EXHIBIT 9.1
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is entered into effective as of October 5,
2006 (the "Effective Date") by and among SWINGSTATION SYSTEMS,LLC, INC., a New
Jersey limited liability company ("SwingStation LLC"), SWING STATION, INC. a New
Jersey corporation ("SSI"), and DIGITAL IMAGING RESOURCES, INC., a Delaware
corporation ("Digital").
RECITALS
A. SSI is engaged in the business of developing and marketing
a digital video recording system for sports training, corporate entertainment,
and special events(the "System").
B. Pursuant to the terms and conditions of this Agreement, SSI wishes to
sell to SwingStation LLC, and SwingStation LLC desires to purchase from SSI
certain assets related to the System.
C. SSI is a wholly-owned subsidiary of Digital. As consideration for the
purchase of certain assets of SSI, SwingStation LLC has offered to assume
certain liabilities of SSI and of Digital and to issue to Digital a warrant to
purchase a membership interest in SwingStation LLC.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as
follows:
1. SALE OF ASSETS.
1.1 PURCHASE AND SALE. Subject to the terms and conditions contained
herein, SwingStation LLC agrees to buy and SSI agrees to sell those certain
tangible and intangible assets, contracts, rights, and properties, including
without limitation the System and all related intellectual property, including
without limitation all SwingStation service marks and trademarks (the
"Intellectual Property"), all as more particularly described in Exhibit 1 to
this Agreement (collectively, the "Assets").
1.2 COMPLETE TRANSFER. SSI expressly agrees that the sale of the
Assets under this Agreement constitutes a complete transfer of all of its
rights, title and interest with respect to the Assets and that SSI reserves
no rights to market or otherwise transfer the Assets. SwingStation LLC shall
have no obligation to SSI to support, maintain, offer, or do any other act
relating to the Assets and may dispose of the Assets as SwingStation LLC, in its
sole discretion, decides.
2. ASSUMPTION OF LIABILITIES; ISSUANCE OF WARRANT.
2.1 (a) As consideration for the purchase of the Assets, subject to the
provisions of this Agreement, SwingStation LLC assumes and agrees to pay or to
discharge the obligations of SSI and Digital (the "Assumed Liabilities")set
forth on Exhibit 2(a) attached hereto totaling approximately $185,000.
(b) Except as specifically assumed by SwingStation LLC pursuant to the
immediately preceding sentence, SwingStation LLC shall not assume or have any
liability with respect to any other obligation or liability of SSI or Digital,
whether absolute, accrued, contingent or otherwise, and whether due or to become
due (the "Excluded Liabilities"). Without limiting the previous sentence, the
parties acknowledge that SwingStation LLC shall specifically not assume, in
addition to all other Excluded Liabilities, any liability for taxes payable by
SSI or Digital or any liability for any legal, accounting or other fees or
expenses incurred by SSI or Digital in connection with the negotiation and
execution of this Agreement or any related agreement. The assumption of the
Assumed Liabilities by SwingStation LLC hereunder shall not enlarge any rights
of third parties under contracts or arrangements with SwingStation LLC, SSI or
Digital and nothing herein shall prevent any party from contesting in good faith
with any third party any of the Assumed Liabilities.
2.2 TAXES. SSI shall be responsible for any and all sales or other
transaction taxes, duties and other similar charges payable in connection with
the sale of the Assets or the transactions and payments contemplated hereby.
2.3 ISSUANCE OF WARRANT. SwingStation LLC shall issue to Digital a
five-year warrant to purchase a membership interest equal to ten percent of
SwingStation LLC at the time of the Closing with an exercise price of $50,000.
3. CLOSING. The closing of the purchase and sale provided for in this
Agreement (the "Closing") shall be held at the offices of SSI at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx and shall be effective as of 12:01 a.m. on
October 6, 2006, or at such other place or earlier or later date or time as may
be fixed by mutual agreement of the parties hereto (the "Closing Date").
