EXHIBIT 10.8
FRANCHISE PURCHASE AGREEMENT
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
This agreement is made as of November 5, 1997, at San Diego,
California, among San Diego Soccer Development Corporation ("Buyer"), a
California corporation, having its principal place of business at 000 Xxxxx
Xxxxxx, Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 and Parker Management, Inc.
("Seller"), a Massachusetts corporation, dba as SRDLP, Inc. and the Colorado
Foxes, having its principal place of business at 0000 Xxxxx Xxxx, Xxxxxx,
Xxxxxxxx 00000. The Buyer and Seller are collectively referred to in this
agreement as the "Parties."
RECITALS
Buyer desires to purchase from Seller and Seller desires to sell to
Buyer, on the terms and subject to the conditions of the agreement, the
existing A-League franchise, endorsed and granted by the United Systems of
Independent Soccer Leagues, Inc. (hereafter referred to as the U.S.I.S.L.,
Inc.) to the Seller, as well as the following promotional items: (1) one
inflatable speed kick, which includes one radar gun, one blower, one
container; and (2) one inflatable soccer ball, which also includes on e
blower and one storage bag; all of which are described in the attached
Exhibit "A". In consideration of the mutual covenants, agreements,
representations and warranties contained in this agreement, the parties agree
as follows:
PURCHASE AND SALE OF ASSETS
ASSETS TO BE SOLD: Subject to the terms and conditions set forth in
this agreement, Seller will sell, convey, transfer, assign,
and deliver to Buyer, and Buyer will purchase from Seller, all
the assets listed in the Exhibit "A" (all of which are
sometimes collectively referred to as the Assets).
CONSIDERATION FROM THE BUYER AT EXECUTION OF THIS AGREEMENT: As partial
payment of the total cash selling price of fifty thousand U.S.
dollars ($50,000), Buyer agrees to pay by cashiers check the
sum of ten thousand U.S. dollars ($10,000) at the time of
execution of this agreement by all the parties.
CONSIDERATION FROM THE BUYER AT CLOSING: As full and final payment of
the total purchase price of fifty thousand U.S. dollars
($50,000), upon transfer and delivery of all the assets to the
Buyer, before or no later than the sixtieth day from the date
this agreement is executed by the parties (hereafter referred
to as the "Closing"), Buyer must deliver at the Closing, a
cashiers check for the balance of the cash purchase price of
fifty thousand U.S. dollars ($50,000), the sum of forty
thousand U.S. dollars ($40,000) payable to Seller, as well as
delivery of one hundred fifty thousand (150,000) shares of
common stock in San Diego Soccer Development Corporation, in
the name of SRDLP, Inc.
TAXES: Each of the parties must report this transaction for federal
tax purposes in accordance with this allocation of the
purchase price. The Parties agree to pay all sales taxes and
use taxes arising from the transfer of the Assets and will pay
their portion, prorated as of the closing date, of state and
local personal property taxes, if applicable. Buyer will not
be responsible for any business, occupation, withholding, or
similar tax, or any taxes of any kind related to any period
before the closing date.
WARRANTIES OF SELLING PARTIES
WARRANTIES OF SELLING PARTIES: Selling Parties, jointly and severably,
warrant that:
CORPORATE VALIDITY: That Xxxxxx Management, Inc. is duly
organized, validly existing, and in good standing
under the laws of the State of Massachusetts and has
all necessary corporate powers to own its properties
and operate its business as now owned and operated by
it.
OWNERS: Shareholders are the owners, beneficially and of
record, of all the shares of Xxxxxx Management, Inc.,
and warranty that all assets transferred under this
agreement are solely owned by Xxxxxx Management, Inc.
TAX RETURNS AND AUDITS: Within the times and in the manner
prescribed by law, Seller has filed all federal,
state and local tax returns as required by law and
have paid all taxes, assessments, and penalties due
and payable. There are no present disputes about
taxes of any nature payable by Seller or the Colorado
Foxes that in any manner whatsoever encumber or
create a security on the assets to be transferred
pursuant to this agreement.
