EXHIBIT 99.1
DEBT PAYMENT & EXTRA COMPENSATION AGREEMENT
This DEBT PAYMENT & EXTRA COMPENSATION AGREEMENT (the "Agreement") is entered
into to be effective as of June 30, 2004 (the "Effective Date") by and among
SPORTS ARENAS, INC., a Delaware corporation ("SAI"), XXXXXX XXXXXXX, INC., a
Nevada corporation ("AB"), and XXXXXX X. XXXXX, a single man ("Xx. Xxxxx") as
follows:
1. Recitals
1.1 Pursuant to a loan from SAI to AB (the "SAI-AB Loan"), AB is currently
indebted to SAI under that certain PROMISSORY NOTE dated December 21, 1990
in the original principal amount of $1,055,886 (the "SAI-AB Loan Note").
Under the SAI-AB Loan Note, all principal and accrued but unpaid interest
was due and payable on November 7, 2003. No such payment was made or
received.
1.2 The outstanding balance of the SAI-AB Loan as of June 25, 2004 was
$3,461,348, including principal and accrued but unpaid interest. In
addition thereto, interest is currently accruing at the rate of $482.00 per
day after June 25, 2004. All amounts payable to SAI in connection with the
SAI-AB Loan including principal and accrued but unpaid interest are
collectively referred to as the "SAI-AB Loan Debt."
1.3 AB is the registered owner of 21,808,267 shares of SAI common stock
(approximately 80 percent of SAI's issued and outstanding stock). Pursuant
to that certain PLEDGE AGREEMENT dated December 21, 0000 (xxx "XXX-XX
Xxxxxx Xxxxxxxxx"), XX granted SAI a first priority security interest in
all SAI shares held in the name of AB (the "Collateral"). At all times
since granting such security interest, the Collateral has been and is in
the possession and control of SAI as a secured party.
1.4 By notices dated November 8, 2003, but physically produced later, SAI gave
AB the notice of breach and opportunity to cure required under both the
SAI-AB Loan Note and SAI-AB Loan Pledge Agreement.
1.5 SAI is currently obligated to pay an unspecified amount of compensation
("Extra Compensation") to: (a) Xx. Xxxxx for past and current credit
supports directly provided by him to enhance SAI's creditworthiness; and
(b) AB for past and current credit support indirectly provided by it for
the same purpose. The term "Extra Compensation Obligation" refers to SAI's
as yet unsatisfied obligation to pay Extra Compensation to Xx. Xxxxx and
AB. Notwithstanding the foregoing, nothing in this Agreement, including
SAI's acknowledgment and satisfaction of Extra Compensation Obligations to
both Xx. Xxxxx and AB or that Xx. Xxxxx and AB may have provided direct and
indirect credit supports, respectively, for the same indebtedness, shall in
any way constitute evidence or an admission by any party that AB at anytime
was the alter ego of Xx. Xxxxx or vice versa.
1.6 As of the Effective Date, AB has no assets other than the Collateral
(including no cash or cash equivalents) to satisfy the SAI-AB Loan Debt.
Further, SAI has no cash or cash equivalents available to satisfy its Extra
Compensation Obligation to Xx. Xxxxx and AB.
1.7 Prior to the Effective Date, SAI's board of directors appointed an
independent director committee (the "Special Committee") to, among other
things: (a) supervise SAI's efforts to collect SAI-AB Loan Debt; (b)
determine the value of the Collateral; (c) determine the amount of Extra
Compensation SAI owes to Xx. Xxxxx and AB; and (d) negotiate a transaction
whereby SAI could satisfy its Extra Compensation Obligation by issuing
restricted SAI common stock ("Extra Compensation Stock") in lieu of cash or
cash equivalents. To those ends, the Special Committee caused SAI to engage
a financial advisor to find and report to it whether the delivery of
6,802,167 shares of Extra Compensation Stock to Xx. Xxxxx and AB is fair to
SAI and its unaffiliated shareholders.