4. TRANSFER OF ASSETS.
4.1 At the Closing, SSI shall deliver or cause to be delivered to
SwingStation LLC good and sufficient instruments of transfer transferring to
Buyer title to all the Assets. Such instruments of transfer (i) shall be in the
form and will contain provisions not inconsistent with the provisions hereof
which are usual and customary for transferring the type of property involved
under the laws of the jurisdictions applicable to such transfers, (ii) shall be
in form and substance reasonably satisfactory to SwingStation LLC, and (iii)
shall effectively vest in SwingStation LLC title to all the Assets free and
clear of all liens, restrictions and encumbrances.
4.2 At Closing SwingStation LLC shall deliver to SSI and Digital an
assignment and assumption agreement assigning the Assumed Obligations to
SwingStation LLC, such assignment and assumption to be in form and substance
satisfactory to SSI and Digital.
5. DELIVERY OF RECORDS AND CONTRACTS: FURTHER ASSURANCES.
(a) At the time of the Closing, subject to subsection (b) below, SSI
shall deliver or cause to be delivered to SwingStation LLC all of SSI's
contracts, commitments, agreements and rights which are included in the Assets,
with such assignments thereof and consents to assignments as are necessary to
assure SwingStation LLC of the full benefit of the same. SSI shall take all
requisite steps to put SwingStation LLC in actual possession and operating
control of the Assets.
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(b) If an attempted sale, conveyance, assignment, transfer or delivery
of any contracts, claims, commitments, franchises, privileges, permits,
consents, certificates, licenses or any other assets, rights or benefits to be
sold, conveyed, assigned, transferred and delivered to SwingStation LLC which
are included in the Assets (collectively, the "Rights") would be ineffective
without the consent of any other person, and such consent has not been obtained
on or before the Closing Date, this Agreement shall not constitute an assignment
or an attempted assignment of such Right if such assignment or attempted
assignment would constitute a breach thereof or be unlawful. In such case, SSI
shall use commercially reasonable efforts to obtain, as soon as practicable, the
consent of each such or other person in all cases in which such consent is
required, and SSI and SwingStation LLC will cooperate in any reasonable
arrangement designed to enable SSI to perform its obligations hereunder, and to
provide for the assumption by SwingStation LLC of the benefits, risks and
burdens of, any such agreement consistent with the provisions of this Agreement.
(c) SSI from time to time after the Closing at the request of
SwingStation LLC and without further consideration shall execute and deliver
further instruments of transfer and assignment and take such other action as
SwingStation LLC may reasonably require to more effectively transfer and assign
to, and vest in, SwingStation LLC each of the Assets.
6. REPRESENTATIONS AND WARRANTIES OF SSI.
Except as disclosed or excepted in the Schedule of Exceptions (the
"Schedule"), which shall state the specific subsection of this Section 4 to
which each disclosure or exception is made, SSI represents and warrants to
SwingStation LLC as set forth in this Section 4.
6.1 ORGANIZATION AND STANDING. SSI is a corporation organized, validly
existing and in good standing under the laws of the State of New Jersey.
6.2 POWER AND AUTHORIZATION. SSI has all requisite legal power and
authority to enter into and perform this Agreement in accordance with its terms.
The execution and delivery of this Agreement and the transactions contemplated
hereby have been validly and duly authorized by all necessary corporate action
on the part of SSI and no further authorization or approval, whether from
directors or shareholders of SSI, or governmental bodies or otherwise, is
necessary to enable SSI to enter into and perform the same; and this Agreement,
when executed and delivered, shall constitute the legal and binding obligation
of SSI, enforceable against SSI in accordance with its terms.
6.3 TITLE TO ASSETS; INTELLECTUAL PROPERTY.
6.3.1 GOOD TITLE. SSI has good and marketable title in and to all of
the Assets including any patents, patent applications, service marks, trade
names, trademarks, trademark applications, copyrights, copyright applications,
trade secrets, know-how, data or other proprietary or intellectual property
rights included in the Assets (collectively, "Intellectual Property Rights") and
such are not subject to any mortgage, pledge, lien, lease, claim, encumbrance,
charge, security interest, royalty obligations or other interest or claim of any
kind or nature whatsoever, and SSI does not license any component thereof from a
third party. There are no material agreements or arrangements between SSI and
any third party which are
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reasonably likely to have a material effect upon SSI's title to and other rights
respecting the Assets. SSI has the sole right to bring actions for infringement
of any Intellectual Property Rights included in the Assets.
