PURCHASE AGREEMENT
------------------
by and between
MARGATE PARTNERS LIMITED PARTNERSHIP,
Seller,
and
MARGATE FAMILY GOLF CENTERS, INC.,
Purchaser
PREMISES:
0000 Xxxxx Xxxx,
Xxxxxxx, Xxxxxxx
INDEX OF EXHIBITS AND SCHEDULES
EXHIBIT A LEGAL DESCRIPTION
EXHIBIT B-1 PERSONAL PROPERTY
EXHIBIT B-2 EXCLUDED PERSONAL PROPERTY
EXHIBIT C PERMITTED EXCEPTIONS
PURCHASE AGREEMENT
------------------
PURCHASE AGREEMENT, made as of the 18th day of October, 1996 (this
"Agreement"), by and between MARGATE PARTNERS LIMITED PARTNERSHIP, a Florida
limited partnership having an address at X.X. Xxx 000, 0000 Xxxxx Xxxxxxxx,
Xxxxxx Xxxxx Xx, Xxxxxxxxxx 00000 ("Seller"), and MARGATE FAMILY GOLF CENTERS,
INC., a Delaware corporation having an address at 000 Xxxxxxxxxxx Xxxx, Xxxxx
000X, Xxxxxxxx, Xxx Xxxx 00000 ("Purchaser").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Seller is the owner of certain real property located at 0000
Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000 and more particularly described on Exhibit
A attached hereto and made a part hereof (the "Land") and the buildings and
improvements located on the Land (the "Improvements" and, together with the
Land, the "Premises");
WHEREAS, Seller operates a golf driving range and related facilities at
the Premises under the name "Lighthouse Cove Golf & Games" (the "Business");
and
WHEREAS, Seller wants to sell the Premises to Purchaser, and Purchaser
wants to purchase the Premises from Seller, on the terms, and subject to the
conditions, set forth herein.
NOW, THEREFORE, in consideration of TEN ($10.00) DOLLARS, the terms and
conditions set forth herein, and other good and valuable consideration, the
mutual receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree to the foregoing and as follows:
4. Agreement to Sell and Purchase.
4.1 Property to be Purchased by Purchaser. Seller agrees to sell and
convey to Purchaser, and Purchaser agrees to purchase and acquire from Seller,
upon the terms and conditions hereinafter set forth, all of Seller's right,
title and interest in and to the following property (collectively, the
"Property"):
4.1.1 the Premises;
4.1.2 the easements, rights of way, appurtenances and other
rights and benefits of Seller in and to the Premises, including without
limitation, all of Seller's interest in any air rights, water rights and
irrigation rights;
4.1.3 all furnishings, fixtures, machinery, equipment, vehicles
and personalty attached or appurtenant to or used in connection with the
Premises that are owned by Seller, and all inventories, supplies, sales,
marketing and instructional materials of every kind and description relating
to the Business, wherever located, including without limitation, the items
described on Exhibit B-1 attached hereto and made a part hereof (the "Personal
Property"), except specifically not including the items described on Exhibit
B-2 attached hereto and made a part hereof;
4.1.4 the files, books, notices and other correspondence from
any governmental agencies, and other records used or employed by Seller or its
affiliates in connection with the ownership and/or operation of the Premises
and the Business (collectively, the "Records");
- 2 -
4.1.5 any consents, authorizations, variances, waivers,
licenses, certificates, permits and approvals held by or granted to Seller in
connection with the ownership of the Premises (collectively, the "Permits");
4.1.6 any manufacturers' and vendors' warranties and guarantees,
except to the extent the same relate solely to any Retained Assets or Retained
Liabilities (the "Claims"); and
4.1.7 any other properties and assets of every kind and nature,
real or personal, tangible or intangible, relating in any way whatsoever to
the Premises or the Business, except to the extent the same relate solely to
the Retained Assets or Retained Liabilities.
