ASSET PURCHASE AGREEMENT
by and between
ACTIVE SPORTS MARKETING, LLC
Seller,
CERTAIN PRINCIPALS OF SELLER,
and
GOLDEN SPIKES, INC.,
Purchaser
INDEX OF EXHIBITS AND SCHEDULES
EXHIBIT A DISTRIBUTION AGREEMENT
EXHIBIT B PERSONAL PROPERTY
EXHIBIT C CONTRACTS
EXHIBIT D INDEMNITY ESCROW AGREEMENT
EXHIBIT E ESCROW AGREEMENT
ASSET PURCHASE AGREEMENT
------------------------
ASSET PURCHASE AGREEMENT, made as of the 29th day of July, 1997
(this "Agreement"), by and among ACTIVE SPORTS MARKETING, LLC, a Colorado
limited liability company having an address at 000 X. Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx 00000 ("Seller"), XXXXXX XXXX, having an address at 00 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("Xxxx"), XXXX XXXXX, having an address at
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 ("Xxxxx") (Xxxx and Xxxxx
collectively referred to herein as "Principals") and GOLDEN SPIKES, 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 holder of the right to distribute in the United
States soft golf spikes manufactured by XxxXxxxx Engineering pursuant to an
oral agreement by and between Seller and XxxXxxxx Engineering (the
"Distribution Agreement") under substantially the same terms and conditions as
contained in the draft Distribution Agreement attached hereto as Exhibit A.
WHEREAS, Seller currently distributes soft spikes throughout the
United States pursuant to the Distribution Agreement ("the Business");
WHEREAS, Seller wants to sell certain assets relating to the Business
to Purchaser, and Purchaser wants to purchase such assets from Seller, on the
terms, and subject to the conditions, set forth herein.
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, 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:
1. Agreement to Sell and Purchase.
1.1 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"):
1.1.1 all furnishings, fixtures, machinery, equipment,
vehicles and personalty attached or appurtenant to or used in connection with
the Business 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 attached hereto and made a part hereof (the "Personal
Property");
1.1.2 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
Business (collectively, the "Records");
1.1.3 any consent, authorizations, variances, waivers,
licenses, certificates, permits and approvals held by or granted to Seller in
connection with the operation of the business (collectively, the "Permits");
1.1.4 the contracts, leases and other agreements, including
the Distribution Agreement, of or relating to the Business described on Exhibit
C attached hereto and made a part hereof, except to the extent the same relate
solely to any Retained Assets or Retained Liabilities (as hereinafter defined)
(the "Contracts");
1.1.5 all accounts receivable of Seller arising out of the
sale of goods or services in connection with the Business on the books of the
Seller as of April 1, 1997 (the "Effective Date") or arising after the
Effective Date;
1.1.6 all cash, funds in bank accounts and cash equivalents
existing as of the Effective Date;
1.1.7 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
1.1.8 any other properties and assets of every kind and
nature, real or personal, tangible or intangible, relating in any way
whatsoever to the Business, including, but not limited to the right to use the
name "Active Sports Marketing", except to the extent the same relate solely to
the Retained Assets or Retained Liabilities.
1.2 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"):
1.2.1 any rights of Seller with respect to insurance
policies owned by Seller or for which Seller is the named insured; and
1.2.2 any patents, trade secrets, designs, trademarks,
trademark registrations, copyrights, copyright registrations, trade names
(other than the name "Active Sports Marketing") 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").
1.3 Assumption of Certain Liabilities. Purchaser shall assume and
agree to pay and discharge when due (the "Assumed Liabilities"):
1.3.1 all liabilities and obligations of Seller under the
Contracts to the extent the same arise from and after the Closing; and
1.3.2 all trade payables of Seller arising out of the
purchase of goods and services in connection with the Business on the books of
Seller on and after the Effective Date.
1.4 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 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 other than
the Assumed Liabilities (collectively, the "Retained Liabilities").