6.3.3 PROTECTION OF OWNERSHIP INTEREST. SSI has taken and will take
all reasonable security measures to protect the secrecy, confidentiality and
value of all Intellectual Property Rights transferred in accordance with this
Agreement. SSI has not taken any action or, to its knowledge, failed to take an
action that directly or indirectly caused the proprietary information contained
in the Assets to enter the public domain or in any way affected its value or
SSI's absolute and unconditional ownership thereof. No source code or object
code of any Intellectual Property Rights is subject to escrow and such source
code has not been disclosed to any third party.
6.3.4 NO LIMITATIONS ON ASSETS. With respect to the transfer of
rights in and to the Assets under this Agreement, SwingStation LLC shall be
subject to no limitations, obligations or restrictions with regard to the sale,
license, distribution or other transfer or exploitation of the Assets, whether
in the form transferred to SwingStation LLC or after modification. All rights to
any tangible or intangible property material (including, but not limited to, all
intellectual property rights in the Assets) to the Assets and used in SSI's
business as presently conducted or currently planned by SSI, or as conducted by
any predecessor entity to SSI or prior owner of any portion of the Assets, have
been validly transferred to SSI free of any adverse claims by any such
predecessor entity, or any partner, limited partner, security holder or creditor
of any such predecessor entity, and no such property rights remain in any such
entity. SSI is under no obligation to pay any other party any royalties or other
fixed or contingent amounts based upon the sale, license, distribution or other
use or exploitation of the Assets.
6.3.5 NO VIOLATION OF THIRD PARTY RIGHTS. The use of the Assets and
the Intellectual Property Rights in the Assets in the conduct of SSI's business
have not and do not infringe or conflict with the rights of others under any
Intellectual Property Rights in any jurisdiction in the world.
6.3.6 NO INDEMNITY OBLIGATIONS. SSI has not agreed to indemnify any
third party for or against any infringement of any Intellectual Property Rights.
6.4 CONFLICTING AGREEMENTS. Neither the execution nor delivery by SSI of
this Agreement nor compliance by SSI with the terms and provisions hereof will
(a) conflict with, or result in a breach of the terms, conditions or provisions
of, or constitute a default under, or result in any violation of, the bylaws or
articles of incorporation of SSI, any award of any arbitrator or any other
agreement, any regulation, law, judgment, order or the like to which SSI is
subject or any Contract, or (b) result in the creation of any lien upon all or
any of the Assets. SSI is not a party to, or otherwise subject to any provision
contained in, any instrument evidencing indebtedness, any agreement relating
thereto or any other contract or agreement which restricts or otherwise limits
the transfer of the Assets.
6.5 LITIGATION. No action, suit, proceeding or investigation is pending
or threatened against SSI: (a) which questions the validity of this
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Agreement or the License Agreement or the right of SSI to enter into this
Agreement or the License Agreement or seeks to prevent any of the transactions
contemplated under this Agreement or the License Agreement, (b) which is
reasonably likely to have a material adverse effect on the Assets, (c) which
challenges the ownership or use, in any respect, of the Assets, or (d) which
challenges the rights of SSI under or the validity of any of the Intellectual
Property Rights. There is no judgment, decree, injunction, rule or order of any
court, governmental department, commission agency, instrumentality or arbitrator
or other similar ruling outstanding against SSI relating to the Assets or this
transaction. No action, suit, proceeding or investigation is pending or
threatened by SSI against any third party relating to the Assets.