4.2 Assets to be Retained by Seller. Anything herein to the contrary
notwithstanding, Seller shall not sell, and Purchaser shall not acquire, the
following assets of Seller (the "Retained Assets"):
4.2.1 any rights of Seller with respect to insurance policies
owned by Seller or for which Seller is the named insured;
4.2.2 all cash, funds in bank accounts and cash equivalents
existing as of the date hereof; and
4.2.3 any patents, trademarks, trademark registrations,
copyrights, copyright registrations, trade names and all registrations thereof
and all applications for any of the foregoing, whether issued or pending, if
any, and all goodwill associated with any of the foregoing (the "Intangible
Assets").
4.3 Liabilities to be Retained by Purchaser. Seller shall retain, and
Purchaser shall not assume, perform, discharge or pay, and shall not be
responsible for, any and all liabilities or
- 3 -
obligations of any nature whatsoever in connection with or relating to the
Property, Seller or the Business or any predecessor owner of the Property or
the Business (collectively, the "Retained Liabilities").
5. Consideration. In consideration for the Property, Purchaser shall pay
to Seller Two Million Dollars ($2,000,000.00), subject to adjustment as
hereinafter provided, payable on the date hereof in cash, or by certified or
bank check or by the wire transfer of funds.
6. Title; Permitted Exceptions. Seller will convey the Property to
Purchaser free and clear of any and all liens, charges, encumbrances,
mortgages, pledges, security interests, easements, agreements and other
interests and adverse claims (collectively, "Encumbrances"), other than the
matters set forth in Exhibit C attached hereto and made a part hereof (the
"Permitted Exceptions").
7. Apportionments.
7.1 The following items shall be apportioned as of 11:59 PM of the
day immediately preceding the Closing Date:
7.1.1 real estate taxes and assessments, on the basis of the
fiscal year for which the same are levied, imposed or assessed, subject to
Section 4.2 hereof;
7.1.2 charges for water, sewer rents, electricity, steam, gas
and telephone, which are not metered; provided that if the consumption of any
of such utilities is measured by meters, at the Closing (as hereinafter
defined) Seller shall furnish a current reading of each meter; and further
provided that if there is not a meter or if the current xxxx for any of such
utilities has not
- 4 -
been issued prior to the Closing Date, the charges therefore shall be adjusted
at the Closing on the basis of the charges for the prior period for which
bills were issued and shall be further adjusted when the bills for the current
period are issued;
7.1.3 utility deposits, to the extent actually assigned to
Purchaser;
7.1.4 fuel, if any, at Seller's cost therefore (as determined by
Seller's fuel supplier).
7.2 If the Closing shall occur before the real estate tax rate is
fixed, the apportionment of real estate taxes shall be based upon the tax rate
for the next preceding year applied to the latest assessed valuation.
7.3 To the extent that any of the prorations made pursuant to this
Article are based upon estimates of payments to be made and/or expenses to be
incurred by Purchaser subsequent to the Effective Date, or either party
discovers any errors in or omissions in respect of the Adjustment, Seller and
Purchaser agree to adjust such prorations promptly upon receipt by Seller or
Purchaser, as the case may be, of such payments or of bills or other
documentation setting forth the actual amount of such expenses.
7.4 Seller and Purchaser shall maintain and make available to each
other any books or records necessary for the adjustment of any item pursuant
to this Article. The provisions of this Article shall survive the Closing (as
hereinafter defined).
8. The Closing.
- 5 -
8.1 The closing of the transaction provided for in this Agreement
(the "Closing") shall take place simultaneously with the execution and
delivery of this Agreement (the actual date of the Closing being referred to
herein as the "Closing Date").
