EXHIBIT 10.5

 

ASSET PURCHASE AGREEMENT

 

This ASSET PURCHASE AGREEMENT (this “Agreement”) dated as of October 15, 2004,
by and among Miller Acquisition, Inc., a corporation organized and existing
under the laws of the State of Florida (“Buyer”), Miller Golf Company, LLC, a
limited liability company organized and existing under the laws of the State of
Florida (“Seller”).

 

W I T N E S S E T H :

 

WHEREAS, the Seller is engaged in the business of manufacturing, marketing,
distributing and selling high quality men’s and women’s golf bags and
accessories (the “Business”);

 

WHEREAS, the Buyer desires to acquire from the Seller and the Seller desires to
sell to the Buyer substantially all of the assets of the Business upon the terms
and subject to the conditions set forth in this Agreement (the “Sale”); and

 

WHEREAS, the Board of Directors of the Buyer and the Managers and Members of the
Seller have each approved the Sale, the terms of this Agreement and the
transactions contemplated hereby.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties, intending legally to be bound, agree as follows:

 

SECTION 11.16 AGREEMENT

 

[A list of defined terms is provided in Article 9 hereof]

 

Article 11. Purchase and Sale

 

11.1 General. On the terms and subject to the conditions set forth in this
Agreement, at the Closing, Buyer shall purchase from Seller, and Seller shall
sell, transfer, assign, convey and deliver to Buyer, all of Seller’s right,
title and interest in and to the Business, including, without limitation, in and
to all of the assets, properties, rights, goodwill, contracts and claims of the
Business, other than the Excluded Assets, wherever located, whether tangible or
intangible, real or personal, known or unknown, actual or contingent, as the
same shall exist as of the Closing (such rights, title and interest in and to
all such assets, properties, rights, contracts and claims, being collectively
referred to herein as, the “Purchased Assets”). The Purchased Assets shall
include, without limitation, the following assets:

 

(a) Cash and cash equivalents, including petty cash accounts or cash on hand or
in bank accounts, certificates of deposit, commercial paper and other similar
securities related to the Business;

 

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(b) all inventory (including work in process, raw materials and finished goods),
goods in transit, unbilled revenues and other properties and rights associated
with the performance of contracts and the operation of the Business;

 

(c) all supplies, machinery, equipment, test equipment, demonstration equipment,
computers, tools, dies, spare parts, vehicles, furniture, office materials and
other tangible personal property, whether or not such assets are located at the
Premises;

 

(d) all accounts receivable and notes receivable and other claims for money or
other obligations due (or which hereafter will become due) to Seller arising out
of the Business together with any unpaid interest accrued thereon from the
respective obligors and any security or collateral therefor;

 

(e) all of Seller’s interest in the Intellectual Property Rights, including,
without limitation, all results of the Business’s research and development
activities and other Intellectual Property Rights developed or acquired for the
Business, or related to, or of use or potential use in connection with any
current or contemplated potential future products of the Business or parts,
components or subassemblies used or purchased by the Business;

 

(f) all proceeds under any insurance contract or arrangement relating to the
Business;

 

(g) all right, title and interest in, to and under all Contracts associated with
the Business, subject in each case to the terms of such Contracts;

 

(h) all books and records (including such books and records as are contained in
computerized storage media) of the Business, including all inventory,
purchasing, accounting, sales, export, import, research, engineering,
manufacturing, maintenance, repairs, marketing, banking, documents and records
constituting Intellectual Property Rights, shipping records, personnel files and
all files, customer and supplier lists, records, literature and correspondence,
whether or not physically located on any of the Premises, provided the Seller
may retain copies of all books and records related to Excluded Liabilities,
Excluded Assets and employees;

 

(i) any other tangible assets of Seller which are used in the Business and which
are of a nature not customarily reflected in the books and records of a
business, such as assets which have been written off for accounting purposes but
which are still used by or of value to the Business;

 

(j) all Permits which are transferable and which are used in the Business, as
presently conducted;

 

(k) all rights of the Seller pursuant to any express or implied warranties,
representations or guaranties made by suppliers to the Business;

 

(l) all goodwill associated with the Business;

 

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(m) all rights under non-disclosure agreements with employees and agents of
Seller and under confidentiality agreements with prospective purchasers of the
Business or with other third parties to the extent relating to the Business;

 

(n) all deposits, prepaid charges, insurance, sums and fees, offset credit
balances in any country, refunds, and causes of action;

 

(o) any other asset of Seller, other than Excluded Assets, in respect of which
there is an Assumed Liability; and

 

(p) other than to the extent related to a liability asserted against Seller, all
rights of recovery, rights of set-off and rights of recoupment of Seller in
connection with the Business.

 

11.2 Excluded Assets. Notwithstanding anything herein to the contrary, the
Purchased Assets shall not include any of the following assets related to the
Business (collectively, the “Excluded Assets”): the leasehold and other
interests in Real Property listed on Schedule 1.2. In addition, the Buyer will
have no obligation to retain or employ any of the current or former employees,
independent contractors or agents of Seller.

 

11.3 Certain Provisions Relating to the Purchased Assets.

 

(a) To the extent that a contract, Permit or other asset which would otherwise
be included within the definition of “Purchased Assets,” or any claim, right or
benefit arising thereunder or resulting therefrom (each an “Interest” and
collectively the “Interests”), is not capable of being sold, assigned,
transferred or conveyed without the approval, consent or waiver of the issuer
thereof or the other party thereto, or any third person (including a
Governmental Authority), and such approval, consent or waiver has not been
obtained prior to the Closing, or if such sale, assignment, transfer or
conveyance or attempted sale, assignment, transfer or conveyance would
constitute a breach thereof or a violation of any law, decree, order, regulation
or other governmental edict, this Agreement shall not constitute a sale,
assignment, transfer or conveyance thereof, or an attempted sale, assignment,
transfer or conveyance thereof.

 

(b) Seller and Buyer shall use their best efforts and shall cooperate to obtain
all approvals, consents or waivers necessary to convey to Buyer each Interest as
of the Closing. The failure to obtain any approval, consent or waiver necessary
to convey any Interest to Buyer shall not affect the obligations of the parties
to close hereunder. Subsequent to the Closing, the Seller shall execute and
deliver any other instruments and take any actions, which may be reasonably
required for the implementation of this Agreement and the transactions
contemplated hereby.

 

11.4 Assumption of Liabilities. On the terms and subject to the conditions set
forth in this Agreement, at the Closing, Buyer will assume and become
responsible for the following, other than the Excluded Liabilities, disclosed
liabilities and obligations of the Seller (the “Assumed Liabilities”):

 

(a) all of the third party liabilities and obligations set forth on Schedule
1.4(a) arising from the ownership, use or possession of the Purchased Assets or
the operation of the Business following the Closing Date including all accounts
payables; and

 

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(b) the contracts being transferred to Buyer hereunder, a list of which is set
forth on Schedule 1.4(b) (the “Contracts”) (to the extent that such liabilities
and obligations remain unsatisfied or are required to be performed on or after
the Closing Date).

