ASSET PURCHASE AGREEMENT
BY AND BETWEEN
ALL-AMERICAN GOLF LLC
AND
THE ALL-AMERICAN GOLF CENTER, INC.
DATED AS OF
DECEMBER 30, 1998
TABLE OF CONTENTS
SECTION 1. TRANSACTION ............................................
1.1 Purchase and Sale of Acquired Assets......................
1.2 Excluded Assets...........................................
1.3 Assumption of Liabilities.................................
1.4 Excluded Liabilities......................................
1.5 Purchase Price............................................
1.6 Closing...................................................
1.7 Assignment of Contracts...................................
SECTION 2. DELIVERIES AT CLOSING...................................
2.1 Deliveries at Closing by the Seller ......................
2.2 Deliveries at Closing by the Buyer .......................
2.3 Prorations ...............................................
2.4 Further Assurances .......................................
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE SELLER............
3.1 Organization .............................................
3.2 Authorization; No Breach .................................
3.3 Assets ...................................................
3.4 No Undisclosed Liabilities ...............................
3.5 Consents and Approval ....................................
3.6 Litigation ...............................................
3.7 Compliance with Law ......................................
3.8 Transactions with Certain Persons ........................
3.9 Tax Matters ..............................................
3.10 Compliance with Legislation Regulating Environmental
Quality ................................................
3.11 Material Misstatements or Omissions ......................
3.12 Qualifications of the Seller's Representations and
Warranties .............................................
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BUYER.............
4.1 Organization; Power and Authority ........................
4.2 Authorization; No Breach .................................
SECTION 5. RELEASE OF OBLIGATIONS .................................
5.1 Release of Obligations ...................................
SECTION 6. CONDITIONS TO OBLIGATIONS ..............................
6.1 Conditions to the Buyer's Obligations ....................
6.2 Conditions to the Seller's Obligations ...................
SECTION 7. INDEMNIFICATION AND OTHER AGREEMENTS ...................
7.1 General Indemnification ..................................
7.2 Construction Defects .....................................
7.3 Year 2000 ................................................
7.4 Permits; Assignments; Releases ...........................
SECTION 8. DISPUTE RESOLUTION .....................................
8.1 Direct Discussion ........................................
8.2 Requirement of Arbitration ...............................
8.3 Number of Arbitrators ....................................
8.4 Location; Commencement ...................................
8.5 Discovery ................................................
8.6 Arbitrator's Award .......................................
8.7 Expenses .................................................
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8.8 Confidentiality ..........................................
8.9 Enforcement of Award .....................................
SECTION 9. POST-CLOSING COVENANTS .................................
9.1 Conditions ...............................................
9.2 Press Release and Announcements ..........................
9.3 Confidentiality ..........................................
9.4 No Solicitation of Employees .............................
9.5 Noncompetition ...........................................
9.6 Employment Obligations ...................................
9.7 Access After Closing; Cooperation ........................
9.8 Naming of the Seller and the Buyer as
Additional Named Insureds ...............................
SECTION 10. DEFINITIONS ...........................................
10.1 Affiliates ..............................................
10.2 Confidential Information ................................
10.3 Code ....................................................
10.4 Employee Plans ..........................................
10.5 Employees ...............................................
10.6 ERISA ...................................................
10.7 Intellectual Property ...................................
10.8 Liens ...................................................
10.9 Material Adverse Effect .................................
10.10 Permitted Liens .........................................
10.11 Person ..................................................
10.12 Tax or Taxes ............................................
10.13 Tax Return ..............................................
SECTION 11. MISCELLANEOUS .........................................
11.1 Fees and Expenses .......................................
11.2 Special Remedies and Enforcement ........................
11.3 Remedies Cumulative .....................................
11.4 Entire Agreement; Modifications .........................
11.5 Waivers .................................................
11.6 Successors and Assigns ..................................
11.7 Severability ............................................
11.8 Counterparts ............................................
11.9 Descriptive Heading; Interpretation .....................
11.10 No Third-Party Beneficiaries ............................
11.11 Schedules and Exhibits ..................................
11.12 Bulk Sales ..............................................
11.13 Governing Law ...........................................
11.14 Authority ...............................................
11.15 Notices .................................................
11.16 Mail Received After Closing .............................
11.17 Tender ..................................................
11.18 Brokers .................................................
11.19 No Strict Construction ..................................
11.20 Incorporation of Recitals ...............................
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of December 30, 1998 by and among All-American Golf LLC, a California
limited liability company (the "Seller"), and The All-American Golf Center,
Inc., a Nevada corporation (the "Buyer"). Capitalized terms used herein and
not otherwise defined herein have the meaning given to such terms in Section
10 below.
RECITALS
A. The Seller, CGV, Inc., a California corporation ("CGV"), All-American
SportPark, Inc., a Nevada corporation ("SportPark"), Saint ▇▇▇▇▇▇▇ Golf
Corporation, a Nevada corporation ("SAGC"), and ▇▇▇ ▇▇▇▇▇▇ entered into a
Membership Interest Purchase Agreement dated May 5, 1998 (the "Purchase
Agreement") pursuant to which CGV purchased SAGC's 80% membership interest in
the Seller.
B. The Seller now desires to sell to the Buyer, a wholly owned
subsidiary of SAGC, and the Buyer desires to purchase from the Seller,
substantially all of the assets of the Seller pursuant to the terms and
conditions contained herein.
C. Prior to May 5, 1998, SAGC was the manager of the Seller and was
responsible for the design, construction and operation of the Center (as
defined below). It is the intention for the Parties hereto that any
representation or warranty made herein by the Seller shall apply only with
respect to the period (the "Seller Period") commencing May 5, 1998 and ending
on the Closing (as defined below).
NOW, THEREFORE, in consideration of the mutual covenants, agreements and
understandings herein contained, the Buyer and the Seller agree as follows:
1. Transaction.
1.1 Purchase and Sale of Acquired Assets. Subject to the terms and
conditions and in reliance on the representations and warranties set forth
herein, the Buyer agrees to purchase from the Seller, and Seller shall sell,
assign, transfer, and deliver to the Buyer, all of the Acquired Assets at the
Closing for the consideration specified below in Section 1.5. "Acquired
Assets" means all right, title, and interest in and to the assets of the
Seller used in the operation of the golf facility on approximately 42 acres of
land (the "Center") on Las Vegas Boulevard in Las Vegas, Nevada, (other than
the Excluded Assets referred to in Section 1.2), free and clear of all Liens,
including but not limited to:
(a) leaseholds and subleaseholds therein, improvements, fixtures,
and fittings thereon, and easements, rights-of-way, and other appurtenances
thereto (such as appurtenant rights in and to public streets);
(b) tangible personal property (such as equipment, inventories of
raw supplies, furniture, automobiles, trucks, tractors, trailers, and tools);
(c) stationery and office supplies, furniture and fixtures,
equipment and appliances located at the Center;
(d) leases, subleases, and rights thereunder;
(e) contracts, agreements other similar arrangements, and rights
thereunder;
(f) files and documents relating to customers and vendors;
(g) all research, engineering, marketing and other data of the
Center;
(h) permits, licenses, registrations, and similar rights obtained
from governments and governmental agencies;;
(i) accounting books, records, ledgers, and advertising and
promotional materials;
(j) all the goodwill and trade connections of the Center to the
extent transferable; and
(k) any of the assets listed on the Acquired Assets Schedule which
includes but is not limited to replacement graphics and software for the
"Pebble Beach" graphics and software referred to below.
1.2 Excluded Assets. The parties to this Agreement expressly agree and
understand that the Acquired Assets shall not include any of the following
assets which shall be specifically excluded from this transaction ("Excluded
Assets"):
(a) any of the fixtures, improvements, equipment, furnishings and
computer hardware and software solely and exclusively used in Bay One of the
three fitting bays (the "Fitting Bays") located at the Center as set forth on
the attached Fitting Bay Diagram Schedule;
(b) the "Pebble Beach" graphics located within the Center (including
without limitation the Software Screens prepared by Interactive Light or any
Interactive Light Software);
(c) the "Greenway Software" solely and exclusively used in the
Fitting Bays;
(d) qualifications to conduct business as a foreign entity,
arrangements with registered agents relating to foreign qualifications,
taxpayer and other identification numbers, seals, minute books, and other
documents relating to the organization, maintenance, and existence of the
Seller as a limited liability company;
(e) any of the rights of the Seller under this Agreement or under
any other agreement between the Seller on the one hand and the Buyer on the
other hand entered into on or after the date of this Agreement;
(f) cash and bank accounts;
(g) minute books, ownership ledger records and related records of
the Seller;
(h) insurance policies;
(i) any and all rights of the Seller to any Intellectual Property
which is the property of Callaway Golf Company ("Callaway") including any
license or sublicense from Callaway;
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(j) the Seller's and/or the Center's Employee Plans;
(k) the Seller's agreements with Employees and the Seller's officers
and directors;
(l) the Seller's or the Center's Employees; it being understood
that the Buyer may, but is not obligated to, extend offers of employment to
any or all of such Employees;
(m) any right or claim for indemnity whether contractual or
equitable with respect to the Seller Period; and
(n) any of the assets listed on the Excluded Assets Schedule.
1.3 Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer will accept the Acquired Assets
subject to, and will assume, all of the liabilities and obligations of the
Seller specified in this Section 1.3 directly relating to the Acquired Assets.