1.8 SAI and certain of its subsidiaries are indebted under outstanding
financing facilities which contain covenants (each a "Control Covenant")
which either treat a change in control of SAI as an event of default or
allow the creditor to accelerate the indebtedness upon such a change in
control of SAI. Among other purposes of this Agreement, the parties intend
the rights, duties and obligations under this Agreement will assure no
change in control of SAI has or will occur as the result of SAI's
foreclosure of its security interest in the Collateral or issuance of Extra
Compensation Stock. Further, the first day upon which no creditor may treat
a change in control of SAI as an event of default or allows the creditor to
accelerate the indebtedness upon a change in control of SAI is referred to
as the "Zero Control Covenant Date."
FOR GOOD AND VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED,
THE PARTIES AGREE AS FOLLOWS:
2. Extra Compensation
2.1 To satisfy in full SAI's Extra Compensation Obligation to AB, SAI on the
Effective Date shall issue 1,360,433 shares of Extra Compensation Stock to
AB. Upon such issuance, the security interest granted under the SAI-AB Loan
Pledge Agreement shall attach to AB's Extra Compensation Stock and it shall
be added to and become part of the Collateral. To that end, upon delivery
of certificates evidencing AB's Extra Compensation Stock, AB shall endorse
the same to SAI and SAI shall retain possession of all of AB's Extra
Compensation Stock pursuant to the terms and conditions of the SAI-AB Loan
Pledge Agreement. AB's Extra Compensation Stock shall be subject to the
foreclosure of the security interest granted therein as hereinafter
provided.
2.2 As soon as practicable after the Effective Date, SAI as directed by an
Independent Determination (as hereinafter defined) and Xx. Xxxxx shall
negotiate in good faith and enter into a STOCK RESTRICTION AGREEMENT within
60 days after the Effective Date to govern the Extra Compensation Stock to
be issued to Xx. Xxxxx. The STOCK RESTRICTION AGREEMENT shall contain such
terms and provisions as would customarily be included in a commercially
reasonable stock restriction agreement governing restricted stock subject
to a substantial risk of forfeiture and issued to a senior executive of a
small publicly-held company. In addition the STOCK RESTRICTION AGREEMENT
shall contain terms and provisions which substantially implement the
following.
2.2.1Through the Zero Control Covenant Date, all of Xx. Xxxxx'x Extra
Compensation Stock shall be forfeited to SAI upon its election by an
Independent Determination if Xx. Xxxxx:
(a) is terminated by SAI "for cause" under Xx. Xxxxx'x employment
agreement with SAI as in effect from time to time or, if none, as such
term is usually and customarily defined in senior executive employment
agreements of publicly-held companies;
(b) voluntarily terminates his employment with SAI, except in the case
where SAI by an act resulting from an Independent Determination has:
(1) relieved Xx. Xxxxx of his duties as chief executive officer of any
SAI operations or subsidiaries other than XXXXXX SPORTS, LLC; or (2)
substantially reduced Xx. Xxxxx'x basic compensation program from that
in effect on the Effective Date;
(c) usurps an opportunity without first having offered the opportunity to
SAI and SAI rejecting the opportunity by an Independent Determination;
or
(d) competes or acquires a controlling interest in a business that
competes against SAI or any of its business operations without SAI's
prior consent by an Independent Determination.
2.2.2SAI by an Independent Determination may purchase any or all of Xx.
Xxxxx'x Extra Compensation Stock at a price equal to such stock's
value as of the Effective Date adjusted for inflation since the
Effective Date if:
(a) as determined by Independent Determination, the net fair market value
of SAI's assets has failed to increase by at least 2.5 percent per
annum, compounded annually, over the period between the Effective Date
and the fifth anniversary of the Effective Date after adjustments for
any distributions made to SAI's shareholders approved by Independent
Determination;
(b) SAI by an Independent Determination substantially reduces Xx. Xxxxx'x
basic compensation program from that in effect on the Effective Date
and as a result Xx. Xxxxx voluntarily terminates his employment with
SAI;
(c) Xx. Xxxxx or any of his affiliates sell or transfer SAI stock prior to
the later of the fifth anniversary of the Effective Date or the Zero
Control Covenant Date without SAI's consent by an Independent
Determination; or
(d) Xx. Xxxxx defaults under the terms of any indebtedness to SAI or its
affiliates.