 

11.5 Excluded Liabilities. The Seller and the Buyer expressly understand and
agree that, other than the Assumed Liabilities, Buyer shall not assume, pay,
perform or discharge or become liable for any and all obligations, commitments
or liabilities of any and every nature whatsoever of the Seller including
(without limitation) all obligations, commitments or liabilities (whether
recourse or non-recourse to the Seller) which relate to, are secured by or
otherwise encumber any of the Purchased Assets, including, without limitation:

 

(a) all liabilities associated with the Real Property including, without
limitation, any mortgage thereon;

 

(b) liabilities resulting from Environmental Claims relating to the operation of
the Business prior to the Closing;

 

(c) claims arising prior to Closing that the operation of the Business infringes
the Intellectual Property Rights of any Person, except as otherwise set forth
herein;

 

(d) any liability or obligation arising out of any claim of or for injury to
persons or property by reason of the improper performance or malfunctioning,
improper design or manufacture, or failure to adequately package, label or
provide warnings as to the hazards of, any product of the Business, where the
injury giving rise to such claim occurred on or prior to the Closing Date;

 

(e) any obligation to any Affiliates of the Seller including any obligation to
Stanford Financial Group or any of its Affiliates;

 

(f) any liability of the Seller to any plan, individual or governmental agency
arising out of any failure of the Seller to comply with the applicable
provisions of any Employee Benefit Plans, ERISA, the Code, or other applicable
Laws with respect to its employees, including any obligation or liability of the
Seller for any penalty, fine or similar amount due from the Seller on account of
any breach of fiduciary duty or failure to comply with applicable laws or
regulations;

 

(g) any liability for severance pay, leaving allowances, guaranteed fixed terms
of employment or retirement benefits beyond those provided under applicable law,
collective bargaining agreements, or any Employee Benefit Plan applicable to
employees of the Business generally, which arises out of any acts or omissions
of Sellers prior to the Closing Date; and

 

(h) all liabilities of Seller or any Affiliate of Seller for Taxes which are not
Assumed Liabilities as set forth in Schedule 1.5(h) hereto (collectively, the
“Excluded Liabilities”).

 

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11.6 Purchase Price; Payment. On the terms and subject to the conditions set
forth in this Agreement at the Closing, the Buyer shall deliver to the Seller
the Shares (the “Purchase Price”) for the sale of the Purchased Assets.

 

11.7 [intentionally omitted]

 

11.8 [intentionally omitted]

 

11.9 Closing and Closing Date.

 

(a) The closing (the “Closing”) of the transactions herein contemplated shall
occur simultaneously upon the due execution and delivery of this Agreement (such
time and date being referred to herein as the “Closing Date”), at the offices of
Adorno & Yoss, Suite 1600, 2601 South Bayshore Drive, Miami, Florida 33133, or
at such other place as the Seller and the Buyer shall agree.

 

(b) At the Closing, the Seller shall deliver, or caused to be delivered, to the
Buyer the following items:

 

(i) A duly executed bill of sale and such other executed assignments, bills of
sale or certificates of title, each dated the Closing Date and in form and
substance reasonably satisfactory to counsel to Buyer, as are reasonably
necessary to transfer to Buyer all of Seller’s right, title and interest in, to
and under the Purchased Assets;

 

(ii) Duly executed assignments, sufficient to transfer all of Seller’s right,
title and interest in and to the Intellectual Property Rights to Buyer, in a
form suitable for recording in the various appropriate national or regional
patent, trademark, copyright offices or other governmental offices;

 

(iii) Certificate of the Secretary of the Seller, dated the Closing Date, (A) as
to the incumbency and signatures of the officers or representatives of the
Seller executing this Agreement and each of the agreements and any other
certificate or other document to be delivered pursuant hereto or thereto,
together with evidence of the incumbency of such Secretary, and (B) certifying
attached resolutions of the Board of Directors of the Seller, which authorize
and approve the execution and delivery of this Agreement and each of the
agreements to which Seller is a party and the consummation of the transactions
contemplated hereby and thereby;

 

(iv) Duly executed and acknowledged assignment and assumption, in form and
substance reasonably acceptable to the Buyer, transferring to Buyer all of
Seller’s right, title and interest in and to the Contracts;

 

(v) Duly executed letters, in form and substance reasonably acceptable to the
Buyer, whereby the Seller notifies its customers of the consummation of the Sale
and instructs such customers to remit payment relating to the Purchased Assets
directly to the Buyer;

 

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(vi) Duly executed letters, in form and substance reasonably acceptable to the
Buyer, whereby the Seller notifies its suppliers, vendors and lessors of the
consummation of the Sale; and

 

(vii) The documents and instruments required to be delivered under Section 5
hereof.

 

(c) At the Closing, the Buyer shall deliver, or caused to be delivered, to the
Seller the following items:

 

(i) Certificate(s) evidencing the Shares;

 

(ii) Certificate of the Secretary of the Buyer, dated the Closing Date, (A) as
to the incumbency and signatures of the officers or representatives of Buyer
executing this Agreement and each of the agreements and any other certificate or
other document to be delivered pursuant hereto or thereto, together with
evidence of the incumbency of such Secretary, and (B) certifying attached
resolutions of the Board of Directors and Shareholders of the Buyer, which
authorize and approve the execution and delivery of this Agreement and each of
the agreements to which Buyer is a party and the consummation of the
transactions contemplated hereby and thereby; and

 

(iii) The documents and instruments required to be delivered under Section 6
hereof.

 

(d) At the Closing, each of the parties hereto shall take, or cause to be taken,
all such actions and deliver, or cause to be delivered, all such other
documents, instruments, certificates and other items as may be required under
this Agreement or otherwise, in order to perform or fulfill all covenants and
agreements on its part to be performed at or prior to the Closing Date.

 

11.10 Taking of Necessary Action; Further Action. Each of the parties shall use
its respective reasonable best efforts to take all such action as may be
necessary or appropriate in order to effectuate the Closing as promptly as
possible. If, on or at any time after the Closing Date, any further reasonable
action is necessary or desirable to carry out the purposes of this Agreement and
to vest the Buyer with full right, title and possession to all assets, property,
rights, privileges, powers, and franchises of the Purchased Assets, the Seller
shall take, and shall ensure that the officers of the Seller are fully
authorized, in the name of the Seller or otherwise, to take, and shall take, all
such lawful and necessary action.

 

Article 12. Representations and Warranties of the Seller.

 

In order to induce the Buyer to enter into this Agreement and purchase the
Purchased Assets, the Seller jointly and severally makes the following
representations and warranties to the Buyer, which representations and
warranties shall be true and correct as of the Closing Date:

 

12.1 Disclosure Schedules; Due Diligence Information; Access.

 

(a) The Seller has delivered to the Buyer the Disclosure Schedule, which
includes the numbered schedules specifically referred to in this Article 2 (the
“Disclosure Schedule”). The information contained in the Disclosure Schedule is
complete and accurate, and all documents that are attached to or form a part of
the Disclosure Schedule are complete and accurate copies of the genuine original
documents they purport to represent. References to Schedules in this Agreement
shall be to Schedules included in the Disclosure Schedule.

 

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(b) All of the documents, financial statements, reports, compilations,
management and statistical reports and other information provided by the Seller
to the Buyer in response to Buyer’s due diligence investigation of the Business
and the Purchased Assets are true, correct and complete.

 

(c) The Seller has given the Buyer and its representatives reasonable access to
Seller’s employees (including appropriate experts and other knowledgeable
personnel), attorneys, accountants, agents, independent contractors, properties,
books and records of the Seller and has furnished the Buyer and its
representatives with such information concerning the Seller as the Buyer has
reasonably requested.

 

12.2 Organization and Standing. The Seller is a limited liability company duly
organized, validly existing, and in good standing under the laws of the State of
Florida and has all requisite limited liability company power and authority to
own, lease and operate its properties and assets and to conduct its business as
it is now being conducted. The Seller is duly qualified to do business as a
foreign limited liability company and is in good standing under the laws of each
state in which the operation of its business or ownership of its assets makes
such qualification necessary, except where the failure to so qualify or be in
good standing would not have a Material Adverse Effect. The copies of the
articles of organization, operating agreement or other organizational documents
which have been delivered to the Buyer are true, accurate and complete. The
Seller does not have any subsidiaries and does not own or have any right to
acquire any equity interest in any other Person. The Seller does not presently
own or control, directly or indirectly, any interest in any other corporation,
association, or other business entity. The Seller is not a participant in any
joint venture, partnership, or similar arrangement.