6.7 GOVERNMENTAL AUTHORIZATIONS AND REGULATIONS. SSI is not in violation
of any laws, material governmental orders, rules or regulations, whether
federal, state or local, to which SSI or the Assets are subject except for any
such violations which are not reasonably likely to have a material adverse
effect on SSI. SSI has prior to the Closing Date
delivered to SwingStation LLC a true and correct list of all licenses,
franchises, permits and other governmental authorizations held by SSI that are
material in connection with SSI's business related to the ownership and use of
the Assets.
6.8 BULK SALES LAWS. The Bulk Sales laws of no state are applicable to
the sale and transfer of the Assets.
6.10 MANUFACTURING AND TECHNOLOGY RIGHTS. SSI has not granted rights
to manufacture, publish, produce, assemble, license or sell the Intellectual
Property Rights or any of its technology to any other person and is not bound by
any agreement which affects SSI's exclusive right to manufacture, publish,
produce, assemble, license, distribute or sell the Intellectual Property Rights.
6.11 TAXES. There are no tax liens against the Assets and there is no
basis for any such lien.
6.12 BROKERAGE. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf of
SSI.
6.13 FULL DISCLOSURE. This Agreement, the Exhibits and Schedules hereto,
the License Agreement, and all other documents delivered by SSI to SwingStation
LLC or their attorneys or agents in connection herewith or therewith or with the
transactions contemplated hereby or thereby, when taken as a whole, do not
contain any untrue statement of a material fact nor, to SSI's knowledge, omit to
state a material fact necessary in order to make the statements contained herein
or therein not misleading.
7. REPRESENTATIONS AND WARRANTIES OF SWINGSTATION LLC.
SwingStation LLC represents and warrants to SSI as follows:
7.1 ORGANIZATION AND STANDING. SwingStation LLC is a corporation duly
organized, validly existing and in good standing under the law of New Jersey.
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7.2 POWER; AUTHORIZATION. SwingStation LLC has all requisite legal power
and authority to enter into and perform this Agreement in accordance with its
terms. The execution and delivery of this Agreement and the transactions
contemplated hereby have been validly and duly authorized by all necessary
corporate action on the part of SwingStation LLC and no further authorization or
approval, whether from directors or shareholders of SwingStation LLC or
governmental bodies or otherwise, is necessary to enable SwingStation LLC to
enter into and perform the same; and this Agreement, when executed and
delivered, shall constitute the legal and binding obligation of SwingStation
LLC, enforceable against SwingStation LLC in accordance with its terms.
7.3 CONFLICTING AGREEMENTS. Neither the execution nor delivery by
SwingStation LLC of this Agreement nor compliance by SwingStation LLC with the
terms and provisions hereof will conflict with, or result in a breach of (a) the
terms, conditions or provisions of, or constitute a default under, or result in
any violation of, the bylaws or articles of incorporation of SwingStation LLC or
any agreement to which SwingStation LLC is a party, which would prevent any of
the transactions contemplated under this Agreement or the License Agreement, or
(b) any regulation, law, judgment, order or the like to which SwingStation LLC
is subject, the default or violation of which would prevent any of the
transactions contemplated under this Agreement or the License Agreement.
7.4 LITIGATION. No action, suit, proceeding or investigation is pending
or threatened against SwingStation LLC which questions the validity of this
Agreement or the License Agreement or the right of SwingStation LLC to enter
into this Agreement or the License Agreement or seeks to prevent any of the
transactions contemplated under this Agreement or the License Agreement.
7.6 BROKERAGE. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf of
SwingStation LLC.
8. REPRESENTATIONS AND WARRANTIES OF DIGITAL.
Digital represents and warrants to SSI as follows:
8.1 ORGANIZATION AND STANDING. Digital is a corporation duly organized,
validly existing and in good standing under the law of Delaware.
8.2 POWER; AUTHORIZATION. Digital has all requisite legal power and
authority to enter into and perform this Agreement in accordance with its terms.
The execution and delivery of this Agreement and the transactions contemplated
hereby have been validly and duly authorized by all necessary corporate action
on the part of Digital and no further authorization or approval, whether from
directors or shareholders of Digital or governmental bodies or otherwise, is
necessary to enable Digital to enter into and perform the same; and this
Agreement, when executed and delivered, shall constitute the legal and binding
obligation of Digital, enforceable against Digital in accordance with its terms.