2. Consideration. In consideration for the Property, Purchaser shall
(i) pay to Seller Five Hundred Thousand Dollars ($500,000.00), 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 $250,000.00 of which
shall be held in escrow under the Escrow Agreement attached hereto as Exhibit
E, and (ii) cause Family Golf Centers, Inc. ("FGC") to issue 16,500 validly
issued, fully paid and non-assessable shares of common stock, $.01 par value
per share, of FGC (the "FGC Shares") and to deliver at Closing, free and clear
of all liens, claims and encumbrances: (A) a certificate representing 1,667
shares of FGC Shares to the Escrow Agent under the Indemnity Escrow Agreement
attached hereto as Exhibit D; (B) a certificate representing 8,250 shares of
FGC Shares to the Escrow Agent under the Escrow Agreement attached hereto as
Exhibit E; and (C) a certificate representing 6,583 shares of FGC Shares
registered in the name of Xxxxxx Xxxx, as designated by the Seller.
3. Apportionments.
3.1 The parties hereto agree that (i) all operating expenses of
Seller relating to the Business (i.e., real estate taxes, utilities, cost of
inventories, advertising, collections, fees, hired services, insurance,
miscellaneous expenses, postage, repairs and maintenance, supplies, taxes and
wages, but specifically not including interest on indebtedness, professional
fees and expenses, travel, lodging, or depreciation), and (ii) all income of
Seller, shall be apportioned between Seller and Purchaser as of the Effective
Date based on the portion of each such expense or revenue attributable to the
period falling before the Effective Date on the one hand, which Seller shall
bear the responsibility and benefit of, and the portion of each such expense or
revenue attributable to the period falling on or after the Effective Date, on
the other hand, which Purchaser shall bear the responsibility and benefit of
(the "Adjustment"). The net Adjustment will be paid by the party owing the same
to the other at the Closing. The expenses and liabilities for which Seller
shall be liable pursuant to this Section shall be included within the meaning
of the term "Retained Liabilities".
3.2 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 Closing Date, or either party
discovers any errors in or omissions in respect of such prorations, 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.
3.3 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 of the transactions described herein (the "Closing").
4. The Closing. The Closing of the transaction provided for in this
Agreement 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").
5. Representations and Warranties.
5.1 Seller and each of the Principals, jointly and severally,
hereby represent and warrant to Purchaser as follows:
5.1.1 Organization; Power and Authority. Seller is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Colorado, 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.
5.1.2 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.
5.1.3 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.
5.1.4 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.
5.1.5 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 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, site plan approvals,
zoning or subdivision regulations or urban redevelopment plans applicable to
the Premises.
5.1.6 Title to Assets. Seller has good and marketable title
to the Property free and clear of all Encumbrances.
5.1.7 Contracts. Except as set forth on Exhibit C, Seller is
not a party to any leases, contracts, orders or agreements relating to the
Property or the Business (written or otherwise) (collectively, "Contracts").
Exhibits C sets forth a full and complete description of the Contracts
described therein, and none of such Contracts have been amended or modified
except as reflected on said Exhibits. Seller is not holding any security
deposits under any of said Contracts. Each of the Contracts are in full force
and effect and no party under any such Contract, including Seller, is in
default, or has sent or received notice of default, in any respect of any such
Contract.
5.1.8 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.
5.1.9 [INTENTIONALLY OMITTED].
5.1.10 Litigation. There is no action or proceeding or
governmental investigation pending, or, to the best of Seller's knowledge,
threatened against, or relating to, Seller (insofar as it relates to the
Property or the Business), the Property, the Business or the transactions
contemplated by this Agreement, nor is there any basis for any such action,
proceeding or investigation.
5.1.11 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.
5.1.12 Distribution Agreement. Attached hereto as Exhibit A
is a draft distribution agreement containing substantially the same terms and
conditions of the oral Distribution Agreement. The Distribution Agreement is in
full force and effect; has not been modified or amended in any way and neither
the Seller nor XxxXxxxx Engineering is in default, or sent or received any
notice of default; in respect of the Distribution Agreement. No Event has
occurred or circumstance exists which, with the giving of notice or the passage
of time, or both, would constitute a default under the Distribution Agreement.
Neither Seller nor XxxXxxxx Engineering has exercised any right or option, or
states its intent, to terminate or cancel the Distribution Agreement. Seller
has not assigned, mortgaged, pledged, transferred or conveyed the Distribution
Agreement or any interest therein, or granted any right or option with respect
thereto, to any party other than Purchaser.