8.2 At the Closing, Seller shall deliver or cause to be delivered to
Purchaser physical possession of the Property (receipt of which may be actual
or constructive) and the following:
8.2.1 a full warranty deed with covenants against grantor's
acts, duly executed and acknowledged by Seller, in proper statutory form for
recording, so as to convey to Purchaser fee simple title to the Premises,
subject to and in accordance with the provisions of this Agreement (the
"Deed");
8.2.2 a xxxx of sale conveying, transferring and selling to
Purchaser all right, title and interest of Seller in and to all of the
Personal Property, which xxxx of sale shall contain a warranty that such
property is free and clear of all Encumbrances other than the Permitted
Exceptions, duly executed and acknowledged by Seller;
8.2.3 an assignment and assumption agreement (the "Assignment
and Assumption Agreement") assigning to Purchaser all of Seller's right, title
and interest in and to the Permits and the Claims, duly executed and
acknowledged by Seller;
8.2.4 a settlement statement (the "Settlement Statement")
setting forth the amounts paid by or on behalf of and/or credited to each of
Purchaser and Seller pursuant to this Agreement;
8.2.5 a Certificate or Certificates of Occupancy for all
Improvements;
- 6 -
8.2.6 any transfer tax or other return required by any
applicable governmental authority in connection with the sale of the Property,
duly executed and acknowledged by Seller;
8.2.7 an affidavit (the "FIRPTA Affidavit") duly executed and
acknowledged by Seller pursuant to Section 1445 (b)(2) of the Internal Revenue
Code of 1986, as amended, stating that Seller is not a foreign person within
the meaning of such provision;
8.2.8 keys to all locks relating to the Property, appropriately
labeled; 8.2.9 all other instruments and documents to be executed,
acknowledged where appropriate and/or delivered by Seller to Purchaser
pursuant to any of the other provisions of this Agreement; and
8.2.10 such other documents as may be reasonably required by
Purchaser's counsel in connection with this transaction.
8.3 At the Closing, Purchaser shall deliver or cause to be delivered
to Seller the following:
8.3.1 the cash consideration referred to in Section 2 hereof;
8.3.2 the Assignment and Assumption Agreement, duly executed and
acknowledged by Purchaser;
8.3.3 the Settlement Statement, duly executed and acknowledged
by Purchaser;
8.3.4 all other instruments and documents to be executed,
acknowledged where appropriate and/or delivered by Purchaser to Seller; and
- 7 -
8.3.5 such other documents as may be reasonably required by
Seller's counsel in connection with this transaction.
9. Representations and Warranties.
9.1 Seller represents and warrants to Purchaser as follows:
9.1.1 Organization; Power and Authority. Seller is a limited
partnership duly formed validly existing and in good standing under the laws
of the State of Florida, and has all requisite power and authority to carry on
its business as it is now being conducted, to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. All American Family Golf, Inc. is the sole general
partner of Seller, is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada, and has all requisite
power and authority to carry on its business as it is now being conducted, to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby.
9.1.2 Due Authorization and Execution; Effect of Agreement. The
execution, delivery and performance by Seller of this Agreement and the
consummation by Seller of the transactions contemplated hereby have been duly
authorized by all necessary corporate action required to be taken on the part
of Seller. This Agreement has been duly and validly executed and delivered by
Seller and constitutes the valid and binding obligation of Seller, enforceable
in accordance with its terms, except to the extent that such enforceability
(a) may be limited by bankruptcy, insolvency, or other similar laws relating
to creditors' rights generally; and (b) is subject to general principles of
equity.
- 8 -
9.1.3 Consents. No consent, approval or authorization of,
exemption by, or filing with, any governmental or regulatory authority or any
third party is required in connection with the execution, delivery and
performance by Seller of this Agreement, except for consents, approvals,
authorizations, exemptions and filings, if any, which have been obtained.
9.1.4 Compliance with Applicable Laws. Seller is not engaging in
any activity or omitting to take any action as a result of which Seller is in
violation of any law, rule, regulation, ordinance, statute, order, injunction
or decree, or any other requirement of any court or governmental or
administrative body or agency, applicable to the Property or the Business, and
neither the execution and delivery by Seller of this Agreement or of any of
the other agreements and instruments to be executed and delivered by it
pursuant hereto, the performance by Seller of its obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby will result in any such violation. Seller is in compliance with all
material requirements imposed in writing by any insurance carrier of Seller to
the extent such carrier is an insurer or indemnitor of the Property. The
Premises are not subject to any notice of violation of law, municipal
ordinance, orders or requirements issued by any building department or other
governmental agency or subdivision having jurisdiction.