TITLE TO ASSETS: Seller has good and marketable title to all
their respective assets and interests in assets,
whether tangible or intangible, that are listed as
part of Exhibit "A" to this agreement. All Assets
transferred to the Buyer under this agreement are
free and clear of restrictions on or conditions to
transfer or assignment, and of mortgages, liens,
leases, pledges, charges, encumbrances, equities,
claims, covenants, conditions, or restrictions. No
Shareholders, officers, directors, or employees of
the Seller; or any spouse, child or other relative of
any of these persons, owns, or has any interest,
directly or indirectly, in any of the personal
property owned and offered for sale to Buyer by
Seller. Seller does not maintain ownership or
possession of any Asset to be part of this sales
agreement in violation of any law, regulation, or
decree.
COMPLIANCE WITH THE LAWS: Seller has not received notice of
any violation of any applicable federal, state, or
local statute, law, or regulation (including any
applicable building, zoning, environmental
protection, or other law, ordinance, or regulation)
affecting the assets to be transferred to Buyer,
pursuant to this agreement; and to the best of the
knowledge of the Sellers, there are not such
violations.
LITIGATION: There is no pending, or, to the best actual
knowledge of the Seller, any threatened suit, action,
arbitration, or legal administrative or other
proceeding, or governmental investigation against or
affecting the Seller's assets. Seller is not in
default with respect to any court order, writ,
injunction, or decree of any federal, state, local or
foreign court, department, agency, or
instrumentality. The Seller is not presently in any
legal action to recover moneys due to, or damages
sustained by any of them, or to any third parties.
AUTHORITY AND CONSENTS: Seller has the right, power, legal
capacity, and authority to enter into and perform
their respective obligations under this agreement,
and no approvals or consents of any person other than
Seller is necessary in connection with it. The
execution and delivery of this agreement by Seller
has been duly authorized by all necessary corporate
action on the part of the Seller. Seller will deliver
to Buyer, on or before the execution of this
agreement, a written consent of its shareholders
authorizing and approving the sale of substantially
all its personal property and assets to Buyer on the
terms and conditions provided in this agreement.
FULL DISCLOSURE: None of the warranties made by Seller, or any
certificate or memorandum furnished or to be
furnished by any of them or on their behalf, contains
or will contain any untrue statement of a material
fact, or omits to state a material fact necessary to
prevent the statements from being misleading. All
warranties of Seller set forth in this agreement and
in any written statements delivered to Buyer by the
Seller under this agreement will be as true and
correct on the closing date as if made on that date.
BUYER'S WARRANTIES
WARRANTIES OF BUYER: Buyer warrants that:
CORPORATE VALIDITY: Buyer is a corporation duly organized,
existing, and in good standing under the laws of
California. The execution and delivery of this
agreement and the consummation of this transaction by
Buyer have been duly authorized, and no further
corporate authorization is necessary on the part of
Buyer.
NO RESTRICTIONS ON PERFORMANCE: No consent, approval, or
authorization of, or declaration, filing, or
registration with, any United States federal or state
governmental or regulatory authority, other than the
express written consent and approval of the
U.S.I.S.L., Inc., is required to be made or obtained
by Buyer in connection with the execution, delivery,
and performance of this agreement and the
consummation of the transactions contemplated by this
agreement.
PRIVATE PLACEMENT MEMORANDUM: The representations contained
in the SDSDC, Inc. Private Placement Memorandum dated
September 25, 1997, a copy of which has been provided
to Seller prior to the signing of this agreement, are
true and correct.
CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
INTRODUCTION: The obligations of Buyer to purchase the Assets under
this agreement are subject to the satisfaction, at or before
closing, of all the following conditions. Buyer may waive any
or all of these conditions in whole or in part without prior
notice, provided, however, that no such waiver of a condition
constitutes a waiver by Buyer of any of its other rights or
remedies, at law or in equity, if Seller should be in default
of any of its representations, warranties, or covenants under
this agreement.
CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE: The obligations of Buyer
to purchase the Assets under this agreement are subject to the
satisfaction, at or before the Closing, of all the conditions
set out below in this Article Four. Buyer may waive any or all
of these conditions in whole or in part without prior notice;
provided, however, that no such waiver of a condition
constitutes a waiver by Buyer of any of its other rights or
remedies, at law or in equity, if Shareholders or Corporation
are in default of any of their representations, warranties, or
covenants under this agreement.