 

12.3 Binding Agreement. The Seller has all requisite limited liability company
power and authority to enter into this Agreement, to execute and deliver this
Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Seller and the consummation by the Seller of its obligations hereunder
have been duly and validly authorized by all necessary limited liability company
and stockholder action on the part of the Seller. This Agreement has been duly
executed and delivered on behalf of the Seller and, assuming the due
authorization, execution and delivery by the Buyer, constitutes a legal, valid
and binding obligation of the Seller enforceable in accordance with its terms.
As of the Closing Date, each of the agreements, instruments and other documents
to be delivered hereunder to the Buyer at the Closing will have been duly and
validly executed and delivered by the Seller and will be enforceable against the
Seller in accordance with its terms except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer, equitable subordination, or similar laws and doctrines affecting the
rights of creditors generally and general equitable principles.

 

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12.4 Absence of Violations; Required Consents. Except for the Required Consents,
the execution, delivery and performance by the Seller of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (a)
violate or result in the breach or default of any provision of articles of
organization, operating agreement or other charter or corporate governance
documents of the Seller, (b) violate any Law or Governmental Order applicable to
the Seller or any of its properties or assets, (c) except for the Required
Consents, require any consent, approval, authorization or other order of, action
by, registration or filing with or declaration or notification to any
Governmental Authority or any other Person or (d) result in any violation or
breach of, constitute a default (or event which with the giving of notice, or
lapse of time or both, would become a default) under, require any consent under,
or give to others any rights of notice, termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any
Encumbrance on the Purchased Assets, or result in the imposition or acceleration
of any payment, time of payment, vesting or increase in the amount of
compensation or benefit payable, pursuant to, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license or permit, or franchise
to which the Seller is a party or by which its assets are bound. Except for the
Required Consents, the Seller does not need to give any notice to, make any
filing with or obtain any authorization, consent or approval of any Governmental
Authority in order for the parties to consummate the transactions contemplated
by this Agreement. A true and complete list of all third party (including,
without limitation, lenders, lessors, licensees, licensors, distributors and
vendors) consents, licenses, permits, waivers, approvals, authorizations or
orders required to be obtained or made in connection with the authorization,
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby is set forth on Schedule 2.4 attached hereto.

 

12.5 Entire Business. The Seller’s ownership of the Business is evidenced,
except for the Excluded Assets, solely by the Purchased Assets and the sale,
assignment, conveyance and delivery of the Purchased Assets to the Buyer
pursuant to this Agreement will transfer all of the Seller’s and its Affiliates’
ownership interests comprising such Business.

 

12.6 Financial Information.

 

(a) The Seller has have delivered to Buyer the audited balance sheets of the
Seller as at December 31, 2003 (the “December 31, 2003 Balance Sheet”) and
December 31, 2002, together with the audited statements of operations,
stockholders equity and cash flows for the two years ended December 31, 2003,
together with the notes thereto (the “Audited Financial Statements”).

 

(b) Each of the balance sheets referred to above (including the related notes
and schedules) fairly presents in all material respects the financial position
of the Seller, as of its date and each of the statements of operations,
stockholders equity and cash flows (including any related notes and schedules)
fairly presents in all material respects the results of operations, net income
and cash flows of the Seller for the periods set forth therein, in each case in
accordance with GAAP consistently applied during the periods involved, except as
may be noted therein. Each of the Audited Financial Statements referred to above
are in proper form and will satisfy the historical financial statement
requirements of Form 8-K promulgated by the SEC for a material acquisition by
the Buyer and the independent accountants of the Seller have consented to the
use of their report in connection with such filing.

 

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(c) The Seller maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Audited Financial Statements are in agreement
with the books and records regularly maintained by the Seller.

 

12.7 [Intentionally omitted.]

 

12.8 No Undisclosed Liabilities. Except as set forth on Schedule 2.8, there are
no liabilities associated with the Business or the Purchased Assets (whether
accrued, absolute, contingent or otherwise), except for (i) liabilities of the
Business set forth or reserved against or disclosed in the December 31, 2003
Balance Sheet or the notes thereto, (ii) liabilities disclosed in this Agreement
or the Disclosure Schedules hereto or the other agreements contemplated by this
Agreement, (iii) liabilities incurred in the ordinary course of business since
the date of the December 31, 2003 Balance Sheet and set forth in Schedule 2.8,
and (iv) Excluded Liabilities.

 

12.9 Business Conduct. The Seller nor any of its officers, directors, employees
or agents, nor persons acting under the authority of any of the foregoing (i)
have made, or have been charged by any Governmental Authority with making,
directly or indirectly, any domestic or foreign payments for bribes or kickbacks
(governmental or commercial) or unlawful political contributions or other
questionable or illegal payments with respect to the Business or to secure
favorable treatment for the Business or (ii) have maintained or permitted to
exist any use of “off the books” bookkeeping, secret accounts, unrecorded bank
accounts, “slush” funds, falsified books, or any other device that could have
been or could be utilized to distort records or reports of the true operating
results and financial condition of the Business.

 

12.10 Title to Assets; Related Matters. (i) The Seller has good, valid and
marketable title (as measured in the context of their current uses) to, or, in
the case of leased or subleased assets or other possessory interests, valid and
subsisting leasehold or other possessory interests (as measured in the context
of their current uses) in all of the Purchased Assets in order to conduct the
Business, free and clear of all Encumbrances, (ii) the Purchased Assets
constitute all the assets and rights necessary for the operation of the Business
as currently conducted, (iii) the Equipment is in good operating condition and
repair and maintained in accordance with industry practices taking into account
the age thereof, (iv) there are no assets, properties or rights necessary to
conduct the Business as the same was conducted immediately prior to the date
hereof that are owned by any Person other than the Seller which assets,
properties or rights are not to be leased or licensed to Buyer under valid,
current lease or license arrangements and (v) there are no contractual or legal
restrictions to which the Seller is a party or by which the Equipment is
otherwise bound that preclude or restrict the Seller’s ability to use the
Equipment for the purposes for which it is currently being used. The Seller
enjoys peaceful and undisturbed possession of all Equipment. The Equipment and
other tangible assets owned or used by the Seller have no known material
defects. None of the Purchased Assets is subject to any commitment or other
arrangement for its sale or use by the Seller, its Affiliates or third parties.

 

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The assets reflected on the December 31, 2003 Balance Sheet or acquired
thereafter are valued on the books of the Seller at or below the actual cost
less an adequate and proper depreciation charge. The Seller has not depreciated
any of the Purchased Assets on an accelerated basis (or in any other manner)
inconsistent with applicable requirements of the Code.

 

12.11 Equipment and Other Tangible Assets. The equipment and other tangible
assets which are included in the Purchased Assets are in all material respects
adequate for the purposes for which such Purchased Assets are currently used or
are held for use, and are in good repair and operating conditions (subject to
normal wear and tear) and there are no facts or conditions affecting the
Purchased Assets which could, individually or in the aggregate, interfere with
any material respect with the use, occupancy or operation thereof as currently
used, occupied or operated, or their adequacy for such use.