9.1.5 Permits. All Permits required by any federal, state, or
local law, rule or regulation and necessary for the operation of the Property
and the Business as currently being conducted have been obtained and are
currently in effect. No registrations, filings, applications, notices,
transfers, consents, approvals, orders, qualifications, waivers or other
actions of any kind are required by virtue of the execution and delivery of
this Agreement or the consummation of
- 9 -
the transactions contemplated hereby (a) to avoid the loss of any Permit or
the violation of any law, regulation, order or other requirement of law, or
(b) to enable Purchaser to continue the operation of the Property as presently
conducted after the Closing. The current use and occupation of any portion of
the Property does not violate any of, and, where applicable, is in material
compliance with, the Permits, any applicable deed restrictions or other
covenants, restrictions or agreements including without limitation, any of the
Permitted Exceptions, site plan approvals, zoning or subdivision regulations
or urban redevelopment plans applicable to the Premises.
9.1.6 Title to Assets. Seller has good and marketable title to
the Property free and clear of all Encumbrances other than the Permitted
Exceptions.
9.1.7 Contracts. Seller is not a party to any leases, contracts,
orders or agreements relating to the Property or the Business (written or
otherwise).
9.1.8 Condition of the Improvements. There are no material
structural or mechanical defects in the Improvements, and there are no leaks
in any roof on any Improvement.
9.1.9 Condition of Personal Property. The Personal Property is
in good operating condition and repair, ordinary wear and tear excepted, and
is adequate, suitable and sufficient to meet the needs of and to operate the
Property as currently conducted.
9.1.10 Environmental Matters.
9.1.10.1 As used in this Agreement "Hazardous Material"
shall mean: (I) any "hazardous substance" as now defined pursuant to the
Comprehensive Environmental
- 10 -
Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C.
[section] 9601(33); (ii) any "pollutant or contaminant" as defined in 42
U.S.C. [section] 9601(33); (iii) any material now defined as "hazardous waste"
pursuant to 40 C.F.R. Part 261; (iv) any petroleum, including crude oil and
any fraction thereof; (v) natural or synthetic gas usable for fuel; (vi) any
"hazardous chemical" as defined pursuant to 29 C.F.R. Part 1910; (vii) any
asbestos, asbestos containing material, polychlorinated biphenyl ("PCB"), or
isomer of dioxin, or any material or thing containing or composed of such
substance or substances; and (viii) any other pollutant, contaminant,
chemical, or industrial or hazardous, toxic or dangerous waste, substance or
material, defined or regulated as such in (or for purposes of any
Environmental Law (as hereinafter defined) and any other toxic, reactive or
flammable chemicals.
9.1.10.2 There is no Hazardous Material at, under or on
the Premises and there is no ambient air, surface water, groundwater or land
contamination within, under, originating from or relating to the Premises.
Seller has not, and has not caused to be, manufactured, processed,
distributed, used, treated, stored, disposed of, transported or handled any
Hazardous Material at, on or under the Premises.
9.1.10.3 Seller has no obligation or liability imposed or
based upon any provision under any foreign, federal, state or local law, rule,
or regulation or common law, or under any code, order, decree, judgment or
injunction applicable to Seller or the Property or any notice, or request for
information issued, promulgated, approved or entered thereunder, or under the
common law, or any tort, nuisance or absolute liability theory, relating to
public health or safety, worker health or safety, or pollution, damage to or
protection to the environment,
- 11 -
including without limitation, laws relating to emissions, discharges, releases
or threatened releases of Hazardous Material into the environment (including
without limitation, ambient air, surface water, groundwater, land surface or
subsurface), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, generation, disposal, transport or
handling of pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes (hereinafter collectively referred to as
"Environmental Laws").
9.1.10.4 Seller has not been subject to any civil,
criminal or administrative action, suit, claim, hearing, notice of violation,
investigation, inquiry or proceeding for failure to comply with, or received
notice of any violation or potential liability under the Environmental Laws in
respect of the Premises.