5.1.13 Financial Condition. Seller will deliver within 30
days from the date hereof true and correct copies of (1) audited financial
statements consisting of balance sheets and income statements of Seller as of
December 31, 1996; (2) unaudited statements for the quarters ended March 31,
1997; (3) internal reports for the months ended April 30, May 31 and June 30,
1997 and for the period commencing July 1, 1997 through the date immediately
prior to the date hereof and (4) a schedule reconciling cash and accounts
receivable from the Effective Date to the Closing Date. Each such balance sheet
presents fairly in all material respects the financial condition, assets and
liabilities of Seller as of its date; each such statement of income
presents fairly in all material respects 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, 1996
and since March 31, 1997: (a) there has at no time been a material adverse
change in the financial 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 material 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.
5.1.14 Effective Date. Seller has operated the Business
since the Effective Date only in the ordinary course of business for the
benefit of the Purchaser, other than any extraordinary transactions which were
consented to by the Purchaser in advance.
5.1.15 Investment Representations of Seller. Seller,
including any designee of Seller, represents and warrants to Purchaser and FGC
that:
a. Seller understands that the FGC Shares it is acquiring pursuant to
this Agreement have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), nor qualified under any state securities laws,
and that the issuance and delivery of the FGC Shares is intended to be exempt
from such registration and qualification based in part upon the representations
of Seller contained herein. Seller recognizes that an investment in the FGC
Shares may involve a number of risks, and that no federal or state agency has
passed upon the FGC Shares or made any finding or determination as to the
fairness of this investment.
b. Seller has been furnished copies of (i) FGC's 1996 Annual Report;
(ii) Annual Report on Form 10-K for the year ended December 31, 1996; (iii)
Quarterly Report on Form 10-K for the quarter ended March 31, 1997; and (iv)
Proxy Statement, dated
May 20, 1997, all as filed with the Securities and Exchange Commission (the
"Commission") and such other materials regarding FGC, if any, as it has
requested in writing, and has been given the opportunity to obtain from FGC all
information that it has requested regarding its business and affairs.
c. Seller and its officers and advisors have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the investment contemplated by this Agreement. Seller is
able to bear the economic risk of its investment in FGC.
d. Seller understands that it must bear the economic risk of such
investment indefinitely unless the FGC Shares are registered or qualified
pursuant to the Securities Act or applicable state securities laws or an
exemption from such registration and qualification is available, and that FGC
has no obligation to so register or qualify such shares. Seller further
understands that there is no assurance that any exemption will allow Seller to
dispose of or otherwise transfer any or all of the FGC Shares in the amounts or
at the times Seller might propose. Seller will not sell or otherwise transfer
any of the FGC Shares unless they are registered and qualified under the
Securities Act and applicable state laws or unless an exemption from such
registration and qualification. Nothing contained herein shall, however,
adversely affect Seller's right to sell the FGC Shares pursuant to Rule 144
under the Securities Act, to the extent such Rule is then available in
connection with such sale.
e. Seller is acquiring the FGC Shares solely for its own account as
principal for investment and not with a view toward resale, transfer or
distribution thereof or any interest therein, in whole or in part, nor with any
present intention of distributing the FGC Shares.
f. Seller is not relying on Purchaser or FGC with respect to the tax
and other economic considerations relating to its investment in the FGC Shares.
In regard to such considerations, Seller has relied on the advice of, or has
consulted with, only the Seller's own advisors.
g. Seller has formed an independent judgment concerning the FGC
Shares.
5.1.16 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.
5.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as follows:
5.2.1 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.
5.2.2 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 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 By-Laws 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.
5.2.3 Capitalization. The authorized capital stock of FGC
consists of 50,000,000 shares of FGC Common Stock and 2,000,000 shares of
Preferred Stock, of which there were on May 12, 1997, a total of 11,878,617
shares of FGC Common Stock and no shares of Preferred Stock issued and
outstanding. All FGC Shares issued and delivered to Seller pursuant to this
Agreement have been duly authorized, validly issued, fully paid, non-assessable
and free of preemptive rights.
