) After the Closing  Date,  SMI and the  Stockholders  shall provide
each other with reasonable cooperation in connection with the preparation of Tax
Returns  of CMJ  and  shall  make  available  to  the  other  and to any  taxing
authority,  as  reasonably  requested,  all  information,  records or  documents
relating to Tax  Liabilities or potential Tax Liabilities of CMJ for all periods
prior to or including the Closing Date and shall preserve all such  information,
records and  documents  until the  expiration of any statute of  limitations  or
extensions thereof.


                                   ARTICLE XI

                                 INDEMNIFICATION

          Section 11.1 Survival of  Representations.  Warranties and Agreements.
Subject to the limitations set forth in this Article XI and  notwithstanding any
investigation  conducted at any time with regard  thereto by or on behalf of SMI
and/or Merger Sub, on the one hand, or CMJ and/or the Stockholders, on the other
hand, all representations,  warranties,  covenants and agreements of SMI, Merger
Sub, CMJ or the  Stockholders  in this  Agreement  shall survive the  execution,
delivery and performance of this Agreement and shall be deemed to have been made
again by SMI, Merger Sub, CMJ and the Stockholders at and as of the Closing. The
representations and warranties  contained in this Agreement shall remain in full
force and effect for a period of eighteen  (18) months  after the Closing  Date;
provide however, that the representations, warranties and covenants contained in
Section  2.10 and  Article  X  relating  to  Taxes,  Section  2.13  relating  to
Intellectual  Property and Section 2.22 relating to Environmental  Matters shall
remain  in full  force  and  effect  until the  expiration  of their  respective
applicable  statute of  limitations  (including  any  extensions  thereof).  The
obligation  of  indemnity  provided  herein  shall  survive  the  Closing.   All
statements contained in any exhibit, schedule,  statement,  certificate or other
writing  pursuant  to this  Agreement  or in  connection  with the  transactions
contemplated  hereby  shall be deemed  representations  and  warranties  of SMI,
Merger  Sub,  CMJ or the  Stockholders,  as the case may be,  set  forth in this
Agreement within the meaning of this Article.

                                       23



          Section 11.2 Indemnification.

          (a)  Each of CMJ and  each  Stockholder,  and  only  the  Stockholders
following the Closing, shall, jointly and severally, indemnify and hold harmless
SMI, and both SMI and the Surviving  Corporation following the Closing, from and
against  any and all  losses,  liabilities,  damages,  demands,  claims,  suits,
actions,  judgments  or  causes  of  action,  assessments,  costs  and  expenses
including, without limitation,  interest, penalties, reasonable attorneys' fees,
any  and  all  reasonable  expenses  incurred  in  investigating,  preparing  or
defending  against  any  litigation,  commenced  or  threatened,  or  any  claim
whatsoever,  and  any  and  all  amounts  paid in  settlement  of any  claim  or
litigation (collectively,  "Damages"),  asserted against,  resulting to, imposed
upon, or incurred or suffered by SMI or the Surviving  Corporation,  directly or
indirectly,  as a result  of or  arising  from the  following  (individually  an
"Indemnifiable Claim" and collectively  "Indemnifiable  Claims" when used in the
context of SMI as the Indemnified Party (as defined below)):

               (i) Any  inaccuracy  in or breach of any of the  representations,
               warranties  or  agreements  made in this  Agreement of CMJ or the
               Stockholders or the non-performance of any covenant or obligation
               to be  performed  by any of CMJ or the  Stockholders  under  this
               Agreement;

               (ii) Any violation by CMJ or the  Stockholders  of any law, rule,
               regulation,  arbitral  determination,   order,  writ,  decree  or
               injunction on or prior to the Closing Date;

               (iii) Any  misrepresentation in or any omission from any exhibit,
               schedule, statement, certificate or other writing furnished or to
               be  furnished  by or on behalf of CMJ or the  Stockholders  under
               this Agreement; and

          (b) SMI, and SMI and the Surviving Corporation, jointly and severally,
following the Closing,  shall indemnify and hold harmless the Stockholders,  and
just the  Stockholders  following  the  Closing,  from and  against  any and all
Damages asserted against, resulting to, imposed upon, or incurred or suffered by
the  Stockholders,  directly or  indirectly,  as a result of or arising from the
following (individually an "Indemnifiable Claim" and collectively "Indemnifiable
Claims"  when  used  in the  context  of CMJ or any of the  Stockholders  as the
Indemnified Party):

               (i) Any  inaccuracy  in or breach of any of the  representations,
               warranties  or  agreements  made  by SMI or  Merger  Sub in  this
               Agreement or the non-performance of any covenant or obligation to
               be performed by SMI or Merger Sub under this Agreement; and

               (ii) Any  misrepresentation  in or any omission from any exhibit,
               schedule, statement, certificate or other writing furnished or to
               be  furnished  by or on behalf of SMI or  Merger  Sub under  this
               Agreement.