9.1.10.5 The Premises are not (a) listed or proposed for
listing on the National Priority List or (b) listed on the Comprehensive
Environmental Response, Compensation, Liability Information System List
("CERCLIS") promulgated pursuant to CERCLA, 42 U.S.C. [section] 9601(9), or any
comparable list maintained by any foreign, state or local government
authority.
9.1.10.6 There are no underground storage tanks at the
Premises and Seller further warrants and represents that any prior use and
operation of underground storage tanks has been in compliance with all
Environmental Laws.
9.1.11 Tax Proceedings. There are no proceedings pending
regarding the reduction of real estate taxes or assessments in respect of the
Premises.
- 12 -
9.1.12 Utilities. All water, storm and sanitary sewer, gas,
electricity, telephone and other utilities adequately service the Premises,
enter the Premises through lands as to which valid public or private easements
exist that will inure to the benefit of Purchaser and the Premises are
furnished by facilities of public utilities and the cost of installation of
such utilities has been fully paid.
9.1.13 Access. To the best of Seller's knowledge, there are no
federal, state, county, municipal or other governmental plans to change the
highway or road system in the vicinity of the Premises which could materially
restrict or change access from any such highway or road to the Premises or any
pending or threatened condemnation or eminent domain proceedings relating to
or affecting the Premises. All roads bounding the Premises are public roads
and the Deed is the only instrument necessary to convey to Purchaser full
access to and the right to use such roads freely as well as to convey all
rights appurtenant to the Premises in such roads.
9.1.14 Insurance Requirements. All requirements or
recommendations by any insurer or by any board of fire underwriters or similar
body in respect of the Property have been satisfied.
9.1.15 Litigation. There is no action or proceeding (zoning or
otherwise) or governmental investigation pending, or, to the best of Seller's
knowledge, threatened against, or relating to, Seller (insofar as it relates
to the Premises or the Business), the Premises, the Business or the
transactions contemplated by this Agreement, nor is there any basis for any
such action, proceeding or investigation.
- 13 -
9.1.16 Assessments. There are no special or other assessments
for public improvements or otherwise now affecting the Premises nor does
Seller know of (a) any pending or threatened special assessments affecting the
Premises or (b) any contemplated improvements affecting the Premises that may
result in special assessments affecting the Premises.
9.1.17 Employee Agreements. There are no union or employment
contracts or agreements (written or oral) involving employees of Seller or its
affiliates affecting the Property or the Business which will survive the
Closing. All employees of Seller will have been terminated as of the date
hereof.
9.1.18 Work at the Premises. No services, material or work have
been supplied to the Premises for which payment has not been made in full.
9.1.19 Financial Condition. Seller has delivered, or will
promptly after the closing deliver, to Purchaser true and correct copies of
(1) audited financial statements consisting of balance sheets and income
statements of Seller as of December 31, 1995; (2) unaudited statements for the
quarters ended March 31, 1996, June 30, 1996 and September 30, 1996; and (3)
internal reports for the months ended July 31, August 31, and September 30,
1996 and for the period commencing October 1, 1996 through the date
immediately prior to the date hereof. Each such balance sheet presents fairly
the financial condition, assets and liabilities of Seller as of its date; each
such statement of income presents fairly the results of operations of Seller
for the period indicated. The financial statements referred to in this Section
are in accordance with the books and records of Seller. Since December 31,
1995 and since September 30, 1996: (a) there has at no time been a material
adverse change in the financial
- 14 -
condition, results of operations, businesses, properties, assets, liabilities
or future prospects of Seller, the Property or Business; (b) the Business has
been conducted in all respects only in the ordinary course; and (c) Seller has
not suffered an extraordinary loss (whether or not covered by insurance) or
waived any right of substantial value.
9.1.20 Full Disclosure. To the best knowledge of Seller, none of
the information supplied by Seller herein or in the exhibits hereto contains
any untrue statement of a material fact or omits to state a material fact
required to be stated herein or necessary in order to make the statements
herein, in light of the circumstances under which they are made, not
misleading.