 

12.12 Absence of Certain Changes, Events and Conditions. Since December 31,
2003, except as otherwise provided in Schedule 2.12, in the unaudited balance
sheet of the Seller as at June 30, 2004 (“Interim Balance Sheet”) and related
unaudited statement of operations, stockholders equity and cash flows for the
six months then ended (the “Interim Financial Statements”) or as otherwise
contemplated by this Agreement, the Seller has not:

 

(a) other than in the ordinary course of business consistent with past practice,
sold, transferred, leased, subleased, licensed, encumbered or otherwise disposed
of any assets, other than the sale of obsolete Equipment and transfers of cash
and the distribution to the Company’s shareholders of amounts necessary to pay
tax liabilities under Subchapter S of the Code;

 

(b) permitted any of the Purchased Assets to be subjected to any Encumbrance;

 

(c) made any changes, including changes to collection practices, to be made in
the operations of the Seller;

 

(d) permitted any Purchased Assets to be sold, transferred, leased, subleased,
licensed, encumbered or otherwise disposed of (including, without limitation,
sales, transfers, leases, subleases, licenses or dispositions of material assets
to the Seller or any of its Affiliates;

 

(e) made any commitments for the Seller to make capital expenditures in excess
of $10,000 individually or in the aggregate;

 

(f) made any amendment of the articles of incorporation or bylaws of the Seller;

 

(g) permitted any new agreement, contract, commitment or arrangement, or
amendments or modifications to any existing such agreement, contract, commitment
or arrangement, to be entered into with any Affiliate of the Seller or any third
parties that is material to the Seller or that will continue in effect after the
Closing Date and not be terminable by the Seller on not more than 30 days’
written notice without payment of premium or penalty;

 

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(h) except as set forth on Schedule 2.15, entered into any new Material Contract
or any amendments or modifications to any existing such Material Contract;

 

(i) borrowed any amount or incurred or become subject to any liabilities, except
trade payables incurred in the ordinary course of business and liabilities under
contracts entered into in the ordinary course of business (excluding any capital
lease obligations);

 

(j) discharged or satisfied any material Encumbrance or paid any material
obligation or liability, other than in the ordinary course of business;

 

(k) declared or made any payment or distribution of cash or other property to
its stockholders with respect to its capital stock or other equity securities or
purchased or redeemed any shares of its capital stock or other equity securities
(including, without limitation, any warrants, options or other rights to acquire
its capital stock or other equity securities);

 

(l) sold, assigned or transferred any material Intellectual Property Rights or
disclosed any proprietary confidential information to any Person;

 

(m) granted any increase, or announced any increase, in the wages, salaries,
compensation, bonuses, incentives, pension or other benefits payable to any of
the officers, employees, independent contractors or agents, including, without
limitation, any increase or change pursuant to any Employee Benefit Plan, or
(ii) established, increased or accelerated the payment or vesting of any
benefits under any Employee Benefit Plan with respect to officers or employees;

 

(n) made any material change in any method of accounting or accounting practice
or policy, including, without limitation, material changes in assumptions
underlying or methods of calculating bad debt, contingency or other reserves, or
notes or accounts receivable write-offs, or in corporate allocation methodology,
in each case other than changes required by Law or under GAAP;

 

(o) suffered any casualty loss or damage with respect to any assets, whether or
not covered by insurance;

 

(p) experienced any material adverse change in the condition, financial or
otherwise, business, prospects, assets or rights of the Seller;

 

(q) conducted the Business outside of the ordinary and usual course consistent
with past practice;

 

(r) compromised, settled, granted any waiver or release relating to, or
otherwise adjusted any Action, Indebtedness or any other claims or rights;

 

(s) experienced any change in the financial condition or results of operations
or cash flows of the Business or in the condition of the Purchased Assets and
the Business has not suffered any damage, destruction or loss, in each case
which has had or which could reasonably be expected to have a Material Adverse
Effect; or

 

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(t) taken any action or engaged in any activity which would not have been
permitted by Section 4.1 had it been in effect on the date of the December 31,
2003 Balance Sheet.

 

12.13 Litigation. Except as set forth on Schedule 2.13, as of the date hereof:
(i) there are no Actions against the Seller pending, or, to the Knowledge of the
Seller, threatened to be brought against the Seller or the Business, (ii) the
Seller is not subject to any Governmental Order (nor, to the Knowledge of the
Seller, are there any such Governmental Orders threatened to be imposed by any
Governmental Authority), in each case with respect to the Seller or the
Business; and (iii) there is no Action pending, or, to the Knowledge of the
Seller, threatened to be brought that seeks to question, delay or prevent the
consummation of the transactions contemplated hereby. Schedule 2.13 lists the
following for the period from January 1, 2000 to the present (and, in the case
of clause (z), any other matter referred to therein which is currently in
effect): (x) all fines (civil and criminal), penalties imposed by any
governmental agency or authority (other than short or long-term disability or
medical claims), (y) actions, administrative or arbitration proceedings
requiring a payment by the Seller in excess of $10,000 (other than short or
long-term disability claims) and (z) any final order, writ, judgment,
injunction, decree, determination or other award of any court or any
governmental agency which are related to the Business or the Purchased Assets.

 

12.14 Insurance. The Seller has all insurance that is reasonable for the conduct
of the Business, and (i) all insurance policies to which the Seller is a party
or under which the Seller is covered as an additional named insured or otherwise
(or replacement policies therefor) are in full force and effect, and the Seller
has paid all premiums due and is not in default, (ii) all insurance policies are
sufficient for compliance by the Seller with all applicable requirements of Law
and all agreements to which the Seller is a party or subject, in each case with
respect to the Business, (iii) no notice of cancellation or non-renewal with
respect to, or disallowance of any claim under, any such policy has been
received by the Seller, and (iv) the Seller has not been refused insurance, nor
has coverage been previously canceled or materially limited, by an insurer to
which the Seller has applied for such insurance, or with which the Seller has
held insurance, within the last three years.

 

12.15 Material Contracts.

 

(a) Schedule 2.15 sets forth all Material Contracts as of the date hereof.

 

(b) Each Material Contract, agreement, contract, policy, plan, mortgage,
understanding, arrangement or commitment of the Seller that is intended to be
binding upon the parties thereto is legal, valid and binding on the parties
thereto, enforceable in accordance with the terms thereof.

 

(c) The Seller has performed its obligations under each such Material Contract,
agreement, contract, policy, plan, mortgage, understanding, arrangement or
commitment and to the Knowledge of Seller the Seller is not in default under any
such agreement, contract, policy, plan, mortgage, understanding, arrangement or
commitment and no condition exists nor event has occurred which with the passage
of time or the giving of notice or both would result in a material default,
material breach or event of material noncompliance by

 

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the Seller under any such agreement, contract, policy, plan, mortgage,
understanding, arrangement or commitment.

 

(d) The Seller does not have any present expectation or intention of not fully
performing all its material obligations under each such Material Contract,
agreement, contract, policy, plan, mortgage, understanding, arrangement or
commitment.

 

(e) To the Knowledge of the Seller, no other party to any of the Material
Contracts or any of its other agreements, contracts, policies, plans, mortgages,
understandings, arrangements or commitments has breached or is in default
thereunder.

 

(f) The Seller has delivered true, correct and complete copies of each Material
Contract and all amendments thereto and documentation or correspondence
modifying the terms thereof to the Buyer.

 

(g) No customer which is a party to a Material Contract is entitled to any
retroactive pricing, refund, rebate, price adjustment or other financial
settlement for charges in excess of $5,000 relating to the sales by the
Business.

 

(h) The sale of the Purchased Assets hereunder will not result in a default
under or the termination of any Material Contract.

 

(i) Except as set forth on Schedule 2.15, there are no contracts for the sale of
goods or services by the Seller as to which at the time of the most recent
scheduled contract milestone for any such Contract the work scheduled was more
than sixty (60) days late.

 

(j) Except as set forth on Schedule 2.15, there are no contracts, options or
bids for the sale of goods or services by the Seller which include a liquidated
damages clause for late delivery.