8.3 NO LIMITATIONS ON ASSETS. With respect to the transfer of rights in
and to the Assets under this Agreement, SwingStation LLC shall be subject
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to no limitations, obligations or restrictions with regard to the sale, license,
distribution or other transfer or exploitation of the Assets, whether in the
form transferred to SwingStation LLC or after modification. Digital is under no
obligation to pay any other party any royalties or other fixed or contingent
amounts based upon the sale, license, distribution or other use or exploitation
of the Assets. Digital has no knowledge of any unsatisfied liens or judgments
relating to the Assets.
8.4 CONFLICTING AGREEMENTS. Neither the execution nor delivery by
Digital of this Agreement nor compliance by Digital with the terms and
provisions hereof will conflict with, or result in a breach of (a) the terms,
conditions or provisions of, or constitute a default under, or result in any
violation of, the bylaws or articles of incorporation of Digital or any
agreement to which SwingStation LLC is a party, which would prevent any of the
transactions contemplated under this Agreement or the License Agreement, or (b)
any regulation, law, judgment, order or the like to which Digital is subject,
the default or violation of which would prevent any of the transactions
contemplated under this Agreement or the License Agreement.
8.5 LITIGATION. No action, suit, proceeding or investigation is pending
or threatened against Digital which questions the validity of this Agreement or
the License Agreement or the right of Digital to enter into this Agreement or
the License Agreement or seeks to prevent any of the transactions contemplated
under this Agreement or the License Agreement.
8.6 BROKERAGE. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf of
Digital.
9. CLOSING CONDITIONS OF SSI.
SSI's obligations to sell the Assets are subject to the fulfillment on
or prior to the Closing Date of all of the conditions set forth in this Section
9. SwingStation LLC acknowledges and agrees that SSI shall not owe SwingStation
LLC any amount for a failure of the closing to occur as a result of a closing
condition.
9.1 MATERIAL ADVERSE CHANGE. SSI shall be satisfied in its sole
discretion that the representations and warranties made by SwingStation LLC
above are true and correct as of the Closing Date.
9.2 CONSENTS, APPROVALS AND WAIVERS. SSI and SwingStation LLC shall have
obtained, in a manner satisfactory to SSI, any and all approvals, consents,
permits and waivers and made all filings necessary or appropriate for the sale
and transfer of the Assets under this Agreement.
9.3 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by SwingStation LLC on or prior to the Closing
Date shall have been performed or complied with in all respects.
9.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be satisfactory in substance and
form to SSI, and SSI shall have received all such counterpart originals
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or certified or other copies of such documents and instruments as they may
reasonably request.
10. CLOSING CONDITIONS OF SWINGSTATION LLC.
SwingStation LLC's obligations to purchase the Assets are subject to the
fulfillment on or prior to the Closing Date of all of the conditions set forth
in this Section 10.
10.1 SATISFACTORY DUE DILIGENCE; MATERIAL ADVERSE CHANGE. SwingStation
LLC shall be satisfied in its sole discretion (a) that the representations and
warranties made by SSI above are true and correct as of the Closing Date and (b)
SwingStation LLC shall be satisfied in its sole discretion with the results of
its business, technical, legal and financial review of the books, records,
agreements and other legal documents and business organization of SSI.
10.2 CONSENTS, APPROVALS AND WAIVERS. SSI and SwingStation LLC shall
have obtained, in a manner satisfactory to SwingStation LLC, any and all
approvals, consents, permits and waivers and made all filings necessary or
appropriate for the sale and transfer of the Assets under this Agreement.
10.3 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by SSI on or prior to the Closing Date shall have
been performed or complied with in all respects.
10.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be satisfactory in substance and
form to SwingStation LLC, and SwingStation LLC shall have received all such
counterpart originals or certified or other copies of such documents and
instruments as they may reasonably request.
11. CLOSING CONDITIONS OF DIGITAL.
Digital's obligations hereunder are subject to the fulfillment on or
prior to the Closing Date of all of the conditions set forth in this Section 11.