9.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as follows:
9.2.1 Organization; Power and Authority. Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite power and authority to
carry on its business as it is now being conducted, to execute, deliver and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby.
9.2.2 Due Authorization and Execution; Effect of Agreement. The
execution, delivery and performance by Purchaser of this Agreement and the
consummation by Purchaser of the transactions contemplated hereby have been
duly authorized by all necessary corporate action required to be taken on the
part of Purchaser. This Agreement has been duly and validly executed and
delivered by Purchaser and constitutes the valid and binding obligation of
- 15 -
Purchaser, enforceable in accordance with its terms. The execution, delivery
and performance by Purchaser of this Agreement and the consummation by
Purchaser of the transactions contemplated hereby will not, with or without
the giving of notice or the lapse of time, or both, (a) violate any provision
of any law, rule or regulation to which Purchaser is subject; (b) violate any
order, judgment or decree applicable to Purchaser; or (c) conflict with or
result in a breach of or a default under any term or condition of Purchaser's
Certificate of Incorporation or ByLaws or any agreement or other instrument to
which Purchaser is a party or by which it or its assets may be bound, except
in each case, for violations, conflicts, breaches or defaults which in the
aggregate would not materially hinder or impair the consummation of the
transactions contemplated hereby.
9.3 Survival. The representations and warranties of the parties made
in this Article 6 shall survive the Closing.
10. Further Assurances. At any time and from time to time after the
Closing, Seller shall, at the request of Purchaser, execute and deliver any
further instruments or documents and take all such further action as Purchaser
may reasonably request in order to transfer into the name of Purchaser any and
all Property contemplated to be sold pursuant to this Agreement and to further
consummate the transactions contemplated by this Agreement. This Article shall
survive the Closing.
11. Brokers. Seller and Purchaser warrant and represent to each other that
they dealt with no broker, finder or similar agent or party who or which might
be entitled to a commission or compensation on account of introducing the
parties, the negotiation or execution of this
- 16 -
Agreement and/or the closing of the transaction provided for herein, other
than Xxxxxx Xxxxxx (the "Broker"). Purchaser and Seller hereby respectively
agree to indemnify and hold harmless the other party from and against all
loss, liability, damage and expense (including, without limitation, attorneys'
fees) imposed upon or incurred by the other party by reason of any claim for
commissions or other compensation for bringing about this transaction by any
broker, finder or similar agent or party other than the Broker who claims to
have dealt with the indemnifying party in connection with this transaction.
Seller agrees to pay Broker any commissions due the Broker in connection with
this transaction pursuant to a separate agreement or agreements between Seller
and the Broker. The provisions of this Article shall survive the Closing or
any termination of this Agreement.
12. Costs and Fees. Documentary stamps for the Deed, deed transfer or
conveyancing taxes, if any, shall be payable by Seller, and in no event be
payable by Purchaser. Purchaser shall pay the expenses incurred in connection
with (a) the examination of title, (b) the issuance of a policy of title
insurance for Purchaser, and (c) a survey of the Property. Any other similar
costs not expressly provided for elsewhere in this Agreement shall be divided
and borne in accordance with the usual practices in the jurisdiction where the
Premises are located. The provisions of this Article shall survive the
Closing.
13. Indemnification.
13.1 Subject to the further provisions of this Article, Seller shall
protect, defend, hold harmless and indemnify Purchaser, its officers,
directors, shareholders, employees, agents and affiliates, and their
respective successors and assigns, from, against and in respect of any and
- 17 -
all losses, liabilities, deficiencies, penalties, fines, costs, damages and
expenses whatsoever (including without limitation, reasonable professional
fees and costs of investigation, litigation, settlement, and judgment and
interest) ("Losses") that may be suffered or incurred by any of them arising
from or by reason of (i) any Retained Liability or other liability or
obligation of Seller; (ii) the breach of any representation, warranty,
covenant or agreement of Seller contained in this Agreement or in any document
or other writing delivered pursuant to this Agreement (determined for this
purpose as if all references to knowledge and materiality contained in Section
6 are deleted); (iii) any claim by Legends Sports, Inc. ("Legends") on account
of amounts owed by Seller to Legends in connection with the Property; and (iv)
any and all actions, suits, proceedings, claims, demands, assessments,
judgments, costs and expenses (including without limitation, interest,
penalties, reasonable legal fees and accounting fees) incident to the
foregoing and the enforcement of the provisions of this Section 10.1.
