EXECUTION COPY
================================================================================
EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
Dated as of March 30, 1999
by and among
------------
National Golf Properties, Inc.
National Golf Operating Partnership, L.P.
American Golf Corporation
------------
and
------------
Golf Acquisitions, L.L.C.
------------
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS.................................................... 2
1.1. Defined Terms.................................................. 2
1.2. Reference to Stock Purchase Agreement.......................... 8
1.3. Other Defined Terms............................................ 9
ARTICLE II. SALE AND TRANSFER OF ASSETS; CLOSING........................... 10
2.1. Sale of Assets to the Buyers................................... 10
2.2. Assumption of Liabilities by the Buyers........................ 10
2.3. Excluded Liabilities........................................... 10
ARTICLE III. DEPOSITS; PURCHASE PRICE; ADJUSTMENT........................... 11
3.1. Deposits....................................................... 11
3.2. Purchase Price................................................. 11
3.3. Purchase Price Adjustment for Stock Purchase Closing Adjustment
Amount......................................................... 11
3.4. Purchase Price Adjustment for Holdback Assets and Other
Acquired Assets that are not Initially Conveyed to the Buyers.. 12
3.5. Purchase Price Determinations.................................. 13
ARTICLE IV. CLOSING........................................................ 13
4.1. Closing........................................................ 13
4.2. Closing Costs; Transfer Taxes and Fees......................... 14
4.3. Conveyances at Closing......................................... 14
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLER AND
BUYERS......................................................... 15
5.1. Representations and Warranties of Seller....................... 15
5.2. Representations and Warranties of the Buyers................... 16
ARTICLE VI. COVENANTS OF SELLER AND BUYERS................................. 17
6.1. Covenants of Seller............................................ 17
6.2. Stock Purchase Agreement; Amendments; Waivers and Consents..... 17
6.3. Negative Covenant.............................................. 18
6.4. Notification................................................... 18
6.5. Access and Investigation....................................... 18
6.6. Employee Matters............................................... 18
6.7. Consents and Best Efforts...................................... 20
6.8. Payment of Expenses............................................ 20
6.9. Grant of Liens................................................. 21
6.10. Nonsolicitation................................................ 21
ARTICLE VII. CONDITIONS PRECEDENT TO SELLER'S AND BUYERS'
OBLIGATIONS TO CLOSE .............................................................................................21
7.1. Conditions Precedent to Seller's Obligation to Close ............................................................. 21
7.2. Conditions Precedent to the Buyers' Obligation to Close........................................................... 22
ARTICLE VIII. TERMINATION; DEPOSIT; LIQUIDATED DAMAGES
8.1. Termination........................................................................................................22
8.2. Effect of Termination; Deposit; Liquidated Damages................................................................ 22
ARTICLE IX. INDEMNIFICATION................................................................................................... 24
9.1. Survival.......................................................................................................... 24
9.2. Indemnification of NGOP by Seller................................................................................. 25
9.3. Indemnification of AGC by Seller.................................................................................. 27
9.4. Indemnification of Seller by NGOP................................................................................. 30
9.5. Indemnification of Seller by AGC.................................................................................. 32
9.6. Allocation of Indemnity Limits.................................................................................... 33
9.7. Indemnification for Assumed and Excluded Liabilities.............................................................. 34
9.8. Control Over Proceedings.......................................................................................... 35
ARTICLE X GENERAL PROVISIONS................................................................................................. 36
10.1. Consents to Assignment............................................................................................ 36
10.2. Public Announcements.............................................................................................. 36
10.3. Confidentiality................................................................................................... 36
10.4. Notices........................................................................................................... 37
10.5. Governing Law..................................................................................................... 39
10.6. Dispute Resolution Process........................................................................................ 39
10.7. Waiver of Jury Trial.............................................................................................. 39
10.8. Waiver............................................................................................................ 40
10.9. Entire Agreement and Modification................................................................................. 40
10.10. Assignments, Successors, and No Third-Party Rights................................................................ 40
10.11. No Assignment of Stock Purchase Agreement......................................................................... 40
10.12. No Partnership or Joint Venture................................................................................... 40
10.13. Severability...................................................................................................... 41
10.14. Section Headings, Construction.................................................................................... 41
10.15. No Interpretation Against Drafter................................................................................. 41
10.16. Counterparts...................................................................................................... 41
ii
EXHIBIT
-------
A Form of NGOP General Assignment and ▇▇▇▇ of Sale.................................................................... A-1
B Form of AGC General Assignment and ▇▇▇▇ of Sale..................................................................... B-1
C Form of Assignment of Lease......................................................................................... C-1
D Form of Assignment of Water Rights.................................................................................. D-1
E Form of NGOP Assumption Document.................................................................................... E-1
F Form of AGC Assumption Document..................................................................................... F-1
G Form of Blackstone Water Rights Agreement........................................................................... G-1
H Form of Cobblestone Trademark Assignment............................................................................ H-1
I Form of Cobblestone Trademark License............................................................................... I-1
iii
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made as of March
----------
30, 1999, by and among Golf Acquisitions, L.L.C., a Delaware limited liability
company ("Seller"), National Golf Properties, Inc., a Maryland corporation
------
("NGP"), National Golf Operating Partnership, L.P., a Delaware limited
---
partnership ("NGOP"), and American Golf Corporation, a California corporation
----
("AGC").
---
RECITALS
A. WHEREAS, a wholly-owned subsidiary of ClubCorp, Inc., a Delaware
corporation ("CCI") and a wholly-owned subsidiary of AGC are parties to a
---
Limited Liability Company Agreement dated as of March 30, 1999 (as amended, the
"Operating Agreement") whereby they formed Seller for the purpose of entering
-------------------
into a Stock Purchase Agreement dated as of February 10, 1999 (as amended, the
"Stock Purchase Agreement") with Meditrust Corporation and Meditrust Operating
------------------------
Company (collectively, the "Current Owners");
--------------
B. WHEREAS, the Stock Purchase Agreement contemplates that Seller
will acquire all of the issued and outstanding capital stock of Meditrust Golf
Group, Inc., The Cobblestone Golf Companies, Inc., and Meditrust Golf Group II,
Inc. or all of the membership interests of any limited liability companies which
are successors thereto (collectively, the "Companies"), from the Current Owners
---------
for a purchase price of $391,278,000 less certain liabilities as specified in
Section 1.3 of the Stock Purchase Agreement;
C. WHEREAS, following Seller's purchase of the Companies under the
Stock Purchase Agreement, the CCI Designees (as defined herein), NGOP and AGC
desire to acquire the golf course properties and related assets (the "Acquired
--------
Company Assets") owned by the Companies and their subsidiaries (the "Acquired
-------------- --------
Companies"), and Seller desires that the Acquired Companies transfer such assets
---------
to the CCI Designees, NGOP and AGC;
D. WHEREAS, NGOP and AGC have entered into this Agreement with Seller
in order to set forth the terms and conditions upon which NGOP and AGC will
acquire certain of the Acquired Company Assets from Seller;
E. WHEREAS, concurrently herewith the CCI Designees entered into an
Asset Purchase Agreement with Seller dated as of even date herewith (the "CCI
---
Asset Purchase Agreement") which sets forth the terms and conditions upon which
------------------------
the CCI Designees will acquire certain of the Acquired Company Assets from
Seller; and
F. WHEREAS, immediately upon the consummation of the acquisitions
contemplated hereby, NGOP will lease (or sublease, as the case may be) the
Acquired Company Assets acquired by NGOP hereunder to AGC (or its designees).
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
-----------
1.1. Defined Terms. As used herein, the terms below shall have the
-------------
following meanings. Any of such terms, unless the context otherwise requires,
may be used in the singular or plural, depending upon the reference.
"Acquired Assets" shall mean all of the right, title, and interest
that any member of the Transfer Group possesses in and to all of the assets
constituting the Acquired Properties, including each Acquired Property's (i)
Real Property Interests, Improvements and Water Rights, (ii) tangible personal
property and fixtures (such as Furnishings, Fixtures and Equipment and
Inventory) owned by the Acquired Companies and located at the Acquired
Properties, (iii) intellectual property, goodwill associated therewith, licenses
and sublicenses granted and obtained solely with respect to such Acquired
Property's business, and rights thereunder, remedies against infringements
thereof, and rights to protection of interests therein under the laws of all
jurisdictions, (iv) Leases, and rights of the Acquired Companies with respect to
any Acquired Assets listed in clauses (i) and (ii) of this definition, (v)
accounts, notes, and other receivables (including any rents and license fees)
arising from the operations of the Acquired Properties, (vi) claims, deposits,
prepayments, refunds, causes of action, choses in action, rights of recovery,
rights of set off, and rights of recoupment (including any such item relating to
the payment of taxes) arising out of the operation of the Acquired Properties,
(vii) Permits, (viii) Books and Records and (ix) Contract Rights; provided,
however, that the Acquired Assets shall not include any assets of the Transfer
Group for matters which are Seller Assets.
"Acquired Properties" shall mean the golf course properties listed in
Parts A and B of Schedule 1.1 attached hereto.
------------
"Acquired Property Employees" shall mean the individuals who were
employed at an Acquired Property or who worked principally for the benefit of an
Acquired Property on the day prior to the Closing Date (including those on
vacation, leave of absence or disability). For purposes of this Agreement, an
Acquired Property Employee is deemed to be assigned to the particular Acquired
Property where such employee was employed or worked principally for the benefit
of such Acquired Property on the day prior to the Closing Date.
"AGC Leases" shall mean leases (or subleases) between NGOP, as lessor
(or sublessor), and AGC (or its designees), as lessee (or sublessee), with
respect to the NGOP Acquired Properties which shall be in the standard form
currently used by NGOP and AGC for leases of the types of the NGOP Acquired
Properties with such adjustments of the type customarily made by NGOP and AGC
with respect to state and local law and other matters, and upon terms which are
mutually agreed upon by NGOP and AGC.
"AGC Acquired Assets" shall mean all of the Acquired Assets arising
out of or relating to the AGC Acquired Properties and all other Acquired Assets
which are not NGOP Acquired Assets.
"AGC Acquired Properties" shall mean the Acquired Properties set forth
in Part B of Schedule 1.1.
------------
2
"AGC Assumed Liabilities" shall mean all Operating Liabilities and the
Assumed Liabilities arising out of or relating to the AGC Acquired Assets.
"AGC's Percentage" shall mean 1.36%.
"Affiliate" shall mean any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by" and "under common control with"), as
applied to any Person, means (i) the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract or
otherwise, or (ii) the ownership of more than 10% of the voting securities of
that Person.
"Assumed Contracts" shall mean the Contracts and Leases related solely
to the Acquired Assets.
"Assumed Liabilities" shall mean, with respect to an Acquired
Property, all Liabilities accruing from, arising out of or relating to such
Acquired Property and/or its operations (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including, without limitation, the Liabilities of any member of the
Transfer Group (i) for transfer, sales, use, and other non-income taxes arising
in connection with the consummation of the Contemplated Transactions and for
periods prior to and after the Closing Date, (ii) for costs and expenses
(including legal fees and expenses) of any member of the Transfer Group incurred
in connection with this Agreement and the Contemplated Transactions except to
the extent set forth in Section 6.8(a), (iii) under the agreements, contracts,
leases, licenses, and other arrangements referred to in the definition of
Acquired Assets, (iv) with respect to any Acquired Property Employees under
employee benefit plans to the extent set forth in Section 6.6, (v) of or
relating to the Acquired Properties with respect to environmental matters,
including without limitation those arising under Environmental Laws, and (vi) to
indemnify any Person by reason of the fact that such Person was an officer,
employee, or agent of an Acquired Property or was serving as a partner, trustee,
director, officer, employee, or agent of another entity (whether such
indemnification is for judgments, damages, penalties, fines, costs, amounts paid
in settlement, losses, expenses, or otherwise and whether such indemnification
is pursuant to any statute, charter document, bylaw, agreement, or otherwise)
for the benefit of an Acquired Property.
"Best Efforts" shall mean the commercially reasonable efforts that a
prudent business Person desirous of achieving a result would use in similar
circumstances to ensure that such result is achieved as expeditiously as
possible; provided, however, that an obligation to use Best Efforts under this
Agreement does not require the Person subject to that obligation to take action
that would result in a materially adverse change in the benefits to such Person
of this Agreement and the Contemplated Transactions.
"Bid Agreement" shall mean that certain Bid Agreement dated as of
February 10, 1999 between CCI and AGC.
3
"Books and Records" shall mean, to the extent relating solely to one
or more individual Acquired Properties, (i) all records and lists of the
Acquired Companies, (ii) all records and lists of the business, customers,
suppliers or personnel of the Acquired Properties, (iii) all product, business
and marketing plans, (iv) all books, ledgers, files, documents, reports,
correspondence, lists, plats, architectural plans, drawings, and specifications,
creative materials, studies, reports, and other printed or written materials,
and (v) all tax returns, but excluding the minute books, stock books, blank
stock certificates and similar corporate, tax and organizational documents of
any member of the Transfer Group that relate to the organization, maintenance,
and existence of any member of the Transfer Group as an entity.
"Breach" shall mean any inaccuracy in or breach of, or any failure to
perform or comply with, any representation, warranty, covenant, obligation, or
other provision of this Agreement or any document or instrument delivered
pursuant to this Agreement.
"Buyer Claim Period" shall mean a period from the Closing Date until
the later of (i) seven years after the Closing Date or (ii) the conclusion of
all relevant litigation or other proceedings initiated prior to the end of such
seven-year period relating to Non-Excluded Claims.
"Buyers" shall mean, collectively, NGOP and AGC, each of whom shall
individually be referred to herein as a "Buyer".
-----
"Buyers' Percentage" shall mean 47%.
"CCI Designees" shall mean collectively, ClubCorp Golf of California,
L.L.C., ClubCorp Golf of Florida, L.L.C., ClubCorp Golf of Georgia, L.P.,
ClubCorp Golf of North Carolina, L.L.C., and ClubCorp Golf of Texas, L.P., each
of whom shall individually be referred to herein as a "CCI Designee".
------------
"Cobblestone Trademark Assets" shall mean, subject to the limitations
and exceptions disclosed by the Current Owners pursuant to the Stock Purchase
Agreement including, without limitation, Schedule 2.13 thereto, the trade names,
trademarks and service marks described in the Cobblestone Trademark Assignment,
attached as Exhibit H, the applications to register and registrations for such
trademarks and service marks.
"Concurrent Agreements" shall mean the Bills of Sale, Deeds,
Assignments of Lease, Assignment of Water Rights, Assumption Documents, AGC
Leases, Blackstone Water Rights Agreement, Cobblestone Trademark Assignment and
Cobblestone Trademark License.
"Consent" shall mean any approval, consent, ratification, waiver, or
other authorization.
"Contemplated Transactions" shall mean all of the transactions
contemplated by this Agreement, including:
(i) the purchase and sale of the Acquired Assets and the assumption of
the Assumed Liabilities;
4
(ii) the execution, delivery, and performance of the Concurrent
Agreements; and
(iii) the performance by the parties hereto of their respective
covenants and obligations under this Agreement.
"Contract" shall mean any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied).
"Contract Rights" shall mean all of the Acquired Companies' rights and
obligations under the Assumed Contracts.
"Deposit Percentage" shall mean, as to NGOP, AGC, or collectively the
CCI Designees, the percentage equal to the deposits made by NGOP, AGC or
collectively the CCI Designees, respectively, of the total amount of (i) all
Deposits made by NGOP and AGC hereunder and (ii) the deposits made by the CCI
Designees under the section of the CCI Asset Purchase Agreement corresponding to
Section 3.1.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Excluded Claims" shall mean all claims which are "Excluded Claims"
under Article VIII of the Stock Purchase Agreement and all claims which arise
under this Agreement for a breach of the representations and warranties,
covenants or other provisions hereof other than the representation and warranty
under Section 5.1(a) and the covenant under Section 6.1.
"Furnishings, Fixtures and Equipment" shall mean all of the furniture,
fixtures, furnishings, machinery, automobiles, carts, trucks, tractors,
trailers, tools and other equipment owned by the Acquired Companies and located
in, at or upon the Acquired Properties.
"Income Tax" shall mean any federal, state, local, or foreign income
tax, including any interest, penalty, or addition thereto, whether disputed or
not.
"Improvements" shall mean all buildings and improvements located on or
attached to any Acquired Properties and owned or leased by any Acquired Company.
"Indemnifiable Amount" shall mean the Maximum Amount less the
----
Threshold Amount.
"Inventory" shall mean all of the right, title, and interest that any
member of the Transfer Group possesses and has the right to transfer in and to
all inventory held at the Acquired Properties for the business conducted at the
Acquired Properties, including, without limitation, all pro-shop merchandise,
food and beverage consumables and supplies, seed, sand, fertilizer, fuel and
other grounds-keeping supplies, maintenance parts and supplies and office
supplies.
"Lease" shall mean all of the right, title, and interest that any
member of the Transfer Group possesses and has the right to transfer in and to
all of the existing leases and
5
subleases with respect to the personal or real property of any Acquired Company
located in, at, upon or pertaining to the use of any Acquired Property.
"Legal Requirement" shall mean any requirement of Law.
"Liabilities" shall mean, without duplication, (i) all obligations for
borrowed money, including, without limitation, all obligations for accrued and
unpaid interest thereon and any pre-payment premiums or penalties (and
associated fees, costs and expenses) with respect thereto, (ii) any
reimbursement obligations in respect of any letters of credit, (iii) any Lease
obligation, (iv) all obligations under any Contract, (v) any liability of any
nature not encompassed by clauses (i) through (iv), and (vi) all guarantees
issued in respect of any obligations of any Person of the type described in the
foregoing clauses (i) through (v).
"Net Purchaser Deposits" shall mean (i) the Purchaser Deposits less
----
(ii) the deposits required to be paid by Seller pursuant to Section 1.2 of the
Stock Purchase Agreement (together with interest (if any) actually earned
thereon).
"NGOP Acquired Assets" shall mean all of the Acquired Assets arising
out of or relating to the NGOP Acquired Properties which are (i) Real Property
Interests, Improvements or Water Rights, (ii) tangible personal property and
fixtures (such as Furnishings, Fixtures and Equipment) owned by the Acquired
Companies and located at such Acquired Properties, (iii) Leases, and rights of
the Acquired Companies with respect to any such Acquired Assets listed in clause
(i) of this definition, and (iv) Books and Records relating to any of the
foregoing assets (except to the extent such Books and Records relate to the
operation of the Acquired Properties); provided, however, in no event shall the
items of personal property acquired by NGOP with respect to any Acquired
Property which are NGOP Acquired Assets have a purchase price allocation in
excess of ten percent of the purchase price allocable to such Acquired Property
(as determined for Federal income tax purposes). In the event that the value of
personal property to be acquired by NGOP would exceed such limitation with
respect to any Acquired Property, (a) items of personal property from that
Acquired Property with a purchase price allocation at least equal to such
excess, as selected by NGOP and AGC, shall become AGC Acquired Assets; (b) the
amount of the purchase price payable by NGOP and AGC hereunder shall be
equitably adjusted; and (c) equitable adjustments shall be made to the terms
(including rent) of the applicable AGC Lease between NGOP and AGC to account for
such change in the leased assets.
"NGOP Acquired Properties" shall mean the Acquired Properties set
forth in Part A of Schedule 1.1.
------------
"NGOP Assumed Liabilities" shall mean the Assumed Liabilities arising
out of or relating to the NGOP Acquired Assets, but excluding all Operating
Liabilities.
"NGOP's Percentage" shall mean 45.64%.
"Non-Excluded Claims" shall mean indemnity claims made against Seller
by either of the Buyers or any of the CCI Designees which are not Excluded
Claims or "Excluded Claims" under the CCI Asset Purchase Agreement.