 

12.16 Accounts Receivable. All of the accounts receivable of the Seller
reflected on the Interim Balance Sheet are collectible, actual and bona fide
receivables representing obligations for the total dollar amount thereof shown
on its books, subject to no defenses or counterclaims. No reserves for bad debt
in excess of the amounts thereof on June 30, 2004 are required by GAAP. The
allowance for doubtful accounts set forth in the Interim Balance Sheet is
adequate in accordance with GAAP. The revenue in respect of the sales that gave
rise to such receivables have been properly invoiced to customers and properly
recognized in accordance with GAAP. The Seller has no Knowledge of any facts or
circumstances generally (other than general economic conditions) which would
result in any material increase in the uncollectability of such receivables as a
class in excess of the reserves therefore set forth in the Audited Financial
Statements. Schedule 2.16 hereto accurately lists as of the date hereof, all
receivables arising out of or relating to the Business, the amount owing, and
the aging of such receivable, the name and last known address of the party from
whom such receivable is owing, and any security in favor of the Seller for the
repayment of such receivable which the Seller purports to have. Since June 30,
2004, the Seller has collected its receivables and payments under all Contracts
in accordance with past business practices and has not negotiated for or
accepted advance payments nor accelerated the collection of any such receivables
or payments.

 

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12.17 Permits and Licenses; Compliance with Law.

 

(a) The Seller currently holds all foreign, federal, state and local permits,
licenses, authorizations, certificates, exemptions and approvals of Governmental
Authorities or other Persons including, without limitation, Environmental
Permits, necessary to conduct the businesses in which they are engaged and to
own and use the facilities and properties owned and used by them (collectively,
“Permits”), other than such permits or authorizations the lack of which would
not materially and adversely affect the Business, properties, prospects or
financial condition of the Seller. Each such Permit is valid and in good
standing with the issuer of the Permit and not subject to any proceedings for
suspension, modification or revocation. Without limiting the generality of the
foregoing: (i) the Seller has not received any written notice from any
Governmental Authority revoking, canceling, rescinding, materially modifying or
refusing to renew any Permit and (ii) the Seller is in compliance with the
requirements of all Permits. All such Permits held by the Seller are assignable
to the Buyer, and no governmental approvals are required for such assignment,
except in each case as set forth on Schedule 2.17. The sale of the Purchased
Assets hereunder will not result in a default under or the termination of any
such Permit.

 

(b) (i) The Seller is in compliance with all Laws (including, without
limitation, with respect to affiliate transactions) and Governmental Orders
applicable to the Business and (ii) the Seller has not been charged at any time
with a violation of any Law or any Governmental Order relating to the conduct of
the Business.

 

(c) The Seller has not received any written notice that the Seller is in
violation in any respect of any zoning regulation, building restriction,
restrictive covenant, ordinance or other Law relating to any Real Property that
the Seller owns including the Premises. The Premises are not the subject of any
condemnation action and, to the Knowledge of the Seller, there is no proposal
under consideration by any Governmental Authority or entity to condemn the
Premises.

 

12.18 Environmental Matters. (i) Hazardous Materials have not been Released on
any Real Property except in compliance with applicable Law; (ii) there have been
no events related to the Seller or the Real Property that could give rise to
liability under any Environmental Law; (iii) the Seller is now, and has for the
past three years been, in compliance with all applicable Environmental Laws and
there are no extant conditions that could constitute an impediment to such
compliance in the future; (iv) the Seller has disposed of all wastes containing
Hazardous Materials in compliance with all applicable Environmental Laws
(including the filing of any required reports with respect thereto) and
Environmental Permits; (v) there are no pending or, to the Knowledge of the
Seller, threatened Environmental Claims against the Seller relating to the Real
Property or the operations of the Business; (vi) there is no environmental
remediation or other environmental response occurring on any Real Property
(including any easements, rights-of-way or other possessory interests in the
real property of others) nor has the Seller issued a request for proposal or
otherwise requested an environmental contractor to begin plans for any such
environmental remediation or other environmental response; and (vii) the Seller
has not received any notice, or has knowledge of any circumstances related to
liability, under CERCLA or any analogous state law.

 

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12.19 Employee Benefit Matters. The Seller has delivered true, accurate and
complete copies of all Employee Benefit Plans applicable to any director,
officer, employee, independent contractor or agent of the Seller. All such
Employee Benefit Plans are in compliance with the terms of the applicable plan
and the requirements prescribed by applicable law currently in effect with
respect thereto, and the Seller has performed in all respects all obligations
required to be performed by it thereunder. The Seller has no Union Employees.
The Seller has not incurred and no event, transaction or condition has occurred
or exists which could result in the occurrence of, any liability to the Pension
Benefit Guaranty Corporation or any “withdrawal liability” within the meaning of
Section 4201 of ERISA, or any other liability pursuant to Title I or IV of ERISA
or the penalty, excise tax or joint and several liability provisions of the Code
relating to employee benefit plans, in any such case relating to any Employee
Benefit Plan or any pension plan maintained by any company that would be treated
as a single employer with the Seller under Section 4001 of ERISA or Section 414
of the Code (an “ERISA Affiliate”). The Seller does not have in effect an
Employee Benefit Plan intended to be “qualified” within the meaning of Section
401(a) of the Code. The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee or officer of the
Seller or any ERISA Affiliate to severance pay, unemployment compensation or
other payment, or (ii) accelerate the time of payment or vesting, or increase
the amount of compensation due any such employee or officer. There are no
pending, or, to the Knowledge of the Seller, threatened or anticipated claims by
or on behalf of any Employee Benefit Plan, by any employee or beneficiary
covered under any such plan, or otherwise involving any such plan (other than
routine claims for benefits). The Seller does not contribute in any
multiemployer plan (within the meaning of Section 3(37) of ERISA) for the
benefit of any of its directors, officers, employees, independent contractors or
agents. All contributions that are due on or before the Closing Date to any
Employee Benefit Plans, including without limitation salary reduction
contributions and matching contributions, will have been contributed as of the
Closing Date (to the extent such accrual is required under GAAP). The Seller
shall not adopt, amend or modify any Employee Benefit Plans or otherwise
increase the salary or benefits of any of the directors, officers, employees,
independent contractors or agents of the Seller prior to the Closing Date.
Except as set forth in Schedule 2.19, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (x)
result in any payment becoming due to any employee (current, former or retired)
of the Seller, (y) increase any benefits otherwise payable under any Employee
Benefit Plan or (z) result in the acceleration of the time of payment or vesting
of any such benefits.

 

12.20 Health and Safety Conditions.

 

(a) Except as set forth in Schedule 2.20(a), the Seller is in compliance with
all Laws designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards, and any program, whether governmental or
private, designed to provide safe and healthful working conditions including
without limitation the Occupational Safety and Health Act of 1970, as amended,
as well as any similar state or local Law.

 

(b) Schedule 2.20(b) lists the following items with respect to the Business:

 

(i) personnel safety statistics and OSHA Form 200s related to the Business since
January 1, 2000;

 

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(ii) citations, notices of violations, orders, consent orders, administrative or
judicial enforcement proceedings from state and federal OSHA agencies or their
foreign equivalents concerning the Business since January 1, 2000 or which are
currently pending; and

 

(iii) all current health and safety permits and licenses.

 

12.21 Customers and Suppliers.

 

(a) Schedule 2.21 contains a list of (i) all customers and suppliers of the
Business which have contracts (including oral contracts and purchase orders)
with the Business involving purchases or sales in an amount in excess of $5,000
per annum and (ii) sole source suppliers to the Business with contracts with the
Business.