No agreement to assume any other liabilities shall be implied from the
assumption of the liabilities listed in this Section 1.3. Except as set forth
in this Section 1.3, the Buyer has not agreed to pay and will not be required
to assume or have any liability or obligation with respect to, any liability
or obligation, direct or indirect, absolute or contingent, known or unknown,
of the Seller or Callaway, any Affiliate of either of them or any other
Person. The liabilities and obligations to be so assumed by the Buyer are
hereinafter collectively referred to as the "Assumed Liabilities," and are
limited to the following:
(a) the obligations of the Seller arising after the date of the
Closing under all contracts entered into by the Seller listed on the Contracts
Schedule hereto (the "Contracts");
(b) all sales, use, transfer, recording, and similar taxes (other
than income taxes) arising directly from the sale and transfer of the Acquired
Assets;
(c) all liability for any defect in the land, buildings, equipment,
or other improvements to the extent installed prior to May 5, 1998 including
but not limited to the list of defective conditions set forth on Construction
Defects Schedule;
(d) any of the liabilities listed on the Assumed Liabilities
Schedule; and
(e) except for the Secured Note (as defined below) all liabilities
or obligations, proceedings or litigation against the Seller, to the extent
they relate to the Acquired Assets, directly arising from or related to any
act, omission or event occurring prior to May 5, 1998, whether or not such
liabilities, obligations, proceedings or litigation were know or unknown as of
May 5, 1998.
1.4 Excluded Liabilities. Notwithstanding anything in this Section 1 to
the contrary, the liabilities and obligations of the Seller to be assumed by
the Buyer shall not include any of the following liabilities and obligations
of the Seller, which shall be retained by the Seller (hereinafter collectively
referred to as the "Excluded Liabilities"):
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(a) the obligations of the Seller under all contracts entered into
by the Seller other than the Contracts;
(b) any claims, causes of action, liabilities, obligations,
including but not limited to accounts payable, proceedings or litigation
against the Seller to the extent directly arising from or related to any
event, act or omission occurring on or after May 5, 1998 and prior to the
Closing Date;
(c) all liabilities and obligations of the Seller arising out of
insurance policies, binders, agreements or commitments of the Seller;
(d) all liabilities and obligations of the Seller incurred on or
after May 5, 1998 and prior to the Closing Date relating to Employees of the
Seller or the Center;
(e) all loans payable to equity owners of the Seller or Callaway;
(f) except as provided by Section 2.3, all accounts payable of the
Seller;
(g) all intercompany balances with Affiliates of the Seller or
Callaway;
(h) all liabilities and obligations of the Seller resulting or
arising from any Excluded Asset;
(i) the Secured Promissory Note dated June 13, 1997 executed by the
Seller in favor of Callaway in the original principal amount of Five Million
Two Hundred Fifty Thousand Dollars ($5,250,000) (the "4");
(j) all workers' compensation liabilities with respect to Employees
of the Seller or the Center for the Seller Period;
(k) all liabilities and obligations of the Seller in respect of any
Tax charges (including interest and penalties, if any) due or claiming to be
due from the Seller by federal or state taxing authorities in respect of the
income of the Seller (including, without limitation, the Seller's gain, if
any, on the sale of the Acquired Assets and the Seller's income relating to
the Acquired Assets); and
(l) all liabilities and obligations of the Seller not expressly
assumed hereunder.
1.5 Purchase Price. The total purchase price ("Purchase Price") to be
paid by the Buyer for the Acquired Assets shall be One Million Dollars, to be
paid by delivery of a trade credit from Active Media Services, Inc. ("Active")
in the form attached hereto, which trade credit shall be freely assignable by
the Seller to Callaway or otherwise usable by Callaway, and certificated in a
form which is reasonably satisfactory to the Seller (the "Certificate"). The
Seller acknowledges that the delivery of the Certificate shall be in full
satisfaction of the Buyer's obligation to pay the Purchase Price and that the
Buyer shall not be responsible for the Seller's use or non-use of the trade
credit represented by the Certificate or Active's compliance with or
fulfillment of the terms thereof.
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1.6 Closing. The closing of the transaction (the "Closing") shall take
place at the principal offices of the Seller or at such other place as may be
mutually agreeable to the Buyer and the Seller at a time and date mutually
agreeable to the Buyer and the Seller (the "Closing Date").
1.7 Assignment of Contracts. The Seller shall, subject to Section 7.2,
assign to the Buyer, and the Buyer shall assume, as of the Closing Date, all
of the rights and obligations (only to the extent set forth in Section 1.3(a)
and on the Contracts Schedule) of the Seller under the Contracts.
2. Deliveries at Closing.
2.1 Deliveries at Closing by the Seller. The Seller shall deliver the
following to the Buyer at the Closing:
(a) The Seller shall deliver to Buyer an executed Trademark License
Agreement (the "Trademark License") in the form attached as Exhibit __ hereto
and the Greenway Software License Agreement (the "Greenway License") in the
form attached as Exhibit ___ hereto.
(b) Such other documents relating to the transactions contemplated
by this Agreement as the Buyer may reasonably request, including, but not
limited to:
(i) ▇▇▇▇ of Sale transferring the Acquired Assets to the
Buyer;
(ii) UCC-2's Releasing the Security Interest of Callaway in
the Acquired Assets;
(iii) Assignments of all leases, licenses and agreements
included in the Acquired Assets; and
(iv) All other documents, instruments and writings required to
be delivered by the Seller at or prior to the Closing pursuant to this
Agreement or otherwise required in connection herewith; and
(c) Certified copies of resolutions duly adopted by the Seller's
managing members authorizing the execution, delivery and performance of this
Agreement and the other agreements contemplated hereby.
(d) Any delivery specified in this Section 2.1 may be waived if
consented to in writing by the Buyer.
2.2 Deliveries at Closing by the Buyer. The Buyer shall deliver the
following to the Seller at the Closing:
(a) The Purchase Price in the manner and amount set forth in
Section 1.5.
(b) Certified copies of the resolutions duly adopted by the Buyer's
board of directors authorizing the execution, delivery and performance of this
Agreement and each of the other agreements contemplated hereby.
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(c) The Buyer shall have delivered to the Seller an executed
Trademark License and Greenway License.
(d) Such other documents relating to the transactions contemplated
by this Agreement as the Seller or their special counsel may reasonably
request, including but not limited to the following;
(i) Assumption of Liabilities whereby the Buyer assumes the
Assumed Liabilities;
(ii) Acceptance of Assignments assuming the Contracts;
(iii) Documentation canceling the Option Agreement between CGV
and Buyer and the Covenant Not to Compete between Buyer, CGV and ▇▇▇ ▇▇▇▇▇▇
("▇▇▇▇▇▇") each dated May 5, 1998; and
(iv) All other documents, instruments and writings required to
be delivered by the Buyer at or prior to the Closing pursuant to this
Agreement or otherwise required in connection herewith.
(e) Any delivery specified in this Section 2.2 may be waived if
consented to in writing by the Seller.
2.3 Prorations. The Buyer and the Seller agree that the following
prorations relating to the Acquired Assets will be made as of the Closing,
with the Seller liable to the extent such items relate to any time period up
to and including the Closing and the Buyer liable to the extent such items
relate to periods subsequent to the Closing. Except as otherwise specifically
provided herein, the net amount of all such prorations will be settled and
paid with 10 days of the payment of the relevant item by the affected party.
(a) Personal property, real estate, occupancy, water and other
similar taxes, if any, on or with respect to the Acquired Assets (other than
taxes relating to leases which, pursuant to the terms thereof, are payable by
the lessor and in respect of which the lessee is not obligated to reimburse
the lessors);
(b) Rents, taxes and other items payable by the Seller under any
lease, contract or other agreement or arrangement to be assigned to or assumed
by the Buyer hereunder;
(c) The amount of sewer rents and charges for water, telephone,
electricity and other utilities and fuel; and
(d) All other items normally prorated in connection with similar
transactions.
The Seller agrees to furnish the Buyer with such documents and other
records as the Buyer reasonably requests in order to confirm all proration
calculations. Any disputes as to the amount or propriety of any prorations
described as to the amount or propriety of any prorations described in this
Section 2.3 may be referred for a final and binding determination to
independent certified public accountants designated by the Buyer's accountants
and the Seller's accountants by either the Buyer or the Seller upon 15 days'
prior written notice to the other party. The costs and expenses for the
services of such third independent certified public accountants shall be
shared equally by the Buyer and the Seller.
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2.4 Further Assurances. After the Closing, each of the Seller and
Callaway, on the one hand, and the Buyer, on the other hand, shall from time
to time, with any expenses to be borne in accordance with Section 11.1 of this
Agreement, execute and deliver such other instruments of conveyance, transfer
or assumption and take such other actions as the other may reasonably request,
in order to more effectively consummate the transactions contemplated hereby,
including to vest in the Buyer such title as the Seller may have to any of the
Acquired Assets (including, without limitation, assistance in the collection
or reduction to possession of any of the Acquired Assets) and to provide for
the assumption of the Assumed Liabilities by the Buyer.
3. Representation and Warranties of the Seller.
As a material inducement to the Buyer to enter into this Agreement and
purchase the Acquired Assets hereunder, the Seller represents and warrants to
the Buyer as follows:
3.1 Organization. The Seller is a limited liability company duly
organized and validly existing under the laws of California. The Seller has
all necessary powers and authority to execute, deliver and perform this
Agreement.