2.2.3Mr. Elkan's Extra Compensation Stock is intended to be: (a)
restricted property as such term is defined in Internal Revenue Code
section 83; (b) entitled to reasonable "piggy-back" registration
rights; and (c) protected by reasonable anti-dilution provisions.
2.2.4As used in this Agreement, the term "Independent Determination" shall
mean a reasonable determination made by a duly authorized committee of
SAI's board of directors composed solely of directors who are
independent from Xx. Xxxxx.
2.3 To satisfy in full SAI's Extra Compensation Obligation to Xx. Xxxxx, SAI on
the Effective Date shall issue 5,144,734 shares of Extra Compensation Stock
to Xx. Xxxxx. Until the execution and delivery of the STOCK RESTRICTION
AGREEMENT, SAI shall: (a) retain possession of all of Xx. Xxxxx'x Extra
Compensation Stock in trust; and (b) have the right to vote Xx. Xxxxx'x
Extra Compensation Stock by an Independent Determination. Upon the
execution and delivery of the STOCK RESTRICTION AGREEMENT, SAI shall
physically deliver such Extra Compensation Stock to Xx. Xxxxx subject to
the terms and provisions of the STOCK RESTRICTION AGREEMENT.
3. Foreclosure of Security Interest in AB's SAI Stock
3.1 The Collateral after the addition of AB's Extra Compensation Stock consists
of 23,168,700 shares of SAI common stock. As determined by the Special
Committee, the value of unrestricted SAI common stock on May 31, 2004 was
$0.03951 per share. For purposes of SAI foreclosing its security interest
in the Collateral under this Agreement, the value of the Collateral as of
the Effective Date is acknowledged to be $915,401.73.
3.2 AB acknowledges, represents and warrants to SAI:
(a) both the SAI-AB Loan Note and the SAI-AB Pledge Agreement were duly
executed and delivered and are currently valid and enforceable against
AB in accordance with their terms and applicable law;
(b) SAI is the holder of the SAI-AB Loan Debt;
(c) the amount of the SAI Loan Debt as of June 25, 2004 was $3,461,348,
including principal and accrued but unpaid interest;
(d) interest shall continue to accrue as provided under the SAI-AB Loan
Note until the SAI-AB Loan Debt is satisfied in full and such interest
will accrue at the rate of $482 per day from and after June 25, 2004
assuming no intervening payments are made on the SAI-AB Loan Debt;
(e) at all times since the granting of the security interest in the
Collateral under the SAI-AB Loan Pledge Agreement: (1) the Collateral
is and has been under the control of SAI as a secured party; (2) such
security interest is and has been continuously perfected and attached
to the Collateral; and (3) there are no other liens, security
interests, encumbrances, claims or other charges against the
Collateral;
(f) a default has occurred and currently exists under the both the SAI-AB
Loan Note and the SAI-AB Loan Pledge Agreement;
(g) all rights to cure such default have expired;
(h) AB has no rights of setoff of any kind against the SAI-AB Loan Debt;
(i) AB has no defenses or other rights which would prevent or preclude the
immediate enforcement of the SAI's rights and remedies under either
the SAI-AB Loan Note or the SAI-AB Loan Pledge Agreement; and
(j) except for the SAI-AB Loan Debt, AB is not indebted to any other
person and no person other than AB and SAI has any interest in the
Collateral.
3.3 Concurrently with the execution and delivery of this Agreement, AB shall
cause the execution and delivery to SAI for filing with the Superior Court
for the County of San Diego, State of California, of the STATEMENT
CONFESSING JUDGMENT and the CERTIFICATE OF DEFENDANT'S ATTORNEY SUPPORTING
CONFESSION OF JUDGMENT attached hereto as Exhibit 3.3.
3.4 Pursuant to California Commercial Code ("CCC") section 9620(c)(1), SAI
shall accept the Collateral in partial satisfaction of the SAI-AB Loan Debt
on the Effective Date (such act being referred to as "Partial Satisfaction
Acceptance"). AB hereby consents to SAI's Partial Satisfaction Acceptance
and acknowledges all of the conditions to such Partial Satisfaction
Acceptance under the SAI-Loan Pledge Agreement and the CCC have been
performed or satisfied. AB forever waives any and all rights to require a
disposition of the Collateral or to redeem the Collateral.