6
"Operating Liabilities" shall mean all Assumed Liabilities related to
the operation of individual Acquired Properties, including, without limitation,
Liabilities for employees, taxes, insurance, utilities, irrigation, maintenance,
landscaping, clubhouse operations, equipment leases, liquor licenses and other
Permits with respect to the operation of the Acquired Properties, and other
Assumed Liabilities for any matters of the type for which AGC will be
responsible under the AGC Leases.
"Permits" shall mean all of the right, title, and interest that any
member of the Transfer Group possesses and has the right to transfer in and to
all licenses, permits, franchises, approvals, authorizations, entitlements,
consents, registrations, certificates, variances, waiver or orders of, or
filings with, any Governmental Authority or any other Person, necessary or
desirable for the past, present or anticipated conduct of, or relating to the
operation of the Acquired Properties or the ownership or use of the Acquired
Assets (including any restaurant, catering or liquor licenses and permits).
"Person" shall mean any individual, corporation (including any non-
profit corporation), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization, labor union, or other
entity or Governmental Authority.
"Property Closing Date" shall mean, with respect to any particular
Acquired Property, the date and time as of which the conveyance of such Acquired
Property to the appropriate Buyer hereunder actually takes place.
"Purchase Price" shall mean the sum of the NGOP Purchase Price plus
----
the AGC Purchase Price.
"Purchase Price Deductions" shall mean the sum as reflected on the
Closing Balance Sheet of (i) long-term debt, less current portion, (ii) capital
lease obligations, less current portion, and (iii) deferred purchase price
liabilities, less current portion.
"Purchaser Deposits" shall mean (i) all deposits made by NGOP and AGC
under Section 3.1 and (ii) the deposits made by the CCI Designees under the
section of the CCI Asset Purchase Agreement corresponding to Section 3.1.
"Real Property Interests" shall mean real property, leaseholds and
subleaseholds therein, easements, rights-of-way, entitlements, development
rights, and other appurtenances thereto (such as appurtenant rights in and to
public streets).
"Representative" shall mean with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor or other representative
of such Person, including legal counsel, accountants and financial advisors.
"Seller Assets" shall mean any assets (including any pre-paid
expenses) of the Transfer Group (i) for matters which are related to the general
corporate administration of any member of the Transfer Group, including any
prepaid-expenses, the corporate charter, qualifications to conduct business as a
foreign corporation, arrangements with registered agents relating to foreign
qualifications, and taxpayer and other identification numbers, as well as the
7
Lease for the corporate headquarters of the Acquired Companies and office
furniture, computer equipment, software and other personal property used in the
corporate headquarters of the Acquired Companies, or (ii) related to any of the
rights of the Seller under this Agreement (or of any member of the Transfer
Group under any side agreement between any member of the Transfer Group on the
one hand and any of the Buyers on the other hand entered into on or after the
date of this Agreement) or the CCI Asset Purchase Agreement (or of any member of
the Transfer Group under any side agreement between any member of the Transfer
Group on the one hand and any of the CCI Designees on the other hand entered
into on or after the date of the CCI Asset Purchase Agreement).
"Seller Claim Period" shall mean a period from the Closing Date until
the later of (i) one year after the Closing Date or (ii) the conclusion of all
relevant litigation or other proceedings initiated prior to the end of such one-
year period which relate to claims for which Seller is entitled to
indemnification from a Buyer under Sections 9.4 or 9.5 or for which Seller is
entitled to indemnification from a CCI Designee under the section of the CCI
Asset Purchase Agreement corresponding to Sections 9.4 or 9.5.
"Seller Liabilities" shall mean all Liabilities of the Transfer Group
which are not Assumed Liabilities or Liabilities assumed by the CCI Designees
and their respective affiliates under the CCI Asset Purchase Agreement,
including, without limitation, Liabilities (i) related to the general corporate
administration of any member of the Transfer Group or (ii) associated with
closing the corporate offices of the Acquired Companies.
"SPA Termination Net Proceeds" shall mean the amount received by
Seller from the Current Owners under the Stock Purchase Agreement (together with
interest (if any) actually earned thereon, but less any expenses already
----
incurred in accordance with Section 6.8(a) and the section of the CCI Asset
Purchase Agreement corresponding to Section 6.8(a).
"Transfer Group" shall mean Seller and the Acquired Companies.
"Water Rights" shall mean all water rights relating to the use,
operation or maintenance of any Acquired Property that any member of the
Transfer Group possesses in accordance with this Agreement.
1.2. Reference to Stock Purchase Agreement. The following terms
-------------------------------------
shall have the meanings ascribed thereto in the sections of the Stock Purchase
Agreement set forth below and shall be interpreted as provided in Section 10.3
of the Stock Purchase Agreement.
Term Section
---- -------
Acquired Companies Employees 5.1(a)
Allocated Value 4.13
Benefit Plans 2.9
Closing Adjustment 1.3(b)
Closing Balance Sheet 1.3(b)
Closing Date 1.4
Environmental Laws 2.14
8
Term Section
---- -------
Governmental Authority 2.6(a)
Holdback Property 4.13
Holdback Property Closing Date 4.13
Indemnification Cut-Off Date 8.2(a)
Indemnified Disputes 8.2(a)
Law 2.15
Losses 10.2(d)
Maximum Amount 8.2(b)
Severance Arrangements 2.5(d)
Shareholder Action 8.2(a)
Threshold Amount 8.2(b)
1.3. Other Defined Terms. The following terms shall have the
--------------------
meanings defined for such terms in the Sections of this Agreement set forth
below:
Term Section
---- -------
AAA 10.6
Acquired Companies Recital C
Acquired Company Assets Recital C
AGC Preamble
AGC Closing Adjustment 3.3(b)
AGC Deposits 3.1
AGC Indemnified Party 9.3(a)
AGC Purchase Price 3.2(b)
Agreement Preamble
Asset Closing Adjustments 3.3(b)
Buyers' Advisors 6.5
Break-Up Fee Guidance 8.2(i)
CCI Recital A
CCI Asset Purchase Agreement Recital E
Closing 4.1
Confidants 10.3
Confidential Information 10.3
Current Owners Recital A
Deposits 3.1
Derivative Works 10.3
Entitled Party 10.3
Excluded Liabilities 2.3
NGOP Preamble
NGOP Base Amount 8.2(i)
NGOP Closing Adjustment 3.3(b)
NGOP Deposits 3.1
9
Term Section
---- -------
NGOP Indemnified Party 9.2 (a)
NGOP Purchase Price 3.2(a)
NGP Preamble
Obligated Party 10.3
Operating Agreement Recital A
Owner 10.3
Qualifying Income 8.2(i)
REIT Limit 8.2(i)
REIT Requirements 8.2(i)
Rules 10.6(a)
Seller Preamble
Seller Indemnified Party 9.4(a)
Side Letters 3.4(c)
Stock Purchase Agreement Recital A
WARN 6.6(a)
ARTICLE II.
SALE AND TRANSFER OF ASSETS; CLOSING
2.1. Sale of Assets to the Buyers. Upon the terms and subject to the
----------------------------
conditions of this Agreement, at the Closing, Seller shall cause the Acquired
Companies to (i) sell, convey, transfer, assign and deliver to NGOP the NGOP
Acquired Assets and (ii) sell, convey, transfer, assign and deliver to AGC the
AGC Acquired Assets.
2.2. Assumption of Liabilities by the Buyers. Upon the terms and
---------------------------------------
subject to the conditions of this Agreement, (i) upon the Property Closing Date
with respect to each NGOP Acquired Property, NGOP shall assume all NGOP Assumed
Liabilities accruing from, arising out of or relating to such NGOP Acquired
Property; and (ii) upon the Property Closing Date with respect to each AGC
Acquired Property, AGC shall assume all AGC Assumed Liabilities accruing from,
arising out of or relating to such AGC Acquired Property; provided, that, in
each case, each of the Buyers shall comply with Section 3.4(d) of this
Agreement.
2.3. Excluded Liabilities. Notwithstanding any other provision of
--------------------
this Agreement, except for the NGOP Assumed Liabilities and the AGC Assumed
Liabilities expressly specified in Section 2.2, neither NGOP nor AGC,
respectively, shall assume, or otherwise be responsible for, any Liabilities of
Seller or the Acquired Companies, whether liquidated or unliquidated, or known
or unknown, whether arising out of any event, occurrence or circumstances
occurring or existing prior to, at or after the date hereof, including without
limitation, the Seller Liabilities and the liabilities assumed by the CCI
Designees under the CCI Asset Purchase Agreement ("Excluded Liabilities").
--------------------
10
ARTICLE III
DEPOSITS; PURCHASE PRICE; ADJUSTMENT
------------------------------------
3.1. Deposits. NGOP has made deposits with Seller toward the NGOP
--------
Purchase Price in the Aggregate amount of $18,256,000 (the "NGOP Deposits"). AGC
-------------
has made deposits with Seller toward the AGC Purchase Price in the aggregate
amount of $544,000 (the "AGC Deposits" and, together with the NGOP Deposits, the
------------
"Deposits"). AGC has assigned to NGOP certain rights and obligations to be set
--------
forth in this Agreement with respect to NGOP, including the right to the use and
benefit of $18,256,000 of the deposit previously made by AGC with Seller. Such
portion of such deposit shall be considered to be a portion of the NGOP Deposit
hereunder. The remaining portion of such deposit shall be considered to be a
portion of the AGC Deposit.
3.2. Purchase Price.
--------------
(a) NGOP Purchase Price. Subject to the adjustments determined
-------------------
pursuant to Sections 3.3 and 3.4, the purchase price (the "NGOP Purchase Price")
-------------------
for the sale, conveyance, transfer, assignment and delivery of the NGOP Acquired
Assets will be equal to $178,504,352.
(b) AGC Purchase Price. Subject to the adjustments determined
------------------
pursuant to Sections 3.3 and 3.4, the purchase price (the "AGC Purchase Price")
------------------
for the sale, conveyance, transfer, assignment and delivery of the AGC Acquired
Assets will be equal to $2,913,202.
(c) Purchase Price Allocation. The purchase price shall be allocated
-------------------------
among the Acquired Properties in accordance with an allocation schedule as
Seller and each Buyer may mutually agree. In the event Seller and each Buyer
cannot agree on an allocation schedule within seventy (70) days after the
Closing Date, then the purchase price shall, to the greatest extent possible, be
allocated in accordance with Section 1.6 of the Stock Purchase Agreement. Such
allocation shall be binding upon Seller and each Buyer for all purposes
(including financial accounting, financial, regulatory reporting and tax
purposes except to the extent that the Buyers' and Seller's independent public
accountants mutually agree that such allocation would be inappropriate for
financial accounting, financial and/or regulatory reporting purposes). Each
Buyer and Seller agree to each prepare and file on a timely basis with the
Internal Revenue Service substantially identical initial and supplemental
Internal Revenue Service Forms 8594 "Asset Acquisition Statements Under Section
1060" consistent with such allocation.
3.3. Purchase Price Adjustment for Stock Purchase Closing Adjustment
---------------------------------------------------------------
Amount.
------
(a) Coordination of Closing Adjustment. As soon as possible after
----------------------------------
receipt thereof, Seller will cause to be delivered to the Buyers the Closing
Balance Sheet and all other documents available to Seller in connection with the
Closing Adjustment.
(b) Purchase Price Adjustments for Stock Purchase Adjustment Amount.
---------------------------------------------------------------
Upon the date on which the Closing Adjustment is conclusively resolved pursuant
to Section 1.3 of the Stock Purchase Agreement, a calculation shall be made of
the net working capital, based on the items and methodology set forth in the
definition of "Closing Adjustment" in Section
11
1.3(b) of the Stock Purchase Agreement, with respect to (i) NGOP Acquired Assets
and NGOP Assumed Liabilities (the "NGOP Closing Adjustment") and (ii) AGC
-----------------------
Acquired Assets and AGC Assumed Liabilities (the "AGC Closing Adjustment" and,
----------------------
together with the NGOP Closing Adjustment, the "Asset Closing Adjustments");
-------------------------
provided that, for purposes of such calculations, the $5,278,000 cash floor
shall be allocated to NGOP and AGC according to NGOP's Percentage and AGC's
Percentage, respectively (with the remaining amount of such cash floor to be
retained by Seller and then allocated by Seller to the CCI Designees in
accordance with the terms of the CCI Asset Purchase Agreement). The amount of
the Asset Closing Adjustments as finally determined shall be settled in cash
within five (5) business days after final determination of the Closing
Adjustment. If an Asset Closing Adjustment is a positive number, the relevant
Buyer shall promptly pay to Seller by wire transfer of immediately available
funds in the amount of such Asset Closing Adjustment to a bank account or
accounts designated by Seller and the amount of such Buyer's purchase price
under Section 3.1 shall be increased by the amount of such Asset Closing
Adjustment. If an Asset Closing Adjustment is a negative number, then Seller
shall promptly pay to the relevant Buyer by wire transfer of immediately
available funds the amount of such Asset Closing Adjustment to a bank account or
accounts designated by such Buyer and the amount of such Buyer's purchase price
under Section 3.1 shall be reduced by the amount of such Asset Closing
Adjustment. Notwithstanding the foregoing, if a Closing Adjustment is to be paid
to Seller under Section 1.3 of the Stock Purchase Agreement, all payments
required under this Section 3.3(b) shall be delayed until the date upon which
such positive Closing Adjustment is actually paid to Seller by the Current
Owners under Section 1.3 of the Stock Purchase Agreement.
(c) Other Purchase Price Adjustments. In the event the parties to the
--------------------------------
Stock Purchase Agreement enter into any side letter agreements or other
arrangements ("Side Letters") regarding the final determination of the "Purchase
------------
Price" under the Stock Purchase Agreement, the Buyers and Seller shall enter
into substantively similar Side Letters. The parties acknowledge and agree
that, for purposes of any such Side Letters between Buyers and Seller, any
adjustments to the "Purchase Price" under the Stock Purchase Agreement shall be
allocated to the Acquired Property(ies) to which such adjustments relate.
3.4. Purchase Price Adjustment for Holdback Assets and Other Acquired
----------------------------------------------------------------
Assets that are not Initially Conveyed to the Buyers.
----------------------------------------------------
(a) If any Acquired Property is designated a Holdback Property
pursuant to the provisions of Section 4.13 of the Stock Purchase Agreement then
Seller shall have the right to hold back the conveyance of such Holdback
Property hereunder until the Holdback Property Closing Date with respect to such
Holdback Property.
(b) With respect to each Holdback Property, Seller and each Buyer,
respectively, shall remain fully obligated to purchase and sell (i) such
Holdback Properties and (ii) all other Acquired Assets relating to the Holdback
Properties on the terms and conditions set forth in this Agreement; provided
that (i) the Purchase Price payable on the Closing Date pursuant to Section 3.2
above applicable to all other Acquired Assets shall be (x) reduced by the
Allocated Value of the Holdback Property or Holdback Properties.
(c) With respect to the Holdback Properties, (i) an amount equal to
four
12
percent (4%) of the Allocated Value of each Holdback Property shall be retained
by Seller as a continuing deposit subject to disposition, as liquidated damages,
in accordance with Article VIII as to such Holdback Property; and (ii) the
Closing Date with respect to the Holdback Properties shall be the Holdback
Property Closing Date. It is the intention of the parties hereunder that: (i)
the Holdback Property Closing Date shall be deemed to be the Closing Date with
respect to the Holdback Properties under this Agreement; (ii) that on the
Holdback Property Closing Date the Holdback Properties shall be conveyed to the
applicable Buyer hereunder in exchange for the Allocated Value for each Holdback
Property, and (iii) with respect to the Holdback Properties, the date of March
31, 1999 as set forth in Section 9.1(b) of the Stock Purchase Agreement shall be
deemed to be September 30, 1999, time being of the essence with respect to such
dates.
(d) With respect to each Holdback Property for which the Current
Owners and Seller enter into a management or other arrangement described in the
last paragraph of Section 4.13 of the Stock Purchase Agreement and any other
Acquired Asset which is not conveyed to the appropriate Buyer on the Closing
Date (including without limitation Acquired Assets which are not conveyed to the
appropriate Buyer on the Closing Date because (i) they relate to more than one
Acquired Property or (ii) such conveyance requires a third party consent which
has not yet been obtained), Seller and the appropriate Buyer shall enter into an
arrangement hereunder (if such arrangement can be entered into and performed
without violating the provisions of any law or agreement or any contract
relating to the applicable Holdback Property or other Acquired Asset that is not
conveyed to the appropriate Buyer on the Closing Date) to transfer all of the
net economic benefits and burdens of such Holdback Property or Acquired Asset
(including control of such Holdback Property or Acquired Asset) to the
appropriate Buyer as if such Holdback Property or the relevant part of such
Acquired Asset comprising part of Buyer's Acquired Assets had been transferred
to such Buyer on the Closing Date; provided, that, as provided in Section 9.7,
from and after the Closing Date, such Buyer shall be responsible for Assumed
Liabilities relating to such Holdback Property or Acquired Asset, irrespective
of when or whether such Holdback Properties or Acquired Assets are actually
conveyed to such Buyer; and provided, further, that NGOP shall not be required
to enter into any agreement which could, in NGP's reasonable determination,
adversely affect NGP's tax status as a real estate investment trust.
(e) With respect to each Holdback Property, on the business day prior
to the Holdback Property Closing Date for such Holdback Property, the relevant
Buyer shall make a deposit of immediately available funds in the amount of the
Allocated Value for such Holdback Property with the Seller.
3.5. Purchase Price Determinations. Seller and each Buyer shall work
-----------------------------
in good faith to arrive at a final determination of the Purchase Price pursuant
to Sections 3.2 through 3.4. Time shall be of the essence in such
determinations.
ARTICLE IV
CLOSING
-------
4.1. Closing. The purchase and sale (the "Closing") provided for in
------- -------
this Agreement will take place at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Closing Date concurrently
with the closing under Section 1.4 of the Stock Purchase Agreement. Subject to
Sections 3.4 and 6.7, the parties shall endeavor
13
to consummate all of the Contemplated Transactions on such date or as soon as
practicable thereafter. Failure to consummate the Contemplated Transactions on
the date and time and at the place determined pursuant to this Section 4.1 will
not result in the termination of this Agreement and will not relieve any party
of any obligation under this Agreement. Notwithstanding the foregoing, the
relevant Buyer hereunder can require Seller to consummate the sale of any
particular Acquired Asset despite the absence of any required Consent to such
sale. In such event, such Buyer shall indemnify Seller on commercially
reasonable terms for any Losses which it might incur as a result of such sale.
4.2. Closing Costs; Transfer Taxes and Fees. NGOP shall be
--------------------------------------
responsible for any documentary, transfer, sales, use or other taxes, any
deficiency, interest or penalty asserted with respect thereto and any fees and
costs of recording or filing all applicable conveyancing instruments described
in Section 4.3(b) imposed by reason of the transfers of the NGOP Acquired Assets
hereunder, the costs of applying for new Permits and obtaining the transfer of
existing Permits which may be lawfully transferred relating thereto and the
costs of purchasing title insurance policies, updated surveys and environmental
site assessments for the NGOP Acquired Assets, if any. AGC shall be responsible
for any documentary, transfer, sales, use or other taxes, any deficiency,
interest or penalty asserted with respect thereto and any fees and costs of
recording or filing all applicable conveyancing instruments described in Section
4.3(b) imposed by reason of the transfers of the AGC Acquired Assets hereunder,
the costs of applying for new Permits and obtaining the transfer of existing
Permits which may be lawfully transferred relating thereto and the costs of
purchasing environmental site assessments for the AGC Acquired Assets, if any.
4.3. Conveyances at Closing.
-----------------------
(a) Payment of Purchase Price. Subject to Section 3.4, at the Closing
-------------------------
(i) NGOP will deliver to Seller the NGOP Purchase Price less the NGOP Deposits
----
and (ii) AGC will deliver to Seller the AGC Purchase Price less the AGC
----
Deposits. All payments under this Section 4.3(a) shall be made by wire transfer
of immediately available funds to an account or accounts designated by Seller.