          (c)  Without   duplication  of  Damages,   SMI  and/or  the  Surviving
Corporation shall be deemed to have suffered Damages arising out of or resulting
from the  matters  referred  to

                                       24



in subsection (a) above if the same shall be suffered by any parent,  subsidiary
or affiliate of either SMI or the Surviving Corporation.

          Section 11.3 Procedure for Indemnification with Respect to Third Party
Claims.  The Indemnified Party shall give the Indemnifying  Party prompt written
notice of any third party claim, demand, assessment, suit or proceeding to which
the indemnity  set forth in this Article XI applies which notice shall  describe
said claim in reasonable detail (the "Indemnification Notice").  Notwithstanding
the foregoing,  the Indemnified  Party shall not have any obligation to give any
notice of any  assertion of liability by a third party unless such  assertion is
in writing, and the rights of the Indemnified Party to be indemnified  hereunder
in respect of any third  party  claim  shall not be  adversely  affected  by its
failure to give notice pursuant to the foregoing  unless and, if so, only to the
extent that,  the  Indemnifying  Party is  materially  prejudiced  thereby.  The
Indemnifying  Party shall have the right to control the defense or settlement of
any such  action  subject to the  provisions  set forth  below in the event such
claim solely  involves an action for  monetary  damages and could not affect the
Indemnified  Party's business going forward,  but the Indemnified  Party may, at
its election, participate in the defense of any action or proceeding at its sole
cost and expense; provided,  however,  specifically,  that SMI may defend itself
against any  Indemnification  Claim  which may affect the  business of CMJ going
forward.  Notwithstanding the foregoing,  if there exists a conflict of interest
that would make it  inappropriate  for the same  counsel to  represent  both the
Indemnified  and  Indemnifying  Parties,  in connection  with any  Indemnifiable
Claim, then the Indemnified Party shall be entitled to retain its own counsel as
is reasonably satisfactory to the Indemnifying Party at the Indemnifying Party's
expense.  In the event that such  Indemnified  Party  seeks  indemnification  as
provided herein, such Indemnified Party shall make available to the Indemnifying
Party,  at  its  expense,  all  witnesses,   pertinent  records,  materials  and
information  in the  Indemnified  Party's  possession  or under the  Indemnified
Party's control relating  thereto as is reasonably  required by the Indemnifying
Party. Should the Indemnifying Party fail to defend any such Indemnifiable Claim
(except for failure  resulting from the  Indemnified  Party's  failure to timely
give notice of such Indemnifiable claim), then, in addition to any other remedy,
the  Indemnified  Party may settle or defend such action or  proceeding  through
counsel of its own  choosing  and may recover  from the  Indemnifying  Party the
amount of such  settlement,  demand,  or any  judgment  or decree and all of its
costs and expenses,  including  reasonable  fees and  disbursements  of counsel.
Except as permitted in the preceding sentence,  the Indemnifying Party shall not
be liable for any settlement effected without its written consent, which consent
shall not be unreasonably withheld;  provided. however, that if such approval is
unreasonably  withheld, the liability of the Indemnifying Party shall be limited
to the amount of the proposed  compromise  or  settlement  and the amount of the
Indemnified Party's reasonable counsel fees incurred in defending such claim, as
permitted by the preceding  sentence,  at the time such consent is  unreasonably
withheld.  Notwithstanding the preceding sentence,  the right of the Indemnified
Party to compromise or settle any claim without the prior written consent of the
Indemnifying  Party  shall  only  be  available  if a  complete  release  of the
Indemnifying  Party is  contemplated  to be part of the proposed  compromise  or
settlement of such third party claim.  The  Stockholders  shall not agree to any
adjustment or adjustments that would increase Tax Liability of SMI, with respect
to any period ending after the Closing Date,  without the prior written  consent
of SMI.