3.2 Authorization; No Breach. The execution, delivery and performance
of this Agreement and all of the other agreements and instruments contemplated
hereby to which the Seller is a party have been duly authorized by the Seller.
This Agreement constitutes a valid and binding obligation of the Seller,
enforceable in accordance with its terms, and all other agreements and
instruments contemplated hereby to which the Seller is a party, when executed
and delivered by the Seller in accordance with the terms hereof, shall each
constitute a valid and binding obligation of the Seller, enforceable in
accordance with their respective terms. The execution and delivery by the
Seller of this Agreement and the fulfillment of and compliance with the
respective terms hereof and thereof by the Seller do not and shall not (a)
conflict with or result in a breach of the terms, conditions or provisions of,
(b) constitute a default under (whether with or without the passage of time,
the giving of notice or both), (c) result in the creation of any lien upon the
Acquired Assets, (d) give any Person the right to modify, terminate or
accelerate any obligation under, (e) result in a violation of, or (f) require
any authorization, consent, approval, exemption or other action by or notice
or declaration to, or filing with, any Person or any court or administrative
or governmental body or agency pursuant to, the Seller's organization
documents, or any material law, statute, rule or regulation to which the
Seller is subject, or any agreement, instrument, order, judgment or decree to
which the Seller is subject.
3.3 Assets. The Seller has good and marketable fee simple title to, or
has a valid leasehold interest in, the Acquired Assets. None of the Acquired
Assets is subject to any Liens other than Permitted Liens. All tangible
Acquired Assets are in good operating condition and repair and suitable for
their respective current uses, except and only to the extent they are affected
by the Construction Defects or removal of the Excluded Assets. The Seller has
in all material respects performed all the obligations required to be
performed by it with respect to all Acquired Assets through the date hereof.
Each of the Contracts is in full force and effect and constitutes a valid an
legally binding obligation of the Seller, and, to the knowledge of the Seller,
of each other person that is a party thereto; and the Seller is not and, to
the knowledge of the Seller, no other party to any such contract is, in
violation, breach or default or is delinquent in any obligation under any such
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Contract (or with or without notice or lapse of time or both would be in
violation, breach or default under any such contract). The Acquired Assets
include all assets necessary to conduct the business of the Center as it is
being conducted on the date hereof, except and only to the extent the conduct
of the business of the Center is affected by the removal of the Excluded
Assets. Notwithstanding the foregoing, in all events, the Acquired Assets
include all equipment necessary to operate Fitting Bay #3.
3.4 No Undisclosed Liabilities. The Seller has no liabilities or
obligations (whether absolute, accrued, contingent or otherwise) that in the
aggregate have or may reasonably be expected to have a Material Adverse Effect
which were caused by the Seller's acts or omissions during the Seller Period.
3.5 Consents and Approvals. No consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority, or any other person or entity, is required to be made or obtained
by the Seller or Callaway in connection with the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby.
3.6 Litigation. There is no action, order, writ, injunction, judgment
or decree outstanding or claim, suit, litigation, proceeding, labor dispute,
arbitral action or investigation (collectively, "Actions") pending or, to the
knowledge of the Seller, threatened or anticipated against (a) the Seller, ,
or (b) the transactions contemplated by this Agreement. The Seller is not a
party to any judgment, order, writ, injunction or decree of any court or
governmental agency which is specifically directed to the Seller in which the
Seller is specifically named as the subject, and to which the Seller or any of
the Acquired Assets is expressly subject, and there are no unsatisfied
judgments against the Seller with respect thereto.
3.7 Compliance with Law. The Seller and the operation of the Center, as
conducted by the Seller, are in compliance with all applicable laws, statutes,
ordinances and regulations, whether federal, state or local, except where the
failure to comply would not have a Material Adverse Effect. The Seller has not
received any written notice to the effect that, or otherwise been advised
that, the Seller or the Center is not in compliance with any of such statutes,
regulations, orders, ordinances or other laws, and neither the Seller has any
reason to reasonably anticipate that any presently existing circumstances are
likely to result in violations of any such regulations. The Seller has not
directly or indirectly, paid or delivered any fee, commission or other sum of
money or item or property, however characterized, to any finder, agent,
government official or other party, in the United States or any other country,
which is in any manner related to the business or operations of the Seller,
which the Seller knows or has reason to believe to have been illegal under any
federal, state or local laws of the United States or any other country having
jurisdiction.
3.8 Transactions with Certain Persons. Except as expressly contemplated
hereby, neither any equity owner, officer, director, employee or agent of the
Seller or Callaway nor any member of any such person's immediate family is
presently a party to any material transaction with the Seller relating to the
Acquired Assets which is binding upon the Buyer after the Closing including
without limitation, any contract, agreement or other arrangement (a) providing
for the furnishing of material services by, (b) providing for the rental of
material real or personal property from, or (c) otherwise requiring material
payments to (other than for services as officers, directors or employees of
8
the Buyer) any such person or corporation, partnership, trust or other entity
in which any such person has a substantial interest as a shareholder, officer,
director, trustee or partner.
3.9 Tax Matters.
(a) The Seller, any predecessor of the Seller and all members for
income tax purposes of any affiliated group of corporations of which the
Seller or any such predecessor corporation is or has been a member
(hereinafter referred to collectively as the "Taxpayers") have duly filed all
Tax reports and returns required to be filed by them, including all federal,
state, local and foreign Tax Returns and reports, and the Tax Returns and
other information filed are complete and accurate in all material respects.
The Taxpayers have paid in full all Taxes required to be paid by such
Taxpayers before such payment became delinquent, and the Taxpayers do not have
any material liability for Taxes in excess of the amounts so paid. The Seller
has made adequate provision, consistent with past practice, for the payment of
all Taxes which may subsequently become due. All Taxes which any Taxpayer has
been required to collect or withhold have been duly collected or withheld and,
to the extent required when due, have been or will be duly paid to the proper
taxing authority.
(b) No federal income Tax Returns of the Seller have been examined
by the Internal Revenue Service as of the date hereof. There are no audits
known by the Seller to be pending of the Seller's Tax Returns, and to the
Seller's knowledge there are no claims which have been or may be asserted
relating to any of the Seller's Tax Returns filed for any year which if
determined adversely would result in the assertion by any governmental agency
of any deficiency that would have a Material Adverse Effect. There have been
no waivers of statutes of limitations by the Seller for the assessment of
Taxes.
(c) None of the Taxpayers has filed a statement under Section
341(f) of the Code (or any comparable state income tax provision) consenting
to have the provisions of Section 341(f)(2) (collapsible corporations
provisions) of the Code (or any comparable state income tax provision) apply
to any disposition of a subsection (f) asset owned by any of them. No
Acquired Asset is property which the Buyer will be required to treat as owned
by another Person pursuant to the provisions of Section 168(f) (safe harbor
leasing provisions) of the Code.
3.10 Compliance with Legislation Regulating Environmental Quality.
(a) For the purposes of this Agreement, the term "Environmental
Laws" shall mean all federal, state and local environmental protection,
occupational, health and safety or similar laws, ordinances, restrictions,
licenses, rules, regulations and permit conditions, including but not limited
to the Federal Water Pollution Control Act (33 U.S.C. Sec. 1251 et seq.),
Resource Conservation & Recovery Act (42 U.S.C. Sec. 6901 et seq.), Safe
Drinking Water Act (21 U.S.C. Sec. 349, 42 U.S.C. Subsec. 201, 300F), Toxic
Substances Control Act (15 U.S.C. Sec. 2601 et seq.), Clean Air Act (42 U.S.C.
Sec. 7401 et seq.), and Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Sec. 9601 et seq.), or other U.S. or Canadian
federal, state, province, or local laws of similar effect, each as amended as
of the Closing, and the term "Hazardous Materials" shall mean any hazardous or
toxic substances, wastes or materials, including without limitation petroleum
or petroleum products, defined as such or governed by any applicable
Environmental Law.
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(b) (i) Throughout the period of the Seller's ownership or
operation of its properties, neither the Seller nor Callaway has received any
written notices, directives, violation reports, actions or claims from or by
(A) any local, state or federal governmental agency concerning violations of
Environmental Laws or (B) any person alleging that, in connection with
Hazardous Materials, conditions at the Center or the Seller's or Callaway's
acts or omissions have resulted in or caused or threatened to result in or
cause injury or death to any person or damage to any property, including
without limitation, damage to natural resources, and to the best knowledge of
the Seller, no such notices, directives, violation reports, actions, claims or
allegations exist; (ii) to the knowledge of the Seller, the Center is in
compliance with all applicable state, federal and local Environmental Laws;
and (iii) no underground storage tanks either are or to the knowledge of the
Seller have been located at the Center.
(c) To the knowledge of the Seller (i) there has been no spill,
discharge, release, cleanup or contamination of or by any Hazardous Materials
used, generated, treated, stored, disposed of or handled by the Seller at the
Center and (ii) the Seller has not treated, stored, disposed of, released or
transported any Hazardous Material in a manner which would give rise to any
liability under any Environmental Laws.
3.11 Material Misstatements or Omissions. No representations or
warranties by the Seller in this Agreement, nor any document, exhibit,
statement, certificate or schedule furnished by the Seller to the Buyer
pursuant hereto contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact necessary to make the
statements or facts contained therein and the circumstances in which they are
made not misleading.