(b) Instruments and Possession. Subject to Sections 3.4 and 6.7, to
--------------------------
effect the sale and transfer referred to in Section 2.1 hereof, Seller will
cause the appropriate member or members of the Transfer Group to, at the
Closing, execute and deliver to the Buyers:
(i) Deeds, in form reasonably acceptable to NGOP, conveying, in
the aggregate, all of the real property owned by any member of the Transfer
Group that is included in the Acquired Assets;
(ii) General Assignment and Bills of Sale, in the form attached
hereto as Exhibit A and Exhibit B, conveying in the aggregate to NGOP and
--------- ---------
AGC, respectively, all of the tangible and intangible personal property
owned by any member of the Transfer Group that is included in the Acquired
Assets;
(iii) Assignments of Lease in the form attached hereto as
Exhibit C with respect to the Leases owned by any member of the Transfer
---------
Group that are included
14
in the Acquired Assets with any changes required to comply with the local
law of the jurisdiction where the conveyed leasehold is located;
(iv) Assignments of Water Rights, in the form attached hereto as
Exhibit D, conveying in the aggregate all of the Acquired Companies' water
---------
rights directly or indirectly owned or held by any member of the Transfer
Group that are included in the Acquired Assets; and
(v) such other instruments as may reasonably be requested by the
Buyers to vest in the Buyers title in and to the Acquired Assets in
accordance with the provisions hereof.
(c) Assumption Documents. At the Closing, subject to Section 3.4(d),
--------------------
NGOP shall execute and deliver to Seller an Assumption Document in the form of
Exhibit E, with respect to the NGOP Assumed Liabilities and AGC shall execute
---------
and deliver to Seller an Assumption Document in the form of Exhibit F, with
---------
respect to the AGC Assumed Liabilities.
(d) AGC Leases. At the Closing, subject to Sections 3.4 and 6.7, AGC
----------
and NGOP shall execute and deliver to each other the AGC Leases with respect to
each of the NGOP Properties.
(e) Permits and Consents. At the Closing, subject to Sections 3.4 and
--------------------
6.7, Seller shall cause the appropriate members of the Transfer Group to deliver
the appropriate Buyer all Permits and any other third party consents and
estoppels required for the valid transfer of the Acquired Assets and the
assumption of the Assumed Liabilities as contemplated by this Agreement.
(f) Blackstone Water Rights Agreement. At the Closing, subject to
---------------------------------
Sections 3.4 and 6.7, NGOP and AGC shall execute and deliver the Blackstone
Water Rights Agreement in the form of Exhibit G to the designee of CCI as CCI
---------
shall notify NGOP hereunder.
(g) Cobblestone Trademark Assignment. At the Closing, subject to
--------------------------------
Sections 3.4 and 6.7, Seller shall cause the appropriate members of the Transfer
Group to execute and deliver to AGC the Cobblestone Trademark Assignment in the
form of Exhibit H.
---------
(h) Cobblestone Trademark License. Immediately after the Closing,
-----------------------------
subject to Sections 3.4 and 6.7, AGC shall execute and deliver the Cobblestone
Trademark License in the form of Exhibit I to the parties set forth therein
---------
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER AND BUYERS
---------------------------------------------------
5.1. Representations and Warranties of Seller. Seller represents and
----------------------------------------
warrants to each Buyer and NGP as follows.
(a) Representations and Warranties from the Stock Purchase Agreement:
----------------------------------------------------------------
Each of the Current Owners' representations and warranties contained in Article
II of the Stock Purchase Agreement is true, correct and complete, as of the date
it was made, subject only to the
15
exceptions thereto contained in the disclosure schedules attached to the Stock
Purchase Agreement.
(b) Organization and Good Standing. Seller is a limited liability
------------------------------
company, duly formed, validly existing and in good standing under the laws of
the State of Delaware, with organizational power and authority to conduct its
business as it is now being conducted, to own or use the properties and assets
that it purports to own or use and to perform all its obligations under this
Agreement, each Concurrent Agreement, the Stock Purchase Agreement and each
other agreement entered into in connection therewith to which it is a party.
(c) Authority; No Conflict. This Agreement constitutes the legal,
----------------------
valid and binding obligation of Seller, enforceable against Seller in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general equitable principles. Upon the execution and
delivery by Seller of the Concurrent Agreements to which it is a party, such
Concurrent Agreements will constitute the legal, valid and binding obligations
of Seller, enforceable against Seller in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
or by general equitable principles. Seller has the right, power and authority to
execute and deliver this Agreement and the Concurrent Agreements to which it is
a party and to perform its respective obligations under this Agreement and such
Concurrent Agreements. The execution, delivery and performance of this Agreement
and the Concurrent Agreements to which Seller is a party have been duly and
validly authorized by all necessary action of Seller.
(d) Brokers or Finders. Except as set forth on Schedule 5.1(d),
------------------
neither Seller nor any agent thereof has incurred any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement or the Contemplated
Transactions
5.2. Representations and Warranties of the Buyers. Each Buyer
--------------------------------------------
severally, but not jointly, represents and warrants to Seller as follows:
(a) Organization and Good Standing. Buyer is the type of business
------------------------------
organization set forth in the Preamble to this Agreement, duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, with full organizational power and authority to conduct its
business as it is now being conducted, to own or use the properties and assets
that it purports to own or use and to perform all its obligations under each
Contract to which it is a party.
(b) Authority; No Conflict. This Agreement constitutes the legal,
----------------------
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general equitable principles. Upon the execution and
delivery by Buyer of the Concurrent Agreements to which it is a party, such
Concurrent Agreements will constitute the legal, valid and binding obligations
of Buyer, enforceable against Buyer in accordance with their respective terms
except as such enforceability
16
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally or by general equitable principles.
Buyer has the right, power and authority to execute and deliver this Agreement
and the Concurrent Agreements to which it is a party and to perform its
respective obligations under this Agreement and such Concurrent Agreements. The
execution, delivery and performance of this Agreement and the Concurrent
Agreements to which Buyer is a party have been duly and validly authorized by
all necessary action (corporate or other) of Buyer.
(c) Brokers or Finders. Except as set forth on Schedule 5.2(c),
------------------
neither Buyer nor any agent thereof has incurred any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement or the Contemplated
Transactions.
ARTICLE VI
COVENANTS OF SELLER AND BUYERS
------------------------------
6.1. Covenants of Seller. Seller hereby covenants that the Current
-------------------
Owners will perform all of their covenants contained in the Stock Purchase
Agreement at the times and in the manners specified therein and subject to the
limitations thereof.
6.2. Stock Purchase Agreement; Amendments; Waivers and Consents.
----------------------------------------------------------
Seller shall be bound by and shall fully comply with the terms of the Stock
Purchase Agreement. Seller shall not without the prior written consent of each
Buyer do any of the following, in each case, to the extent such action would
affect, in any manner, the Acquired Assets or the Assumed Liabilities acquired
or assumed by such Buyer hereunder:
(a) assign, pledge or otherwise encumber any of its right, title or
interest under, in or to the Stock Purchase Agreement to anyone other than the
Buyers and their respective successors, assigns and designees hereunder and the
CCI Designees and their respective successors, assigns and designees under the
CCI Asset Purchase Agreement;
(b) take or omit to take any action, the taking or omission of which
would result in an alteration or impairment of the effect of any of the
representations, warranties, covenants, indemnities or other provisions of the
Stock Purchase Agreement;
(c) enter into any agreement amending or supplementing the Stock
Purchase Agreement in any material respect;
(d) grant any consents, waivers (including without limitation any
waivers of any closing conditions) or approvals under the Stock Purchase
Agreement; or
(e) make any decision as to whether to exercise the right of Seller to
terminate the Stock Purchase Agreement; provided that if Seller has the right to
terminate the Stock Purchase Agreement pursuant to Section 9.1(d) or 9.1(e)
thereof, Seller shall do so unless (i) each Buyer agrees otherwise or (ii) (A)
Seller pays to NGOP an amount equal to (w) the NGOP Deposits less NGOPs'
----
Percentage of all expenses incurred by Seller as of the date of such payment in
accordance with Section 6.8 hereof plus (x) interest on the amount determined
----
under
17
clause (w) at an interest rate equal to the rate at which interest is earned on
the deposit made pursuant to Section 1.2 of the Stock Purchase Agreement; and
(B) Seller pays to AGC an amount equal to (y) the AGC Deposits less AGC's
----
Percentage of all expenses incurred by Seller as of the date of such payment in
accordance with Section 6.8 hereof plus (z) interest owned on the amount
----
determined under clause (y) at an interest rate equal to the rate at which
interest is earned on the deposit made pursuant to Section 1.2 of the Stock
Purchase Agreement.
6.3. Negative Covenant. Except as otherwise expressly permitted by
-----------------
this Agreement, between the date of this Agreement and the final Property
Closing Date, Seller will not without the prior written consent of each Buyer,
take any affirmative action, or fail to take any reasonable action within its
control, a result of which there would be an adverse effect on the Acquired
Assets or the Assumed Liabilities acquired or assumed by such Buyer hereunder.
6.4. Notification. Between the date of this Agreement and the final
------------
Property Closing Date, Seller will promptly notify each Buyer in writing if
Seller becomes aware of any fact or condition that causes or constitutes a
Breach of any of the representations and warranties contained in this Agreement.
During the same period, Seller will promptly notify Buyer of the occurrence of
any Breach of any covenant contained in this Agreement or the CCI Asset Purchase
Agreement or of the occurrence of any event that may make the satisfaction of
the conditions in this Agreement or the CCI Asset Purchase Agreement impossible
or unlikely. No notice given pursuant to this Section 6.4 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances in which
they were made, not misleading. Seller will deliver to each Buyer a copy of each
demand, notice, communication or document of a material nature delivered to or
sent by it in any way relating to this Agreement, the CCI Asset Purchase
Agreement or the Stock Purchase Agreement and will keep each Buyer informed of
all material circumstances known to it bearing upon the representations,
warranties, covenants and indemnities or other provisions of the Stock Purchase
Agreement.
6.5. Access and Investigation. Between the date of this Agreement
------------------------
and the final Property Closing Date, Seller, to the fullest extent permitted
under the Stock Purchase Agreement, and will cause its Representatives and
Representatives of the Acquired Companies to, (a) afford each Buyer and their
respective Representatives, lenders and other potential financing sources and
their respective Representatives (collectively, "Buyers' Advisors") full access
----------------
to the Acquired Companies' personnel, properties, contracts, books and records
and other documents and data, (b) furnish the Buyers and the Buyers' Advisors
with copies of all such contracts, books and records, and other existing
documents and data as the Buyers may reasonably request, and (c) furnish the
Buyers and the Buyers' Advisors with such additional financial, operating and
other data and information as either Buyer may reasonably request.
6.6. Employee Matters.
----------------
(a) AGC shall ensure that each Acquired Property Employee who remains
an Acquired Property Employee as of the Property Closing Date with respect to
the Acquired Property at which such Acquired Property Employee is employed will
remain employed in a comparable position on and immediately after the Property
Closing Date with respect to the Acquired Property at which such Acquired
Property Employee is employed for such period of
18
time as determined by AGC, at not less than the same base rate of pay, except as
otherwise provided in this Section 6.6. Notwithstanding the foregoing, AGC shall
not, at any time prior to 60 days after the Closing Date, effectuate a "plant
closing" or "mass layoff" as those terms are defined in the Worker Adjustment
and Retraining Notification Act of 1988 ("WARN"), or comparable conduct under
----
any applicable state law, affecting in whole or in part any facility, site of
employment, operating unit or employee of the Acquired Property without
complying fully with the requirements of WARN.
(b) To the extent permissible under applicable law and to the extent
that service is relevant for purposes of eligibility and vesting under any
employee benefit plan, program or arrangement established or maintained by AGC
(other than any defined benefit pension plan) following the Property Closing
Date with respect to each Acquired Property, for the benefit of Acquired
Property Employees employed at such Acquired Property as of the relevant
Property Closing Date at such time as any employee benefit plan, program or
arrangement is made available to such Acquired Property Employees, such plan,
program or arrangement shall credit such employees for service on or prior to
such Property Closing Date that was recognized by the Current Owners or the
Acquired Companies, as the case may be, for purposes of employee benefit plans,
programs or arrangements (including vacation policies) maintained by any of
them. In addition, with respect to any welfare benefit plan (as defined in
Section 3(1) of ERISA) established or maintained by AGC following such Property
Closing Date, for the benefit of Acquired Property Employees at such Acquired
Property, to the extent permissible under applicable law, such plan shall waive
any pre-existing condition exclusions and provide that any covered expenses
incurred during the 1999 plan year on or before such Property Closing Date by
such an Acquired Property Employee or by a covered dependent shall be taken into
account for purposes of satisfying applicable deductible coinsurance and maximum
out-of-pocket provisions after such Property Closing Date.
(c) AGC agrees that it will make COBRA continuation coverage available
to each Acquired Property Employee who is a COBRA qualified beneficiary under
the Benefit Plans immediately prior to the Property Closing Date with respect to
the Acquired Property at which such Acquired Property Employee is employed.
(d) For a period of one year following the Closing Date, AGC shall
provide each Acquired Property Employee that remains an Acquired Property
Employee as of the Property Closing Date with respect to the Acquired Property
at which such Acquired Property Employee is employed with benefits that either
are (i) substantially comparable, in the aggregate, to the benefits provided
under the Benefit Plans as in effect immediately prior to the Closing Date or
(ii) the same as the benefits generally made available to a majority of AGC's
similarly situated employees.
(e) From and after the Property Closing Date with respect to the
Acquired Property at which such Acquired Property Employee is employed, AGC will
honor in accordance with their terms all of the severance payments pursuant to
Severance Arrangements between any of the Acquired Companies and the Acquired
Property Employees at such Acquired Property in effect as of February 10, 1999
and listed on Schedule 2.12(a) of the Stock Purchase Agreement as such Severance
Arrangements relate to such Acquired Property Employees.
19
(f) Anything in this Agreement to the contrary notwithstanding, (i)
AGC hereby agrees to indemnify Seller and its Affiliates against and hold Seller
and its Affiliates harmless from any and all Losses arising out of or otherwise
in respect of any of the following: (a) any claim made by any Acquired Property
Employee against Seller or any of its Affiliates for any severance or
termination benefits pursuant to the provisions of the Severance Arrangements or
any applicable federal or state law arising after the Closing Date, (b) any
action taken after the Closing Date by AGC with respect to any plan (including
any Benefit Plan), (c) any claim for payments or benefits by Acquired Property
Employees or their beneficiaries under any Benefit Plan, (d) any liability of
Seller relating to an Acquired Property Employee that would have been a
liability of AGC under this Section 6.6 but for the fact that the Acquired
Property at which such Acquired Property Employee is employed was conveyed to
the applicable Buyer after the Closing Date and (e) any failure of AGC to
discharge its obligations under this Section 6.6, but excluding from clauses
(a), (b), (c), (d) and (e) all Seller Liabilities and Liabilities assumed by the
CCI Designees and their affiliates under the CCI Asset Purchase Agreement, and
(ii) Seller agrees to indemnify the Buyers and their respective Affiliates
against and hold the Buyers and their respective Affiliates harmless from any
and all Losses arising out of or otherwise in respect of any claim made by any
Acquired Companies Employee against either Buyer or any of their respective
Affiliates for (x) any Retention Bonuses and (y) any other employee benefit
obligation of the Acquired Companies to the Acquired Companies Employees not
expressly to be undertaken by AGC pursuant to this Section 6.6, without regard
to the Threshold Amount or the Maximum Amount; provided, however, that the
procedural requirements of Sections 9.2 through 9.5 shall apply to Seller's and
AGC's indemnification obligations under this Section 6.6(f).
(g) Notwithstanding anything else contained herein to the contrary,
nothing in this Section 6.6 shall be construed to create any third party
beneficiary rights in any person who is not a party to this Agreement.
6.7. Consents and Best Efforts. The relevant Buyer hereunder will
-------------------------
and will cause each of its Affiliates to, as soon as practicable, commence to
take all action required to obtain all Permits, consents, approvals and
agreements of, and to give all notices and make all other filings with, any
third parties, including Governmental Authorities, necessary to authorize,
approve or permit the full and complete sale, conveyance, assignment or transfer
of the NGOP Acquired Assets or the AGC Acquired Assets, as applicable. In
addition, subject to the terms and conditions herein provided, each of the
parties hereto covenants and agrees to (i) use its Best Efforts to take, or
cause to be taken, all action or do, or cause to be done, all things necessary,
proper or advisable under Legal Requirements to consummate and make effective
the Contemplated Transactions and to cause the fulfillment of the parties'
obligations hereunder; (ii) to execute any documents, instruments or conveyances
of any kind which may be reasonably necessary or advisable to carry out the
Contemplated Transactions; and (iii) to cooperate with each other in connection
with the foregoing.
6.8. Payment of Expenses.
-------------------
(a) Except as otherwise expressly provided in this Agreement, the
Purchaser Deposits shall be used for payment of all reasonable, out-of-pocket
costs and expenses (including attorney's fees and fees and expenses of
investment bankers, with the agreement that the
20
aggregate fees paid to the investment bankers will be no more than $3,800,000
and no individual investment banker will earn more than $2,100,000) incurred by
Seller, Buyers, CCI and the CCI Designees with respect to the Contemplated
Transactions and the transactions contemplated under the CCI Asset Purchase
Agreement and the Stock Purchase Agreement.
(b) Notwithstanding the foregoing, Seller shall not be responsible for
costs for which the Buyers are responsible under Section 4.2 and for which the
CCI Designees are responsible under the section of the CCI Asset Purchase
Agreement corresponding to Section 4.2 and any costs and expenses related to
financing by either Buyer or any CCI Designee with respect to the Contemplated
Transactions and the transactions contemplated under the CCI Asset Purchase
Agreement, fees and expenses related to organizational matters (including tax
advice) with respect to the specific parties, and fees and expenses related to
the negotiation and preparation of this Agreement, the CCI Asset Purchase
Agreement, the Bid Agreement, the Operating Agreement and any other agreements
(other than the Stock Purchase Agreement) entered into hereunder; provided,
however, Seller shall be responsible for the fees, costs and expenses incurred
with respect to the conversion and/or merger of certain members of the Transfer
Group into or with limited liability companies being conducted in conjunction
with the transactions contemplated by the Stock Purchase Agreement.
6.9. Grant of Liens. If a Buyer reasonably believes at any time
--------------
after the date hereof that any of its respective Acquired Assets will not be
conveyed to such Buyer on or prior to the 20th day after the Closing Date as a
result of the failure of the parties to obtain any necessary consent to or
approval of such conveyance then Seller shall, upon the request of such Buyer,
▇▇▇▇▇ ▇ ▇▇▇▇ to such Buyer on such Acquired Assets. Such lien shall be in a form
which is reasonably acceptable to such Buyer and Seller and is in conformance
with applicable local laws and customs.
6.10. Nonsolicitation. For a period of one year following the
---------------
Closing Date, neither Buyer nor any of their respective Affiliates shall solicit
or hire any employee of the Acquired Companies who are employed by the Acquired
Companies on the day prior to the Closing Date other than Acquired Property
Employees.
ARTICLE VII.
CONDITIONS PRECEDENT TO SELLER'S AND BUYERS' OBLIGATIONS TO CLOSE
-----------------------------------------------------------------
7.1. Conditions Precedent to Seller's Obligation to Close. Seller's
----------------------------------------------------
obligation to sell the Acquired Assets and to take the other actions required to
be taken by Seller at the Closing is subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any of which may be waived by
Seller, in whole or in part):
(a) Satisfaction or Waiver of Conditions Precedent in Stock Purchase
----------------------------------------------------------------
Agreement. All of the conditions precedent set forth in Article VII of the
---------
Stock Purchase Agreement shall have been satisfied or waived and the parties
thereunder shall then be obligated and prepared to effect the closing thereunder
with no further conditions.
21
(b) Buyers' Performance. All of the covenants and obligations that
-------------------
the Buyers are required to perform or to comply with pursuant to this Agreement
at or prior to the Closing (considered collectively), and each of these
covenants and obligations (considered individually), must have been performed
and complied with in all material respects.