 

(b) The Seller has not received any notice or has any reason to believe that any
customer of the Seller (i) has ceased, or will cease, to use its products or
goods, (ii) has substantially reduced or will substantially reduce, the use of
products or goods of the Seller or (iii) has sought, or is seeking, to reduce
the price it will pay for products or goods of the Seller, including in each
case after the consummation of the transactions contemplated hereby. No customer
of the Seller described in clause (a) above has otherwise threatened to take any
action described in the preceding sentence as a result of the consummation of
the transactions contemplated by this Agreement.

 

(c) The Seller has not received any notice or has any reason to believe that
there has been any material adverse change in the price of such raw materials,
supplies, merchandise or other goods or services, or that any such supplier will
not sell raw materials, supplies, merchandise and other goods to the Buyer at
any time after the Closing Date on terms and conditions similar to those used in
its current sales to the Seller, subject to general and customary price
increases. No supplier of the Seller described in clause (a) above has otherwise
threatened to take any action described in the preceding sentence as a result of
the consummation of the transactions contemplated by this Agreement.

 

12.22 Labor Relations. There are no labor organizations recognized as
representing any of the directors, officers, employees, independent contractors
or agents of the Seller and (i) the Seller is not party to any collective
bargaining agreement or other labor union contract, (ii) there are no strikes,
slowdowns, picketing, lockouts or work stoppages pending or threatened between
the Seller and any of its employees, and the Seller has not experienced any such
strike, slowdown, or work stoppage within the past two years, (iii) there are no
unfair labor practice complaints or employee disputes pending against the Seller
before the National Labor Relations Board or any other Governmental Authority or
any current union representation questions involving employees of the Seller,
and (iv) each of the Seller is in compliance in all respects with its
obligations under all Laws and Governmental Orders governing its employment
practices, including, without limitation, provisions relating to wages, hours
and equal opportunity. Seller is in compliance with all Laws, and all orders of
any court, governmental agency or arbitrator, relating to employment, including
all such Laws relating to wages, hours, collective bargaining, discrimination,
civil rights, occupational safety and health, affirmative action and the payment
of

 

16

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withholding and/or Social Security and similar taxes, except where such
non-compliance could not reasonably be expected to have a Material Adverse
Effect.

 

12.23 Employee Accruals. Schedule 2.23 sets forth all accrued vacation time of
any employees of the Seller. There are no bonuses, profit sharing, incentives,
commissions or other compensation of any kind with respect to work done prior to
December 31, 2003 due to present or former employees of the Seller not fully
paid prior to such applicable date.

 

12.24 Intellectual Property Rights.

 

(a) All trademarks, service marks and copyrights held by the Seller are valid
and subsisting and provide the Seller with the right to exclude all others from
the use thereof and (i) the Seller is not, or as a result of the execution and
delivery of this Agreement or the performance by the Seller of their obligations
hereunder will be, in violation of any license, sublicense or other agreement
applicable to it, or give any party the right to require the Seller to pay any
amount or enter into any restrictions in order to continue the use thereof, (ii)
the Seller owns all right, title and interest to, or has the right to use
pursuant to a valid license, all Intellectual Property Rights used in the
Business, (iii) there have been no claims made against either of the Seller or
threatened or, to the Knowledge of the Seller, likely to be threatened by any
Person, asserting the invalidity, misuse or unenforceability of any Intellectual
Property Rights referred to in (i) above or challenging the ownership, validity
or effectiveness of any of the Intellectual Property Rights.

 

(b) The Seller has not received any notices of any material unauthorized use,
infringement or misappropriation by, or conflict with, any present or former
employee of the Seller, principal shareholders, strategic partners or any other
third party with respect to such Intellectual Property Rights (including,
without limitation, any demand or request that of the Seller license any rights
from a third party).

 

(c) The conduct of the Seller has not infringed, misappropriated or conflicted
with and does not infringe, misappropriate or conflict with any Intellectual
Property Rights of other Persons.

 

(d) To the Knowledge of the Seller, the Intellectual Property Rights owned by or
licensed to the Seller have not been infringed, misappropriated or conflicted by
other Persons.

 

(e) No Intellectual Property Right is subject to any Encumbrance and there is no
fact that would render the Intellectual Property Rights invalid. No Intellectual
Property Right is subject to any outstanding order, judgment, decree,
stipulation or agreement restricting in any manner the licensing or exploitation
thereof by the Seller. The Seller has not entered into any agreement to
indemnify any other person against any charge of infringement relating to any
Intellectual Property Right. No employee of the Seller is in violation of any
term of any confidentiality or invention assignment agreement, employment
contract (whether written or verbal), patent disclosure agreement or any other
contract or agreement relating to the relationship of any such employee with
either of the Seller or any other party (including prior employers) because of
the nature of the business conducted or proposed to be conducted by the Seller.

 

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(f) The Seller is the sole and exclusive owner of the Intellectual Property
Rights and no governmental registration of any of the rights related to the
Intellectual Property Rights has lapsed, expired or been canceled, abandoned,
opposed or the subject of a reexamination request.

 

(g) Except as listed on Schedule 2.24, as of the date of this Agreement, there
are no written claims which have been received since January 1, 2000 and no
proceedings are pending, or have been instituted or, to the Knowledge of Sellers
are threatened or impending which challenge the Seller’s ownership rights in
respect of any of the Intellectual Property Rights. None of the Intellectual
Property Rights is subject to any outstanding order, decree, judgment or
stipulation.

 

(h) The engineering drawings for all major products being sold or manufactured
by the Seller in the Business represent the most appropriate revision level of
drawings used in the Business and each such drawing of a currently manufactured
product has been approved and accepted where required by the relevant customer
and reflects such product as it is currently being manufactured with no changes
therefrom which would require any customer approval or authorization which has
not been obtained, except in those circumstances where the Seller has obtained
engineering deviations from the customers. For the products currently being
developed by the Business, engineering drawings being transferred represent all
drawings used by Seller for such development work.

 

(i) Neither this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) result in the termination, suspension, breach, or
violation of any contract between the Seller and any Person relating to
Intellectual Property Rights; or (ii) will result in the termination,
suspension, breach, or violation of Intellectual Property Rights. All of the
Seller’s rights under the Intellectual Property Rights are transferable to Buyer
in connection with the transactions contemplated by this Agreement and Buyer
will be entitled to continue to use all of the Intellectual Property Rights to
the same extent and under the same conditions that it has heretofore been used
in the Business, without financial obligations to any other Person.

 

(j) The Intellectual Property Rights constitutes all of the intellectual
property used in, or necessary to, the operation of the Business.

 

12.25 Taxes.

 

(a) The Seller has timely filed all Tax Returns required to be filed and all
such Tax Returns were correct and complete in all material respects. Seller has
timely paid all Taxes that are due, or claimed by any taxing authority to be
due, or has provided for all such Taxes on its financial statements in
accordance with GAAP.

 

(b) All Taxes shown on such Tax Returns have been timely paid;

 

(c) No audits with respect to the Seller are in process, pending or threatened,
no deficiencies or adjustments to Tax Returns exist or have been asserted in
writing with respect to Taxes of the Seller, no notice has been received in
writing that any Tax Return or Taxes of the Seller required to be filed or paid
has not been filed or have not been paid;

 

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(d) There are no Tax liens on any of the Purchased Assets;

 

(e) All Taxes that the Seller is required to withhold or collect have been duly
withheld or collected and, to the extent required, have been paid to the proper
Tax authority;

 

(f) The Seller (i) is not currently or has ever been a member of an affiliated
group filing a consolidated federal income tax return or (ii) has no liability
for the Taxes of any person under Treasury Regulations Section 1.1502-6 (or any
similar provision of state, local or foreign law), or as transferee or
successor, by contract or otherwise;

 

(g) The Seller has not ever been a party to any Tax sharing or similar
agreements;

 

(h) No consent under Section 341(f) of the Code has been filed with respect to
either of the Seller; and

 

(i) The Seller is not a USRPI as that term is defined in Section 897 of the Code
and the Treasury Regulations thereunder.