5.2.4 Commission Reports. FGC has made all required filings of
reports and forms with the Commission under the Securities Exchange Act of
1934, as amended (the "Exchange Act") since December, 31, 1995. All such
reports and forms (as amended, in the case of any thereof which were amended
after filing) were prepared in all material respects in accordance with the
requirements of the Exchange Act and the rules and regulations thereunder. As
of their respective dates (or as of the date last amended, in the case of any
thereof which were amended after filing), none or such reports or forms
contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except to the extent corrected by a subsequently filed amendment,
or other report, form or document. The audited consolidated financial
statements and unaudited interim financial statements and schedules of FGC (as
amended, if applicable) contained in such public reports (or incorporated
therein by reference) were prepared in accordance with general accepted
accounting principles applied on a consistent basis, except as noted therein,
and fairly presented the consolidated financial condition and results of
operations of FGC and its consolidated subsidiaries as at the respective dates
thereof and for the periods indicated therein, subject in the case of interim
unaudited financial statements to normal year-end audit adjustments.
5.3 Securities Act Legend. Each certificate or other instrument
evidencing any FGC Shares shall bear a legend in substantially the following
form:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933 and such shares may not be sold or transferred
unless such sale or transfer will be effected in accordance with the
registration requirements of the Securities Act of 1933, as at that time
amended, or in accordance with any exemption from such registration
requirements which may then be available.
Seller understands and acknowledges that FGC will deliver unlegended
certificates in exchange for any certificate bearing such legend only in the
event that (i) (A) Seller transfers shares represented by such certificate
pursuant to and in the manner provided for in an effective registration
statement covering the transfer or sale or such shares or (B) Seller shall have
delivered to FGC an opinion of counsel in form and substance satisfactory to
FGC, to the effect
that the FGC Shares in question may be transferred without registration under
the Securities Act and (ii) all applicable requirements of applicable state
securities laws have been satisfied
5. Survival. The representations and warranties of the parties made in
this Article 5 shall survive the Closing.
6. 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.
7. 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 Agreement and/or the closing of
the transaction provided for herein. 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 who claims to have dealt with the
indemnifying party in connection with this transaction.. The provisions of this
Article shall survive the Closing or any termination of this Agreement.
8. Costs and Fees. The parties shall each pay for their own expenses
(including, but not limited to, all financing, legal, appraisal, accounting and
advisers' expenses) in connection with the consummation of the transaction
contemplated hereby.
9. Indemnification.
9.1 Subject to the further provisions of this Article, Seller and
each of the Principals 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 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 which is not an Assumed Liability;
(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 5 are deleted);
and (iii) 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 9.1.
9.2 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) any of the Assumed Liabilities on and after
the date hereof, (ii) 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 (iii) 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 9.2.
9.3 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 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 9.3 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 9.3.
9.4 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.
9.5 The obligation of Seller under Section 9.1 shall be satisfied
first from the Escrow Account and, if the Escrow Account is inadequate to
provide indemnification to Purchaser, then from Seller and the Principals
directly.
10. 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, and (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. 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.
11. 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 Family Golf Centers, Inc. 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx
00000, Attention: Xxxxxx X. Xxxxxxx, General Counsel. A copy of any Notice
given by Purchaser to Seller shall simultaneously be given in either manner
provided above to Ireland, Xxxxxxxxx, Xxxxx & Xxxxxx, P.C. 0000 Xxxxxxxx, Xxxxx
0000, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxx, Esq. 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.
12. Miscellaneous.
12.1 This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
13.2 This Agreement shall be governed by, interpreted under and
construed and enforced in accordance with, the laws of the State of New York.
12.3 The captions or article headings in this Agreement are for
convenience only and do not constitute part of this Agreement.
12.4 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.
12.5 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.
12.6 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.
12.7 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.
12.8 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 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.
12.9 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.
ACTIVE SPORTS MARKETING, LLC
By:
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Name:
Title:
GOLDEN SPIKES, INC.
By:
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Name:
Title:
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XXXXXX XXXX
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XXXX XXXXX