(c) Performance of Purchase Deposit Obligations. Notwithstanding any
-------------------------------------------
contrary provision herein, each Buyer shall have strictly and timely complied
with its obligations under Section 3.1 of this Agreement.
7.2. Conditions Precedent to the Buyers' Obligation to Close. The
-------------------------------------------------------
Buyers' obligation to purchase the Acquired Assets, assume the Assumed
Liabilities and to take the other actions required to be taken by the Buyers at
the Closing is subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by each Buyer, in whole
or in part, in such Buyer's sole discretion):
(a) Satisfaction or Waiver of Conditions Precedent in Stock Purchase
----------------------------------------------------------------
Agreement. All of the conditions precedent set forth in Article VII of the
---------
Stock Purchase Agreement shall have been satisfied or waived.
(b) Seller's Performance. All of the covenants and obligations that
--------------------
Seller is required to perform or to comply with pursuant to Sections 6.2 and 6.3
at or prior to the Closing (considered collectively), and each of these
covenants and obligations (considered individually), must have been duly
performed and complied with in all material respects.
ARTICLE VIII
TERMINATION; DEPOSIT; LIQUIDATED DAMAGES
----------------------------------------
8.1. Termination. This Agreement shall terminate as follows:
-----------
(a) Immediately upon any termination of the Stock Purchase Agreement,
without any action of the parties hereto; or
(b) Immediately upon any material breach by either Buyer of any of its
obligations under this Agreement without any action of the parties hereto.
8.2. Effect of Termination; Deposit; Liquidated Damages.
--------------------------------------------------
(a) Limitation on Liability. In the event of termination of this
-----------------------
Agreement as provided in Section 8.1, this Agreement shall forthwith become void
and there shall be no liability on the part of any party hereto except as set
forth in Articles VIII, IX and X; provided, however, that nothing herein shall
relieve any party from liability for any willful breach hereof.
(b) Termination of SPA by Current Owners or by Seller; No APA Buyer
---------------------------------------------------------------
Default and No CCI APA CCI Designee Default; No Joint APA Buyer Default and CCI
-------------------------------------------------------------------------------
APA CCI Designee Default. In the event that (i) the Stock Purchase Agreement is
------------------------
terminated by the Current Owners or Seller in accordance with the provisions
thereof and (ii) (a) neither Buyer has materially breached any of its
obligations under this Agreement and no CCI Designee has materially breached any
of its obligations under the CCI Asset Purchase Agreement, or (b) both a
22
Buyer and a CCI Designee have each materially breached their respective
obligations under this Agreement or the CCI Asset Purchase Agreement, as the
case may be, the Buyers and the CCI Designees shall be entitled to receive the
SPA Termination Net Proceeds and the Net Purchaser Deposits, and such amounts,
if any, shall be delivered by Seller to such parties in accordance with their
respective Deposit Percentages.
(c) Termination of SPA; APA Buyer Default or CCI APA Designee Default.
-----------------------------------------------------------------
In the event that (i) the Stock Purchase Agreement is terminated by the Current
Owners in accordance with the provisions thereof and (ii) a Buyer has materially
breached its obligations under this Agreement or a CCI Designee has materially
breached its obligations under the CCI Asset Purchase, such breaching party(ies)
shall not be entitled to any part of the SPA Termination Net Proceeds or the Net
Purchaser Deposits which amounts, if any, shall instead be delivered by Seller
to the CCI Designees in the event of a breach by a Buyer or to the Buyers in the
event of a breach by a CCI Designee in accordance with their relative Deposit
Percentages.
(d) Termination of APA and/or CCI APA but not SPA. In the event that
---------------------------------------------
(i) this Agreement is terminated for a material breach by a Buyer of its
obligations under this Agreement or the CCI Asset Purchase Agreement is
terminated by a material breach by a CCI Designee of its obligations under the
CCI Asset Purchase Agreement, but (ii) the Stock Purchase Agreement is not
terminated, such breaching parties shall not be entitled to any part of the
Purchaser Deposits which amounts shall instead be delivered by the Seller to the
CCI Designees in the event of a breach by a Buyer or to the Buyers in the event
of a breach by a CCI Designee in accordance with their relative Deposit
Percentages. In the event that (i) both a Buyer and a CCI Designee have each
materially breached their respective obligations under this Agreement or the CCI
Asset Purchase Agreement, as the case may be, but (ii) the Stock Purchase
Agreement is not terminated, then no redistribution of the Purchaser Deposits
shall be made by Seller and the Purchaser Deposits shall be applied as required
under the Stock Purchase Agreement.
(e) In the event amounts are received by Seller pursuant to Section
1.2(c) of the Stock Purchase Agreement, Seller shall pay to each Buyer the
result of (x) such Buyers' Deposit Percentage multiplied by (y) any amounts so
-------------
received by Seller
(f) Seller shall have no liability with respect to payments under this
Agreement which correspond to payments from the Current Owners under the Stock
Purchase Agreement unless and until Seller shall have received such
corresponding payments from the Current Owners under the Stock Purchase
Agreement. Seller shall use its best efforts to pursue any such claim under the
Stock Purchase Agreement.
(g) The entitlement to receive or retain amounts hereunder shall be
the sole and exclusive remedy of the receiving or retaining party and shall
constitute liquidated damages, and each party shall be relieved and released
from any further liability and obligations hereunder, subject to continuing
obligations as set forth in Article X. The parties agree that actual damages
accruing from the termination of this Agreement are incapable of precise
estimation and would be difficult to prove, that the rights stipulated in this
Section 8.2 bear a reasonable relationship to the potential injury likely to be
sustained in the event of such breach and that the stipulated
23
payments are intended by the parties to provide just compensation in the event
of a such a breach and are not intended to compel performance or to constitute a
penalty for nonperformance.
(h) Notwithstanding any contrary provision, the amounts otherwise
payable to NGOP pursuant to this Section 8.2 (the "NGOP Base Amount") shall not
----------------
exceed the sum of (A) the maximum amount that can be paid to NGOP without
causing NGP to fail to meet the requirements of Sections 856(c)(2) and (3) of
the Code determined as if the payment of such amount did not constitute income
described in Sections 856(c) (2) (A)-(H) and 856(c) (3) (A)-(I) of the Code
("Qualifying Income") and as if NGP had $400,000 of income from unknown sources
-----------------
which was not Qualifying Income (in addition to any known or anticipated income
of NGP which was not Qualifying Income), as determined by NGP's independent
accountants, and (B) the NGOP Base Amount less the amounts paid under clause (A)
in the event NGP receives a reasoned opinion from outside counsel or a ruling
from the Internal Revenue Service (the "Break-Up Fee Guidance") indicating that
---------------------
NGOP's receipt of the NGOP Base Amount would either constitute Qualifying Income
or would be excluded from NGP's gross income within the meaning of Sections
856(c)(2) and (3) of the Code (the "REIT Requirements"). In the event that NGOP
-----------------
is not able to receive the full NGOP Base Amount due to the above limitation,
Seller shall place the unpaid amount in escrow and shall not release any portion
thereof unless and until NGP receives (and delivers to Seller) any one or
combination of the following, once or more often: (i) a letter from NGP's
independent accountants indicating the maximum amount that can be paid to NGOP
at that time without causing NGP to fail to meet the REIT Requirements
(calculated as described above) or (ii) the Break-Up Fee Guidance; in which
event Seller shall pay to NGOP the lesser of the unpaid NGOP Base Amount or the
maximum amount stated in the letter referred to in (i). Seller's obligation to
pay any unpaid portion of the NGOP Base Amount shall terminate six years from
the date of this Agreement, at which time any remaining amounts in the escrow
shall be returned to Seller. The limitations and the procedures set forth
above for receiving the NGOP Base Amount shall be referred to as the "REIT
----
Limit."
-----
ARTICLE IX
INDEMNIFICATION
---------------
9.1. Survival.
--------
(a) Subject to the limitations and other provisions of this Agreement,
the representations and warranties of the parties hereto contained herein, as
the case may be, shall survive the Closing and shall remain in full force and
effect in perpetuity; provided, however, that the representations and warranties
of Seller which are based on the representations and warranties of the Current
Owners in the Stock Purchase Agreement (other than those contained in Sections
2.1, 2.2, 2.8, 2.9 and 2.17 thereof) shall survive the Closing for a period of
one (1) year after the Closing Date and the representations and warranties of
the Seller which are based on the representations and warranties of the Current
Owners contained in Sections 2.8 and 2.9 of the Stock Purchase Agreement shall
survive until the seven (7) year anniversary of the Closing Date.
(b) Subject to the limitations and other provisions of this Agreement,
including Section 9.1(a) above, each covenant and agreement of the parties
hereto contained in Section 6.1 shall survive the Closing and shall remain in
full force and effect for: (i) one (1) year
24
or (ii) until the end of the applicable period specified in the Stock Purchase
Agreement with respect to such covenant or agreement. All other covenants
contained herein shall survive the Closing in perpetuity.
9.2. Indemnification of NGOP by Seller.
---------------------------------
(a) Seller agrees, subject to the other terms and conditions of this
Agreement (including Section 9.6(a)), to indemnify NGOP and its Affiliates,
officers, directors, employees, agents, successors and assigns (each an "NGOP
----
Indemnified Party") against and hold them harmless from all Losses arising out
-----------------
of (i) the breach of any representation or warranty of Seller contained in this
Agreement (ii) any breach of any covenant or agreement of Seller contained in
this Agreement, (iii) the Indemnified Disputes and (iv) any Shareholder Action,
subject to the REIT Limit, applied as if any amount to be paid pursuant to this
sentence was included in the NGOP Base Amount. Anything in Section 9.2 to the
contrary notwithstanding, no claim may be asserted nor any action commenced
against Seller for breach of any representation or warranty contained herein,
unless written notice of such claim or action is received by Seller describing
in detail the facts and circumstances with respect to the subject matter of such
claim or action on or prior to the thirtieth (30th) day after the date on which
the representation or warranty on which such claim or action is based ceases to
survive as set forth in Section 9.1.
(b) The indemnification obligations of Seller pursuant to Section
9.2(a) (excluding the indemnification obligations of Seller for Excluded Claims;
the amount paid with respect to Excluded Claims shall not be counted in any
calculation of the Threshold Amount or the Maximum Amount) shall not be
effective until the aggregate dollar amount of: (i) all Losses (including
without limitation NGOP's expenses of defending and/or settling any claim or
dispute giving rise to such indemnification obligation) that would otherwise be
indemnifiable pursuant to Section 9.2(a) plus (ii) all Losses (including without
----
limitation AGC's expenses of defending and/or settling any claim or dispute
giving rise to such indemnification obligation) that would otherwise be
indemnifiable pursuant to Section 9.3(a) plus (iii) all Losses (including
----
without limitation the aggregate CCI Designees' expenses of defending and/or
settling any claim or dispute giving rise to such indemnification obligation)
that would otherwise be indemnifiable pursuant to the section of the CCI Asset
Purchase Agreement corresponding to Section 9.2(a) plus (iv) all Losses
----
(including without limitation Seller's expenses of defending and/or settling any
claim or dispute giving rise to an indemnification obligation of the Current
Owners under Section 8.2 of the Stock Purchase Agreement) relating to Seller
Assets or Seller Liabilities that would otherwise be indemnifiable pursuant to
Section 8.2 of the Stock Purchase Agreement, exceeds the Threshold Amount, and
then only to the extent such aggregate amount exceeds the Threshold Amount. The
indemnification obligations of Seller pursuant to Section 9.2(a) (excluding the
indemnification obligation of Seller related to Excluded Claims) shall be
effective only until (w) the dollar amount paid in respect of the Losses
(including without limitation NGOP's expenses of defending and/or settling any
claim or dispute giving rise to such indemnification obligation) indemnified
against under Section 9.2(a) (excluding the indemnification obligations of
Seller related to Excluded
25
Claims), plus (x) the dollar amount paid in respect of the Losses (including
----
without limitation AGC's expenses of defending and/or settling any claim or
dispute giving rise to such indemnification obligation) indemnified against
under Section 9.3(a) (excluding the indemnification obligations of Seller
related to Excluded Claims), plus (y) the dollar amount paid in respect of the
----
Losses (including without limitation the aggregate CCI Designees' expenses of
defending and/or settling any claim or dispute giving rise to such
indemnification obligation) indemnified against under the section of the CCI
Asset Purchase Agreement corresponding to Section 9.2(a) (excluding the
indemnification obligations of Seller related to Excluded Claims) plus (z)
----
the dollar amount paid in respect of the Losses (including without limitation,
Seller's expenses of defending and/or settling any claim or dispute giving rise
to an indemnification obligation of the Current Owners under Section 8.2 of the
Stock Purchase Agreement (excluding indemnification obligations of the Current
Owners for Excluded Claims), equal the Maximum Amount for all Losses.
For purposes of this Section 9.2(b), in computing such individual or
aggregate amounts of claims, the amount of any insurance proceeds and any
indemnity, contribution or other similar payment actually received by the NGOP
Indemnified Parties, the AGC Indemnified Parties, the CCI Indemnified Parties
(as defined in the CCI Asset Purchase Agreement) and Seller in respect of any
Losses related to Seller Liabilities, from any third party with respect thereto
shall be deducted from each such claim.
(c) An NGOP Indemnified Party shall give Seller written notice of any
claim, assertion, event or proceeding by or in respect of a third party as to
which such NGOP Indemnified Party may request indemnification hereunder or as to
which the Threshold Amount may be applied as soon as is practicable and in any
event within thirty (30) days of the time that such NGOP Indemnified Party
learns of such claim, assertion, event or proceeding; provided, however, that
the failure to so notify Seller shall not affect rights to indemnification
hereunder except to the extent that Seller is actually prejudiced by such
failure. Seller shall have the right to direct, through counsel of its own
choosing, the defense or settlement of any such claim or proceeding at its own
expense. If Seller elects to assume the defense of any such claim or
proceeding, Seller shall consult with NGOP and NGOP may participate in such
defense, but in such case the expenses of NGOP shall be paid by NGOP. NGOP
shall provide Seller with access to its records and personnel relating to any
such claim, assertion, event or proceeding during normal business hours and
shall otherwise cooperate with Seller in the defense or settlement thereof, and
Seller shall reimburse NGOP for all its reasonable out-of-pocket expenses in
connection therewith. If Seller elects to direct the defense of any such claim
or proceeding, NGOP shall not pay, or permit to be paid, any part of any claim
or demand arising from such asserted liability unless Seller consents in writing
to such payment or unless Seller, subject to the last sentence of this Section
9.2(c), withdraws from the defense of such asserted liability or unless a final
judgment from which no appeal may be taken by or on behalf of Seller is entered
against NGOP for such liability. If Seller fails to defend or if, after
commencing or undertaking any such defense, Seller fails to prosecute or
withdraw from such defense, NGOP shall have the right to undertake the defense
or settlement thereof, at Seller's expense. If NGOP assumes the defense of any
such claim or proceeding pursuant to this Section 9.2(c) and proposes to settle
such claim or proceeding prior to a final judgment thereon or to forego any
appeal with respect thereto, then NGOP shall give Seller prompt written notice
thereof, and Seller shall have the right to participate in the settlement or
assume or reassume the defense of such claim or proceeding.
26
(d) NGOP hereby acknowledges and agrees that from and after the
Closing, its sole and exclusive remedy with respect to any and all claims
relating to this Agreement, including the NGOP Acquired Assets and the NGOP
Assumed Liabilities, shall be pursuant to the indemnification provisions set
forth in this Article IX. In furtherance of the foregoing and except as
specified herein, NGOP hereby waives, to the fullest extent permitted under
applicable Law, any and all rights, claims and causes of action relating to the
subject matter of this Agreement that they may have against Seller arising under
or based upon any Law (including, without limitation, any such rights, claims or
causes of action arising under or based upon common law or otherwise).
(e) Except as set forth in this Agreement, Seller is not making any
representation, warranty, covenant or agreement with respect to the matters
contained herein. Anything herein to the contrary notwithstanding, no breach of
any representation, warranty, covenant or agreement contained herein shall give
rise to any right on the part of NGOP, after the consummation of the
transactions contemplated hereby, to rescind this Agreement or any of the
transactions contemplated hereby.
(f) Seller shall have no liability under any provision of this
Agreement for and in no event shall the Threshold Amount be applied to any
consequential damages. NGOP shall take all reasonable steps to mitigate Losses
for which indemnification may be claimed pursuant to this Agreement upon and
after becoming aware of any event that could reasonably be expected to give rise
to any such Losses.
(g) Seller shall have no liability under any provision of this Section
9.2 relating to indemnification for breaches of Sections 5.1 or 6.1 unless and
until, and only to the extent, Seller shall have received corresponding
indemnity payments from the Current Owners under Article VIII of the Stock
Purchase Agreement. Seller shall use its Best Efforts to pursue any claim under
said provisions of the Stock Purchase Agreement.
(h) Notwithstanding any contrary provision, if any member of the
Transfer Group is the owner of any NGOP Acquired Assets that such member of the
Transfer Group is unable or fails to assign, convey or transfer to NGOP in
accordance with this Agreement, NGOP's sole remedy shall be limited to specific
performance.
9.3. Indemnification of AGC by Seller.
--------------------------------
(a) Seller agrees, subject to the other terms and conditions of this
Agreement (including Section 9.6(a)), to indemnify AGC and its Affiliates,
officers, directors, employees, agents, successors and assigns (each an "AGC
---
Indemnified Party") against and hold them harmless from all Losses arising out
-----------------
of (i) the breach of any representation or warranty of Seller contained in this
Agreement (ii) any breach of any covenant or agreement of Seller contained in
this Agreement, (iii) the Indemnified Disputes and (iv) any Shareholder Action.
Anything in Section 9.3 to the contrary notwithstanding, no claim may be
asserted nor any action commenced against Seller for breach of any
representation or warranty contained herein, unless written notice of such claim
or action is received by Seller describing in detail the facts and circumstances
with respect to the subject matter of such claim or action on or prior to the
thirtieth (30th) day after the
27
date on which the representation or warranty on which such claim or action is
based ceases to survive as set forth in Section 9.1.
(b) The indemnification obligations of Seller pursuant to Section
9.3(a) (excluding the indemnification obligations of Seller for Excluded Claims;
the amount paid with respect to Excluded Claims shall not be counted in any
calculation of the Threshold Amount or the Maximum Amount) shall not be
effective until the aggregate dollar amount of: (i) all Losses (including
without limitation AGC's expenses of defending and/or settling any claim or
dispute giving rise to such indemnification obligation) that would otherwise be
indemnifiable pursuant to Section 9.3(a) plus (ii) all Losses (including without
----
limitation NGOP's expenses of defending and/or settling any claim or dispute
giving rise to such indemnification obligation) that would otherwise be
indemnifiable pursuant to Section 9.2(a) plus (iii) all Losses (including
----
without limitation the aggregate CCI Designees' expenses of defending and/or
settling any claim or dispute giving rise to such indemnification obligation)
that would otherwise be indemnifiable pursuant to the section of the CCI Asset
Purchase Agreement corresponding to Section 9.3(a) plus (iv) all Losses
----
(including without limitation Seller's expenses of defending and/or settling any
claim or dispute giving rise to an indemnification obligation of the Current
Owners under Section 8.2 of the Stock Purchase Agreement) relating to Seller
Assets or Seller Liabilities that would otherwise be indemnifiable pursuant to
Section 8.2 of the Stock Purchase Agreement, exceeds the Threshold Amount, and
then only to the extent such aggregate amount exceeds the Threshold Amount. The
indemnification obligations of Seller pursuant to Section 9.3(a) (excluding the
indemnification obligation of Seller related to Excluded Claims) shall be
effective only until (w) the dollar amount paid in respect of the Losses
(including without limitation AGC's expenses of defending and/or settling any
claim or dispute giving rise to such indemnification obligation) indemnified
against under Section 9.3(a) (excluding the indemnification obligations of
Seller related to Excluded Claims), plus (x) the dollar amount paid in respect
----
of the Losses (including without limitation NGOP's expenses of defending and/or
settling any claim or dispute giving rise to such indemnification obligation)
indemnified against under Section 9.3(a) (excluding the indemnification
obligations of Seller related to Excluded Claims), plus (y) the dollar amount
----
paid in respect of the Losses (including without limitation the aggregate CCI
Designees' expenses of defending and/or settling any claim or dispute giving
rise to such indemnification obligation) indemnified against under the section
of the CCI Asset Purchase Agreement corresponding to Section 9.2(a) (excluding
the indemnification obligations of Seller related to Excluded Claims) plus (z)
----
the dollar amount paid in respect of the Losses (including without limitation,
Seller's expenses of defending and/or settling any claim or dispute giving rise
to an indemnification obligation of the Current Owners under Section 8.2 of the
Stock Purchase Agreement (excluding indemnification obligations of the Current
Owners for Excluded Claims), equal the Maximum Amount for all Losses.