          Section 11.4 Limitations as to Amount.  Notwithstanding the foregoing,
the  Stockholders  shall have no  obligation  to indemnify  SMI or the Surviving
Corporation for any

                                       25



Damages in excess of $20,000;  provided,  however,  that this Section 11.4 shall
not  apply  (i)  to  any  Damages  resulting  from  the  knowing  breach  of any
representation or warranty made by CMJ or the Stockholders that are set forth in
Articles  II and III  hereof  or (ii)  with  respect  to any  indemnifiable  Tax
Liability  of CMJ (as set forth in  Section  10.1(a))  for all  taxable  periods
ending on or  before  December  31,  2001,  until the total  amount of CMJ's Tax
Liability for such period exceeds $60,000.

                                   ARTICLE XII

                        TERMINATION, AMENDMENT AND WAIVER

          Section 12.1  Termination.  This  Agreement may be terminated  and the
transactions  contemplated by this Agreement  abandoned at any time prior to the
Closing:

          (a) By the  mutual  written  consent of SMI,  CMJ,  Merger Sub and the
Stockholders;

          (b) By CMJ and the  Stockholders if it and the  Stockholders or Merger
Sub  are  not  in  material  breach  of  their  representations,  warranties  or
obligations   under  this   Agreement  and  there  has  been  a  breach  of  any
representation,  warranty,  covenant or agreement contained in this Agreement on
the part of SMI or Merger Sub or if any  representation  or  warranty  of SMI or
Merger Sub shall have become untrue, in either case such that the conditions set
forth in Articles VII and VIII would not be satisfied;  provided,  however, that
if such breach or breaches are capable of being cured prior to the Closing, such
breaches  shall not have been cured  within 30 days of delivery to SMI or Merger
Sub, as the case may be, of written  notice of such  breach or breaches  (but no
such cure  period  shall be  required  if such  breach by its  nature  cannot be
cured);

          (c) By either SMI or Merger Sub if it is not in material breach of its
representations,  warranties or  obligations  under this Agreement and there has
been a breach of any representation,  warranty,  covenant or agreement contained
in  this  Agreement  on  the  part  of  the   Stockholders  or  CMJ  or  if  any
representation  or warranty of the Stockholders or CMJ shall have become untrue,
in either  case such that the  conditions  set forth in Article VII and IX would
not be satisfied; provided, however, that if such breach or breaches are capable
of being cured prior to the  Closing,  such  breaches  shall not have been cured
within 30 days of delivery to CMJ and the Stockholders of written notice of such
breach or breaches  (but no such cure period shall be required if such breach by
its nature cannot be cured); or

          (d) By SMI,  Merger Sub or CMJ if. (i) the Closing has not occurred by
March 15, 2002 (provided  that the right to terminate this Agreement  under this
clause (i) shall not be available to any party whose willful  failure to fulfill
any  obligation  hereunder has been the cause of, or resulted in, the failure of
the  Closing  to occur on or before  such  date);  (ii)  there  shall be a final
non-appealable  order, decree or ruling of a court of competent  jurisdiction in
effect preventing consummation of the transactions contemplated hereby; or (iii)
there shall be any statute,  rule,  regulation or non-appealable  order enacted,
promulgated  or issued or deemed  applicable  to the  transactions  contemplated
hereby  by  any  governmental  entity  that  would  make  consummation  of  such
transactions illegal.

                                       26



          Section 12.2 Effect of Termination. In the event of any termination of
this  Agreement  in  accordance  with  Sections  12.1  (a) or (d)  hereof,  this
Agreement shall forthwith become void and there shall be no liability under this
Agreement  on the  part  of any  party  hereto  or  its  respective  affiliates,
officers,  directors,  employees or agents by virtue of such termination. In the
event of any  termination of this Agreement in accordance with Sections 12.1 (b)
or (c), the parties hereto reserve their rights to take any action  permitted by
law, including as provided in Section 13.2 hereof.


                                  ARTICLE XIII

                                  MISCELLANEOUS

          Section 13.1 Notices.

          All  notices,  requests,  demands and other  communications  which are
required or may be given under this  Agreement  shall be in writing and shall be
deemed to have been duly given  when  delivered  personally  or three days after
being sent by registered or certified mail,  return receipt  requested,  postage
prepaid:

          (a) If to SMI to:

              Sporting  Magic,  Inc.
              6430 Cobble Lane
              Harrison, Tennessee 37341
              Attention: Danny F. Cooke, its Chairman

              with a copy (which shall not constitute notice) to:

              Olshan  Grundman  Frome  Rosenzweig  & Wolosky LLP
              505 Park Avenue
              16th  Floor
              New  York,  New  York  10022
              Attention: Robert H. Friedman, Esq.

              and

              Miller & Martin  LLP
              Suite 1000 Volunteer Building
              832 Georgia Avenue
              Chattanooga, TN 37402-2289
              Attention: W. Scott McGinness Jr., Esq.