ACCURACY OF SELLER'S WARRANTIES: Except as otherwise permitted
by this agreement, all warranties by the Sellers, or
in any written statement that will be delivered to
Buyer by the Seller under this agreement, must be
true in all material respects on the closing date as
though made at that time; and
PERFORMANCE BY SELLER: On or before the closing date, Seller
will have performed, satisfied, and complied in all
material respects with all covenants, agreements, and
conditions required of any of them by this agreement;
and
NO MATERIAL ADVERSE CHANGE: During the period from the date
this agreement is fully executed by the parties to
the closing date, there will not have been any
material adverse change in the financial condition or
the results of operations of Seller will not have
sustained any material loss or damage to assets that
materially or affects the marketability of the
assets.
EXECUTION OF THIS AGREEMENT: That prior to the tendering of
the initial down payment of ten thousand U.S. dollars
($10,000), Seller shall provide buyer a duly executed
copy of this agreement by an authorized individual;
and
CONSENT OF SHAREHOLDERS: That prior to the tendering of the
initial down payment of ten thousand U.S. dollars
($10,000) Seller shall provide Buyer with the written
consent of each of the shareholders of Seller, as
requested under Article II, paragraph 7 hereinabove;
and
APPROVAL BY THE U.S.I.S.L., INC.: That prior to the payment of
the balance of the cash price of forty thousand U.S.
dollars ($40,000) and the issuance of the stock in
Buyer, the U.S.I.S.L., Inc., must expressly ratify
this agreement and approve the transfer of assets as
stated herein.
REFUND OF ALL PAYMENTS: If either the U.S.I.S.L., Inc. fails to
approve the transfer or if Seller fails to provide the
warranties as set forth in this agreement as to the clear
title to each of the assets transferred, the payment of all
money made to Seller by buyer, including but not limited to
the initial ten thousand U.S. dollars ($10,000) paid upon the
execution of this agreement, shall become fully refundable
immediately to the Buyer.
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
INTRODUCTION: The obligations of Seller to sell and transfer the Assets
under this agreement are subject to the satisfaction, at or
before closing, of all the following conditions. Seller may
waive any or all of these conditions in whole or in part
without prior notice, provided, however, that no such waiver
of a condition constitutes a waiver by Seller of any of its
other rights or remedies, at law or in equity, if Buyer should
be in default of any of its representations, warranties, or
covenants under this agreement.
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE: The obligations of Buyer
to purchase the Assets under this agreement are subject to the
satisfaction, at or before the Closing, of all the conditions
set out below in this Article Five. Buyer may waive any or all
of these conditions in whole or in part without prior notice;
provided, however, that no such waiver of a condition
constitutes a waiver by Buyer of any of its other rights or
remedies, at law or in equity, if Shareholders or Corporation
are in default of any of their representations, warranties, or
covenants under this agreement.
ACCURACY OF BUYER'S WARRANTIES: All warranties by Buyer
contained in this agreement or in any written
statement delivered by Buyer under this agreement
must be true on and as of the closing date as though
such warranties were made on and as of that date.
BUYER'S PERFORMANCE: Buyer will have performed and complied
with all covenants and agreements and satisfied all
conditions that it is required by this agreement to
perform, comply with, or satisfy, before or at the
Closing.
PAYMENT OF INITIAL DOWN PAYMENT: That upon providing Buyer
with a duly signed copy of this agreement by an
authorized individual, Buyer will tender payment of
ten thousand U.S. dollars ($10,000) to Seller in the
form of a cashiers check made payable to Parker
Management, Inc., to be sent by overnight mail to
Seller's address stated hereinabove;
PAYMENT UPON CLOSING: That prior to transferring title and
ownership of the A-League franchise and each of the
other assets to be transferred under this agreement
prior to or on the day of Closing, Buyer must: (a)
tender payment of the remainder of the cash purchase
price of forty thousand U.S. Dollars ($40,000) in the
form of a cashiers check made payable to Parker
Management, Inc., to be sent by overnight mail to
Seller's address stated hereinabove; and (b) buyer
will deliver by overnight mail to Seller's address
stated hereinabove, one hundred fifty thousand shares
of common stock in San Diego Soccer Development
Corporation.