3.5 Following SAI's Partial Satisfaction Acceptance, AB and SAI acknowledge the
remaining SAI-AB Loan Debt shall be $2,548,356 plus interest after the
Effective Date. Nothing in this Agreement shall prevent SAI from
immediately seeking to enforce any of its rights and remedies under the
SAI-AB Loan Note or the SAI-AB Loan Pledge Agreement to collect the SAI-AB
Loan Debt still outstanding.
4. Releases
4.1 AB hereby releases and forever discharges SAI and its agents, directors,
employees, officers, representatives, attorneys, successors, advisors and
assigns from any and all claims, demands, and causes or causes of action of
any nature whatsoever, whether known or unknown, fixed or contingent,
matured or unmatured, or otherwise existing or hereafter arising out of,
related to or connected with the SAI-AB Loan. AB represents and warrants it
has not heretofore sold, assigned, hypothecated or otherwise transferred to
any third party any rights or interests in or to any such claims, demands
or cause or causes of action.
4.2 AB acknowledges it may have claims against SAI of which it has no knowledge
at the time of the execution of this release. This release is specifically
intended to and does extend to any and all claims in any way based upon the
SAI-AB Loan, whether known or unknown, as of the Effective Date. As further
consideration and inducement, AB further waives the provisions of Civil
Code section 1542, which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
4.3 At any time or from time to time upon the request of SAI, AB shall execute
all such additional documents and instruments and shall do such additional
acts and things as SAI may reasonably request in order to fully effectuate
the purposes of this release.
4.4 This release is not to be construed and does not constitute an admission of
liability on the part of SAI or AB. This release shall constitute an
absolute bar to any claim of any kind by or through AB, whether such claim
is based on contract, tort, warranty, mistake or other theory, whether
legal, equitable or statutory. Any attempt to assert a claim barred by this
release shall subject AB to applicable law governing the bringing of
groundless, baseless or frivolous claims or causes of action.
5. Default and Remedies
5.1 A material breach under this Agreement shall occur upon a party's: (a)
failure to timely perform or satisfy any obligation which it is required to
perform or satisfy under this Agreement; or (b) breach of any warranty made
by such party; or (c) misrepresentation or omission of a material fact
which induced (either entirely or partly) another party to enter into this
Agreement.
5.2 If a material breach occurs under this Agreement, an aggrieved party shall
notify each breaching party and the other parties of the obligation
breached and the provisions of this Agreement under which the obligation
arises. After party's notice, the breaching party shall either: (a) cure
the breach; or (b) be deemed in default under this Agreement if the
breaching party has failed to cure the breach within five days after an
aggrieved party's notice.
5.3 A party not in default shall have the right to seek and obtain any remedy
it may have hereunder, at law or in equity and to enforce one or more of
the remedies successively or concurrently and any such action shall not
stop or prevent such party from pursuing any other remedy which it may have
hereunder, at law or in equity. No act or failure to act by a party under
this Agreement shall be deemed or construed to be a waiver of, or an
election with respect to, such party's rights under this Agreement or
applicable law.
6. Miscellaneous
6.1 Attorneys' Fees. If any party employs counsel to enforce or interpret this
Agreement, including the commencement of any legal proceeding whatsoever
(including insolvency, bankruptcy, arbitration, mediation, declaratory
relief or other litigation), the prevailing party shall be entitled to
recover its reasonable attorneys' fees and court costs (including the
service of process, filing fees, court and court reporter costs,
investigative fees, expert witness fees and the cost of any bonds, whether
taxable or not) in addition to any other remedy it may obtain or be
awarded. Any judgment or final order issued in any legal proceeding shall
include such reimbursement for attorneys' fees and costs. In any legal
proceeding, the "prevailing party" shall mean the party determined by the
court to most nearly prevail and not necessarily the party in whose favor a
judgment is rendered.