          (b) If to Merger Sub

              CMJ Acquisition  Company
              c/o Sporting  Magic,  Inc.
              6430 Cobble Lane

                                       27



              Harrison, Tennessee 37341
              Attention: Danny F. Cooke, its Chairman

              with a copy (which shall not constitute notice) to:

              Olshan  Grundman  Frome  Rosenzweig  & Wolosky LLP
              505 Park  Avenue
              16th Floor
              New York, New York 10022
              Attention: Robert H. Friedman, Esq.

              and

              Miller & Martin  LLP
              Suite 1000 Volunteer Building
              832 Georgia Avenue
              Chattanooga, TN 37402-2289
              Attention: W. Scott McGinness Jr., Esq.

          (c) If to the Stockholders to:

              Sean Garber
              [address]

              Lisa Garber
              [address]

              Mark Carter
              [address]

              with a copy (which shall not constitute notice) to:

              Steven A. Goodman,  Esq.
              David H. Cooper, Esq.
              Goldberg  & Simpson,  P.S.C.
              3000  National  City  Tower
              101 South  Fifth  Street
              Louisville, Kentucky 40202
              Fax: (502) 581-1344

          (d) If to CMJ to:

              CMJ Ventures,  Inc.
              3600  Chamberlain  Lane
              Suite 826
              Louisville, Kentucky 40241
              Attention: Sean Garber, President

                                       28



          with a copy (which shall not constitute notice) to:

          Steven A. Goodman, Esq.
          David H. Cooper, Esq.
          Goldberg & Simpson, P.S.C.
          3000 National City Tower
          101 South Fifth Street
          Louisville, Kentucky 40202
          Fax: (502) 581-1344

or to such other address as any party shall have  specified by notice in writing
to the other in compliance with this Section 13.1.

          Section 13.2 Specific Performance.  All parties hereto recognize that,
because  of the  nature of the  subject  matter of this  Agreement,  it would be
impractical and extremely  difficult to determine actual damages in the event of
a breach of this Agreement.  Accordingly, if any of CMJ or the Stockholders,  on
the one hand,  or SMI or Merger  Sub, on the other  hand,  commits a breach,  or
threatens to commit a breach, of any of the provisions of hereof, as applicable,
of this Agreement.  Accordingly,  if any of CMJ or the Stockholders,  on the one
hand, or SMI or Merger Sub, on the other hand, commits a breach, or threatens to
commit a breach,  of any of the  provisions of hereof,  as  applicable,  of this
Agreement, SMI and Merger Sub, on the one hand, or CMJ and the Stockholders,  on
the other hand, shall have the right to seek and receive a temporary restraining
order,  injunction  or other  equitable  remedy  relating to the  prevention  or
cessation of such breach or threatened breach,  including,  without  limitation,
the right to have the provisions of this Agreement  specifically enforced by any
court having equity jurisdiction, it being mutually acknowledged and agreed that
any such  breach or  threatened  breach will cause  irreparable  injury and that
monetary damages will not provide an adequate remedy.

          Section 13.3 Entire Agreement. This Agreement,  including the exhibits
and  schedules  attached  hereto,  constitutes  the entire  agreement  among the
parties  hereto  with  respect to the  subject  matter  hereof and  thereof  and
supersedes all prior agreements,  representations  and understandings  among the
parties hereto, whether written or oral.

          Section 13.4 Binding  Effect.  Benefits.  Assignments.  This Agreement
shall inure to the benefit of and be binding  upon the parties  hereto and their
respective  successors  and  assigns;  nothing in this  Agreement,  expressed or
implied,  is  intended  to confer on any other  person,  other than the  parties
hereto  or their  respective  successors  and  assigns,  any  rights,  remedies,
obligations or liabilities under or by reason of this Agreement.  This Agreement
may not be  assigned  without  the prior  written  consent of the other  parties
hereto.

          Section 13.5  Applicable  Law. This Agreement and the legal  relations
between the parties hereto shall be governed by and construed in accordance with
the laws of the State of Indiana,  without  regard to  conflicts of law rules of
such state.