THE CLOSING
TIME AND PLACE: The transfer of the Assets by Seller to Buyer (the
Closing) will take place at the offices of San Diego Soccer
Development Corporation on the sixtieth calendar day from the
date this agreement is executed by all the parties. If the
sixtieth day happens to be a Saturday or Sunday, the closing
will then be the very next business day or at such other time
and place as the parties may agree to in writing (the closing
date).
INDEMNIFICATION
INDEMNIFICATION BY THE SELLER:
SELLERS' INDEMNITY: Seller will, jointly and severally,
indemnify, defend, and hold harmless Buyer against
and in respect of claims, demands, losses, costs,
expenses, obligations, liabilities, damages,
recoveries, and deficiencies, including interest,
penalties, and reasonable attorney fees, that Buyer
will incur or suffer, that arise from any breach of,
or failure by Seller to perform, any of their
representations, warranties, covenants, or agreements
in this agreement or in any schedule, certificate,
exhibit, or other instrument furnished or to be
furnished by the Seller under this agreement.
SELLER'S RIGHT TO DEFEND: Buyer will promptly notify Seller of
the existence of any claim, demand, or other matter
to which Seller's indemnification obligations would
apply, and will give them a reasonable opportunity to
defend the same at their own expense and with counsel
of their own selection; provided that Buyer will at
all times also have the right to participate fully in
the defense at its own expense. If, within a
reasonable time after this notice, Seller fails to
defend, Buyer will have the right, but not the
obligation, to undertake the defense of, and to
compromise or settle (exercising reasonable business
judgment), the claim or other matter on behalf and at
the risk of Seller. If the claim is one that cannot
by its nature be defended solely by Seller (including
any federal or state tax proceeding), buyer will make
available all information and assistance that Seller
may reasonably request.
INDEMNIFICATION BY THE BUYER:
BUYER'S INDEMNITY: Buyer will, jointly and severally,
indemnify, defend, and hold harmless Seller against
and in respect of claims, demands, losses, costs,
expenses, obligations, liabilities, damages,
recoveries, and deficiencies, including interest,
penalties, and
reasonable attorney fees, that Seller will incur or
suffer, that arise from any breach of, or failure by
Buyer to perform, any of their representations,
warranties, covenants, or agreements in this
agreement or in any schedule, certificates or
exhibits.
BUYERS' RIGHT TO DEFEND: Seller will promptly notify Buyer of
the existence of any claim, demand, or other matter
to which Buyer's indemnification obligations would
apply, and will give them a reasonable opportunity to
defend the same at their own expense and with counsel
of their own selection; provided that Seller will at
all times also have the right to participate fully in
the defense at its own expense. If, within a
reasonable time after this notice, Buyer fails to
defend, Seller will have the right, but not the
obligation, to undertake the defense of, and to
compromise or settle (exercising reasonable business
judgment), the claim or other matter on behalf and at
the risk of Buyer. If the claim is one that cannot by
its nature be defended solely by Buyer (including any
federal or state tax proceeding), Seller will make
available all information and assistance that Buyer
may reasonably request.
FORM OF AGREEMENT
EFFECT OF HEADINGS: The subject headings of the paragraphs and
subparagraphs of this agreement are included for convenience
only and will not affect the construction or interpretation of
any of its provisions.
WORD USAGE: Unless the context clearly requires otherwise: Plural and
singular numbers will each be considered to include the other;
the masculine, feminine, and neuter genders will each be
considered to include the others; "Shall," "will," "must,"
"agree," and "covenants" are each mandatory; "May" is
permissive; "Or" is not exclusive; and "Includes" and
"including" are not limiting.
ENTIRE AGREEMENT; MODIFICATIONS; WAIVER: This agreement constitutes
the entire agreement between the parties pertaining to the
subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations, and
understandings of the parties. No supplement, modification, or
amendment of this agreement will be binding unless executed in
writing by all the parties. No waiver of any of the provisions
of this agreement will be considered, or will constitute, a
waiver of any other provision, and no waiver will constitute a
continuing waiver. No waiver will be binding unless executed
in writing by the party making the waiver.
COUNTERPARTS: This agreement may be executed simultaneously in one or
more counterparts, each of which will be considered an
original, but all of which together will constitute one and
the same instrument.