6.2 Interpretation. Wherever the context of this Agreement requires, all words
used in the singular shall be construed to have been used in the plural,
and vice versa, and the use of any gender specific pronoun shall include
any other appropriate gender. The term "person" shall refer to any
individual, corporation or legal entity having standing to bring an action
in its own name under California law. The use of the conjunctive "or" shall
mean "and/or" unless otherwise required by the context in which the
conjunctive "or" is used. The term "including" shall mean "including
without limitation" and "including but not limited to" unless otherwise
required by the context in which the term "including" is used. This
Agreement has been negotiated at arm's length and each party has been
represented or has had the opportunity to be represented by independent
legal counsel in this transaction. This Agreement was executed voluntarily
without any duress or undue influence on the part of or on behalf of the
parties hereto. The parties acknowledge they have read and understood this
Agreement and its legal effect. Accordingly, each party hereby waives any
benefit under any rule of law (including Section 1654 of the California
Civil Code) or legal decision that would require interpretation of any
ambiguities in this Agreement against the party drafting it.
6.3 Headings and Labels. In this Agreement, articles are distinguished by
article numbers having no decimal point or no numbers to the left of the
decimal point (i.e. "Article 12" or "12."), sections are distinguished by
section numbers on both sides of a single decimal point (i.e. "12.2") and
subsections are distinguished by subsection numbers on both sides of two
decimal points (i.e. "12.2.2") Reference to an "article" shall include the
terms and provisions of each section thereunder and reference to a
"section" shall include the terms and provisions of each subsection under
such section. Article, section, and subsection titles and captions
contained in this Agreement are inserted as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any of its provisions.
6.4 Recitals. The recitals set forth at the beginning of this Agreement of any
matters or facts shall be conclusive proof of the truthfulness thereof and
the terms and conditions set forth in the recitals, if any, shall be deemed
a part of the Agreement.
6.5 Assignment. No party shall voluntarily or by operation of law assign,
hypothecate, convey, give, transfer, mortgage, sublet, license or otherwise
transfer or encumber all or any part of its rights, duties or other
interests in this Agreement or the proceeds thereof without the prior
consent of the other parties. Any attempt to make an assignment in
violation of this provision shall be a material default under this
Agreement and any assignment in violation of this provision shall be null
and void. Absent an express signed written agreement between the parties to
the contrary, no assignment of any of the rights or obligations under this
Agreement shall result in a novation or in any other way release the
assignor from its obligations under this Agreement. Except as provided to
the contrary in this Agreement, this Agreement shall be binding on and
inure to the benefit of the parties and their successors and assigns.
6.6 Governing Law & Trial by Reference. This Agreement shall be construed and
interpreted in accordance with the laws of the State of California. Any
action brought to interpret or enforce this Agreement shall be tried by the
reference procedures set forth in California Code of Civil Procedure
Section 638 et seq. upon motion by either party to the Superior Court for
the County of San Diego, California. A single referee shall be appointed to
try the matter and such referee shall be a retired judge of the California
Superior Court, California Court of Appeals or California Supreme Court.
Each party may reject two referees appointed by the court and hereby waives
the right to trial by jury. The referee shall be compensated at the rate
per hour charged by senior attorneys in major San Diego County law firms.
During the pendency of the reference proceeding, each party shall pay
one-half of the cost thereof. Upon the conclusion of the reference
proceeding, the losing party shall pay all of remaining unpaid costs of the
reference proceeding and reimburse the prevailing party for any such costs
previously paid by the prevailing party. Such reimbursement shall be
included in any judgment or final order issued in the reference proceeding.
Except as otherwise required by law, each party shall exercise its best
efforts to keep the referenced proceeding and the testimony and evidence
presented therein confidential.
6.7 Integrated Agreement; Modifications. This Agreement, including the exhibits
hereto, contains all the agreements of the parties concerning the subject
hereof and cannot be amended or modified except by a written instrument
executed and delivered by the parties. There are no other representations,
agreements, arrangements or understandings, either oral or written, between
or among the parties hereto relating to the subject matter of this
Agreement that are not fully expressed herein. In addition there are no
representations, agreements, arrangements or understandings, either oral or
written, between or among the parties upon which any party is relying upon
in entering this Agreement that are not fully expressed herein. Without
limiting the generality of the foregoing, no party has represented to any
other party and no party is relying on any information concerning the
federal or state income taxes which may or may not result the consummation
of the transactions contemplated herein.