          Section  13.6  Jurisdiction.  The parties  hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising  out of or in

                                       29



connection with, this Agreement or the transactions contemplated hereby shall be
brought in the United States District Court for the Northern District of Indiana
or any  Indiana  State  court  sitting in Wabash,  so long as one of such courts
shall have subject matter jurisdiction over such suit, action or proceeding, and
that any cause of action arising out of this  Agreement  shall be deemed to have
arisen from a transaction  of business in the State of Indiana,  and each of the
parties hereby  irrevocably  consents to the jurisdiction of such courts (and of
the  appropriate  appellate  courts  therefrom)  in any  such  suit,  action  or
proceeding and irrevocably  waives,  to the fullest extent permitted by law, any
objection  that it may now or  hereafter  have to the laying of the venue of any
such suit,  action or proceeding in any such court or that any such suit, action
or  proceeding  which is  brought  in any such  court  has  been  brought  in an
inconvenient  forum Process in any such suit, action or proceeding may be served
on any party anywhere in the world,  whether within or without the  jurisdiction
of any such  court.  Without  limiting  the  foregoing,  each party  agrees that
service of process on such  party as  provided  in Section  13.1 shall be deemed
effective service of process on such party.

          Section  13.7  Severability.  With  respect to any  provision  of this
Agreement  finally  determined  by a  court  of  competent  jurisdiction  to  be
unenforceable,  such court shall have  jurisdiction  to reform such provision so
that it is  enforceable  to the maximum  extent  permitted  by law,  and all the
parties hereto shall abide by such court's determination.  In the event that any
provision of this Agreement  cannot be reformed,  such provision shall be deemed
to be severed from this  Agreement,  but every other provision of this Agreement
shall remain in full force and effect.

          Section 13.8 No Third Party Beneficiaries.  Nothing herein,  expressed
or  implied,  is intended  or shall be  construed  to confer upon or give to any
person,  firm,  corporation or legal entity,  other than the parties hereto, any
rights, remedies or other benefits under or by reason of this Agreement.

          Section 13.9 Headings. The headings and captions in this Agreement are
included for purposes of convenience  only and shall not affect the construction
or interpretation of any of its provisions.

          Section 13.10  Pronouns and Plurals.  All pronouns and any  variations
thereof shall be deemed to refer to the masculine,  feminine, singular or plural
as the context may  require.  All  references  herein to "he," "him" or "his" or
"she,"  "her" or "hers"  shall be for purposes of  simplicity  and,  except with
reference  to  the  Stockholders,  are  not  intended  to  be a  reference  to a
particular gender.

          Section   13.11   Counterparts.   This   Agreement   may  be  executed
simultaneously  in two or more  counterparts,  each of which  shall be deemed an
original,  but  all  of  which  together  shall  constitute  one  and  the  same
instrument.

          Section 13.12 Representation By Counsel;  Interpretation.  SMI, Merger
Sub, CMJ and the Stockholders each acknowledge that each party to this Agreement
has been  represented  by  counsel in  connection  with this  Agreement  and the
transactions   contemplated   hereby.   Accordingly,   any  rule  of  applicable
constitutional provision,  statute, ordinance or other law, rule, regulation, or
interpretation  by any  Governmental  Entity and any order or any legal

                                       30



decision that would require  interpretation  of any claimed  ambiguities in this
Agreement  against the party that drafted it has no application and is expressly
waived.  The provisions of this  Agreement  shall be interpreted in a reasonable
manner to effect the intent of the parties hereto.

             [The remainder of this page was purposely left blank.]

                                       31






          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year hereinabove first set forth.

                                                SPORTING MAGIC, INC.


                                                By: /s/ Dan Cooke
                                                   -----------------------------
                                                   Name:  Dan Cooke
                                                   Title: Chairman


                                                CMJ VENTURES, INC.


                                                By: /s/ Sean Garber
                                                   -----------------------------
                                                   Name:  Sean Garber
                                                   Title: President


                                                CMJ ACQUISTION COMPANY


                                                By: /s/ Dan Cooke
                                                   -----------------------------
                                                   Name:  Dan Cooke
                                                   Title: Chairman



                                                   /s/ Sean Garber
                                                   -----------------------------
                                                   SEAN GARBER


                                                   /s/ Lisa Garber
                                                   -----------------------------
                                                   LISA GARBER


                                                   /s/ Mark Carter
                                                   -----------------------------
                                                   MARK CARTER


                                       32
EX-99 4 sced13d99305313_06112002.htm EXHIBIT 99.3 sec document 


          -------------------------------------------------------------


                 AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER

          -------------------------------------------------------------

                                  BY AND AMONG

                              SPORTING MAGIC, INC.,

                            CMJ ACQUISITION COMPANY,

                               CMJ VENTURES, INC.