11.1 CONSENTS, APPROVALS AND WAIVERS. SSI and SwingStation LLC shall
have obtained, in a manner satisfactory to Digital, any and all approvals,
consents, permits and waivers and made all filings necessary or appropriate for
the assignment and assumption of liabilities under this Agreement.
11.2 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be satisfactory in substance and
form to SwingStation LLC, and SwingStation LLC shall have received all such
counterpart originals or certified or other copies of such documents and
instruments as they may reasonably request.
12. INDEMNIFICATION.
12.1 SSI INDEMNITY. SSI and its successors (collectively, the
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"Sellers") agree to indemnify SwingStation LLC, its affiliates, its
subsidiaries, or its successors (collectively the "Purchasers") and hold them
harmless from and against any and all liabilities, losses, damages, costs or
expenses (including without limitation reasonable legal and expert witnesses'
fees and expenses)incurred by the Purchasers, directly or indirectly, to the
extent that such liabilities, losses, damages, costs or expenses ("Damages") are
occasioned by, caused by or arise out of:
12.1.1 Any breach of any of the representations or warranties or
failure to perform any of the covenants made by the Sellers in this Agreement,
or any certificate, exhibit, instrument or other document delivered pursuant to
this Agreement; or
12.1.2 Any debts, claims, liabilities, or obligations of the Sellers
not expressly assumed by Purchaser pursuant to this Agreement; or
12.2 SWINGSTATION LLC INDEMNITY. Purchaser agrees to indemnify Seller
and hold them harmless from and against any and all liabilities, losses,
damages, costs or expenses (including without limitation reasonable legal and
expert witnesses' fees and expenses) incurred by the Sellers to the extent that
such Damages are occasioned by, caused by or arise out of:
12.2.1 any breach of any of the representations or warranties or
failure to perform any of the covenants made by Purchasers in this Agreement, or
any certificate, exhibit, instrument or other document delivered pursuant to
this Agreement; or
12.3 INDEMNIFICATION CLAIMS. If either party hereto (the "Claimant")
wishes to assert an indemnification claim against the other party hereto, the
Claimant shall deliver to the other party a written notice setting forth:
12.3.1 the specific representation and warranty alleged to have been
breached by such other party;
12.3.2 a detailed description of the facts and circumstances giving
rise to the alleged breach of such representation and warranty; and
12.3.3 a detailed description of, and a reasonable estimate of the
total amount of, the Damages actually incurred or expected to be incurred by the
Claimant as a direct result of such alleged breach.
12.4 DEFENSE OF THIRD PARTY ACTIONS. If either party hereto (the
"Indemnified Party") receives notice or otherwise obtains knowledge of the
commencement or threat of any claim, demand, dispute, action, suit, examination,
audit, proceeding, investigation, inquiry or other similar matter that may give
rise to an indemnification claim against the other party hereto (the
"Indemnifying Party"), then the Indemnitee shall promptly deliver to the
Indemnified Party a written notice describing such complaint or the commencement
of such action or proceeding; provided, however, that the failure to so notify
the Indemnifying Party shall relieve the Indemnifying Party from liability under
this Agreement with respect to such claim only if, and only to the extent that,
such failure to notify the Indemnifying Party results in the forfeiture by the
Indemnifying Party of rights and defenses otherwise available to the
Indemnifying Party with respect to such claim or the opportunity to defend or
participate in the defense of said claim. The Indemnifying Party shall have the
right, upon written notice delivered to the
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Indemnified Party within 20 days thereafter to assume the defense of such action
or proceeding, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of the fees and disbursements of such
counsel. In the event, however, that the Indemnifying Party declines or fails to
assume the defense of the action or proceeding or to employ counsel reasonably
satisfactory to the Indemnified Party, in either case within such 20 day period,
then such Indemnified Party may employ counsel, reasonably acceptable to the
Indemnifying Party, to represent or defend it in any such action or proceeding
and the Indemnifying Party shall pay the reasonable fees and disbursements of
such counsel as incurred; provided, however, that the Indemnifying Party shall
not be required to pay the fees and disbursements of more than one counsel for
all Indemnified Parties in any jurisdiction in any single action or proceeding.