6.8 Severability. If any term or provision of this Agreement is determined to
be illegal, unenforceable or invalid in whole or in part for any reason,
such illegal, unenforceable or invalid provisions or part thereof shall be
stricken from this Agreement, and such provision shall not affect the
legality, enforceability or validity of the remainder of this Agreement. If
any provision or part thereof of this Agreement is stricken in accordance
with the provisions of this section, then the stricken provision shall be
replaced, to the extent possible, with a legal, enforceable and valid
provision that is as similar in tenor to the stricken provision as is
legally possible.
6.9 Notices. Any delivery of this Agreement, notice, modification of this
Agreement, collateral or additional agreement, demand, disclosure, request,
consent, approval, waiver, declaration or other communication that a party
desires or is required to give to another party or any other person shall
be in writing. Any such communication may be served personally, transmitted
by facsimile or nationally recognized overnight delivery service (i.e.,
Federal Express) or sent by prepaid, first class mail to the party's
address as set forth below:
If to SAI: SPORTS ARENAS, INC.,
0000 Xxxxxxx Xxxx, Xxxxx X
Xxx Xxxxx, XX 00000
Telephone (000) 000-0000
Fax (000) 000-0000
Attention: Xxxxxx X. Xxxxx
(email: xxxxxx@xxxxxxxxxx.xxx)
Xxxxxx X. Xxxxxxx (email:
xxxxxxxx@xxxxxxxxxx.xxx)
with copies to: Xxxxxx X. Xxxxxx
XXXXXX & XXXXXXXXX
000 X. Xxxxx Xx., 00xx Xxx.
Xxxx Xxxx Xxxx, XX 00000
Telephone (000) 000-0000
Fax (000) 000-0000
email: xxxxxxx@xxxxxxxxx.xxx
and Xxxxx X. Xxxxxx
XXXXXXXX, XXXXXX & XXXXXXX, A X.X.
000 Xxxx X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Telephone (000) 000-0000
Fax (000) 000-0000
email: xxxxxxx@xxxxxx.xxx
If to AB: XXXXXX XXXXXXX, INC.,
c/o Xxxxxx X. Xxxxx
0000 Xxxxxxx Xxxx, Xxxxx X
Xxx Xxxxx, XX 00000
Telephone (000) 000-0000
Fax (000) 000-0000
Attention: Xxxxxx X. Xxxxx
(email: xxxxxx@xxxxxxxxxx.xxx)
If to Xx. Xxxxx: Xxxxxx X. Xxxxx
0000 Xxxxxxx Xxxx, Xxxxx X
Xxx Xxxxx, XX 00000
Telephone (000) 000-0000
Fax (000) 000-0000
email: xxxxxx@xxxxxxxxxx.xxx
with a copy to: Xxxxxxx XxXxxx
SHEPPARD, MULLIN, XXXXXXX &
HAMPTON LLP
000 Xxxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Telephone (000) 000-0000
Fax: (000) 000-0000
email: xxxxxxx@xxxxxxxxxxxxxx.xxx
6.9.1Any such communication shall be deemed effective upon personal delivery,
confirmed receipt of notice transmitted by facsimile, two days after
transmitting the notice by nationally recognized overnight delivery service
or three days after mailing in accordance with this section. Any party may
change its address by notice to the other party.
6.9.2Each party shall make an ordinary, good-faith effort to ensure it will
accept or receive notices that are given in accordance with this section
and that any person to be given notice actually receives such notice.
6.10 Time. Time is of the essence to the performance of each and every
obligation under this Agreement.
6.11 Reasonable Consent and Approval. Except as otherwise provided in this
Agreement, whenever a party is required or permitted to give its consent or
approval under this Agreement, such consent or approval shall not be
unreasonably withheld or delayed. If a party is required or permitted to
give its consent or approval in its sole and absolute discretion or if such
consent or approval may be unreasonably withheld, such consent or approval
may be unreasonably withheld but shall not be unreasonably delayed.