For purposes of this Section 9.3(b), in computing such individual or
aggregate amounts of claims, the amount of any insurance proceeds and any
indemnity, contribution or other similar payment actually received by the AGC
Indemnified Parties, the NGOP Indemnified Parties, the CCI Indemnified Parties
(as defined in the CCI Asset Purchase Agreement) and Seller in respect of any
Losses related to Seller Liabilities from any third party with respect thereto
shall be deducted from each such claim.
28
(c) Seller shall give AGC written notice of any claim, assertion,
event or proceeding by or in respect of a third party as to which such Seller
may request indemnification hereunder or as to which the Threshold Amount may be
applied as soon as is practicable and in any event within thirty (30) days of
the time that such Seller learns of such claim, assertion, event or proceeding;
provided, however, that the failure to so notify AGC shall not affect rights to
indemnification hereunder except to the extent that AGC is actually prejudiced
by such failure. Seller shall have the right to direct, through counsel of its
own choosing, the defense or settlement of any such claim or proceeding at its
own expense. If Seller elects to assume the defense of any such claim or
proceeding, Seller shall consult with AGC and AGC may participate in such
defense, but in such case the expenses of AGC shall be paid by AGC. AGC shall
provide Seller with access to its records and personnel relating to any such
claim, assertion, event or proceeding during normal business hours and shall
otherwise cooperate with Seller in the defense or settlement thereof, and Seller
shall reimburse AGC for all its reasonable out-of-pocket expenses in connection
therewith. If Seller elects to direct the defense of any such claim or
proceeding, AGC shall not pay, or permit to be paid, any part of any claim or
demand arising from such asserted liability unless Seller consents in writing to
such payment or unless Seller, subject to the last sentence of this Section
9.3(c), withdraws from the defense of such asserted liability or unless a final
judgment from which no appeal may be taken by or on behalf of Seller is entered
against AGC for such liability. If Seller fails to defend or if, after
commencing or undertaking any such defense, Seller fails to prosecute or
withdraw from such defense, AGC shall have the right to undertake the defense or
settlement thereof, at Seller's expense. If AGC assumes the defense of any such
claim or proceeding pursuant to this Section 9.3(c) and proposes to settle such
claim or proceeding prior to a final judgment thereon or to forego any appeal
with respect thereto, then AGC shall give Seller prompt written notice thereof,
and Seller shall have the right to participate in the settlement or assume or
reassume the defense of such claim or proceeding.
(d) AGC hereby acknowledges and agrees that from and after the
Closing, its sole and exclusive remedy with respect to any and all claims
relating to this Agreement, including the AGC Acquired Assets and the AGC
Assumed Liabilities, shall be pursuant to the indemnification provisions set
forth in this Article IX. In furtherance of the foregoing and except as
specified herein, AGC hereby waives, to the fullest extent permitted under
applicable Law, any and all rights, claims and causes of action relating to the
subject matter of this Agreement that they may have against Seller arising under
or based upon any Law (including, without limitation, any such rights, claims or
causes of action arising under or based upon common law or otherwise).
(e) Except as set forth in this Agreement, Seller is not making any
representation, warranty, covenant or agreement with respect to the matters
contained herein. Anything herein to the contrary notwithstanding, no breach of
any representation, warranty, covenant or agreement contained herein shall give
rise to any right on the part of AGC, after the consummation of the transactions
contemplated hereby, to rescind this Agreement or any of the transactions
contemplated hereby.
(f) Seller shall have no liability under any provision of this
Agreement for and in no event shall the Threshold Amount be applied to any
consequential damages. AGC
29
shall take all reasonable steps to mitigate Losses for which indemnification may
be claimed pursuant to this Agreement upon and after becoming aware of any event
that could reasonably be expected to give rise to any such Losses.
(g) Seller shall have no liability under any provision of this Section
9.3 relating to indemnification for breaches of Sections 5.1 or 6.1 unless and
until, and only to the extent, Seller shall have received corresponding
indemnity payments from the Current Owners under Article VIII of the Stock
Purchase Agreement. Seller shall use its Best Efforts to pursue any claim under
said provisions of the Stock Purchase Agreement.
(h) Notwithstanding any contrary provision, if any member of the
Transfer Group is the owner of any AGC Acquired Assets that such member of the
Transfer Group is unable or fails to assign, convey or transfer to AGC in
accordance with this Agreement, AGC's sole remedy shall be limited to specific
performance.
9.4. Indemnification of Seller by NGOP.
---------------------------------
(a) NGOP agrees, subject to the other terms and conditions of this
Agreement (including Sections 9.6(b) and (c)), to indemnify Seller and its
Affiliates, officers, directors, employees, agents, successors and assigns (each
a "Seller Indemnified Party") against and hold them harmless from Losses arising
------------------------
out of (i) the breach of any representation or warranty of NGOP contained
herein, and (ii) any breach of any covenant or agreement of NGOP contained
herein.
(b) NGOP agrees, subject to the other terms and conditions of this
Agreement (including Sections 9.6(b) and (c)), to indemnify the Seller
Indemnified Parties against and hold them harmless from all Losses arising out
of (i) the breach of any representation or warranty of Seller contained in the
Stock Purchase Agreement to the extent such breach is caused by any action or
omission of NGOP, and (ii) any breach of any covenant or agreement of Seller
contained in the Stock Purchase Agreement to the extent such breach is caused by
any action or omission of NGOP.
(c) Anything in this Section 9.4 to the contrary notwithstanding, no
claim may be asserted nor may any action be commenced against NGOP for breach of
any representation or warranty contained herein, unless written notice of such
claim or action is received by NGOP describing in detail the facts and
circumstances with respect to the subject matter of such claim or action on or
prior to the thirtieth (30th) day after the date on which the representation or
warranty on which such claim or action is based ceases to survive as set forth
in Section 9.1, and such claim or action arose on or prior to the date such
representation or warranty ceased to survive, in which case such representation
or warranty will survive as to such claim until such claim has been finally
resolved.
(d) Seller Indemnified Party shall give NGOP written notice of any
claim, assertion, event or proceeding by or in respect of a third party as to
which such Seller Indemnified Party may request indemnification hereunder or as
to which the Threshold Amount may be applied as soon as is practicable and in
any event within thirty (30) days of the time that such Seller Indemnified Party
learns of such claim, assertion, event or proceeding; provided,
30
however, that the failure to so notify NGOP shall not affect rights to
indemnification hereunder except to the extent that the Buyers are actually
prejudiced by such failure. NGOP shall have the right to direct, through counsel
of its own choosing, the defense or settlement of any such claim or proceeding
at its own expense. If NGOP elects to assume the defense of any such claim or
proceeding, NGOP shall consult with the Seller Indemnified Party and the Seller
Indemnified Party may participate in such defense, but in such case the expenses
of the Seller Indemnified Party shall be paid by the Seller Indemnified Party.
The Seller Indemnified Party shall provide NGOP with access to its records and
personnel relating to any such claim, assertion, event or proceeding during
normal business hours and shall otherwise cooperate with NGOP in the defense or
settlement thereof, and NGOP shall reimburse the Seller Indemnified Party for
all the reasonable out-of-pocket expenses of such Seller Indemnified Party in
connection therewith. If NGOP elects to direct the defense of any such claim or
proceeding, the Seller Indemnified Party shall not pay, or permit to be paid,
any part of any claim or demand arising from such asserted liability unless NGOP
consents in writing to such payment or unless NGOP, subject to the last sentence
of this Section 9.4(d), withdraws from the defense of such asserted liability,
or unless a final judgment from which no appeal may be taken by or on behalf of
NGOP is entered against the Seller Indemnified Party for such liability. If NGOP
fails to defend or if, after commencing or undertaking any such defense, NGOP
fails to prosecute or withdraws from such defense, the Seller Indemnified Party
shall have the right to undertake the defense or settlement thereof, at NGOP's
expense. If the Seller Indemnified Party assumes the defense of any such claim
or proceeding pursuant to this Section 9.4(d) and proposes to settle such claim
or proceeding prior to a final judgment thereon or to forego appeal with respect
thereto, then such Seller Indemnified Party shall give NGOP prompt written
notice thereof and NGOP shall have the right to participate in the settlement or
assume or reassume the defense of such claim or proceeding.
(e) Seller hereby acknowledges and agrees that from and after the
Closing, its sole and exclusive remedy with respect to any and all claims
relating to this Agreement shall be pursuant to the indemnification provisions
set forth in this Article IX. In furtherance of the foregoing and except as
specified herein, Seller hereby waives to the fullest extent permitted under
applicable Law, any and all rights, claims and causes of action relating to the
subject matter of this Agreement that it may have against NGOP arising under or
based upon any Law (including, without limitation, any such rights, claims or
causes of action arising under or based upon common law or otherwise).
(f) Except as set forth in this Agreement, NGOP is not making any
representation, warranty, covenant or agreement with respect to the matters
contained herein. Anything herein to the contrary notwithstanding, no breach of
any representation, warranty, covenant or agreement contained herein shall give
rise to any right on the part of Seller, after the consummation of the
transactions contemplated by this Agreement, to rescind this Agreement or any of
the transactions contemplated hereby.
(g) NGOP shall have no liability under any provision of this Agreement
for and in no event shall the Threshold Amount be applied to any consequential
damages. Sellers shall take all reasonable steps to mitigate Losses for which
indemnification may be claimed pursuant to this Agreement upon and after
becoming aware of any event that could reasonably be expected to give rise to
any such Losses.
31
(h) No indemnification shall be payable to a Seller Indemnified Party
with respect to claims asserted by such Seller Indemnified Party pursuant to
Section 9.4(b) after the Indemnification Cut-Off Date.
9.5. Indemnification of Seller by AGC.
--------------------------------
(a) AGC agrees, subject to the other terms and conditions of this
Agreement, to indemnify each Seller Indemnified Party against and hold them
harmless from Losses arising out of (i) the breach of any representation or
warranty of AGC contained herein, and (ii) any breach of any covenant or
agreement of AGC contained herein.
(b) AGC agrees, subject to the other terms and conditions of this
Agreement (including Sections 9.6(b) and (c)), to indemnify the Seller
Indemnified Parties against and hold them harmless from all Losses arising out
of (i) the breach of any representation or warranty of Seller contained in the
Stock Purchase Agreement to the extent such breach is caused by any action or
omission of AGC, and (ii) any breach of any covenant or agreement of Seller
contained in the Stock Purchase Agreement to the extent such breach is caused by
any action or omission of AGC.
(c) Anything in this Section 9.5 to the contrary notwithstanding, no
claim may be asserted nor may any action be commenced against AGC for breach of
any representation or warranty contained herein, unless written notice of such
claim or action is received by AGC describing in detail the facts and
circumstances with respect to the subject matter of such claim or action on or
prior to the thirtieth (30th) day after the date on which the representation or
warranty on which such claim or action is based ceases to survive as set forth
in Section 9.1, and such claim or action arose on or prior to the date such
representation or warranty ceased to survive, in which case such representation
or warranty will survive as to such claim until such claim has been finally
resolved.
(d) Seller Indemnified Party shall give AGC written notice of any
claim, assertion, event or proceeding by or in respect of a third party as to
which such Seller Indemnified Party may request indemnification hereunder or as
to which the Threshold Amount may be applied as soon as is practicable and in
any event within thirty (30) days of the time that such Seller Indemnified Party
learns of such claim, assertion, event or proceeding; provided, however, that
the failure to so notify AGC shall not affect rights to indemnification
hereunder except to the extent that the Buyers are actually prejudiced by such
failure. AGC shall have the right to direct, through counsel of its own
choosing, the defense or settlement of any such claim or proceeding at its own
expense. If AGC elects to assume the defense of any such claim or proceeding,
AGC shall consult with the Seller Indemnified Party and the Seller Indemnified
Party may participate in such defense, but in such case the expenses of the
Seller Indemnified Party shall be paid by the Seller Indemnified Party. The
Seller Indemnified Party shall provide AGC with access to its records and
personnel relating to any such claim, assertion, event or proceeding during
normal business hours and shall otherwise cooperate with AGC in the defense or
settlement thereof, and AGC shall reimburse the Seller Indemnified Party for all
the reasonable out-of-pocket expenses of such Seller Indemnified Party in
connection therewith. If AGC elects to direct the defense of any such claim or
proceeding, the Seller indemnified Party shall not pay, or permit to be paid,
any part of any claim or demand arising from such asserted
32
liability unless AGC consents in writing to such payment or unless AGC, subject
to the last sentence of this Section 9.5(d), withdraws from the defense of such
asserted liability, or unless a final judgment from which no appeal may be taken
by or on behalf of AGC is entered against the Seller Indemnified Party for such
liability. If AGC fails to defend or if, after commencing or undertaking any
such defense, AGC fails to prosecute or withdraws from such defense, the Seller
Indemnified Party shall have the right to undertake the defense or settlement
thereof, at AGC's expense. If the Seller Indemnified Party assumes the defense
of any such claim or proceeding pursuant to this Section 9.5(d) and proposes to
settle such claim or proceeding prior to a final judgment thereon or to forego
appeal with respect thereto, then such Seller Indemnified Party shall give AGC
prompt written notice thereof and AGC shall have the right to participate in the
settlement or assume or reassume the defense of such claim or proceeding.
(e) Seller hereby acknowledges and agrees that from and after the
Closing, its sole and exclusive remedy with respect to any and all claims
relating to this Agreement shall be pursuant to the indemnification provisions
set forth in this Article IX. In furtherance of the foregoing and except as
specified herein, Seller hereby waives to the fullest extent permitted under
applicable Law, any and all rights, claims and causes of action relating to the
subject matter of this Agreement that it may have against AGC arising under or
base upon any Law (including, without limitation, any such rights, claims or
causes of action arising under or based upon common law or otherwise).
(f) Except as set forth in this Agreement, AGC is not making any
representation, warranty, covenant or agreement with respect to the matters
contained herein. Anything herein to the contrary notwithstanding, no breach of
any representation, warranty, covenant or agreement contained herein shall give
rise to any right on the part of Seller, after the consummation of the
transactions contemplated by this Agreement, to rescind this Agreement or any of
the transactions contemplated hereby.
(g) AGC shall have no liability under any provision of this Agreement
for and in no event shall the Threshold Amount be applied to any consequential
damages. Sellers shall take all reasonable steps to mitigate Losses for which
indemnification may be claimed pursuant to this Agreement upon and after
becoming aware of any event that could reasonably be expected to give rise to
any such Losses.
(h) No indemnification shall be payable to a Seller Indemnified Party
with respect to claims asserted by such Seller Indemnified Party pursuant to
Section 9.5(b) after the Indemnification Cut-Off Date.
9.6. Allocation of Indemnity Limits.
------------------------------
(a) During the Buyer Claim Period, the indemnity proceeds of Non-
Excluded Claims received by Seller under the Stock Purchase Agreement shall be
allocated among the Buyers and Seller (on its own behalf and on behalf of the
CCI Designees) as follows:
(i) To the extent recovery of a Non-Excluded Claim is subject,
in whole or in part, to the Threshold Amount, the Buyer or the CCI
Designee, as the case may be, asserting such indemnity claim shall bear the
risk of loss for such claim to the
33
extent such claim, together with all other indemnity claims of the Buyers
and the CCI Designees, do not exceed the Threshold Amount; and
(ii) To the extent that the aggregate indemnity proceeds of
Non-Excluded Claims of the Buyers and the CCI Designees exceeds the
Threshold Amount, the indemnity proceeds of Non-Excluded Claims received by
Seller under the Stock Purchase Agreement shall be allocated among the
Buyers and Seller (on its own behalf and on behalf of the CCI Designees) in
proportion to the relative Losses suffered by each Buyer and the CCI
Designees. Such allocations shall be made irrespective of whether the
Losses occur before or after the times that the aggregate Losses exceed the
Threshold Amount or the Maximum Amount.
(b) Promptly after the termination of the Seller Claim Period, Seller
shall repay to NGOP, AGC and the CCI Designees the aggregate amount paid to
Seller by NGOP, AGC and the CCI Designees pursuant to Sections 9.4(b) and 9.5(b)
and the sections of the CCI Asset Purchase Agreement corresponding to Sections
9.4(b) 9.5(b) which exceeds the Maximum Amount, if any. Such amount shall be
allocated among NGOP, AGC and the CCI Designees on a relative basis based upon
the amounts of such payments by such parties which exceed NGOP's Percentage,
AGC's Percentage and the "CCI Designees' Percentage" (as defined in the CCI
Asset Purchase Agreement), respectively, of the Maximum Amount.
(c) Immediately after making the payment(s) described in clause (b) of
this Section 9.6, Seller shall repay to NGOP, AGC and the CCI Designees an
aggregate amount equal to the Threshold Amount. The Threshold Amount shall be
allocated among NGOP, AGC and the CCI Designees on a relative basis based upon
the net amount paid by NGOP, AGC and the CCI Designees to Seller pursuant to
Sections 9.4(b) and 9.5(b) and the sections of the CCI Asset Purchase Agreement
corresponding to Sections 9.4(b) and 9.5(b) after giving effect to any
repayments described in clause (b) of this Section 9.6 and the section of the
CCI Asset Purchase Agreement corresponding to Section 9.6(b).
9.7. Indemnification for Assumed and Excluded Liabilities.
----------------------------------------------------
(a) From and after the Closing, (i) NGOP shall indemnify and save and
hold harmless, Seller, its Affiliates and subsidiaries, and its Representatives
from and against any and all Losses incurred in connection with, arising out of,
resulting from any NGOP Assumed Liability, (ii) AGC shall indemnify and save and
hold harmless, Seller, its Affiliates and subsidiaries, and its Representatives
from and against any and all Losses incurred in connection with, arising out of,
resulting from any AGC Assumed Liability and (iii) Seller shall indemnify and
save and hold harmless, the Buyers, their respective Affiliates and
subsidiaries, and their respective Representatives from and against any and all
Losses incurred in connection with, arising out of, resulting from any Excluded
Liability. The indemnification obligations under this Section 9.7 shall be
without regard to the Threshold Amount or the Maximum Amount.