3.12 Qualifications of the Seller's Representations and Warranties.
Notwithstanding anything herein to the contrary, none of the representations
and warranties made by the Seller in this Agreement shall be deemed to be made
as to any event, occurrence, or omission arising prior to the commencement of
the Seller Period for which period the Seller is not obligated to make any
representations and warranties, and the existence of an event, occurrence or
omission arising prior to the commencement of the Seller Period shall not,
under any circumstance, be deemed to be a breach or be the basis of any claim
for breach of a warranty or representation.
4. Representations and Warranties of the Buyer.
As a material inducement to the Seller to enter into this Agreement, the
Buyer hereby represents and warrants to the Seller as follows:
4.1 Organization, Power and Authority. The Buyer is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization. The Buyer has all necessary powers and authority to execute,
deliver and perform this Agreement.
4.2 Authorization; No Breach. The execution, delivery and performance
of this Agreement and all other agreements contemplated hereby to which the
Buyer is party have been duly authorized by the Buyer. This Agreement and all
other agreements contemplated hereby to which the Buyer is party, when
executed and delivered by the Buyer in accordance with the terms hereof, shall
each constitute valid and binding obligations of the Buyer, enforceable in
accordance with its terms. The execution and delivery by the Buyer of this
Agreement and all other agreements contemplated hereby to which the Buyer is
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party, the purchase of the Acquired Assets hereunder, and the fulfillment of
and compliance with the respective terms hereof and thereof by the Buyer, do
not and shall not (a) conflict with or result in a breach of the terms,
conditions or provisions of, (b) constitute a default under (whether with or
without the passage of time, the giving of notice or both), (c) give any third
party the right to modify, terminate or accelerate any obligation under, (d)
result in a violation of, or (e) require any authorization, consent, approval,
exemption or other action by or notice or declaration to, or filing with, any
court or administrative or governmental body or agency pursuant to, the
Buyer's organization documents, or any material law, statute, rule or
regulation to which the Buyer is subject, or any material agreement,
instrument, order, judgment or decree to which the Buyer is subject.
5. Release of Obligations.
5.1 Release of Obligations.
(a) Upon and effective as of the Closing, the Buyer, and each of
its successors, heirs, assigns, agents, officers, directors, employees,
agents, representatives, attorneys, subsidiaries, divisions, affiliates, and
all persons acting by, through, under or in concert with them, or any of them
hereby irrevocably and unconditionally release and forever discharge the
Seller and Callaway and each of their respective predecessors, successors,
assigns, agents, officers, directors, employees, agents, representatives,
attorneys, subsidiaries, divisions, affiliates, and all persons acting by,
through, under or in concert with them, or any of them, from any and all
manner of actions, causes of action, suits, debts, liens, contracts, rights,
agreements, obligations, promises, liabilities, claims, demands, damages,
controversies, losses, costs and expenses of any nature whatsoever, known or
unknown, suspected or unsuspected, fixed or contingent which they now have,
own or hold or claim to have, own or hold at any time, heretofore had, owned
or held, or claim to have had, owned or held, or may hereafter have, own or
hold or claim to have, own or hold, from the beginning of time to the date
hereof; provided, however, nothing contained in this release is intended to
release the Seller from its obligations under this Agreement or to release
Callaway from the letter being executed in connection herewith.
(b) Upon and effective as of the Closing, the Seller, and each of
its successors, heirs, assigns, agents, officers, directors, employees,
agents, representatives, attorneys, subsidiaries, divisions, affiliates, and
all persons acting by, through, under or in concert with them, or any of them
hereby irrevocably and unconditionally, jointly and severally, release and
forever discharge each of the Buyer, SAGC, and All-American SportPark, Inc.
("SportPark") and each of their respective predecessors, successors, assigns,
agents, officers, directors, employees, agents, representatives, attorneys,
subsidiaries, divisions, affiliates, and all persons acting by, through, under
or in concert with them, or any of them, from any and all manner of actions,
causes of action, suits, debts, liens, contracts, rights, agreements,
obligations, promises, liabilities, claims, demands, damages, controversies,
losses, costs and expenses of any nature whatsoever, known or unknown,
suspected or unsuspected, fixed or contingent which they now have, own or hold
or claim to have, own or hold at any time, heretofore had, owned or held, or
claim to have had, owned or held, or may hereafter have, own or hold or claim
to have, own or hold, from the beginning of time to the date hereof; provided,
however, nothing contained in this release is intended to release the Buyer
from its obligations under this Agreement or Boreta from his obligations under
the Purchase Agreement or SAGC or SportsPark from the Letter being executed in
connection herewith.
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(c) The above release shall apply to all unknown or unanticipated
results of the foregoing, as well as those known and anticipated, and upon
advice of legal counsel, each of the Seller and the Buyer waives any and all
rights under California Civil Code Section 1542, which section has been
explained to each of the parties, hereto, and reads as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement
with the debtor."
6. Conditions to Obligations
6.1 Conditions to the Buyer's Obligations. The obligation of the Buyer
to consummate the transactions contemplated by this Agreement shall be subject
to the satisfaction, on or before the Closing, of each of the following
conditions, unless waived in writing by the Buyer:
(a) Representations and Warranties. The representations and
warranties of the Seller contained herein shall be true and accurate as of the
date when made and at and as of the Closing Date.
(b) Performance. The Seller shall have performed and complied with
all agreements, obligations and conditions required by this Agreement to be
performed or complied with by the Seller on or prior to the Closing.
(c) Consents. All consents, approvals, waivers, authorizations or
orders from or of third parties and government agencies required to consummate
the transactions contemplated hereby shall have been obtained, it being
understood that unless the Buyer has exercised diligent efforts to obtain such
consents, approvals, waivers, authorizations and orders, the failure to obtain
any of the foregoing shall not excuse the Buyer's obligations to consummate
the transactions contemplated by this Agreement. The consents required shall
include but not be limited to:
(i) the consent of the other parties thereto to the assignment
to the Buyer of all existing tenant leases between the Seller and such other
parties, including but not limited to the tenant leases ("Tenant Leases") set
forth on the Tenant Leases Schedule; provided, however, the lease with
Nordstrom's and the lease with CGV for the operation of the Fitting Bays shall
be terminated;
(ii) the consent of Sierra Sportservice, Inc. ("Sierra") to
the assignment to the Buyer of the Lease and Concession Agreement
("Sportservice Agreement") between Sierra and the Seller;
(iii) the consent of Urban Land of Nevada, Inc., a Nevada
corporation ("Urban Land"), to the assignment to the Buyer of the Indenture of
Lease (the "Ground Lease") dated June 13, 1997 between Urban Land and the
Seller; and
(iv) the consent to transfer the permits ("Permits") set forth
on the Permits Schedule to the Buyer.
(d) No Proceedings or Litigation. No Action by any governmental
authority or other person shall have been instituted or threatened which
prohibits the consummation of the transactions contemplated hereby or
questions the validity or legality of the transactions contemplated hereby and
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which could reasonably be expected materially to damage the Buyer if the
transactions contemplated hereunder are consummated.
(e) Certificates. The Seller shall have furnished the Buyer with
such certificates of its officers and others to evidence compliance with the
conditions set forth in this Section 6 as may be reasonably requested by the
Buyer.
6.2 Conditions to the Seller's Obligations. The obligation of the
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction, on or before the Closing, of each of the
following conditions, unless waived in writing by the Seller:
(a) Representations and Warranties. The representations and
warranties of each of the Buyer contained herein shall be true and accurate as
of the Closing Date.
(b) Performance. The Buyer shall have performed and complied with
all agreements, obligations and conditions required by this Agreement to be
performed or complied with by each of the Buyer on or prior to the Closing.
(c) Consents. All consents, approvals, waivers, authorizations or
orders from or of third parties and government agencies required to consummate
the transactions contemplated hereby shall have been obtained, it being
understood that unless the Seller has exercised diligent efforts to obtain
such consents, approvals, waivers, authorizations and orders, the failure to
obtain any of the foregoing shall not excuse the Seller's obligations to
consummate the transactions contemplated by this Agreement. The consents
required shall include but not be limited to:
(i) the consent of the other parties thereto to the assignment
to the Buyer of all existing leases between the Seller and such other parties,
including but not limited to the Tenant Leases; provided, however, the lease
with Nordstrom's and the lease with CGV for the operation of the Fitting shall
be terminated;
(ii) the consent of Sierra to the assignment to the Buyer of
the Sportservice Agreement;
(iii) the consent of Urban Land to the assignment to the Buyer
of the Ground Lease; and
(iv) the consent to transfer the Permits to the Buyer.
(d) No Proceedings or Litigation. No Action by any governmental
authority or other person shall have been instituted or threatened which
prohibits the consummation of the transactions contemplated hereby or
questions the validity or legality of the transactions contemplated hereby and
which could reasonably be expected materially to damage the Seller if the
transactions contemplated hereunder are consummated.
(e) Certificates. The Buyer shall have furnished the Seller with
such certificates of its officers and others to evidence compliance with the
conditions set forth in this Section 6 as may be reasonably requested by the
Seller.
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7. Indemnification and Other Agreements.