6.12 SAI Board Approval. SAI represents to Xx. Xxxxx the transactions
contemplated by this Agreement have been approved in advance by SAI's
Special Committee and full board of directors in accordance with applicable
law.
6.13 Further Assurances. The parties at their own cost and expense shall execute
and deliver such further documents and instruments and shall take such
other actions as may be reasonably required or appropriate to carry out the
intent and purposes of this Agreement.
6.14 Waivers. Any waiver by any party shall be in writing and shall not be
construed as a continuing waiver. No waiver will be implied from any delay
or failure to take action on account of any default by any party. Consent
by any party to any act or omission by another party shall not be construed
to be a consent to any other subsequent act or omission or to waive the
requirement for consent to be obtained in any future or other instance.
6.15 Counsel. This Agreement was prepared by Xxxxx X. Xxxxxx of XXXXXXXX, XXXXXX
& XXXXXXX, A Law Corporation ("OC&P"), on behalf of SAI and reviewed by
Xxxxxx X. Xxxxxx of XXXXXX & XXXXXXXXX ("F&C") on behalf of the Special
Committee and by Xxxxxxx XxXxxx of SHEPPARD, MULLIN, XXXXXXX & XXXXXXX, LLP
on behalf of Xx. Xxxxx. Messrs. Xxxxxx and Xxxxxx have advised AB and Xx.
Xxxxx that neither OC&P nor F&C are representing AB, Xx. Xxxxx or the
interests of either in connection with the negotiation and preparation of
this Agreement, the subjects addressed herein and related matters
(collectively the "Subject Matter"). Further, Xx. Xxxxxx has disclosed to
SAI, the Special Committee, AB, AB's shareholders and Xx. Xxxxx that: (a)
OC&P currently represents and has previously represented SAI, AB, AB's
shareholders and Xx. Xxxxx (each an "OC&P Client") and their interests in
other matters; and (b) the relevant circumstances and reasonably
foreseeable adverse consequences of OC&P representing only SAI and its
interests in the Subject Matter. Each OC&P Client acknowledges such OC&P
Client has interests which are potentially adverse to the interests of the
others. By executing and delivering this Agreement, each OC&P Client and
the Special Committee confirms it has granted its consent to Xx. Xxxxxx and
OC&P representing only SAI and its interests in the Subject matter. Such
consent may be revoked at any time by any OC&P Client or the Special
Committee.
6.16 Signatures/Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall
not be effective until the execution and delivery between each of the
parties of at least one set of counterparts. A party may deliver this
Agreement by facsimile providing such party transmits the original to Xxxxx
X. Cramer, OLMSTEAD, XXXXXX & XXXXXXX, A X.X., 000 Xxxx X, Xxxxxx, Xxx.
0000, Xxx Xxxxx, Xxxxxxxxxx 00000 on or before the 14th day after the
Effective Date. The parties authorize each other to detach and combine
original signature pages and consolidate them into a single identical
original. Any one of such completely executed counterparts shall be
sufficient proof of this Agreement.
6.17 Date and Delivery of Agreement. Notwithstanding anything to the contrary
contained in this Agreement, the parties intend this Agreement shall be
deemed effective, executed and delivered for all purposes under this
Agreement, and for the calculation of any statutory time periods based on
the date an agreement between parties is effective, executed or delivered,
as of the Effective Date.
6.18 Counting of Days. If a party is required to complete the performance of an
obligation under this Agreement by a date certain and such date is a
Saturday, Sunday or Federal bank holiday (collectively, a "Nonbusiness
Day"), the date for the completion of such performance will be the next
succeeding day that is not a Nonbusiness Day.
IN WITNESS WHEREOF, this Agreement is executed to be effective as of the
Effective Date set forth above.