(b) The party seeking indemnity under this Section 9.7 shall give the
indemnifying party written notice of any claim, assertion, event or proceeding
by or in respect of a third party as to which such indemnified party may request
indemnification under this Section 9.7; provided, however, that the failure to
so notify the indemnifying party shall not affect rights
34
to indemnification hereunder except to the extent that the indemnifying party is
actually prejudiced by such failure. The indemnifying party shall have the right
to direct, through counsel of its own choosing, the defense or settlement of any
such claim or proceeding at its own expense. If the indemnifying party elects to
assume the defense of any such claim or proceeding, the indemnified party shall
consult with the indemnifying party, the indemnified party may participate in
such defense, but in such case the expenses of the indemnified party shall be
paid by the indemnified party. The indemnified party shall provide the
indemnifying party with access to its records and personnel relating to any such
claim, assertion, event or proceeding during normal business hours and shall
otherwise cooperate with the indemnifying party in the defense or settlement
thereof, and the indemnifying party shall reimburse the indemnified party for
all the reasonable out-of-pocket expenses of such indemnified party in
connection therewith. If the indemnifying party elects to direct the defense of
any such claim or proceeding, the indemnified party shall not pay, or permit to
be paid, any part of any claim or demand arising from such asserted liability,
or unless the indemnifying party consents in writing to such payment unless the
indemnifying party, subject to the last sentence of this Section 9.7(b),
withdraws from the defense of such asserted liability, or unless a final
judgment from which no appeal may be taken by or on behalf of the indemnifying
party is entered against the indemnified party for such liability. If the
indemnifying party fails to defend or if, after commencing or undertaking any
such defense, the indemnifying party fails to prosecute or withdraws from such
defense, the indemnified party shall have the right to undertake the defense or
settlement thereof, at the indemnifying party's expense. If the indemnified
party assumes the defense of any such claim or proceeding pursuant to this
Section 9.7(b) and proposes to settle such claim or proceeding prior to a final
judgment thereon or to forego appeal with respect thereto, then such indemnified
party shall give the indemnifying party prompt written notice thereof and the
indemnifying party shall have the right to participate in the settlement or
assume or reassume the defense of such claim or proceeding.
(c) Notwithstanding the foregoing, if any party entitled to
indemnification under this Section 9.7 determines in good faith that there is a
reasonable probability that a proceeding may adversely affect it or its
Affiliates other than as a result of monetary damages for which it would be
entitled to indemnification under this Agreement, the indemnified party may, by
notice to the indemnifying party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the indemnifying party will not be
bound by any determination of a Proceeding so defended or any compromise or
settlement effected without its consent (which may not be unreasonably
withheld).
9.8. Control Over Proceedings. In connection with indemnification
------------------------
claims by NGOP or AGC pursuant to Sections 9.2 and 9.3 relating to breaches of
Section 5.1 or 6.1, the Seller shall pursue indemnification claims under the
Stock Purchase Agreement at the direction of the party making the claim
hereunder. In addition, in the event Seller is directing the defense or
settlement of any claim or proceeding under Article VIII of the Stock Purchase
Agreement, a Buyer who is required to indemnify Seller hereunder with respect to
such claim or proceeding shall be entitled to direct Seller in the defense or
settlement of any such claim or proceeding, but in such cases the expenses of
Seller shall be paid by such Buyer. In respect of the foregoing, the parties
agree that Seller shall be acting as the agent of the Buyers, shall act at the
direction of the Buyers and shall not personally benefit from any such claims or
rights.
35
ARTICLE X.
GENERAL PROVISIONS.
------------------
10.1. Consents to Assignment. Anything in this Agreement to the
----------------------
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any Contract, Lease, Permit or any claim or right or any benefit arising
thereunder or resulting therefrom if an attempted assignment thereof, without
the consent of a third party thereto, would constitute a default thereof or in
any way adversely affect the rights of the Buyers thereunder.
10.2. Public Announcements. The parties hereto will, and will cause
--------------------
each of their Affiliates to, maintain this Agreement confidential and will not,
and will cause each of their Affiliates not to, issue or cause the publication
of any press release or other public announcement with respect to this Agreement
or the transactions contemplated hereby without the prior written consent of the
other party hereto which consent shall not be unreasonably withheld; provided,
however, that nothing herein will prohibit Seller or either Buyer from issuing
or causing publication of any such press release or public announcement to the
extent that such party reasonably determines, after consultation with outside
legal counsel, such action to be required by Law or the rules of any applicable
self-regulatory organization, in which event such party will use its
commercially reasonable efforts to allow the other party reasonable time to
comment on such release or announcement in advance of its issuance.
10.3. Confidentiality. Subject to the requirements of applicable
---------------
Law until the Closing, the parties will, and will instruct each of their
respective Affiliates, associates, partners, and Representatives (the
"Confidants") to, hold in confidence all Confidential Information (as defined
----------
below), will use such information only in connection with the consummation of
the Contemplated Transactions and any transactions related to the financing of
such transactions, and, if this Agreement is terminated in accordance with its
terms, will (i) if the Stock Purchase Agreement has been terminated, deliver
promptly to the disclosing persons (or destroy all Derivative Works and, at the
disclosing person's request, destroy such Confidential Information and certify
to the disclosing persons the destruction of same) all copies of such
information (and any copies, compilations or extracts thereof or based thereon)
then in their possession or under their control or (ii) if the Confidential
Information relates to any of the Acquired Assets or Assumed Liabilities and the
Stock Purchase Agreement has not been terminated, such information will be
delivered to Seller for the benefit of any nonbreaching party. Each party hereto
agrees that money damages would not be a sufficient remedy for any breach of
this Section 10.3 by the other party hereto or any of its Confidants, and that,
in addition to all other remedies, such non-breaching party shall be entitled to
specific performance and injunctive or other equitable relief as a remedy for
any such breach, and each such party further agrees to waive and to use its best
efforts to cause its Confidants to waive, any requirement for the securing or
posting of any bond in connection with any such remedy. Each party agrees to be
responsible for any breach of this Section 10.3 by any of its Confidants. As
used herein, "Confidential Information" shall mean all nonpublic, confidential,
or proprietary information of or relating to any of the following: any Current
Owner, any Company, or any assets or liabilities to be transferred to or
acquired by any CCI Designee, NGP, NGOP or AGC, and shall include, without
limitation: (i) methods of operation, (ii) identities of customers, members,
suppliers, and employees, (iii) cost and expense information, (iv) pricing
information, (v) financial statement and
36
other financial information, and (vi) any other information that is not made
generally available to persons outside the person disclosing such information,
or of another person whose information such party (the "Obligated Party") has or
may have in its possession under obligations of confidentiality or restricted
use, which is disclosed as such by the Obligated Party. Confidential Information
shall also include all analyses, compilations, extracts, reports, studies or
other documents, data, valuations or information that contain, are derived from
or reflect any Confidential Information (collectively, "Derivative Works").
Confidential Information shall not include any information that (i) is already
known to the recipient on a non-confidential basis prior to the time of its
receipt; (ii) is or becomes publicly available other than through acts of the
person revealing such Confidential Information or its Confidants; (iii) is
rightfully received from a third person without similar restriction from such
person, and the disclosure of which by such third person does not constitute a
violation of a confidentiality or restricted use obligation; or (iv) is
independently developed by the recipient without the benefit of Confidential
Information and is so documented or otherwise proved. Notwithstanding the
foregoing, if the Closing under the Stock Purchase Agreement occurs, the
Confidential Information relating to the AGC or NGOP Acquired Assets or Assumed
Liabilities shall be delivered to AGC or NGOP as appropriate, and the
Confidential Information relating to any CCI Designee's Acquired Assets or
Assumed Liabilities shall be delivered to such CCI Designee; provided, however,
that each recipient agrees to make such information available to Seller or such
other parties as shall be necessary to discharge any party's tax obligations or
obligations to the Current Owners under the Stock Purchase Agreement.
10.4. Notices. All notices, consents, waivers, and other
-------
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by a nationally recognized overnight delivery
service (e.g., Federal Express) or (c) one business day after mailed to the
addressee, if sent by a nationally recognized overnight delivery service, in
each case to the appropriate addresses and telecopier numbers set forth below
(or to such other addresses and telecopier numbers as a party may designate by
notice to the other parties):
(a) If to NGOP:
National Golf Operating Partnership, L.P.
c/o National Golf Properties, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
37
If to AGC:
American Golf Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
In each case, with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇., Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Seller:
Golf Acquisitions, L.L.C. -and- Golf Acquisitions, L.L.C.
c/o ClubCorp., Inc. c/o American Golf Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer Attention: ▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇., Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
38
10.5. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of Delaware, without
regard to principles of conflicts of law.
10.6. Dispute Resolution Process. The parties hereby agree to binding
--------------------------
arbitration in accordance with this Section 10.6 as the exclusive means to
resolve all disputes arising out of or relating to this Agreement, the Operating
Agreement, and any other aspect of the parties' or their Affiliates'
relationship to each other.
(a) The parties agree first to try in good faith to resolve the
dispute by mediation administered by the American Arbitration Association
("AAA") under its Commercial Financial Disputes Mediation Rules, before
---
resorting to arbitration. Thereafter, any unresolved controversy or claim shall
be resolved by arbitration administered by the AAA in accordance with its
Commercial Financial Disputes Arbitration Rules (the "Rules"), and judgment upon
-----
the award rendered by the arbitrator(s) may be entered in a court having
jurisdiction thereof pursuant to applicable law.
(b) Notwithstanding any provision to the contrary, neither the
exercise of any right to negotiation, mediation or arbitration, nor the
commencement or prudency of any proceeding, shall limit the right of any party
to this Agreement to seek judicial equitable relief, or other equitable relief
available to it under applicable statutory and/or case law.
(c) Arbitrators appointed by AAA hereunder shall be appointed from the
National Roster for Commercial Financial Disputes as provided in the Rules
unless otherwise mutually agreed to by the parties. Mediators shall be
appointed with consent by the parties, from the National Panel of Mediators,
when practicable, but otherwise by AAA.
(d) With respect to any action arising out of this Agreement,
including any matter subject to judicial determination under this Section, each
party hereby (i) irrevocably submits to the exclusive jurisdiction of any
Delaware state court sitting in the City of Wilmington or the United States
District Court for the District of Delaware; (ii) agrees that all claims in such
action may be decided in such court; (iii) waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum; and (iv) consents to
service of process by mail.
10.7. Waiver of Jury Trial. Consistent with Section 10.6, each party
to this Agreement hereby waives its respective right to a jury trial of any
permitted claim or cause of action arising out of this Agreement, the
Contemplated Transactions, or any dealings between any of the parties hereto
relating to the subject matter of this Agreement or the Contemplated
Transactions. The scope of this waiver is intended to be all encompassing of any
and all disputes that may be filed in any court and that relate to the subject
mater of this Agreement or the Concurrent Agreements, including, without
limitation, contract claims, tort claims, and all other common law and statutory
claims. This waiver is irrevocable, meaning that it may not be modified either
orally or in writing, and this waiver shall apply to any subsequent amendments,
supplements or other modifications to this Agreement, the Concurrent Agreements
or to any other document or agreement relating to the Contemplated Transactions.
39
10.8. Waiver. Except as otherwise expressly provided herein to the
------
contrary, the rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
10.9. Entire Agreement and Modification. This Agreement supersedes
---------------------------------
all prior agreements between the parties with respect to its subject matter
(excluding the Operating Agreement but including the Bid Agreement) and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
10.10. Assignments, Successors, and No Third-Party Rights. Except as
--------------------------------------------------
provided in clauses (a) and (e) of Section 6.2, no party may assign any of its
rights under this Agreement without the prior consent of the other parties,
except that the Buyers may assign any of its rights under this Agreement to any
subsidiary or corporate parent of the Buyers or as collateral security for any
borrowings; provided that the parties acknowledge that NGOP may assign its
rights hereunder with respect to the Acquired Property known as "Sweetwater
Country Club" to an entity designated by NGOP. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects upon, and
inure to the benefit of the successors and permitted assigns of the parties.
Nothing expressed or referred to in this Agreement will be construed to give any
Person other than the parties to this Agreement any legal or equitable right,
remedy, or claim under or with respect to this Agreement or any provision of
this Agreement; provided that the parties acknowledge that the CCI Designees are
intended third party beneficiaries of the Blackstone Water Rights Agreement.
Except as provided in the proviso to the immediately preceding sentence, this
Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their successors and
assigns.
10.11. No Assignment of Stock Purchase Agreement. Neither this
-----------------------------------------
Agreement nor any of the rights granted hereunder shall be deemed to be an
assignment, in whole or in part, of the Stock Purchase Agreement or any of the
rights, interests or obligations thereunder.
10.12. No Partnership or Joint Venture. This Agreement shall not
-------------------------------
constitute a joint venture, partnership or limited liability company between one
or more of NGOP, NGP, AGC, Seller or any CCI Designee. AGC's rights and
obligations under this Agreement are not provided to or assumed by AGC in its
capacity as a member of Seller.
40
10.13. Severability. If any provision of this Agreement is held
------------
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
10.14. Section Headings, Construction. The headings of Sections in
------------------------------
this Agreement are provided for convenience only and will not affect its
construction or interpretation. Unless otherwise expressly provided, all
references to "Section," "Sections," "Article," "Articles," "Schedule,"
"Schedules," "Exhibit," or "Exhibits" refer to the corresponding Section,
Sections, Article, Articles, Schedule, Schedules, Exhibit or Exhibits of this
Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
10.15. No Interpretation Against Drafter. This Agreement is the
---------------------------------
product of negotiations between the parties hereto represented by counsel and
any rules of construction relating to interpretation against the drafter of an
agreement shall not apply to this Agreement and are expressly waived.
10.16. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement. Each such multiple counterpart of this Agreement may
be transmitted via facsimile or other similar electronic means and executed by
one or more of the undersigned, and a facsimile of the signature of one or more
of the undersigned shall be deemed an original signature for all purposes and
have the same force and effect as a manually-signed original.
(Signature page follows)
41
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
GOLF ACQUISITIONS, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
NATIONAL GOLF PROPERTIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
NATIONAL GOLF OPERATING PARTNERSHIP, L.P.
By: NATIONAL GOLF PROPERTIES, INC.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
AMERICAN GOLF CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
S-1
Schedule 1.1
------------
Acquired Property State
----------------- -----
Part A (NGOP Acquired Properties)
---------------------------------
Ahwatukee Country Club Arizona
Foothills Golf Club Arizona
The Lakes at Ahwatukee Arizona
Red Mountain Ranch Country Club Arizona
Carmel Mountain Ranch California
Eagle Crest Golf Club California
El Camino County Club California
The Vineyard at Escondido California
Los ▇▇▇▇ Country Club Texas
Pecan Grove Country Club Texas
Ridgeview Ranch Country Club Texas
Thorntree Country Club Texas
The Trails at Frisco (Blackstone) Texas
Woodlake Country Club Texas
Sweetwater Country Club Texas
Brandermill Country Club Virginia
Kiskiack Golf Club Virginia
▇▇▇▇▇▇▇▇ ▇▇▇▇ Country Club Virginia
Trophy Club of Apalachee Georgia
Trophy Club of Atlanta Georgia
Part B (AGC Acquired Properties)
--------------------------------
Balboa Golf Course California
Saticoy Golf Course California
Redhawk Golf Club California
i
EXHIBIT A
FORM OF NGOP GENERAL ASSIGNMENT AND ▇▇▇▇ OF SALE
GENERAL ASSIGNMENT AND ▇▇▇▇ OF SALE
-----------------------------------
THIS GENERAL ASSIGNMENT AND ▇▇▇▇ OF SALE (this "▇▇▇▇ of Sale") is made
------------
as of this _____ day of March, 1999, by [Tranferor 1], successor in interest to
__________ ("Transferor 1"), and [Transferor 2], successor in interest to
------------
__________ ("Transferor 2"; Transferor 1 and Transferor 2 are each a
------------
"Transferor" and collectively, "Transferors"), for the benefit of NATIONAL GOLF
---------- -----------
OPERATING PARTNERSHIP, L.P., a Delaware limited partnership ("Transferee"). All
----------
capitalized terms used but not specifically defined herein shall have the
meanings given to them in that certain Asset Purchase Agreement, dated as of
March __, 1999, by and among Golf Acquisitions, L.L.C. ("Acquisitions LLC"),
----------------
American Golf Corporation, National Golf Properties, Inc. and Transferee (the
"Purchase Agreement"), which Purchase Agreement is incorporated herein by this
-------------------
reference.
RECITALS
--------
A. Each Transferor is a direct or indirect wholly-owned subsidiary of
Acquisitions LLC.
B. Each Transferor owns, leases or subleases, as the case may be,
certain real properties located in the State of __________, as more particularly
described in "Exhibit A," attached hereto (collectively, the "Land"), and the
--------- ----
buildings, structures and other improvements situated thereon (collectively, the
"Improvements"), and certain Personal Property (as hereinafter defined), if any
------------
(which Personal Property, together with the Land and Improvements are sometimes
hereinafter collectively referred to as the "Property").
--------
C. Pursuant to the terms of the Purchase Agreement, Acquisition LLC
agreed to cause Transferors to transfer to Transferee all of Transferors' right,
title and interest in and to the Property.
D. In order to perfect the transfer and vesting of the Personal
Property (hereinafter defined) to and in Transferee and in order that Transferee
shall be in possession of an instrument evidencing the same, Transferors have
agreed to execute and deliver this ▇▇▇▇ of Sale.
AGREEMENT
---------
NOW, THEREFORE, for and in consideration of the foregoing premises,
and the undertakings set forth below, each Transferor hereby agrees as follows:
1. Transfer and Assignment of Personal Property.
--------------------------------------------
Subject to the terms and provisions of the Purchase Agreement and
excluding any property or assets conveyed to American Golf Corporation pursuant
to the terms of the Purchase Agreement or by separate assignment or ▇▇▇▇ of sale
executed contemporaneously herewith, each Transferor hereby grants, transfers,
assigns, conveys and delivers to Transferee and its successors and assigns, to
have and to hold to and for its and their own use and benefit forever,
absolutely and unconditionally, all of its right, title and interest, if any, in
and to any and all of the following (collectively, the "Personal Property"): (i)
-----------------
all tangible personal property of whatever kind or character now or hereafter
owned by any Transferor and attached to, installed, located on or about, or in
A-1
connection with the ownership of the Property, including, without limitation,
all of Transferor's right, title and interest in and to all air conditioning,
heating, lighting, refrigeration, plumbing, ventilating, incinerating and
electrical equipment, fixtures, including trade fixtures, furniture,
furnishings, equipment, machinery, tools, sprinklers, hoses, repair parts,
appliances, televisions, communications and security equipment, drapes, floor
coverings, pylons and other signs, golf carts and other motor vehicles, and (ii)
all intangible property, including by way of example and not by limitation, (A)
any and all patents, patent applications, licenses, tradenames, trademarks,
service marks and registrations, logos, designs, tradestyles or other product or
business identifiers and all other intellectual property assets associated and
used in connection with the operation of the Property and all variations thereof
(excluding, however, the Cobblestone Trademark Assets), together with all
continuations, divisions or reissues thereof and all rights to any claims and
demands Transferor may have at law or in equity arising out of any infringement
of any of the foregoing, (B) any and all leases or subleases covering any
portion of the Land, Improvements, furniture, fixtures, equipment and vehicles
or other personal property located on the Property (to the extent assignable),
(C) all rights to and under any contracts, warranties or guaranties relating
solely to the ownership of the Property, and all rights to recovery of judgments
relating solely to the ownership of the Property, (D) all books and records,
files, operating manuals, lists, telephone numbers and financial data related to
the ownership of the Property, (E) all governmental permits, dedications,
approvals, rights of use licenses and certificates of occupancy (excluding,
however, any liquor or alcoholic beverage licenses) relating to the ownership of
the Property (to the extent assignable), (F) all architectural and engineering
drawings, plans, specifications, design layouts, surveys, reports, studies,
construction and development contracts and subcontracts, if any, (G) all
minerals, oil, gas and other hydrocarbons located in or beneath the Land, along
with all rights to surface and subsurface entry, and (H) any appurtenances,
rights, including reversionary rights, easements, and privileges belonging to or
running with the Land, including, without limitation, all rights under any
restrictive covenants, reciprocal easement agreements and use or other deed
restrictions or relating to any property owners' association, all parking
rights, all land laying in the bed of any street, road, cul-de-sac, alley or
access way, open or closed, existing, vacated or proposed, adjoining, adjacent
to or contiguous to the Land, all awards for damage to the Land or taking by
eminent domain of any portion thereof or the change in the grade of any street
adjoining the Land, all strips and gores of land adjoining or surrounded by the
Land, and all zoning and land use entitlement and development rights pertaining
to the Land.