 

12.26 Commissions. There is no broker or finder or other Person who has any
valid claim against the Seller, the Buyer, any of their respective Affiliates or
any of their respective assets for a commission, finders’ fee, brokerage fee or
other similar fee in connection with this Agreement, or the transactions
contemplated hereby, by virtue of any actions taken by on or behalf of the
Seller or any of its officers, employees, independent contractors or agents.

 

12.27 Bank Accounts; Powers of Attorney. Within ten (10) days of the date
hereof, the Seller will provide in writing to the Buyer a true, correct and
complete list of each bank in which the Seller maintains an account or safe
deposit box, the corresponding number of each such account or safe deposit box,
the names of all persons holding check-signing or withdrawal powers or other
authority with respect thereto, the names of any persons holding powers of
attorney from the Seller, true, correct and complete copies of any instrument of
appointment and a summary statement of the terms thereof. There are and at the
Closing will be no restrictions on the Seller to terminate any such powers
immediately upon written notice and to withdraw all such funds and close such
bank accounts.

 

12.28 Product Warranties. Set forth on Schedule 2.28 are representative forms of
product warranties and guarantees granted or issued by the Seller in connection
with the Business. None of the other product warranties or guarantees granted or
issued by the Seller in connection with the Business differs in any material
respect from such representative forms. Except as described in Schedule 2.28,
since January 1, 2000, no product warranty or similar claims in excess of
$10,000.00 have been made against Seller in connection with the Business. The
Seller has committed no act, and there has been no omission, which would result
in, and there has been no occurrence which would give rise to, any material
product liability or liability for breach of warranty (whether covered by
insurance or not) on the part of Seller, with respect to products sold prior to
the Closing in the operation of the Business.

 

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12.29 Compliance with WARN Act. The Seller has been exempt from, or has complied
with, all applicable provisions of the WARN Act and the regulations thereunder
in connection with all past reductions in work force relating to the Business.

 

12.30 Securities Laws. The Seller expressly agrees and acknowledges that the
Shares are not being registered and the Buyer has no present intention of
registering such shares pursuant to the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder (the “1933 Act”) or otherwise,
and the issuance of the Shares is intended to be exempt from registration under
Section 4(2) of the 1933 Act as a “transaction by an issuer not involving any
public offering” and that reliance on such exemption is predicated, in part, on
the Seller’s representations and warranties contained herein. The Seller further
acknowledges that the Shares are being obtained solely for the Seller’s own
account and for investment purposes only, within the meaning of the 1933 Act,
and that the Seller has no plan, intention, contract, understanding, agreement
or arrangement with any person to sell, assign, pledge, hypothecate or otherwise
transfer to any person the Shares or any part thereof. The Seller understands
that the Shares are characterized as “restricted securities” under the federal
securities Laws inasmuch as such Shares are being acquired from the Buyer in a
transaction not involving a public offering and that under such Laws and
applicable regulations such securities may be resold without registration under
the 1933 Act, only in certain limited circumstances. In this connection, the
Seller is familiar with SEC Rule 144, as presently in effect, and understands
the resale limitations imposed thereby and by the 1933 Act. The Seller is an
“accredited investor” within the meaning of SEC Rule 501 of Regulation D, as
presently in effect.

 

12.31 No Disqualifying Orders. Neither the Seller nor or any of its affiliates,
directors, officers or principals is subject to any disqualifying order under
the “Bad Boy” provisions of the federal or any state’s securities law. As used
herein, “Bad Boy” provisions include Rule 262 of Regulation A, Rule 507 of
Regulation D and other similar disqualifying provisions of federal and state
securities laws.

 

12.32 Disclosure. No representation or warranty by the Seller contained in this
Agreement nor any statement or certificate furnished or to be furnished by or on
behalf of the Seller to the Buyer or its representatives in connection herewith
or pursuant hereto contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact required to make the
statements contained herein or therein not misleading. There is no fact known to
the Seller that has not been disclosed by the Seller to the Buyer that might
reasonably be expected to have or result in a material adverse effect on the
operations of the Business.

 

Article 13. Representations and Warranties of the Buyer.

 

In order to induce the Seller to enter into this Agreement and sell the
Purchased Assets, the Buyer makes the following representations and warranties
to the Seller, which representations and warranties shall be true and correct as
of the Closing Date:

 

13.1 Organization and Standing. The Buyer is a corporation duly incorporated,
validly existing, and in good standing under the laws of the State of Florida
and has all requisite corporate power and authority to own, lease and operate
its properties and assets and to conduct its business as it is now being
conducted. The Buyer is duly qualified to do business as a foreign

 

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corporation and is in good standing under the laws of each state in which the
operation of its business or ownership of its assets makes such qualification
necessary, except where the failure to so qualify or be in good standing would
not have a Material Adverse Effect. The copies of the articles of incorporation
and bylaws or other organizational documents which have been delivered to the
Seller are true, accurate and complete.

 

13.2 Binding Agreement. The Buyer has all requisite corporate power and
authority to enter into this Agreement, to execute and deliver this Agreement,
to carry out its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the Buyer
and the consummation by the Buyer of its obligations hereunder have been duly
and validly authorized by all necessary corporate and stockholder action on the
part of the Buyer. This Agreement has been duly executed and delivered on behalf
of the Buyer and, assuming the due authorization, execution and delivery by the
Seller, constitutes a legal, valid and binding obligation of the Buyer
enforceable in accordance with its terms. As of the Closing Date, each of the
agreements, instruments and other documents to be delivered hereunder to the
Seller at the Closing will have been duly and validly executed and delivered by
the Buyer and will be enforceable against the Buyer in accordance with its terms
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer, equitable subordination, or
similar laws and doctrines affecting the rights of creditors generally and
general equitable principles.

 

13.3 Authorized Capital of Golf. The authorized capital of Buyer consists of 20
million shares of common stock par value of $.001 per share, of which one (1)
share is issued and outstanding, which is validly issued, fully paid and
nonassessable. Other than the transactions contemplated hereby, there are no
outstanding rights, agreements, arrangements or understandings to which the
Buyer is a party (written or oral) which would obligate the Buyer to issue any
equity interest, option, warrant, convertible note, or other types of securities
or to register any shares in a registration statement filed with the SEC. There
is no agreement, arrangement or understanding between or among any entities or
individuals which affects, restricts or relates to voting, giving of written
consents, dividend rights or transferability of shares with respect to any
voting shares of the Buyer, including without limitation any voting trust
agreement or proxy. There are no outstanding obligations of the Buyer to
repurchase, redeem or otherwise acquire for value any outstanding shares of
capital stock or other ownership interests of the Buyer or to provide funds to
or make any investment (in the form of a loan, capital contribution or
otherwise) in any other entity. There are no anti-dilution or price adjustment
provisions regarding any security issued by the Buyer (or in any agreement
providing rights to security holders) that will be triggered by the issuance of
the Shares.

 

13.4 Valid Issuance of the Shares. The Shares that are being issued to the
Seller hereunder, when issued and delivered in accordance with the terms of this
Agreement for the consideration expressed herein, will be duly and validly
issued, fully paid, and nonassessable, and will be free of restrictions on
transfer other than restrictions on transfer under this Agreement and under
applicable state and federal securities Laws.