13.2 Subject to the further provisions of this Article, Purchaser
shall protect, defend, hold harmless and indemnify Seller, its partners,
employees and agents, and its successors and assigns from, against and in
respect of any and all Losses that may be suffered or incurred by any of them
arising from or by reason of (i) the breach of any representation, warranty,
covenant or agreement of Purchaser contained in this Agreement or in any
document or other writing delivered pursuant to this Agreement; and (ii) any
and all actions, suits, proceedings, claims, demands, assessments, judgments,
costs and expenses (including without limitation, interest, penalties,
reasonable legal fees and accounting fees) incident to the foregoing and the
enforcement of the provisions of this Section 10.2.
- 18 -
13.3 Whenever a party hereto (such party and each of its affiliates
which is entitled to indemnification pursuant to any provision of this
Agreement, an "Indemnified Party") shall learn after the Closing of a claim
that, if allowed (whether voluntarily or by judicial or quasi- judicial
tribunal or agency), would give rise to an obligation of another party (the
"Indemnifying Party") to indemnify the Indemnified Party under any provision
of this Agreement, before paying the same or agreeing thereto, the Indemnified
Party shall promptly notify the Indemnifying Party in writing of all such
facts within the Indemnified Party's knowledge with respect to such claim and
the amount thereof (a "Notice of Claim"). If, prior to the expiration of
fifteen (15) days from the mailing of a Notice of Claim, the Indemnifying
Party shall request, in writing, that such claim not be paid, the Indemnified
Party shall not pay the same, provided the Indemnifying Party proceeds
promptly, at its or their own expense (including employment of counsel
reasonably satisfactory to the Indemnified Party), to settle, compromise or
litigate, in good faith, such claim. After notice from the Indemnifying Party
requesting the Indemnified Party not to pay such claim and the Indemnifying
Party's assumption of the defense of such claim at its or their expense, the
Indemnifying Party shall not be liable to the Indemnified Party for any legal
or other expense subsequently incurred by the Indemnified Party in connection
with the defense thereof. However, the Indemnified Party shall have the right
to participate at its expense and with counsel of its choice in such
settlement, compromise or litigation. The Indemnified Party shall not be
required to refrain from paying any claim which has matured by a court
judgment or decree, unless an appeal is duly taken therefrom and execution
thereof has been stayed, nor shall the Indemnified Party be required to
refrain from paying any claim where
- 19 -
the delay in paying such claim would result in the foreclosure of a lien upon
any of the property or assets then held by the Indemnified Party. The failure
to provide a timely Notice of Claim as provided in this Section 10.3 shall not
excuse the Indemnifying Party from its or their continuing obligations
hereunder; however, the Indemnified Party's claim shall be reduced by any
damages to the Indemnifying Party resulting from the Indemnified Party's delay
or failure to provide a Notice of Claim as provided in this Section 10.3.
13.4 For purposes of this Article, any assertion of fact and/or law
by a third party that, if true, would constitute a breach of a representation
or warranty made by a party to this Agreement or make operational an
indemnification obligation hereunder, shall, on the date that such assertion
is made, immediately invoke the Indemnifying Party's obligation to protect,
defend, hold harmless and indemnify the Indemnified Party pursuant to this
Article.
13.5 The obligation of Seller under Section 10.1 hereof shall be
satisfied first from the Escrowed Funds (as defined in the Cash Escrow
Agreement, dated as of the date hereof, among Seller, Purchaser and
Continental Stock Transfer & Trust Company) and, if the Escrowed Funds are
inadequate to provide indemnification to Purchaser, then from Seller directly.