7.1 General Indemnification.
(a) Indemnification by the Buyer. The Buyer shall defend and
indemnify each of the Seller and its respective Affiliates, stockholders,
partners, officers, directors, employees, agents, representatives, successors
and permitted assigns (collectively, the "Seller Indemnified Parties") and
save and hold each of them harmless against and pay on behalf of or reimburse
the Seller Indemnified Parties and when incurred for any loss, liability,
demand, claim, action, cause of action, cost, damage, deficiency, Tax,
penalty, fine or expense, whether or not arising out of third party claims
(including interest, penalties, reasonable attorneys' fees and expenses and
all amounts paid in investigation, defense or settlement of any of the
foregoing) (collectively, "Losses"), which any of the Seller Indemnified
Parties may suffer, sustain or become subject to, as a result of, in
connection with, relating or incidental to or by virtue of:
(i) any breach of any representation or warranty of the Buyer
in this Agreement or in any of the Schedules or Exhibits attached hereto or in
any of the certificates or other instruments furnished by the Buyer pursuant
to this Agreement;
(ii) any nonfulfillment or breach of any covenant or agreement
by the Buyer under this Agreement or any of the Schedules and Exhibits
attached hereto required to be performed or complied with by the Buyer at or
prior to the Closing;
(iii) any nonfulfillment or breach of any covenant or
agreement by the Buyer under this Agreement required to be performed or
complied with by the Buyer after the Closing;
(iv) the construction defects at the Center resulting from
improvements to the extent installed prior to May 5, 1998 including but not
limited to the list of defective conditions which are described on the
Construction Defects Schedule attached hereto;
(v) Callaway's guarantee of the Sportservice Agreement (the
"Guarantee") (but only to the extent such Losses are based on or related to
events occurring prior to May 5, 1998 or after the Closing);
(vi) the Assumed Liabilities;
(vii) the Contracts (but only to the extent such Losses are
based on or related to events occurring prior to May 5, 1998 or after the
Closing);
(viii) the Sportservice Agreement (but only to the extent such
Losses are based on or related to events occurring prior to May 5, 1998 or
after the Closing);
(ix) the Ground Lease (but only to the extent such Losses are
based on or related to events occurring prior to May 5, 1998 or after the
Closing);
(x) any transfer use or sales tax required to be paid in
connection with transfer of the Acquired Assets to the Buyer; or
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(xi) except as set forth in Section 7.1.(b)(iv), the
operation, maintenance, development or conduct of the Center prior to May 5,
1998 or after the Closing Date arising out of facts or circumstances existing
prior to May 5, 1998 or after the Closing Date whether or not such liabilities
or obligations were known as of the Closing Date.
If and to the extent any provision of this Section 7.1.(a) is
unenforceable for any reason, the Buyer hereby agrees to make the maximum
contribution to the payment and satisfaction of any Loss for which
indemnification is provided for in this Section 7.1.(a) which is permissible
under applicable laws.
(b) Indemnification by the Seller. The Seller shall defend and
indemnify each of the Buyer and SAGC and their respective Affiliates,
stockholders, partners, officers, directors, employees, agents,
representatives, successors and permitted assigns (collectively, the "Buyer
Indemnified Parties") and save and hold each of them harmless against and pay
on behalf of or reimburse the Buyer Indemnified Parties as and when incurred
for any Losses which any of the Buyer Indemnified Parties may suffer, sustain
or become subject to, as a result of, in connection with, relating or
incidental to or by virtue of:
(i) any breach of any representation or warranty of the Seller
in this Agreement or in any of the Schedules or Exhibits attached hereto or in
any of the certificates or other instruments furnished by the Seller pursuant
to this Agreement;
(ii) any non-fulfillment or breach of any covenant or
agreement by the Seller under this Agreement or any of the Schedules and
Exhibits attached hereto required to be performed or complied with by the
Seller at or prior to the Closing;
(iii) any non-fulfillment or breach of any covenant or
agreement by the Seller under this Agreement required to be performed or
complied with by the Seller after the Closing;
(iv) other than the Assumed Liabilities, the operation,
maintenance, development or conduct of the Center during the Seller Period
arising out of facts or circumstances existing at or prior to the Closing, but
not prior to May 5, 1998 and whether or not such liabilities or obligations
were known during the Seller Period or as of the Closing Date.
(v) the Guarantee (but only to the extent such Losses are
based on or related to events, actions or omissions occurring during the
Seller Period);
(vi) the Contracts (but only to the extent such Losses are
based on or related to events, actions or omissions occurring during the
Seller Period);
(vii) the Ground Lease (but only to the extent such Losses are
based on or related to events, actions or omissions occurring during the
Seller Period);
(viii) the Excluded Assets or any of the Excluded Liabilities;
(ix) the Employees of Seller which are terminated by the
Seller at the Closing;
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(x) Taxes, including, without limitation, any Taxes which may
be or become payable by reason of, or in connection with, the transactions
effected pursuant to this Agreement, (A) by the Seller whether or not incurred
prior to the Closing Date, and (B) attributable to or incurred in connection
with the Acquired Assets or the operation of the Acquired Assets prior to and
including the Closing Date, including, without limitation, any personal or
real property or other Taxes which are not due until after the Closing Date
but which are attributable to any period prior to and including the Closing
Date.
If and to the extent any provision of this Section 7.1.(b) is
unenforceable for any reason, the Seller hereby agrees to make the maximum
contribution to the payment and satisfaction of any Loss for which
indemnification is provided for in this Section 7.1.(b) which is permissible
under applicable laws.
(c) Procedure for Indemnification--Notice of Claims. If a Seller
Indemnified Party or Buyer Indemnified Party (individually, an "Indemnified
Party") become aware of facts or circumstances establishing a claim ("Claim")
that an Indemnified Party has experienced or incurred any Loss or may
experience or incur any Loss which will give rise to a right of set-off or
indemnification under this Section, then such Indemnified Party shall give
written notice to the other party (the "Indemnifying Party") of such Claim
("Indemnification Notice"). The Indemnification Notice shall be provided as
soon as reasonably practicable, but in no event more than thirty (30) days
after the Indemnified Party has received written notice or actual knowledge of
such facts or circumstances (provided that failure to give an Indemnification
Notice shall not limit the Indemnifying Party indemnification obligation
hereunder, except to the extent that the delay in giving, or failure to give,
Indemnification Notice materially adversely affects the Indemnifying Party's
ability to defend against a Claim). To the extent reasonably practicable, the
Indemnification Notice will describe the nature, basis and amount of the Claim
and include any relevant supporting documentation. Any Claim described in the
Indemnification Notice shall be deemed final and binding (herein after, a
"Permitted Indemnification Claim") if the Indemnifying Party does not object
in writing to the propriety of the Claim or the amount of the Loss by
delivering a notice of objection to the Indemnified Party (an "Indemnification
Objection Notice") within thirty (30) days after the receipt of the
Indemnification Notice. The Indemnification Objection Notice shall detail the
specific objections of the Indemnifying Party the Claim. If the parties are
unable to resolve the disputed issues concerning the Claim within twenty (20)
business days after the date the Indemnified Party received the
Indemnification Objection Notice, the disputed issues shall be settled
pursuant to Section 8.
(d) Defense of Third Party Claims. The Indemnified Party shall
have the right to control the defense or settlement of any third party claim
("Third Party Claim"). Any legal and related expenses, and any judgment or
settlement paid by the Indemnified Party in connection with a Third Party
Claim shall be included as part of the indemnification obligations of the
Indemnifying Party under this Agreement. The Indemnifying Party shall have
the right to participate in, but not control the defense of any Third Party
Claim. The Indemnified Parties shall periodically apprise the Indemnifying
Party of the progress of such defense. The Indemnified Parties shall not
consent to the entry of any judgment or enter into any settlement (except with
the written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld) which does not include as an unconditional term
thereof, the giving by the claimant to the Indemnifying Party a release from
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all liability in respect of such Third Party Claim (which release only may
exclude any obligations incurred in connection with any such settlement).
(e) Investigations; Survival of Warranties. The representations
and warranties of the Seller, on the one hand, and the Buyer, on the other
hand, contained herein or in any certificates of other documents delivered
prior to or at the Closing shall not be deemed waived or otherwise affected by
any investigation made by any party hereto. Each and every such
representation and warranty of the Seller and the Buyer shall survive the
Closing for three (3) years. This Section 7.1.(e) shall have no effect upon
any other obligations of the parties hereto, whether to be performed before or
after the Closing.
(f) Determination of Damages and Related Matters. In calculating
any amounts payable to the Buyer pursuant to Section 7.1.(b) or payable to the
Seller pursuant to Section 7.1.(a), the Seller or the Buyer, as the case may
be, shall receive credit for any reduction in actual tax liability as a result
of the facts giving rise to the claims for indemnification; any actually paid
insurance recoveries, and no amount shall be included for the Buyer's or the
Seller's consequential damages, as the case may be.
7.2 Construction Defects. No failure to correct or commence correcting
any of the Construction Defects by the Seller shall be the basis for any Loss,
breach of warranty or any duty of the Seller to indemnify the Buyer.
7.3 Year 2000. The Seller specifically disclaims all representations
and warranties, whether express or implied, arising by statute, operation of
law or otherwise, that any hardware or software system included in the
Acquired Assets is Year 2000 compliant, i.e., that the operation of such
hardware or software system will accurately process data or that it will
accurately exchange data with other hardware or software systems before,
during, or after the year 2000. The Buyer expressly waives any claim for
indemnity or damages it may have against the Seller (including direct,
indirect, incidental, special or consequential damages) that may arise out of
or result from the failure of any hardware or software system to accurately
process data or accurately exchange data with other hardware or software
systems before, during, or after the year 2000.