SAI: SPORTS ARENAS, INC.,
a Delaware corporation
BY: /S/ XXXXXX X. XXXXX
-----------------------------
Xxxxxx X. Xxxxx, President
BY: /S/ XXXXXX X. XXXXXXX
------------------------------
Xxxxxx X. Xxxxxxx, Secretary
AB: XXXXXX XXXXXXX, INC.,
a Nevada corporation
BY: /S/ XXXXXX X. XXXXX
----------------------------------
Xxxxxx X. Xxxxx, President and
Secretary
Xx. Xxxxx: /S/ XXXXXX X. XXXXX
--------------------------------
XXXXXX X. XXXXX, a single man
APPROVED
Special Committee: /S/ XXXXXXX XXXXXX
----------------------------------------------------
Xxxxxxx Xxxxxx, Sole Member, Special Committee
of the Board of Directors, SPORTS ARENAS, INC.,
a Delaware corporation
EXHIBIT 3.3
STATEMENT CONFESSING JUDGMENT
CERTIFICATE OF DEFENDANT'S ATTORNEY SUPPORTING CONFESSION OF JUDGMENT
Xxxxxxxx X. Xxxx, Esq. (SBN 141440)
Miles X. Xxxxx, Esq. (SBN 89766)
GRANT & ZEKO, APC
0000 Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Tel: 000-000-0000; Fax: 000-000-0000
Attorneys for SPORTS ARENAS, INC.
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN DIEGO
SPORTS ARENAS, INC., a Delaware CASE NO. _______
corporation
Plaintiff, STATEMENT CONFESSING JUDGMENT
v.
XXXXXX XXXXXXX, INC., a Nevada [Code Civ. Proc. '1132]
corporation
Defendant.
_____________________________________________________________________
I, Xxxxxx X. Xxxxx declare:
1. I am president of defendant XXXXXX XXXXXXX, INC., Nevada corporation
(Defendant). Defendant has authorized me to submit this Statement
Confessing Judgment on its behalf.
2. On or about December 21, 1990, Defendant executed and delivered to
plaintiff SPORTS ARENAS, INC., a Delaware corporation (Plaintiff) that
certain PROMISSORY NOTE dated December 21, 1990 in the principal amount of
ONE MILLION, FIFTY-FIVE THOUSAND AND EIGHT HUNDRED AND EIGHTY-SIX DOLLARS
($1,055,886.00) (the Note). The Note represented a debt of Defendant to
Plaintiff. The Note contains an attorney's fee provision.
3. The Note was due and payable by its terms November 7, 2003. This date is
also known as the maturity date.
4. On the maturity date, the amount due was THREE MILLION, THREE HUNDRED AND
FIFTY-ONE THOUSAND, SEVEN HUNDRED AND TWENTY-FOUR DOLLARS ($3,351,724.00)
including principal and the accrued unpaid interest from the Note.
5. Defendant was unable and remains unable to repay all or any part of the
debt represented by the Note. Defendant does not desire to contest the
amount owed or engage in any litigation to defend itself.
6. The amount due as of June 25, 2004 is THREE MILLION, FOUR HUNDRED SIXTY-ONE
THOUSAND AND FORTY-EIGHT DOLLARS ($3,461,648.00) and interest will accrue
at $482.OO each day after June 25, 2004.
7. Defendants counsel, Xxxxxx X. Xxxxx, has advised defendant's Board of
Directors to utilize the procedure for confessing judgment.
8. Defendant therefore confesses a judgment in favor of Plaintiff as follows:
SPORTS ARENAS, INC., a Delaware corporation (Plaintiff) shall have judgment
against defendant XXXXXX XXXXXXX, INC., Nevada corporation for the sum of THREE
MILLION, FOUR HUNDRED SIXTY-ONE THOUSAND AND FORTY-EIGHT DOLLARS ($3,461,648.00)
plus pre-judgment interest of $482.00 for each day after June 25, 2004 until
entry of judgment. Plaintiff may recover its reasonable attorneys fees and
court costs for enforcing the judgment after entry. The judgment will bear
interest at ten percent (10%) per annum upon entry. I declare under penalty of
perjury that the foregoing is true and correct. Executed on June 30, 2004 at
San Diego, California.
/S/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
(Executed as Defendant's President)
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(Space below for clerk's endorsement of judgment)
JUDGMENT IS ENDORSED ON THIS STATEMENT
DATED: _______________ CLERK OF THE SUPERIOR COURT
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By Deputy Clerk
Name: _______________________