2. No Warranty; Non-Recourse. SUBJECT TO THE TERMS AND PROVISIONS OF
-------------------------
THE PURCHASE AGREEMENT, THE SALE, CONVEYANCE, ASSIGNMENT, TRANSFER AND DELIVERY
MADE HEREUNDER IS ON AN AS-IS BASIS, WITHOUT REPRESENTATIONS OR WARRANTIES OF
ANY KIND, INCLUDING THE WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. SUBJECT TO THE TERMS AND PROVISIONS OF THE PURCHASE AGREEMENT, THIS
▇▇▇▇ OF SALE IS MADE WITHOUT RECOURSE WITH RESPECT TO ANY TRANSFEROR OR WITH
RESPECT TO ANY OF THE OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, AGENTS,
EMPLOYEES, REPRESENTATIVES, OR OTHER CONSTITUENT ENTITIES OF ANY TRANSFEROR.
3. Further Assurances. Each Transferor, for itself and its heirs and
------------------
assigns, hereby covenants that, from time to time after delivery of this
instrument, at Transferee's request and without further consideration, such
Transferor will execute and deliver or will cause to be executed and delivered,
such other instruments of conveyance and transfer and take such other actions as
Transferee reasonably may require to effect the transactions contemplated by
this ▇▇▇▇ of Sale and to effectively vest in Transferee the Personal Property
and to put Transferee in possession of the Personal Property, and to do all
other things and execute and deliver all other instruments and documents as may
be required to effect the same. Each Transferor hereby appoints Transferee as
its agent and attorney, in its own name or in the name of the Transferee, to
receive, collect, enforce and ▇▇▇ for any and all of the Personal
A-2
Property transferred hereby, and to endorse any checks or other instruments
payable to Transferee or its order received in payment therefor. The powers
granted herein are irrevocable and coupled with an interest.
4. Relationship with Purchase Agreement. In the event that any
------------------------------------
provision of this ▇▇▇▇ of Sale shall be construed to conflict with any provision
in the Purchase Agreement, the provisions in the Purchase Agreement shall be
deemed to be controlling.
5. Governing Law. This ▇▇▇▇ of Sale shall be governed by, and
-------------
construed in accordance with the laws of the State of Delaware.
6. Successors and Assigns. This ▇▇▇▇ of Sale shall be binding upon
----------------------
and inure to the benefit of Transferor and Transferee and their respective
successors and assigns.
NO FURTHER TEXT ON THIS PAGE.
A-3
IN WITNESS WHEREOF, Transferor has caused this ▇▇▇▇ of Sale to be
executed as of the date and year first written above.
[TRANFEROR 1]
By:__________________________
Name:
Title:
[TRANFEROR 2]
By:__________________________
Name:
Title:
A-4
EXHIBIT A
---------
Legal Description of Properties
Exh. A
EXHIBIT B
FORM OF AGC GENERAL ASSIGNMENT AND ▇▇▇▇ OF SALE
GENERAL ASSIGNMENT AND ▇▇▇▇ OF SALE
-----------------------------------
THIS GENERAL ASSIGNMENT AND ▇▇▇▇ OF SALE (this "▇▇▇▇ of Sale") is made
------------
as of this _____ day of March, 1999, by [Tranferor 1], successor in interest to
__________ ("Transferor 1"), and [Tranferor 2], successor in interest to
------------
__________ ("Transferor 2"; Transferor 1 and Transferor 2 are each a
------------
"Transferor" and collectively, "Transferors"), for the benefit of AMERICAN GOLF
---------- -----------
CORPORATION, a California corporation ("Transferee"). All capitalized terms
----------
used but not specifically defined herein shall have the meanings given to them
in that certain Asset Purchase Agreement, dated as of March __, 1999, by and
among Golf Acquisitions, L.L.C. ("Acquisitions LLC"), National Golf Operating
----------------
Partnership, L.P., National Golf Properties, Inc. and Transferee (the "Purchase
--------
Agreement"), which Purchase Agreement is incorporated herein by this reference.
---------
RECITALS
--------
A. Each Transferor is a direct or indirect wholly-owned subsidiary of
Acquisitions LLC.
B. Each Transferor owns, leases or subleases, as the case may be,
certain real properties located in the State of ___________ as more particularly
described in "Exhibit A," attached hereto (collectively, the "Land"), and the
--------- ----
buildings, structures and other improvements situated thereon (together with
the Land, the "Property") and certain operational assets related thereto.
--------
C. Pursuant to the terms of the Purchase Agreement, Acquisition LLC
agreed to cause Transferors to transfer to Transferee all of Transferors' right,
title and interest in and to the Purchased Assets (hereafter defined).
D. In order to perfect the transfer and vesting of the Purchased
Assets to and in Transferee and in order that Transferee shall be in possession
of an instrument evidencing the same, Transferors have agreed to execute and
deliver this ▇▇▇▇ of Sale.
AGREEMENT
---------
NOW, THEREFORE, for and in consideration of the foregoing premises,
and the undertakings set forth below, each Transferor hereby agrees as follows:
1. Transfer and Assignment of Purchased Assets.
-------------------------------------------
Subject to the terms and provisions of the Purchase Agreement and
excluding any property or assets relating to the ownership of the Property
conveyed to National Golf Operating Partnership, L.P. pursuant to the terms of
the Purchase Agreement or by separate assignment or ▇▇▇▇ of sale executed
contemporaneously herewith, each Transferor hereby grants, transfers, assigns,
conveys and delivers to Transferee and its successors and assigns, to have and
to hold to and for its and their own use and benefit forever, absolutely and
unconditionally, all of its right, title and interest, if any, in and to any and
all of the following (collectively, the "Purchased Assets"): (i) all inventory,
----------------
professional shop merchandise, saleable food and non-alcoholic beverage
inventory, food service equipment and supplies, recreational equipment, gasoline
and lubricants, fertilizer, seed, sand, chemicals, irrigation parts and
supplies, kitchen utensils, linen, glassware, flatware, china, cleaning
equipment and supplies, computers
B-1
and software used in the operation of the Property, (ii) all management
contracts, operating and maintenance agreements, service agreements, supply
contracts, licenses, permits, warranties, guaranties and all other contracts
relating to the operation of the Property, (iii) all rights to recovery of
judgments and all books and records relating to the operation of the Property
(including all equipment records, administrative files, catalogs, operating
manuals and existing financial data), (iv) all membership applications and
related agreements, including all membership lists and membership billing
records (together with all fees and deposits related thereto), (v) the goodwill
of the business operated on the Property and (vi) any other property or assets
which are required to be conveyed to Transferee pursuant to the terms of the
Purchase Agreement.
2. No Warranty; Non-Recourse. SUBJECT TO THE TERMS AND PROVISIONS OF
-------------------------
THE PURCHASE AGREEMENT, THE SALE, CONVEYANCE, ASSIGNMENT, TRANSFER AND DELIVERY
MADE HEREUNDER IS ON AN AS-IS BASIS, WITHOUT REPRESENTATIONS OR WARRANTIES OF
ANY KIND, INCLUDING THE WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. SUBJECT TO THE TERMS AND PROVISIONS OF THE PURCHASE AGREEMENT, THIS
▇▇▇▇ OF SALE IS MADE WITHOUT RECOURSE WITH RESPECT TO ANY TRANSFEROR OR WITH
RESPECT TO ANY OF THE OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, AGENTS,
EMPLOYEES, REPRESENTATIVES, OR OTHER CONSTITUENT ENTITIES OF ANY TRANSFEROR.
3. Further Assurances. Each Transferor, for itself and its heirs and
------------------
assigns, hereby covenants that, from time to time after delivery of this
instrument, at Transferee's request and without further consideration, such
Transferor will execute and deliver or will cause to be executed and delivered,
such other instruments of conveyance and transfer and take such other actions as
Transferee reasonably may require to effect the transactions contemplated by
this ▇▇▇▇ of Sale and to effectively vest in Transferee the Purchased Assets and
to put Transferee in possession of the Purchased Assets, and to do all other
things and execute and deliver all other instruments and documents as may be
required to effect the same. Each Transferor hereby appoints Transferee as its
agent and attorney, in its own name or in the name of the Transferee, to
receive, collect, enforce and ▇▇▇ for any and all of the Purchased Assets
transferred hereby, and to endorse any checks or other instruments payable to
Transferee or its order received in payment therefor. The powers granted herein
are irrevocable and coupled with an interest.
4. Relationship with Purchase Agreement. In the event that any
------------------------------------
provision of this ▇▇▇▇ of Sale shall be construed to conflict with any provision
in the Purchase Agreement, the provisions in the Purchase Agreement shall be
deemed to be controlling.
5. Governing Law. This ▇▇▇▇ of Sale shall be governed by, and
-------------
construed in accordance with the laws of the State of Delaware.
6. Successors and Assigns. This ▇▇▇▇ of Sale shall be binding upon
----------------------
and inure to the benefit of Transferor and Transferee and their respective
successors and assigns.
NO FURTHER TEXT ON THIS PAGE.
B-2
IN WITNESS WHEREOF, each Transferor has caused this ▇▇▇▇ of Sale to be
executed as of the date and year first written above.
[TRANFEROR 1]
By: ___________________________
Name:
Title:
[TRANSFEROR 2]
By: ___________________________
Name:
Title:
B-3
EXHIBIT A
---------
Legal Description of Properties
Exh. A
EXHIBIT C
FORM OF ASSIGNMENT OF LEASE
RECORDING REQUESTED BY:
AND WHEN RECORDED MAIL TO:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------------------------------------------
ASSIGNMENT AND ASSUMPTION OF GROUND LEASE
THIS ASSIGNMENT AND ASSUMPTION OF GROUND LEASE (this "Assignment") is
----------
made as of March __, 1999, by and between ESCONDIDO CONSULTING ACQUISITION,
L.L.C., a Delaware limited liability company, successor in interest to Escondido
Consulting, Inc., as more particularly described on Exhibit C attached hereto
("Assignor"), and NATIONAL GOLF OPERATING PARTNERSHIP, L.P., a Delaware limited
--------
partnership ("Assignee").
--------
A. Assignor is the owner of leasehold estates in certain land
described on Exhibit A attached hereto (collectively, the "Property"), under the
--------- --------
leases and amendments thereto listed on Exhibit B attached hereto (collectively,
---------
the "Leases").
------
B. Pursuant to the terms and provisions of that certain Asset
Purchase Agreement, dated as of March ___, 1999, among Golf Acquisitions,
L.L.C., American Golf Corporation, National Golf Properties, Inc., and Assignee
(the "Purchase Agreement"), Assignor desires to transfer and assign to Assignee
------------------
as of the date hereof all of Assignor's right, title and interest in and to the
Leases, including, all of Assignor's right, title and interest in any
improvements on the applicable Property (collectively, the "Improvements") and
------------
Assignee desires to assume all of Assignor's obligations under the Leases
arising from and after the date hereof (the "Closing Date").
------------
C. In order to transfer the Leases to Assignee and in order that
Assignee shall be in possession of a document evidencing the same, Assignor and
Assignee have made this Assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:
1. Transfer and Assignment. Assignor hereby grants, assigns,
-----------------------
transfers, conveys and delivers to Assignee, absolutely and unconditionally, all
of Assignor's right, title and interest in, to and under the Leases and any and
all Improvements.
2. Acceptance and Assumption. Assignee hereby accepts the foregoing
-------------------------
transfer and assignment of the Leases and Improvements and agrees to assume all
obligations of Assignor with respect to the Leases accruing or arising from and
after the Closing Date, subject to the terms of the Purchase Agreement.
3. Indemnification. The indemnification provisions of the Purchase
---------------
Agreement shall be deemed incorporated by reference herein to apply to any
losses, costs, expenses, liabilities or other matters arising under the Leases
on account of a default thereunder by either Assignor or Assignee.
C-1
4. Successors and Assigns. This Assignment shall be binding upon and
----------------------
inure to the benefit of Assignor and Assignee and their respective successors
and assigns.
5. Further Acts. Assignor and Assignee each agree for itself and its
------------
successors and assigns that, from time to time after the date hereof, and
without further consideration, to execute and deliver such other documents of
conveyance and transfer and perform such other acts as may be necessary to
effectuate the intents and purposes of this Assignment.
6. Counterparts. This Assignment may be executed in any number of
------------
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Assignment via
telephone facsimile transmission shall be effective as delivery of a manually
executed counterpart of this Assignment.
7. Authority. Each of the parties hereto represent and warrant to
---------
the other that this Assignment, and all documents to be executed by such party
in connection herewith, have been duly authorized, executed and delivered by
such party.
8. Governing Law. This Assignment shall be construed and enforced
-------------
according to and governed by the law of the State of Delaware.
NO FURTHER TEXT ON THIS PAGE.
C-2
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment as of the date first written above.
Assignor: MEDITRUST GOLF GROUP, INC., a Delaware
corporation
By:______________________________
Name:____________________________
Title:___________________________
Assignee:
NATIONAL GOLF OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership
By: NATIONAL GOLF PROPERTIES,
INC., a Maryland corporation, its
General Partner
By:_________________________
Name:_______________________
Title:______________________
C-3
Exhibit A
---------
LEGAL DESCRIPTION
Exh. A
Exhibit B
---------
LEASES
Exh. B
Exhibit C
---------
Exh. C
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK )
On _______________, 1999, before me, ____________________ , a notary
public, personally appeared _______________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon which the person(s) acted, executed
this instrument.
WITNESS my hand and official seal.
------------------------------------
Notary Public
My commission expires:
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK )
On _______________, 1999, before me, ____________________ , a notary
public, personally appeared _______________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon which the person(s) acted, executed
this instrument.
WITNESS my hand and official seal.
------------------------------------
Notary Public
My commission expires:
EXHIBIT D
FORM OF ASSIGNMENT OF WATER RIGHTS
ASSIGNMENT OF WATER RIGHTS
--------------------------
THIS ASSIGNMENT OF WATER RIGHTS (the "Assignment"), is made and
----------
entered into as of March ___, 1999 (the "Effective Date"), by MEDITRUST GOLF
--------------
GROUP, INC., a Delaware corporation ("Assignor") for the benefit of NATIONAL
--------
GOLF OPERATING PARTNERSHIP, L.P., a Delaware limited partnership ("Assignee").
--------
WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as
of March ___, 1999, among, Golf Acquisitions, L.L.C., National Golf Properties,
Inc., Assignee and American Golf Corporation (the "Purchase Agreement"),
------------------
Assignor desires to assign to Assignee all of its right title and interest to
any and all existing water ▇▇▇▇▇ located on, or used in connection with the
operation of the real properties more particularly described on Exhibit A
---------
attached hereto (collectively, the "Property"), all water from such ▇▇▇▇▇, all
--------
water rights, rights under any water leases, contracts or permits, riparian
rights, appropriative and pueblo rights, and water allocations arising from or
otherwise related to the Property, along with all rights to surface and
subsurface entry (collectively, the "Water Rights");
------------
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Assignor hereby agrees as follows:
Assignor hereby assigns, transfers, grants and conveys to Assignee all
of its right, title and interest to all Water Rights and Assignee hereby accepts
such assignment, subject to the limitations set forth in the Purchase Agreement.
This Assignment shall be binding upon and inure to the benefit of
Assignor and Assignee and their respective successors and assigns.
SIGNATURES COMMENCE ON FOLLOWING PAGE.
D-1
In witness whereof, Assignor has executed this Assignment on the date
first above written.
MEDITRUST GOLF GROUP, INC.,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
D-2
EXHIBIT A
---------
Legal Description of Properties
Exh. A
EXHIBIT E
FORM OF NGOP ASSUMPTION DOCUMENT
ASSUMPTION AGREEMENT
--------------------
This ASSUMPTION AGREEMENT (this "Assumption Agreement"), dated as of
--------------------
March ___, 1999, is made, executed and delivered by NATIONAL GOLF OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership ("Assignee") to GOLF
--------
ACQUISITIONS, L.L.C., a Delaware limited liability company ("Acquisition LLC").
---------------
Background
----------
Acquisition LLC, Assignee, National Golf Properties, Inc., and
American Golf Corporation, a California corporation ("AGC") are parties to a
---
certain Asset Purchase Agreement, dated as of March ___, 1999 (the "Purchase
--------
Agreement"). The Purchase Agreement provides, among other things, for the
---------
acquisition by Assignee of certain golf course assets owned or held by certain
subsidiaries of Acquisition LLC and the assumption by Assignee of those
liabilities listed under the definition of "NGOP Assumed Liabilities" in the
Purchase Agreement (the "Assumed Obligations"). Capitalized terms used but not
-------------------
otherwise defined herein shall have the meanings assigned to them in the
Purchase Agreement.
Terms
-----
In consideration of the mutual covenants contained in this Assumption
Agreement and in the Purchase Agreement and intending to be legally bound, the
parties hereto agree as follows:
1. Assumption. Assignee hereby assumes and agrees to pay, fully
----------
satisfy when due and fully perform and discharge when required, all obligations,
commitments and liabilities, of every kind and description, whether known or
unknown, primary or secondary, direct or indirect, recorded or unrecorded,
contingent or absolute arising out of or related to the Assumed Obligations,
subject to the terms of the Purchase Agreement. Except as otherwise expressly
assumed herein, Assignee does not assume and shall not in any manner be
responsible, directly or indirectly, for any liability (including, without
limitation, any contingent liability), obligation, lien or encumbrance of AGC,
Acquisition LLC or any Acquired Company.
2. Successors and Assigns. This Assumption Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
assigns, transferees and successors.
3. Benefit. This Assumption Agreement is being delivered in favor of
-------
Acquisition LLC.
4. Governing Law. This Assumption Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware.
E-1
5. Relationship with the Purchase Agreement. In the event that any
----------------------------------------
provision of this Assumption Agreement is construed to conflict with any
provision of the Purchase Agreement, the provisions of the Purchase Agreement
shall be deemed controlling.
6. Counterparts. This Assumption Agreement may be executed in one or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
NO FURTHER TEXT ON THIS PAGE.
E-2
IN WITNESS WHEREOF, the parties have caused this Assumption Agreement
to be duly executed as of the date and year first above written.
NATIONAL GOLF OPERATING PARTNERSHIP, L.P.
BY: NATIONAL GOLF PROPERTIES, INC., its
General Partner
By:_____________________________
Name:___________________________
Title:__________________________
GOLF ACQUISITIONS, L.L.C.
By:___________________________________
Name:_________________________________
Title:________________________________
E-3
EXHIBIT F
FORM OF AGC ASSUMPTION DOCUMENT
ASSUMPTION AGREEMENT
--------------------
This ASSUMPTION AGREEMENT (this "Assumption Agreement"), dated as of
--------------------
March ___, 1999, is made, executed and delivered by AMERICAN GOLF CORPORATION, a
California corporation ("Assignee") to GOLF ACQUISITIONS, L.L.C., a Delaware
--------
limited liability company ("Acquisition LLC").
---------------
Background
----------
Acquisition LLC, Assignee, National Golf Properties, Inc., and
National Golf Operating Partnership, L.P., ("NGOP") are parties to a certain
----
Asset Purchase Agreement, dated as of March ___, 1999 (the "Purchase
--------
Agreement"). The Purchase Agreement provides, among other things, for the
acquisition by Assignee of certain golf course assets owned or held by certain
subsidiaries of Acquisition LLC and the assumption by Assignee of those
liabilities listed under the definition of "AGC Assumed Liabilities" in the
Purchase Agreement (the "Assumed Obligations"). Capitalized terms used but not
-------------------
otherwise defined herein shall have the meanings assigned to them in the
Purchase Agreement.
Terms
-----
In consideration of the mutual covenants contained in this Assumption
Agreement and in the Purchase Agreement and intending to be legally bound, the
parties hereto agree as follows:
1. Assumption. Assignee hereby assumes and agrees to pay, fully
----------
satisfy when due and fully perform and discharge when required, all obligations,
commitments and liabilities, of every kind and description, whether known or
unknown, primary or secondary, direct or indirect, recorded or unrecorded,
contingent or absolute arising out of or related to the Assumed Obligations,
subject to the terms of the Purchase Agreement. Except as otherwise expressly
assumed herein, Assignee does not assume and shall not in any manner be
responsible, directly or indirectly, for any liability (including, without
limitation, any contingent liability), obligation, lien or encumbrance of NGOP,
Acquisition LLC or any Acquired Company.