7.4 Permits; Assignments; Releases.
(a) The Seller shall use its best efforts to identify, to obtain,
and to cooperate in obtaining, any consent, approval, authorization or order
of, or in making any registration or filing with, any governmental agency or
body or other third party required in connection with the consummation of the
transactions contemplated hereby. With respect to every nontransferable
Permit, the Seller shall cooperate with the Buyer in the preparation and
filing of an application with the appropriate regulatory authority for
issuance of a replacement Permit in the Buyer's name.
(b) Nothing in this Agreement shall be deemed to constitute or
require the transfer or assignment or the attempt to transfer or assign any of
the Acquired Assets if the attempted transfer or assignment thereof, without
the consent of a third party, would adversely affect in any way the rights of
either the Seller or the Buyer thereto, or would materially and adversely
affect the Seller or the Buyer. If any such consent shall not have been
obtained at or prior to the Closing, or the attempted transfer or assignment
of any of the Acquired Assets at the Closing would have a material adverse
effect on the Seller or the Buyer or on the Buyer's rights thereto or the
17
Buyer would not in fact receive the rights thereto, (i) the Seller will
cooperate with the Buyer in any reasonable arrangement designed to provide for
the Buyer the rights thereto (A) enforcing for the benefit of the Buyer any or
all rights of the Seller under any contract, commitment or other agreement
against any other party thereto, or (B) at the Buyer's election, not
transferring, conveying, assigning or delivering to the Buyer at the Closing,
and retaining legal title to, such Acquired Asset while permitting the Buyer
the possession and use of such Acquired Asset for the Buyer's account and with
the Buyer receiving the benefits and bearing the burdens of such Acquired
Asset as if such Acquired Asset had been so transferred, conveyed, assigned
and delivered, and (ii) the Seller will take all reasonable appropriate
further action to obtain such consents, approvals or novations as may be
required under applicable laws or otherwise to effect the transfer or
assignment of such Acquired Asset to the Buyer. Pending the obtaining of such
consents, approvals or novations, the Buyer will continue performance of any
remaining unfulfilled obligations of the Seller under any contract, commitment
or other agreement constituting such an Acquired Asset in the same manner as
though the Buyer rather than the Seller was a party to such contract,
commitment or agreement, with the Buyer receiving the benefits and bearing the
burdens thereof. The Seller agrees to remit to the Buyer all collections
received in respect of any such Acquired Asset promptly on receipt thereof
less any amount due the Seller from the Buyer with respect to such Acquired
Assets. Expenses incurred in connection with actions taken pursuant to this
Section 7.2 shall be borne in such a manner as to place the Seller and the
Buyer in the economic positions in which they would have been had such
Acquired Assets been transferred, conveyed, assigned or delivered at the
Closing.
(c) At the Seller's reasonable request and cost, the Buyer shall
cooperate with the Seller in seeking to obtain the Seller's release from any
of the Assumed Liabilities identified by the Seller which the Buyer and the
Seller, in their reasonable judgment, determine is reasonably likely to be
obtained without prejudice to the obtaining of any consent, approval,
authorization or order required in connection with the transactions
contemplated by this Agreement, provided that the Buyer in seeking to obtain
any such release shall be under no obligation to incur or assume any
obligation with respect to such Assumed Liability other than as contemplated
by this Agreement.
8. Dispute Resolution.
8.1 Direct Discussion. In the event of any dispute, claim, question, or
disagreement arising out of or relating to this Agreement (a "Dispute"), the
parties involved in such Dispute shall use their best efforts to settle such
Dispute. To this effect, senior management of the parties involved shall
consult and negotiate with each other in good faith to attempt to reach a just
and equitable solution satisfactory to both parties. Any dispute which cannot
be resolved within thirty (30) days may be submitted to binding arbitration as
provided below.
8.2 Requirement of Arbitration. Any Dispute which cannot be resolved
through mutual consultation and negotiation, shall be settled by final and
binding arbitration conducted by the Los Angeles office of JAMS/Endispute.
Nothing stated herein, however, shall preclude any party from seeking and
obtaining immediate injunctive relief (whether temporary, preliminary, or
permanent) to prevent or restrain a breach by the other of this Agreement or
to seek enforcement of this arbitration provision or to seek or enforce
prejudgment or ancillary remedies.
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8.3 Number of Arbitrators. The number of arbitrators shall be three
(3). The three arbitrators shall be selected as follows: (a) within ten (10)
days of delivery of any demand for arbitration, each party shall submit to the
other party the name of three (3) candidates nominated from the then-current
list of retired judges or justices at the Los Angeles office of
JAMS/Endispute; (b) within five (5) days of delivery of the opposing party's
list, each party shall submit to the other party the names of two (2)
candidates proposed by the opposing party which are to be stricken from the
opposing party's nomination list, with the non-challenged candidates serving
as two (2) of the three (3) arbitrators; (c) the parties will then confer on
the selection of a third arbitrator and, if no agreement can be reached within
five (5) days, JAMS/Endispute shall appoint the third arbitrator from the list
of retired judges or justices at the Los Angeles office of JAMS/Endispute.
8.4 Location; Commencement. The arbitration shall take place in Los
Angeles, California and shall be commenced within thirty (30) days of the
selection of the arbitrator(s), unless otherwise agreed to by the parties or
ordered by the arbitrator(s) for good cause shown. The arbitration hearing
shall last no longer than two (2) days.
8.5 Discovery. It is expressly understood that the parties have chosen
arbitration to avoid the burdens, costs and publicity of a court proceeding,
and the arbitrators are expected to handle all aspects of the matter,
including discovery, in a manner so as to minimize the expense, time, burden
and publicity of the process, while assuring a fair and just result. The
arbitrator shall limit and restrict the scope of discovery (e.g., number of
depositions, document requests, etc.) to only those matters clearly relevant
to the dispute.
8.6 Arbitrator's Award. The arbitrator(s) shall issue a written award
within twenty (20) days after the matter is submitted for decision. The
arbitrator(s) shall apply the law of the State of Nevada (excluding Nevada
choice of law provisions).
8.7 Expenses. The expenses of the arbitration, including the
arbitrator's fees, expert witness fees, and attorney's fees, may be awarded to
the prevailing party, in the discretion of the arbitrators, or may be
apportioned between the parties in any manner deemed appropriate by the
arbitrators. Unless and until the arbitrators decide that one party is to pay
for all (or a share) of such expenses, both parties shall share equally in the
payment of the arbitrators' fees as and when billed by the arbitrators.
8.8 Confidentiality. Except as set forth below, the parties shall keep
confidential the fact of the arbitration, the dispute being arbitrated, the
decision of the arbitrators, and any documents produced by the parties in the
course of the arbitration. Notwithstanding the foregoing, the parties may
disclose information about the arbitration to persons who have a need to know,
such as directors, trustees, management employees, witnesses, experts
investors, attorneys, lenders, insurers, and others who may be directly
affected. Once the arbitration award has become final, if the arbitration
award is not promptly satisfied, then the prevailing party may,
notwithstanding the foregoing, disclose information about the arbitration only
to the extent necessary to obtain judicial enforcement of the award.
8.9 Enforcement of Award. The arbitration award shall be final and
shall bind the parties. Any award may be enforced by an action filed in the
Nevada Superior Court or the Federal District Court, for Nevada. For purposes
of this arbitration provision, the parties hereby agree to submit to the
19
jurisdiction of these courts and hereby waive any or all objections as to
personal jurisdiction, subject matter jurisdiction and/or venue with respect
to such courts.
9. Post-Closing Covenants.
9.1 Conditions. The Buyer, on the one hand, and the Seller, on the
other hand, shall use their best efforts to satisfy any conditions to Closing
set forth in Section 6 that have not been satisfied prior to or at the time of
Closing.
9.2 Press Release and Announcements. Unless required by law (in which
case each party agrees to consult with the other parties prior to any such
disclosure as to the form and content of such disclosure), no press releases
or other releases of information related to this Agreement or the transactions
contemplated hereby will be issued or released by one party without the
consent of the other.
9.3 Confidentiality. The Seller shall keep confidential all proprietary
or confidential information and materials regarding the Center and the
Acquired Assets (except as to the extent (a) disclosure of such information is
required by law, or (b) the information becomes publicly known except through
the actions or inactions of the Seller or Callaway). The Seller agrees not to
disclose or use at any time, either during the Buyer's business relationship
with the Seller, or thereafter, any Confidential Information (whether or not
such information is or was developed by the Seller), except to the extent that
such disclosure or use is directly related to and required by the performance
of the Seller's duties to the Buyer. The Seller further agrees to take all
appropriate steps to safeguard such Confidential Information and to protect it
against disclosure, misuse, espionage, loss and theft. In the event the
Seller is required by law to disclose any Confidential Information, it shall
promptly notify the Buyer in writing, which notification shall include the
nature of the legal requirement and the extent of the required disclosure, and
shall cooperate with the Buyer to preserve the confidentiality of such
information consistent with applicable law.
9.4 No Solicitation of Employees. The Seller covenants and agrees that
for a period of five years from the Closing, none of the Seller, Callaway or
any corporation or other organization or entity owned or controlled by either
of them shall, without the prior written consent of the Buyer, solicit or
endeavor to entice away, or offer employment or any contract for personal
services to, any employee or personnel of the buyer provided that the
foregoing restrictions shall not apply with respect to any employee or
personnel of the buyer who, without solicitation or enticement by the Seller
or any corporation or other organization or entity owned or controlled by
either of them, has voluntarily offered his services to the Seller or Callaway
or any corporation or other organization or entity owned or controlled by the
either of them (for example, in response to a bona fide open "help-wanted"
advertisement placed in a general or trade publication), has voluntarily left
the employ of the Buyer or has been terminated involuntarily by the Buyer.