14. Bulk Sales. The parties agree to waive the requirements, if any, of
all applicable bulk sales laws. As an inducement to Purchaser to enter into
such waiver, Seller represents and warrants that (a) it will not be rendered
insolvent by the transactions contemplated by this Agreement, (b) all debts,
obligations and liabilities relating to the Property and Business that are not
expressly assumed by Purchaser under this Agreement will be promptly paid and
discharged by Seller as and when they become due, and (c) the sale of the
Property pursuant
- 20 -
to this Agreement does not constitute a "bulk sale" within the meaning of
applicable law. Seller agrees to indemnify and hold Purchaser harmless from,
and reimburse Purchaser for, any loss, cost, expense, liability or damage
which Purchaser may suffer or incur by virtue of the noncompliance by Seller
or Purchaser with any laws pertaining to fraudulent conveyance, bulk sales or
any similar law which might make the sale or transfer of any part of the
Property or Business ineffective as to creditors of, or claimants against the
Seller.
15. Notices. All notices, demands, requests, consents or other
communications ("Notices") which either party may desire or be required to
give to the other hereunder shall be in writing and shall be delivered by
hand, overnight express carrier, or sent by registered or certified mail,
return receipt requested, postage prepaid, in either event, addressed to the
parties at their respective addresses first above set forth. A copy of any
Notice given by Seller to Purchaser shall simultaneously be given in either
manner provided above to Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxx, Esq. A
copy of any Notice given by Purchaser to Seller shall simultaneously be given
in either manner provided above to Xxxxxxx Xxxx Xxxxxxx, P.A., 00 Xxxxx
Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000. Notices given in the
manner aforesaid shall be deemed to have been given three (3) business days
after the day so mailed, the day after delivery to any overnight express
carrier and on the day so delivered by hand. Either party shall have the right
to change its address(es) for the receipt of Notices by giving Notice to the
other party in either manner aforesaid. Any Notice required or permitted to be
given by either party may be given by that party's attorney.
- 21 -
16. Miscellaneous.
16.1 This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
16.2 This Agreement shall be governed by, interpreted under and
construed and enforced in accordance with, the laws of the State of New York.
16.3 The captions or article headings in this Agreement are for
convenience only and do not constitute part of this Agreement.
16.4 This Agreement has been fully negotiated by the parties and
rules of construction construing ambiguities against the party responsible for
drafting agreements shall not apply.
16.5 It is agreed that, except where otherwise expressly provided in
particular Articles or Sections of this Agreement, none of the provisions of
this Agreement shall survive the Closing.
16.6 This Agreement (including the Exhibits annexed hereto) contains
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior understandings, if any, with respect thereto.
16.7 This Agreement may not be modified, changed, supplemented or
terminated, nor may any obligations hereunder be waived, except by written
instrument signed by the party to be charged or by its agent duly authorized
in writing or as otherwise expressly permitted herein.
16.8 No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof or of any other agreement or
- 22 -
provision herein contained. No extension of the time for performance of any
obligations or acts shall be deemed an extension of the time for performance
of any other obligations or acts.
16.9 This Agreement may be executed in one or more counterparts, each
of which when so executed and delivered shall be deemed an original, but all
of which taken together shall constitute but one and the same original.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
MARGATE PARTNERS
LIMITED PARTNERSHIP
By: All American Family Golf
Centers, Inc.
By:
---------------------------
Name: J. Xxxx Xxxxxxxx
Title: President
MARGATE FAMILY
GOLF CENTERS, INC.
By:
---------------------------
Name:
Title:
- 23 -
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT B-1
PERSONAL PROPERTY
EXHIBIT B-2
EXCLUDED PERSONAL PROPERTY
Xxxx Deere Tractor
Xxxxxxxx 5 Gang
EXHIBIT C
PERMITTED EXCEPTIONS
Those items set forth on Schedule B-II of the commitment to insure title
issued by Attorneys' Title Insurance Fund, Inc., commitment no. C-2379709
other than items 1, 2, 12 and 14.