In any action or proceeding with respect to which indemnification is being
sought hereunder, the Indemnified Party or the Indemnifying Party, whichever is
not assuming the defense of such action, shall have the right to participate in
such litigation and to retain its own counsel at such party's own expense. The
Indemnifying Party or the Indemnified Party, as the case may be, shall at all
times use all commercially reasonable efforts to keep the Indemnifying Party or
the Indemnified Party, as the case may be, reasonably apprised of the status of
the defense of any action, the defense of which they are maintaining, and to
cooperate in good faith with each other with respect to the defense of any such
action. No Indemnified Party may settle or compromise any claim or consent to
the entry of any judgment with respect to which indemnification is being sought
hereunder without the prior written consent of the Indemnifying Party, which
shall not be unreasonably withheld. The Indemnifying Party shall not settle any
claim or assertion, unless the Indemnified Party consents in writing to such
settlement, which consent shall not be unreasonably withheld.
12.5 EXPIRATION OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties set forth in this Agreement shall terminate and
expire, and shall cease to be of any force or effect on the first anniversary of
the Closing Date, and all liability of SSI and SwingStation LLC with respect to
such representations and warranties shall thereupon be extinguished; provided,
however, that if, prior to such first anniversary, Claimant delivers a written
notice to the other party hereto or to the Escrow Agent, then the specific
indemnification claim set forth in such notice shall survive such first
anniversary (and shall not be extinguished thereby) until the settlement of such
specific claim.
12.6 THRESHOLD. Neither the Sellers nor the Purchasers shall be required
to make any indemnification payment pursuant to Section 8.1 or 8.2,
respectively, until such time as the total amount of all Damages that have been
directly or indirectly suffered or incurred by an Indemnified Party, or to which
an Indemnified Party has or otherwise becomes subject to, exceeds $50,000 in the
aggregate. At such time as the total amount of such Damages exceeds $50,000 in
the aggregate, the Indemnified Party shall be entitled to be indemnified against
the full amount of such Damages (and not merely the portion of such Damages
exceeding $50,000).
13. POST-CLOSING COVENANTS.
13.1 FURTHER ASSURANCES. SSI shall not voluntarily undertake any
course of action which interferes in any way with the rights obtained by
SwingStation LLC hereunder or is otherwise inconsistent with the satisfaction
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of its obligations or agreements set forth in this Agreement. SSI hereby agrees
not to contest SwingStation LLC's ownership of the Intellectual Property or
SwingStation LLC's title to the Assets. SSI shall execute, acknowledge and
deliver any further assignments, conveyances and other assurances, documents and
instruments of transfer, consistent with the terms of this Agreement, which are
reasonably requested and prepared by SwingStation LLC or its counsel and shall
take any other action, consistent with the terms of this Agreement, that may be
reasonably requested and prepared by SwingStation LLC or its counsel for the
purpose of assigning, transferring, granting, conveying, and confirming to
SwingStation LLC or reducing to its possession, any or all of the Assets or the
liabilities. SwingStation LLC shall be solely responsible for all out-of-pocket
costs related to such requests. If SwingStation LLC cannot secure SSI's
signature for any of the foregoing after reasonable efforts, SSI appoints
SwingStation LLC as SSI's attorney-in-fact to take all actions SwingStation LLC
deems reasonably necessary to exercise its rights under this Section.
13.2 CONFIDENTIALITY. From and after the Closing Date, to the maximum
extent permitted by applicable law, all technical, marketing and other
information directly relating to the Assets and Intellectual Property thereto
shall at all times be and remain the sole and exclusive property of SwingStation
LLC. At all times after the Closing Date, Digital and SSI shall retain in
strictest confidence, and shall not disclose to third parties or use for its
benefit or for the benefit of any third party, all information assigned under
this Agreement or disclosed by SwingStation LLC or in any other way relating to
the Assets. Digital and SSI understand and agree that SwingStation LLC's
remedies at law for a breach by either of them of their obligations under this
Section will be inadequate and that SwingStation LLC shall, in the event of any
such breach, be entitled to equitable relief (including without limitation
injunctive relief and specific performance) in addition to all other remedies
provided under this Agreement or available to SwingStation LLC at law.