                                       and

                    SEAN GARBER, LISA GARBER AND MARK CARTER




                                  May 16, 2002







                 AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER

            THIS  AMENDMENT  NO. 1 TO THE  AGREEMENT  AND PLAN OF  MERGER  (this
"AMENDMENT")  is  entered  into as of May 16,  2002,  by and among (i)  Sporting
Magic, Inc., a Delaware  corporation  ("SMI"),  (ii) CMJ Acquisition  Company, a
Delaware  corporation and wholly owned  subsidiary of SMI ("MERGER SUB"),  (iii)
CMJ Ventures,  Inc., a Florida corporation ("CMJ") and (iv) each of Sean Garber,
Lisa  Garber and Mark Carter  (collectively,  the  "Stockholders").  Capitalized
terms used herein and not otherwise  defined shall have the meanings ascribed to
them in the Merger Agreement (as defined below).

                              W I T N E S S E T H :

            WHEREAS,  SMI, Merger Sub, CMJ and the  Stockholders  are parties to
that certain Agreement and Plan of Merger,  dated as of March 1, 2002, a copy of
which is attached hereto as Exhibit A (the "MERGER AGREEMENT"); and


            WHEREAS,  the parties  hereto wish to amend the Merger  Agreement as
set forth below.

            NOW,  THEREFORE,  in  consideration  of the  premises and the mutual
covenants and agreements herein contained,  the parties do hereby agree, subject
to the terms and conditions hereinafter set forth, as follows:

                                    ARTICLE I

                                   THE MERGER


            1.3  Merger Consideration.
                 ---------------------


            Section  1.3  of the  Merger  Agreement  is  hereby  deleted  in its
entirety and replaced with the following:

            "Section 1.3 MERGER  CONSIDERATION.  For purposes of this agreement,
"Merger Consideration" shall mean, in the aggregate, (i) 1,400,000 shares of SMI
voting common stock,  $.0001 par value per share,  all unencumbered and free and
clear  of  all  liens,  charges,   pledges,  security  interests  or  any  other
restrictions  except for those as may be imposed by federal or state  securities
laws (collectively,  the "SMI COMMON STOCK") and (ii) 4 shares of SMI's Series A
preferred stock, $.0001 par value per share, all unencumbered and free and clear
of all liens, charges, pledges, security interests or any other restrictions and
created  pursuant to a certificate of designation  substantially  similar to the
form of certificate of designation  attached hereto as Exhibit A  (collectively,
the "SMI PREFERRED STOCK").  At the Effective Time, by virtue of the Merger, and
without  further  action by any person or entity,  each  issued and  outstanding
share of CMJ Stock (as  defined in Section  2.2) shall  automatically  converted
into the right to  receive  2,545.4545  shares of SMI Common  Stock and  0.00727
shares  of SMI  Preferred  Stock.  Schedule  1.3 sets  forth to whom and in what
denominations   the  Merger   Consideration  is  to  be  allocated

                                       1



amongst the  Stockholders or their  designees.  Fractional  shares of either SMI
Common Stock or SMI Preferred  Stock to be issued  hereunder shall be rounded to
the nearest whole number."


                            [Signature Page Follows]

                                       2



            IN WITNESS WHEREOF,  the parties hereto have executed this Agreement
as of the day and year hereinabove first set forth.

                                    SPORTING MAGIC, INC.


                                    By:  /s/ Dan Cooke
                                       --------------------------------
                                       Name:  Dan Cooke
                                       Title: Chairman


                                    CMJ VENTURES, INC.



                                    By:  /s/ Sean Garber
                                       --------------------------------
                                       Name:  Sean Garber
                                       Title: President


                                    CMJ ACQUISTION COMPANY



                                    By:  /s/ Dan Cooke
                                       --------------------------------
                                       Name:  Dan Cooke
                                       Title: Chairman


                                         /s/ Sean Garber
                                       --------------------------------
                                       SEAN GARBER



                                         /s/ Lisa Garber
                                       --------------------------------
                                       LISA GARBER



                                         /s/ Mark Carter
                                       --------------------------------
                                       MARK CARTER


                                       3
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