2. Successors and Assigns. This Assumption Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
assigns, transferees and successors.
3. Benefit. This Assumption Agreement is being delivered in favor of
-------
Acquisition LLC.
4. Governing Law. This Assumption Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware.
F-1
5. Relationship with the Purchase Agreement. In the event that any
----------------------------------------
provision of this Assumption Agreement is construed to conflict with any
provision of the Purchase Agreement, the provisions of the Purchase Agreement
shall be deemed controlling.
6. Counterparts. This Assumption Agreement may be executed in one or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
NO FURTHER TEXT ON THIS PAGE.
F-2
IN WITNESS WHEREOF, the parties have caused this Assumption Agreement
to be duly executed as of the date and year first above written.
AMERICAN GOLF CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
GOLF ACQUISITIONS, L.L.C.
By:_________________________________
Name:_______________________________
Title:______________________________
F-3
EXHIBIT G
FORM OF BLACKSTONE WATER RIGHTS AGREEMENT
BLACKSTONE WATER RIGHTS AGREEMENT
---------------------------------
THIS BLACKSTONE WATER RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of the ____ day of March, 1999, by and between NATIONAL GOLF OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership ("NGOP"), and STONEBRIAR
COUNTRY CLUB JOINT VENTURE, a Texas joint venture ("SCC").
R E C I T A L S :
A. NGOP has acquired from Cobblestone Golf Group Acquisitions, ▇.▇▇. ("CGGA")
f/k/a Meditrust Golf Group II, LLC ("MGG") certain property in Frisco, Texas
upon which an 18-hole golf course is being constructed ("Blackstone").
B. SCC is the owner of Stonebriar Country Club in Frisco, Texas ("Stonebriar").
▇. ▇▇▇▇▇▇▇▇▇▇ is benefited by that certain Reclaimed Water Use Agreement (the
"Water Agreement") dated as of June 8, 1998 by and between the City of
Frisco, Texas (the "City") and Golf Management, LP, providing for the
purchase and sale to the owner of Blackstone of effluent water for use in
connection with the golf course to be constructed on Blackstone.
D. SCC is in the process of planning and constructing an additional 18-hole
golf course and desires to ensure the availability of adequate water for the
irrigation of the golf courses at Stonebriar.
▇. ▇▇▇▇ agreed, as a condition to the conveyance of Blackstone, to enter into
this Agreement to allow SCC to use excess water available under the Water
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Sharing of Water. Under the terms of the Water Agreement, NGOP is entitled
----------------
to up to 100,000,000 gallons of reclaimed water per year for a minimum
annual payment of $75,000. Any water used in excess of that figure is to be
charged and billed at a rate of $0.75 per thousand gallons. NGOP hereby
agrees that SCC shall be entitled to the use of water provided or allocated
to NGOP under the Water Agreement, subject to and upon the following
conditions:
(i) SCC's use of the water is permitted by the City;
(ii) the water usage by SCC does not result in any material
impairment of the water rights or usage at Blackstone; and
(iii) any costs charged or assessed to NGOP (or its operator) by the
City over and above the costs that would have been payable by NGOP (or its
operator) in the
G-1
absence of this Agreement and the use by SCC of reclaimed water allocated
to Blackstone under the Water Agreement are to be borne by SCC.
NGOP agrees to cooperate (and cause its operator to cooperate) with SCC, at
no cost to NGOP (or its operator), to obtain the City's agreement to SCC's
use of water under the Water Agreement.
2. No Amendment of Water Agreement. NGOP agrees that it will not, without the
-------------------------------
prior written consent of SCC, amend, modify, alter or replace the Water
Agreement if the result of such action will be a reduction in the volume of
water to be supplied or delivered by the City thereunder. Notwithstanding
the foregoing, NGOP may agree to a reduction in the volume of water if the
reduction results in the lowering of NGOP's water costs and SCC does not
agree after receipt of written notice from NGOP to reimburse NGOP for the
amount of the savings to be realized by NGOP from the reduction.
3. Assignment. This Agreement shall not be assigned by SCC without the prior
----------
written consent of NGOP except that no such consent shall be required for
an assignment to a subsequent owner or lessee of Stonebriar. This
Agreement shall not be assigned by NGOP without the prior written consent
of SCC except that no such consent shall be required for an assignment to
its operator or to any party succeeding to the interests of NGOP under the
Water Agreement.
4. Counterparts. This Agreement may be executed in any number of counterparts
------------
with the same effect as if the parties have all signed the same document.
All counterparts shall be construed together and shall constitute one
instrument. In making proof of this Agreement, it shall not be necessary
to account for more than one counterpart executed by the party against whom
enforcement is sought.
5. Third Party Beneficiary. The parties agree that SCC is an intended third
-----------------------
party to that certain Asset Purchase Agreement between NGOP and CGGA with
respect to the requirement that NGOP enter into this Agreement with SCC.
6. Successors and Assigns. This Agreement shall be binding upon and inure to
----------------------
the benefit of the parties hereto and their respective successors, legal
representatives, and assigns, where permitted herein.
7. Governing Law. This Agreement shall be governed by and construed, enforced
-------------
and interpreted in accordance with the laws of the State of Texas and
applicable federal law.
(Signature Page Follows)
G-2
IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
NATIONAL GOLF OPERATING
PROPERTIES, L.P., a Delaware limited
partnership
By: NATIONAL GOLF PROPERTIES,
INC., a Maryland corporation, its
General Partner
By:______________________________
Name:____________________________
Title:___________________________
AMERICAN GOLF CORPORATION,
a California corporation
By:______________________________
Name:____________________________
Title:___________________________
STONEBRIAR COUNTRY CLUB JOINT
VENTURE, a Texas joint venture
By: Stonebriar Club, Inc., venturer
By:______________________________
Name:____________________________
Title:___________________________
G-3
ASSIGNMENT OF TRADEMARKS AND OTHER
INTELLECTUAL PROPERTY RIGHTS
----------------------------
WHEREAS, Golf Acquisitions, L.L.C., a Delaware limited liability
company ("Seller"), National Golf Properties, Inc., a Maryland corporation
------
("NGP"), National Golf Operating Partnership, L.P., a Delaware limited
---
partnership ("NGOP"), and American Golf Corporation, a California corporation
----
("AGC") are parties to an Asset Purchase Agreement (the "Asset Purchase
----- --------------
Agreement") dated as of the date hereof (capitalized terms used herein without
---------
definition shall have the meaning ascribed thereto therein);
WHEREAS, pursuant to the Asset Purchase Agreement, Seller has agreed
to sell and to cause the acquired companies to sell to AGC and NGOP and AGC and
NGOP have agreed to buy, certain assets; and
WHEREAS, among the assets to be acquired by AGC pursuant to the Asset
Purchase Agreement are all of the intellectual property of the Transfer Group
relating to the "COBBLESTONE" trademark;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller hereby grants, transfers,
assigns, conveys and delivers to AGC all of its right, title and interest in and
to (i) the "COBBLESTONE" trademark worldwide and in any country and the goodwill
associated therewith, (ii) all other trademarks, trade dress, trademark
registrations and trademark applications, service marks and service ▇▇▇▇
applications and trade names, owned or possessed by Seller relating thereto,
(iii) all documents and files relating to, containing or evidencing the
foregoing, and (iv) the right to ▇▇▇ and the right to all damages for any past,
present or future acts of infringement, acts of unfair competition or other
actionable conduct by third parties relating to or arising out of the foregoing
or the ownership thereof.
Dated as of this ___ day of March 1998.
GOLF ACQUSITIONS, L.L.C.
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
▇-▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS
COUNTY OF NEW YORK )
On _______________, 1999, before me, ____________________ , a notary
public, personally appeared _______________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon which the person(s) acted, executed
this instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public
My commission expires:
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK )
On _______________, 1999, before me, ____________________ , a notary
public, personally appeared _______________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon which the person(s) acted, executed
this instrument.
WITNESS my hand and official seal.
---------------------------------------
Notary Public
My commission expires:
H-2
EXHIBIT I
COBBLESTONE TRADEMARK LICENSE
TRADEMARK LICENSE AGREEMENT
---------------------------
This Trademark License Agreement (this "Agreement") is made as of this
---------
___ day of March, 1998, between American Golf Corporation, a California
corporation ("Licensor"), and the licencees set forth on the signature pages
--------
hereto ("Licensees").
---------
RECITALS
WHEREAS, Golf Acquisitions, L.L.C., National Golf Properties, Inc.,
National Golf Operating Partnership, L.P. and Licensor are parties to that
certain Asset Purchase Agreement, dated as of the date hereof (the "Asset
-----
Purchase Agreement");
------------------
WHEREAS, capitalized terms used herein without definition have the
meanings ascribed thereto in the Asset Purchase Agreement;
WHEREAS, as part of the transactions contemplated by the Asset
Purchase Agreement, Licensor acquired from the Acquired Companies rights in
certain intellectual property described in that certain Assignment of Trademark
and other Intellectual Property Rights by Golf Acquisition, L.L.C. dated as of
even date herewith (the "Marks"); and
-----
WHEREAS, Licensees desire to acquire a non-exclusive worldwide right
to use the Marks pursuant to the terms and conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration for the mutual promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Licensor agrees to and hereby does
license the Marks to Licensees as follows:
1. Grant. Subject to the terms and conditions of this Agreement,
-----
Licensor hereby grants to Licensees, a non-exclusive, worldwide license to use
the Marks solely for the purpose of maintaining the use of the word
"Cobblestone" in the corporate or organizational names of the Licencees.
Notwithstanding the foregoing, Licensees shall have no right to publicly display
the Marks (other than in public filings with governmental authorities) or to use
the Marks in advertising, marketing, promotions or for any other purposes.
Licensor reserves the exclusive right to use and/or license the Marks for all
other purposes including without limitation, to use, license and/or permit the
use of the Marks in the corporate names of any other entities.
2. Consideration. As consideration for the rights granted hereunder,
-------------
Licensees hereby agree to pay to Licensor the sum of ten dollars ($10).
3. Assignment. Licensees shall not grant, assign, convey, sublicense
----------
or transfer any of its rights to use the Marks to any person without the prior
written approval of Licensor, which may be withheld at the sole discretion of
Licensor. Any other purported sublicense, assignment, conveyance or transfer
shall be null and void and of no force or effect whatsoever. For purposes of
this Section 3, an assignment of this Agreement shall include the
I-1
sale of a controlling interest in the stock or all or substantially all of the
assets of a Licensee or any entity which, either directly or indirectly, owns or
controls a Licensee. In the event written approval of Licensor is obtained, the
holder or holders through assignment, transfer or conveyance of this Agreement
or any interest herein shall be bound by all of the terms and conditions hereof.
4. Trademark and Goodwill Ownership. Each Licensee agrees that the
--------------------------------
Marks and the goodwill associated therewith ("Goodwill") are and remain
--------
Licensor's exclusive property. No Licensee shall at any time do or suffer to be
done any act which would impair Licensor's proprietary rights to the Marks or
the Goodwill. Each Licensee understands that it acquires no right, title or
interest in the Marks or the Goodwill other than the limited rights of use
described by the express terms of this Agreement. All use by the Licensees of
the Marks shall at all times inure to the benefit of Licensor. If Licensor
deems it advisable to register the Marks, or to record Licensees as registered
user of the Marks in any jurisdiction, Licensees shall cooperate in any such
registration or recordation.
5. Infringement. Licensees shall promptly notify Licensor in writing
------------
of any actual or suspected infringement of the Marks by a third party of which
it becomes aware and of any available evidence thereof. Licensees shall
cooperate, at Licensor's expense, with Licensor's efforts to investigate,
terminate and recover damages for any actual or suspected infringement of the
Marks.
6. Indemnification.
---------------
(a) Licensees shall indemnify, defend and hold harmless Licensor,
Licensor's affiliates, and their officers, employees, servants or agents
(collectively, the "Licensor Agents") from and against all claims, demands,
---------------
suits, actions, losses, costs, damages, costs of defense and reasonable
attorneys fees which Licensor or Licensor Agents may suffer or incur as the
result of (i) any liability to any third party from loss, damage or injury to
persons or property in any manner arising from the use of the Marks, and (ii)
any breach by any Licensee of any term or condition of this Agreement.
(b) The indemnities under this Section 6 shall survive the termination
or expiration of this Agreement and do not require payment as a condition
precedent to recovery. Notwithstanding anything to the contrary herein, it is
expressly understood by the parties that no director, member, officer, employee
or other representative of Licensor shall incur any financial responsibility or
liability of any kind or nature whatsoever in connection with this Agreement or
any subsequent agreement between the parties regarding the subject matter
herein.
7. Relationship of the Parties. This Agreement does not create a
---------------------------
partnership or joint venture between the parties hereto, and does not make
either party the employee, agent or legal representative of the other for any
purpose whatsoever. Neither party is granted any right or authority to assume
or create any obligation or responsibility, express or implied, on behalf of or
in the name of the other party.
I-2
8. Term of Agreement. This Agreement shall commence upon the date
-----------------
first mentioned above and shall terminate upon the earlier of (i) the final
change in the corporate or organizational names of the Licensees to delete the
word "Cobblestone" therefrom and (ii) the occurrence of any of the events listed
under Section 9 herein.
9. Termination.
-----------
(a) If any party commits any material breach of any of its obligations
hereunder, the other party may give written notice of breach to the breaching
party. If the breaching party fails to cure such breach and any intervening
breach within ten (10) days after the date of such written notice, the other
party may immediately terminate this Agreement by giving written notice of
termination.
(b) Notwithstanding the provisions of this Agreement, and in addition
to any other rights and remedies it may have, Licensor shall have the right to
terminate this Agreement with respect to a Licensee by written notice, effective
immediately, if:
(1) Such Licensee has breached any provision of this Agreement
relating to the ownership, protection or use of the Marks;
(2) Such Licensee admits in writing that it is insolvent or unable to
pay its debts as they become due; makes or proposes an assignment for the
benefit of creditors; convenes or proposes to convene a meeting of its
creditors or any class thereof for the purposes of effecting a moratorium
upon or extension or composition of its debts; or commences or has filed
against it any bankruptcy, reorganization, liquidation or insolvency
proceeding under any law in any country for the relief of debtors; or if
any receiver, trustee, liquidator or custodian is appointed to take
possession of any substantial portion of such Licensee's assets; or such
Licensee is put or decides to go into dissolution or liquidation (other
than in connection with a merger or consolidation), or otherwise
discontinues business; or
(3) Such Licensee attempts to assign, transfer, convey, grant, or
sublicense any of the rights granted hereunder to any person without
Licensor's prior written consent.
10. Effect of Termination. Upon expiration or termination of this
---------------------
Agreement with respect to any or all Licensees:
(a) Such Licensees' right to use the Marks shall terminate and all
rights granted to such Licensees under this Agreement shall immediately revert
to, and vest in Licensor, and absolutely no interest whatsoever in any of such
rights, in whole or in part, shall remain in such Licensees or any of their
respective agents, employees or affiliates.
(b) At Licensor's request and expense, such Licensees shall cooperate
with Licensor in the canceling or amending of any recordings to reflect the
termination or expiration of this Agreement.
I-3
(c) Such Licensees shall immediately discontinue all use of the Marks;
11. 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 received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g., Federal Express); and
----
upon receipt, if sent by certified or registered mail, return receipt requested.
Notices shall be sent, in the case of Licensor, to its address stated in Section
10.4 of the Asset Purchase Agreement, and in the case of a Licensee, c/o Golf
Acquisitions, L.L.C., to its addresses stated in Section 10.4 of the Asset
Purchase Agreement; or to such other place and with such other copies as either
party may designate as to itself by written notice to the others.
12. Choice of Law. This Agreement shall be construed, interpreted
-------------
and the rights of the parties determined in accordance with the laws of the
State of Delaware (without reference to its choice of law provisions).
13. Jurisdiction; Services of Process. Any action or proceeding
---------------------------------
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Delaware, County of New Castle, or, if it has or can acquire jurisdiction, in
the United States District Court for the District of Delaware, and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
14. Entire Agreement; Amendments and Waivers. This Agreement and the
----------------------------------------
Asset Purchase Agreement, together with all exhibits and schedules hereto and
thereto, constitutes the entire agreement among the parties pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto. No amendment, supplement, modification or waiver
of this Agreement shall be binding unless executed in writing by the party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided in such writing.
15. Multiple Counterparts. This Agreement may be executed in one or
---------------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. Expenses. Except as otherwise specified in this Agreement, each
--------
party hereto shall pay its own legal, accounting, out-of-pocket and other
expenses incident to this Agreement and to any action taken by such party in
preparation for carrying this Agreement into effect.
I-4
17. Invalidity. In the event that any one or more of the provisions
----------
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
18. Titles; Gender. The titles, captions or headings of the Sections
--------------
herein, and the use of a particular gender, are for convenience of reference
only and are not intended to be a part of or to affect or restrict the meaning
or interpretation of this Agreement.
19. No Third-Party Beneficiary. The provisions of this Agreement are
--------------------------
for the benefit only of the parties hereto and no other third party may seek to
enforce, or benefit from, these provisions. The parties specifically disavow
any desire or intention to create any other third party beneficiary hereunder,
and specifically declare that no other person or entity, except for the parties
and their successors shall have any right hereunder nor any right of enforcement
hereof.
20. No Reliance on Other Information. Neither Licensor nor any
--------------------------------
representative or affiliate or other person acting for any of them makes any
representation or warranty, express or implied, with respect to the Marks, and
Licensor hereby disclaims any such representation or warranty, whether oral or
written, whether by Licensor or any of its representatives or affiliates or any
other person.
(Signature Page Follows)
I-5
IN WITNESS WHEREOF, the parties hereto have executed this Trademark
License Agreement as of the date first written above.
"LICENSOR"
AMERICAN GOLF CORPORATION,
a California corporation
By:________________________________
Name:______________________________
Title:_____________________________
"LICENSEES"
THE COBBLESTONE GOLF ACQUISITION,
L.L.C.,
a Delaware limited liability company
By:________________________________
Name:______________________________
Title:_____________________________
COBBLESTONE ENTERPRISES OF
CALIFORNIA, L.L.C.,
a Delaware limited liability company
By:________________________________
Name:______________________________
Title:_____________________________
COBBLESTONE ENTERPRISES OF
ARIZONA, L.L.C.,
an Arizona limited liability company
By:________________________________
Name:______________________________
Title:_____________________________
COBBLESTONE ENTERPRISES OF
VIRGINIA, INC.,
a Virginia corporation
By:________________________________
Name:______________________________
Title:_____________________________
I-6
COBBLESTONE ENTERPRISES OF FLORIDA, INC.,
a Florida corporation
By:________________________________
Name:______________________________
Title:_____________________________
TEXAS COBBLESTONE VENTURES, L.L.C., a Texas
limited liability company
By:________________________________
Name:______________________________
Title:_____________________________
COBBLESTONE GEORGIA, INC.,
a Georgia corporation
By:________________________________
Name:______________________________
Title:_____________________________
COBBLESTONE BEVERAGE OF TEXAS, INC., a Texas
Corporation
By:________________________________
Name:______________________________
Title:_____________________________
COBBLESTONE CLUB BEVERAGE,
a not-for-profit entity organized under the
laws of the State of Texas
By:________________________________
Name:______________________________
Title:_____________________________
I-7
COBBLESTONE GOLF GROUP
ACQUISITION, L.L.C.,
a Delaware limited liability company
By:________________________________
Name:______________________________
Title:_____________________________
COBBLESTONE GOLF GROUP
ACQUISITION II, L.L.C.,
a Delaware limited liability company
By:________________________________
Name:______________________________
Title:_____________________________
I-8