14. MISCELLANEOUS.
14.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of New Jersey applicable to
contracts between New Jersey residents entered into and to be performed entirely
within the State of New Jersey. Any action or proceeding brought by either party
against the other arising out of or related to this Agreement shall be brought
exclusively in a state or federal court in Xxxxxx County, New Jersey.
14.2 WAIVERS; CUMULATIVE REMEDIES. Any waiver, consent or the like must
be in writing. Any waiver by either party of any breach of this Agreement by the
other party shall not constitute a waiver of any other or subsequent breach of
this Agreement. All remedies, either under this Agreement or by law or
otherwise, afforded to the parties hereunder shall be cumulative and not
alternative.
14.3 NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be effective upon receipt by overnight
delivery service or by facsimile with a confirming copy sent by first-class
mail, postage prepaid to the addresses set forth below or to such other address
as a party may designate for itself by providing notice hereunder:
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If to SSI: If to SwingStation LLC:
SwingStation, Inc. SwingStation, LLC
000 Xxxxxxx Xxxxxx 00 xxx Xxxx Xxxx Xxxxxxxxx
Xxxxxxxxxx, XX. Bernardsville, NJ
14.6 EXPENSES. Each party shall bear its own expenses and legal fees
incurred on its behalf with respect to this Agreement and the transaction
contemplated hereby.
14.7 SEVERABILITY. In case any provision of this Agreement is held to be
invalid or unenforceable, such provision shall be deemed amended to the extent
required to make it valid and enforceable and such amended provision and the
remaining provisions of this Agreement will remain in full force and effect.
14.9 SUCCESSOR AND ASSIGNS. The provisions hereof shall inure to the
Benefit of, and be binding upon, the successors and assigns of the parties
hereto.
14.10 RIGHTS OF THIRD PARTIES. Nothing contained in this Agreement,
express or implied, shall be deemed to confer any rights or remedies upon, or
obligate any of the parties hereto, to any person or entity.
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14.11 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Exhibits hereto
and the other documents delivered pursuant hereto constitute the full,
exclusive, complete and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof and supersedes and revokes
all other previous discussions, understanding and agreements, whether oral or
written, between the parties with regard to the subject matter hereof. Any term
of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the affected
party.
The parties to this Agreement have caused this Agreement to be executed
and delivered as of October 5, 2006.
SWINGSTATION LLC, INC.,
a New Jersey corporation
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxxx
President
SwingStation, INC.
a New Jersey corporation
By: /s/ Xxxxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxxxx X. Xxxxxxxxx
President
Digital Imaging Resources, Inc.,
A Delaware corporation
By: /s/ Xxxxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxxxx X. Xxxxxxxxx
President
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EXHIBIT 1
ASSETS
8,790 Inventory
14,000 2 SwingStation units
5,500 SwingStation Printing Trailer
8,075 Accounts Receivable
========
36,365
EXHIBIT 2(1)
LIABILITIES TO BE ASSUMED
SwingStation Inc. Liabilities to be Assumed
T. Xxxxxxxx Xxxxxxxxx $ 27,500
The Pointer Group LLC 8,560
Xxxxxxxx Xxxxxxxx 1,000
American Express Credit Line 27,165
American Express Debit 9,224
American Express Blue 4,421
Bank of America-Visa 000
Xxxxxxx Xxx-Xxxx 8,070
Xxxxxx Xxxxxxxx 4,417
Highland Technical Services 1,743
--------
92,337
Digital Imaging Resources, Inc.
Liabilities to be Assumed
Salary owed to Xxxxxxxx X.
Xxxxxxxxx 53,750
To The Pointer Group LLC 38,625
--------
Total $184,712
========
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