9.5 Noncompetition.
(a) The Seller acknowledges that the business of the Center is
intensely competitive. Accordingly, the Seller agrees on its own behalf and
on behalf of Callaway and their respective Affiliates that they shall not, for
a period of five (5) years after the date hereof unless otherwise agreed upon
by the parties pursuant to a written agreement, directly or indirectly,
20
through a corporation or subsidiary, individually or in partnership or in
conjunction with another person or persons, firm or corporation, own, manage,
operate, join, control, take a royalty from or participate in the ownership
(other than through ownership of 2% or less of the outstanding stock of a
publicly traded company), management, operation or control of, or be connected
as a director, officer, employee, partner, consultant or otherwise with, any
profit or non-profit business or organization anywhere in the world, that
directly or indirectly through subsidiaries owns or operates a recreational
golf center, golf training facility or golf performance center anywhere within
▇▇▇▇▇ County, Nevada.
(b) The Seller agrees that the covenants set forth in this Section
9.5 are reasonable and necessary for the protection of the business and
goodwill of the Center and the Acquired Assets. Each party also acknowledges
that any violation of the covenants contained herein will cause immeasurable
and irreparable damage to the Buyer and that the remedies at law for any such
breach will be inadequate. Accordingly, each agrees that if any party
breaches any of the covenants contained in this Section 9.5 in addition to any
other remedy which may be available at law or in equity, the non-breaching
party shall be entitled to seek specific performance and injunctive relief,
without posting bond or other security or showing actual damages.
(c) In the event any of the covenants in this Section 9.5 shall be
determined by any court of competent jurisdiction to be unenforceable by
reason of its extending for too great a period of time or over too great a
geographical area or by reason of its being too extensive in any other
respect, it shall be interpreted to extend only over the maximum period of
time of which it may be enforceable, and/or over the maximum geographical area
as to which it may be enforceable and/or to the maximum extent in all other
respects as to which it may be enforceable, all as determined by such court in
such action.
9.6 Employment Obligations. On the Closing Date, the Buyer may, but
shall not be required to, extend an offer of employment to the Employees
listed on the Employees Schedule on terms and conditions determined by the
Buyer.
9.7 Access After Closing; Cooperation.
(a) Each of the Buyer and the Seller acknowledges that (i) pursuant
to this Agreement the Buyer shall retain the books, records and other data of
the Seller relating to the Center and Acquired Assets and the Seller (or to
the extent not transferred prior to the Closing, the Buyer) shall transfer all
other books, records and other data of the Seller to the offices of the
Seller, and (ii) the Buyer, in connection with the Center and the Acquired
Assets after the Closing may require access to the books, records and data of
the Seller retained by the Seller after the Closing and to the officers and
employees of the Seller and that the Seller, in connection with the businesses
and operations of the Seller after the Closing, may require access to the
books, records and other data of the Seller retained by the Buyer after the
Closing and to the officers and employees of the Buyer.
(b) Following the Closing, each of the Buyer and the Seller shall
provide, upon request, to the other of its officers, counsel, independent
accountants and other representatives or agents, reasonable access during
normal business hours, (i) in the case of the Seller's obligation to the
Buyer, to the books, records and other data of the Seller retained by the
21
Seller under this Agreement and (ii) in the case of the Buyer's obligation to
the Seller, to the books, records and other data of the Seller retained by the
Buyer under this Agreement. In each case, such access shall include the
right, at the expense of the requesting party, to transcribe extracts from
such books, records or other data or to make copies thereof.
(c) Each of the Buyer and the Seller agrees that, for a period of
eight years following the Closing, it will not destroy, discard, deface or
otherwise alter any of the books, records or other data in its possession
covering or prepared during the period beginning on the inception of the
Seller and ending on the Closing Date, without prior notice to the other and a
reasonable opportunity for the other, at the expense of the other, to take
custody of such books, records or other data.
(d) Following the Closing, (i) the Buyer shall cooperate, and will
cause its officers and employees to cooperate, with the Seller in the
furnishing of information, testimony and other assistance in connection with
any action, judicial or administrative proceeding, claim or dispute to which
the Seller is or becomes a party relating to the Center or the Acquired
Assets, or in connection with the preparation of financial statements, tax
returns or other reports of the Seller or the preparation for any audit or
other examination of the Seller by any taxing or other governmental authority
relating to the businesses or operations of the Seller or the Seller, prior to
the Closing Date; and (ii) each of the Seller and Callaway shall cooperate
with the Buyer, and shall cause its respective officers and employees to
cooperate with the Buyer, in the furnishing of information, testimony, or
other assistance in connection with any action, judicial or administrative
proceeding, claim or dispute to which the Buyer is or becomes a party relating
to the Center or the Acquired Assets.
(e) Following the Closing, the Buyer shall reasonably cooperate
with the Seller, at the Seller's sole cost and expense, and shall allow the
Seller to remove the Excluded Assets. The Seller agrees that the Excluded
Assets will be removed in a manner that does not interfere with or cause
damage to the Center or its operations.
9.8 Naming of the Seller and the Buyer as Additional Named Insureds.
(a) At the Closing or as soon as practicable thereafter, the Seller
shall have received a certificate of insurance that the Seller has been named
as an additional insured on the Buyer's comprehensive general liability
("CGL") policy with minimum limits of $6,000,000 per occurrence and $7,000,000
aggregate limit; and the Buyer shall maintain such CGL policy in effect for a
period of five (5) years from the Closing Date. The Certificate shall contain
an endorsement that thirty (30) days' notice shall be given to the Seller in
the event of cancellation.
(b) At the Closing or as soon as practicable thereafter, the Buyer
shall have received a certificate of insurance that the Buyer has been named
as an additional insured on the Seller's comprehensive general liability
("CGL") policy with minimum limits of $6,000,000 per occurrence and $7,000,000
aggregate limit, and the Seller shall maintain such CGL policy in effect for a
period of five (5) years from the Closing Date. The Certificate shall contain
an endorsement that thirty (30) days' notice shall be given to the Buyer in
the event of cancellation.
22
10. Definitions.
For the purpose of this Agreement, the following terms have the meanings
set forth below:
10.1 "Affiliates" shall have the meaning given such term in Rule 12b-2
promulgated under the Securities Exchange Act of 1934, as amended.
10.2 "Confidential Information" means all information of a confidential
or proprietary nature (whether or not specifically labeled or identified as
"confidential"), in any form or medium, that is or was disclosed to, or
developed or learned by, the Seller or Callaway and that relates to the
business, products, services or research or development of or relating to the
Center or its suppliers, distributors or customers. Confidential Information
includes, but it not limited to, the following: (a) internal business
information (including information relating to strategic and staffing plans
and practices, business, training, marketing, promotional and sales plans and
practices, cost, rate and pricing structures and accounting and business
methods); (b) identities of, individual requirements of, specific contractual
arrangements with, and information about, the Center's suppliers, distributors
and customers and their confidential information; (c) trade secrets, know-how,
compilations of data and analyses, techniques, systems, formulae, research,
records, reports, manuals, documentation, models, data and data bases relating
thereto; (d) inventions, innovations, improvements, developments, methods,
designs, analyses, drawings, reports and all similar or related information
(whether or not patentable) and (e) other Intellectual Property rights.
Confidential Information shall not include information that the Seller or
Callaway can demonstrate is publicly known through no wrongful act or breach
of any obligation of confidentiality or was rightfully received by the Seller
or Callaway from a third party without a breach of any obligation of
confidentiality by such third party.
10.3 "Code" means Internal Revenue Code of 1986, as amended.
10.4 "Employee Plans" means an employee plan subject to Title IV of
ERISA.
10.5 "Employees" means all employees of the Seller as of the Closing.
10.6 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
10.7 "Intellectual Property" means (a) inventions, whether or not
patentable, whether or not reduced to practice, and whether or not yet made
the subject of a pending patent application or applications, (b) ideas and
concepts of potentially patentable subject matter, including, without
limitation, any patent disclosures, whether or not reduced to practice and
whether or not yet made the subject of a pending patent application or
applications, (c) national (including the United States) and multinational
statutory invention registrations, patent, patent registrations and patent
application (including all reissue, division, continuations,
continuations-in-part, extensions, and reexaminations) and all rights therein
provided by international treaties or conventions and all improvements to the
inventions disclosed in which such registration, patent, or application, (d)
trademarks, service marks, trade dress, logos, trade names, and corporate
names, whether or not registered, including all common law rights, and
registration and applications for registration thereof, including, but not
limited to, all marks registered in the United States Patent and Trademark
23
Office, the Trademark offices of the States and Territories of the United
States of America, and the Trademark Office of other nations throughout the
world, and all rights therein provided by international treaties or
conventions, (e) copyrights (registered or otherwise) and registrations and
applications for registration thereof, and all rights therein provided by
international treaties of conventions, (f) computer software, including,
without limitation, source code, operating systems and specifications, data,
data bases, filed, documentation and other materials related thereto, (g)
trade secrets and confidential, technical and business information (including
idea formulas, compositions, inventions, and conceptions of inventions where
patentable or unpatentable and whether or not reduced to practice), (h)
whether or not confidential, technology (including know-how and show-how),
manufacturing and production processes and techniques, research and
development information, drawings, specifications, designs, plans, proposals,
technical data, copyrightable works, financial, marketing and business data,
pricing and cost information, business and marketing plans and customer and
supplier lists and information, (i) copies and tangible embodiments of all the
foregoing, in whatever form or medium, (j) all right to obtain and a right to
apply for patents, and to register trademarks and copyrights, and (k) all
rights to ▇▇▇ or recover and retain damages and costs and attorney's fees for
present and past infringement of any of the foregoing.