PARTIES
PARTIES IN INTEREST: Nothing in this agreement, whether expressed or
implied, is intended to confer any rights or remedies under or
by reason of its agreement on any persons other than the
parties to it and their respective successors and assigns;
nothing in this agreement is intended to relieve or discharge
the obligation or liability of any third persons to any party
to this agreement; and no provision will give any third
persons any right of subrogation or action against any party
to this agreement.
ASSIGNMENT: This agreement will be binding on, and will inure to the
benefit of, the parties to it and their respective heirs,
legal representatives, successors, and assigns, provided that
Buyer may not assign any of its rights under this agreement
except to a wholly owned subsidiary corporation of Buyer. No
such assignment by Buyer to its wholly owned subsidiary will
relieve Buyer of any of its obligations or duties under this
agreement.
REMEDIES
ARBITRATION: Any controversy or claim arising from or relating to this
agreement, or its making, performance, or interpretation, will
be settled by arbitration in San Diego, California, under the
commercial arbitration rules of the American Arbitration
Association then existing. Judgment on the arbitration award
may be entered in any court having jurisdiction over the
subject matter of the controversy. Arbitrators will be persons
experienced in negotiating, making, and consummating
acquisition agreements.
SPECIFIC PERFORMANCE AND WAIVER OF RESCISSION RIGHTS: Each party's
obligation under this agreement is unique. If any party should
default in its obligations under this agreement, the parties
each acknowledge that it would be extremely impracticable to
measure the resulting damages; accordingly, the non-defaulting
party or parties, in addition to any other available rights or
remedies, may xxx in equity for specific performance, and the
parties each expressly waive the defense that a remedy in
damages will be adequate. Despite any breach or default by any
of the parties of any of their respective representations,
warranties, covenants, or agreements under this agreement, if
the purchase and sale contemplated by it will be consummated
at the Closing, each of the parties waives any rights that
they may have to rescind this agreement or the transaction
consummated by it provided that this waiver will not affect
any other rights or remedies available to the parties under
this agreement or under the law.
RECOVERY OF LITIGATION COSTS: If any legal action, arbitration, or
other proceeding is brought for the enforcement of this
agreement, or because of an alleged dispute, breach, default,
or misrepresentation in connection with any of the provisions
of this agreement, the successful or prevailing party or
parties will be entitled to recover reasonable attorney fees
and other costs incurred in that action or proceeding, in
addition to any other relief to which they may be entitled.
NOTICES
NOTICES: All notices, requests, demands, and other communications under
this agreement must be in writing and will be considered to
have been duly given on the date of service if served
personally on the party to whom notice is to be given, or on
the second day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed as follows:
Buyer: 000 Xxxxx Xxxxxx Seller: 0000 Xxxxx Xxxx
Xxxxxx Xxxxx Xxxxxx, Xxxxxxxx 00000
Xxx Xxxxx, XX 00000
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set forth above.
GOVERNING LAW
This agreement will be construed in accordance with, and governed by,
the laws of the State of California as applied to contracts that are executed
and performed entirely in California.
SEVERABILITY
If any provision of this agreement is held invalid or unenforceable by
any court of final jurisdiction, it is the intent of the parties that all other
provisions of this agreement be construed to remain fully valid, enforceable,
and binding on the parties.
ADVICE OF INDEPENDENT LEGAL COUNSEL
The parties acknowledge that each of them have had the opportunity to
seek the advice of independent legal counsel as to the terms of this agreement.
SIGNATURES
IN WITNESS WHEREOF, the parties to this agreement have duly executed it
on the day and year first above written.
BUYER: SELLER:
S.D.S.D.C. Xxxxxx Management, Inc.
By: /s/ Xxx Xxxxxx By: /s/ Xxxx Xxxxx
--------------------------- -----------------------
Xxx Xxxxxx, President Xxxx Xxxxx, President
EXHIBIT "A"
ASSETS TO BE TRANSFERRED:
1. A-LEAGUE FRANCHISE ISSUED AND OWNED BY THE COLORADO FOXES; and
2. ONE INFLATABLE SPEED KICK, WHICH INCLUDES ONE RADAR GUN, ONE
BLOWER, ONE CONTAINER; and
3. ONE INFLATABLE SOCCER BALL, WHICH ALSO INCLUDES ONE BLOWER AND
ONE STORAGE BAG