10.8 "Liens" means any mortgage, pledge, lien, security interest,
conditional sale agreement, easement, leasehold, interest, license,
restriction, charge claim or other encumbrance or commitment or obligation of
any kind (whether absolute, accrued, contingent or otherwise).
10.9 "Material Adverse Effect" means a material adverse effect on the
business, operations, properties, assets, liabilities (absolute, accrued,
contingent or otherwise), condition (financial or otherwise), results of
operations or prospects of the Center taken as a whole.
10.10 "Permitted Liens" means minor imperfections of title and
encumbrances, if any, which are not substantial in amount, do not materially
detract from the value of the property subject thereto and do not impair the
use of the Acquired Assets or the business operations of the Center.
10.11 "Person" means an individual, a partnership, a corporation, a
limited liability company, as association, a joint stock company a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
10.12 "Tax" or "Taxes" means federal, provincial, state, county, local,
foreign or other income, business, assets, corporate capital, social services,
gross receipts, ad valorem, franchise, profits, sales or use, transfer,
registration, excise, utility, environmental, communications, real or personal
property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or
add-on minimum, estimated and other taxes, assessments, or levies of any kind
whatsoever (including deficiencies, penalties, additions to tax, and interest
attributable thereto) whether disputed or not.
10.13 "Tax Return" means any return, information report, election forms,
or filings with respect to Taxes, including any schedules attached thereto and
including any amendment thereof.
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11. Miscellaneous.
11.1 Fees and Expenses. The Buyer, on the one hand, and the Seller and
Callaway, on the other hand, shall each pay all of its own fees and expenses
(including fees and expenses of legal counsel, accountants, investment bankers
and other representatives and consultants) in connection with this Agreement
and the consummation of the transactions contemplated hereby.
11.2 Special Remedies and Enforcement. The Buyer, on the one hand, and
the Seller, on the other hand, recognize and agree that a breach by one of
them ("Breaching Party") of any of the covenants set forth in this Agreement
could cause irreparable harm to the other party, that the parties' remedies at
law in the event of such breach would be inadequate, and that, accordingly, in
the event of any such breach a restraining order or injunction or both may be
issued against the Breaching Party in addition to any other rights and
remedies which are available to the parties. If this Section 11.2 is more
restrictive than permitted by applicable law, this Section 11.2 shall be
limited to the extent required by such law.
11.3 Remedies Cumulative. Except as otherwise provided herein, the
remedies provided herein shall be cumulative and shall not preclude the
assertion by any party hereto of any other rights or the seeking of any other
remedies against any other party hereto.
11.4 Entire Agreement, Modifications. This Agreement, together with
exhibits and schedules attached hereto, contains the entire agreement between
the parties hereto with respect to the transactions contemplated hereby, and
contains all of the terms and condition thereof and supersedes all prior
agreements and understandings relating to the subject matter hereof; provided,
however, this Agreement is not intended to terminate, amend or modify the
Purchase Agreement (which Purchase Agreement the parties hereto intent to
remain in full force and effect). No changes or modifications of or additions
to this Agreement shall be valid unless the same shall be in writing and
signed by each party hereto.
11.5 Waivers. No waiver of any of the provisions of this Agreement
shall be deemed to be or shall constitute a waiver of any other provision of
this Agreement, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver of any provision of this Agreement shall be
binding on the parties hereto unless it is executed in writing by the party
making the waiver.
11.6 Successors and Assigns. This Agreement and all covenants and
agreements contained herein and right, interests or obligations hereunder, by
or on behalf of each of the parties hereto, shall bind and inure to the
benefit of the respective successors and assigns of the parties hereto whether
so expressed or not. None of the Seller, the Buyer or Callaway may,
voluntarily or by operation of law, assign or otherwise transfer any of its
rights or obligations under this Agreement without obtaining the prior written
consent of all other parties hereto, except that the Buyer may assign all of
its rights together with all of its obligations, under this Agreement to one
or more wholly-owned subsidiaries, provided that in the case of an assignment
in accordance with this provision, the Buyer shall not be relieved of any of
its obligations or liabilities under this Agreement. Any attempted assignment
in violation of this Agreement shall be void and of no effect.
25
11.7 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement or the application of
any such provision to any person, entity or circumstance shall be held to be
prohibited by, illegal or unenforceable under applicable law in any respect by
a court of competent jurisdiction, such provision shall be ineffective only
the extent of such prohibition or illegality or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
11.8 Counterparts. This Agreement may be executed simultaneously in
counterparts (including by means of telecopied signature pages), any one of
which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same Agreement.
11.9 Descriptive Heading; Interpretation. The headings and captions
used in this Agreement and the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized terms used in any Schedule
or Exhibit attached hereto and not otherwise defined therein shall have the
meanings set forth in this Agreement. The use of the word "including" herein
shall mean "including without limitation." The parties intend that each
representation, warranty and covenant contained herein shall have independent
significance. If any party has breached any representation, warranty or
covenant contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the party has not
breached shall not detract from or mitigate the fact that the party is in
breach of the first representation, warranty or covenant.
11.10 No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties and their permitted successors and assigns and nothing
herein expressed or implied shall give or be construed to give any Person,
other than the parties and such permitted successors and assigns, any legal or
equitable rights hereunder except as specifically provided herein, except as
specifically provided herein.
11.11 Schedules and Exhibits.
(a) Nothing in any Schedule or Exhibit attached hereto shall be
adequate to disclose an exception to a representation or warranty made in this
Agreement unless such Schedule or Exhibit identifies the exception with
particularity. Without limiting the generality of the foregoing, the mere
listing (or inclusion of a copy) of a document or other item shall not be
adequate to disclose an exception to a representation or warranty made in this
Agreement, unless the representation or warranty has to do with the existence
of the document or other item itself. No exceptions to any representations or
warranties disclosed on one Schedule shall constitute an exception to any
other representations or warranties made in this Agreement unless the
substance of such exception is disclosed as provided herein on each such other
applicable Schedule or a specific cross-reference to a disclosure on another
Schedule or Exhibit is made.
(b) All Schedules and Exhibits attached hereto or referred to
herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein.
26
11.12 Bulk Sales. The Seller shall be responsible for complying with
all applicable bulk sales laws in connection with the consummation of the
transaction contemplated by this Agreement.
11.13 Governing Law. This Agreement is made and shall be governed by,
and construed and enforced in accordance with, the internal laws of the State
of California, without regard to the conflict of laws principles thereof, as
the same apply to agreements executed solely by residents of California and
wholly to be performed within California. This Agreement shall be interpreted
in accordance with and any disputes hereunder governed by the laws of the
State of California.
11.14 Authority. Each of the persons executing this Agreement
represents and warrants that it is authorized to execute this Agreement and
the entity on whose behalf they are signing is bound by the terms hereof.
11.15 Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be
in writing and shall be deemed to have been given when delivered personally to
the recipient, one day after being sent to the recipient by reputable
overnight courier service (charges prepaid), upon machine-generated
acknowledgment of receipt after transmittal by facsimile or five (5) days
after being mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the parties at the addresses indicated below
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
To the Seller: All-American Golf LLC
c/o Callaway Golf Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇, President
and Chief Executive Officer
with a copy to: Callaway Golf Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Executive Vice President, Licensing,
Chief Legal Officer and Secretary
To the Buyer: All-American Golf Center, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇, President
with copies to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Gondecki & Del ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and: ASI Group, L.L.C.
c/o Agassi Enterprises, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
27
11.16 Mail Received After Closing. Following the Closing, the Buyer may
open all mail addressed to the Seller or Callaway or any of its subsidiaries
received at the Center and deal with the contents thereof in its discretion to
the extent that such mail and the contents thereof relate to the Center or the
Acquired Assets; provided, however, that the Buyer shall immediately deliver
or cause to be delivered to the Seller without retaining any copies thereof
all mail that does not relate to the Center or the Acquired Assets.
11.17 Tender. For purposes of this Agreement, reference herein to
dollars or cash amounts shall refer to United States legal tender.
11.18 Brokers. The Seller represents and warrants that no broker,
finder or investment banker is entitled to any brokerage, finder's or other
fee or commission, in connection with the transactions contemplated hereby
based upon arrangements made by or on behalf of the Seller. The Buyer
represents and warrants that no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission, in connection
with the transactions contemplated hereby based upon arrangements made by or
on behalf of the Buyer.
11.19 No Strict Construction. The parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties, and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any of the provisions of this Agreement.
11.20 Incorporation of Recitals. The Recitals to this Agreement are
incorporated herein by this referenced with the same force and effect as if
set forth in full herein.
IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement on the date first written above.
SELLER:
ALL-AMERICAN GOLF LLC,
a California limited liability company
By: CGV, Inc., a California corporation,
its Manager
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Its: Vice President and Chief Financial
Officer
BUYER:
THE ALL-AMERICAN GOLF CENTER, INC.,
a Nevada corporation
By: /s/ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇
Title: President
28