 

13.5 Absence of Violations; Required Consents. Except for the Required Consents,
the execution, delivery and performance by the Buyer of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (a)
violate or result in the breach or

 

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default of any provision of articles, certificates of incorporation, by-laws or
other charter or corporate governance documents of the Buyer, (b) violate any
Law or Governmental Order applicable to the Buyer or any of its properties or
assets, (c) except for the Required Consents, require any consent, approval,
authorization or other order of, action by, registration or filing with or
declaration or notification to any Governmental Authority or any other Person or
(d) result in any violation or breach of, constitute a default (or event which
with the giving of notice, or lapse of time or both, would become a default)
under, require any consent under, or give to others any rights of notice,
termination, amendment, acceleration, suspension, revocation or cancellation of,
or result in the creation of any Encumbrance on the Purchased Assets, or result
in the imposition or acceleration of any payment, time of payment, vesting or
increase in the amount of compensation or benefit payable, pursuant to, any
note, bond, mortgage or indenture, contract, agreement, lease, sublease, license
or permit, or franchise to which the Buyer is a party or by which its assets are
bound. Except for the Required Consents, the Buyer does not need to give any
notice to, make any filing with or obtain any authorization, consent or approval
of any Governmental Authority in order for the parties to consummate the
transactions contemplated by this Agreement.

 

13.6 Litigation. There are no Actions pending or threatened to be brought by or
before any Governmental Authority, against the Buyer or any of its Affiliates.
There are no Actions pending or threatened to be brought by or before any
Governmental Authority, against the Buyer or any of its Affiliates that (i)
seeks to question, delay or prevent the consummation of the transactions
contemplated hereby, or (ii) would reasonably be expected to affect adversely
the ability of the Buyer to fulfill its obligations hereunder, including without
limitation, the Buyer’s obligations under Article 1 hereof.

 

13.7 Commissions. There is no broker or finder or other Person who has any valid
claim against the Seller or any of its assets for a commission, finders’ fee,
brokerage fee or other similar fee in connection with this Agreement, or the
transactions contemplated hereby, by virtue of any actions taken by on or behalf
of the Buyer or its officers, employees, independent contractors or agents.

 

Article 14. Covenants and Agreements.

 

14.1 Conduct of the Business Following the Closing. The Seller covenants that
the Seller shall collect its receivables and payments under any Contracts in
accordance with past business practices and not negotiate for or accept advance
payments nor accelerate the collection of any such receivables or payments. On
or prior to the Closing Date, the Seller shall deliver an executed letter of
instruction, in the form of Exhibit A attached hereto, to all of the Seller’s
customers and distributors notifying such parties of the consummation of the
transactions contemplated hereby and specifically instructing all customers to
remit payment relating to the Purchased Assets directly to the Buyer. In the
event the Seller receives payments from any customer with respect to any
accounts receivable which are part of the Purchased Assets, the Seller shall
hold such funds in trust for the benefit of the Buyer and immediately turnover
such receipts to the Buyer.

 

14.2 Non-Solicitation. Neither the Seller nor its Affiliates shall for the
period from the date hereof through the date that is two years following the
Closing Date, without the prior

 

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written consent of the Buyer, directly or indirectly, solicit to hire or hire
(or cause or seek to cause to leave the employ of the Seller) any employee,
independent contractor or agent of the Seller.

 

14.3 Cooperation. Following the execution of this Agreement, the Buyer and the
Seller agree as follows:

 

(a) The Seller and the Buyer shall generally cooperate with each other and their
respective officers, employees, attorneys, accountants and other agents and do
such other acts and things in good faith as may be reasonable, necessary or
appropriate to timely effectuate the intent and purposes of this Agreement and
the consummation of the Sale.

 

(b) In connection with the efforts referenced in Section 4.3(a), each of the
parties hereto shall use its commercially reasonable efforts to (i) take, or
cause to be taken, all appropriate action, and do, or cause to be done, all
things necessary, proper or advisable under any Law or otherwise to consummate
and make effective the transactions contemplated by this Agreement; (ii) obtain
any third party consents, licenses, permits, waivers, approvals, authorizations
or orders required to be obtained or made in connection with the authorization,
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, including the consents set forth on Schedule
4.3, approvals or waivers in respect of contracts which are being assumed by the
Buyer; and (iii) make all filings and give any notice, and thereafter make any
other submissions either required or reasonably deemed appropriate by each of
the parties, with respect to this Agreement and the transactions contemplated
hereby required under any Law, including applicable securities and antitrust
Laws.

 

14.4 Confidentiality. At all times following the Closing Date, each of the
Seller and any corporation, partnership or trust controlled, directly or
indirectly, by any of the Seller shall maintain the confidentiality of, and
shall not use for the benefit of itself or others, any confidential information
concerning the Business or the Purchased Assets (the “Confidential
Information”); provided, however, that this paragraph (a) shall not restrict (i)
disclosure by the Seller of any Confidential Information required by applicable
statute, rule or regulation or any court of competent jurisdiction, provided
that the Buyer is given notice and an adequate opportunity to contest such
disclosure, (ii) any disclosure on a confidential basis to the Seller’s
attorneys, accountants, lenders and investment bankers, (iii) any disclosure of
information which is available publicly as of the date of this Agreement, which,
after the date of this Agreement, becomes available publicly through no fault of
the disclosing party, which is disclosed to the Seller by another Person who
acquired it from a third party without an obligation of confidentiality to the
Buyer or the Seller or which is independently developed by an employee of the
Seller who had no access to such information, (iv) the Seller’s use of such
information to protect or enforce their rights under this Agreement, in
connection with tax or other regulatory filings or their use of such information
to protect their rights against any third party, and (v) the Seller’s and its
Affiliates’ use of such information in the conduct of their own businesses if
and to the extent not prohibited by this Section. Any and all information
disclosed by the Buyer to the Seller as a result of the negotiations leading to
the execution of this Agreement, or in furtherance thereof, which information
was not already known to the Seller shall be deemed Confidential Information.

 

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14.5 Public Announcements. Except as otherwise required by law or the rules of
any stock exchange or automated quotation system, the parties shall not issue
any report, statement or press release or otherwise make any public announcement
with respect to this Agreement and the other transactions contemplated hereby
without prior consultation with and approval of the other parties hereto (which
approval shall not be unreasonably withheld). Notwithstanding the foregoing,
either party may at any time furnish any required information with the SEC
regarding this Agreement or the transactions contemplated hereby.

 

14.6 [Intentionally omitted.]

 

14.7 Non-Compete.

 

(a) The Seller covenants and agrees that from the date hereof and until the
third anniversary of the Closing Date, the Seller will not directly or
indirectly, engage in or have any interest in any sole proprietorship,
partnership, corporation, limited liability company or business, whether as an
employee, partner, agent, security holder, consultant or otherwise, that
directly or indirectly (or through any affiliated entity) engages in competition
with the Business (based on the business in which the Seller was engaged or was
actively planning on being engaged as of the Closing Date and in the geographic
areas in which the Seller operated or was actively planning on operating as of
the Closing Date.

 

(b) The Seller acknowledges and agrees that the covenants provided for in this
Section are reasonable and necessary in terms of time, area and line of business
to protect the Buyer’s legitimate business interests as a Buyer of the Purchased
Assets, which includes protecting valuable confidential business information,
substantial relationships with customers throughout the Restricted Area and
customer goodwill associated with the Seller and the Business. The Seller
expressly authorizes the enforcement of the covenants provided for in this
Section by (i) the Buyer, and (ii) any successors to the ownership of the
Purchased Assets and/or the Business. To the extent that the covenant provided
for in this Section may later be deemed by a court to be too broad to be
enforced with respect to its duration or with respect to any particular activity
or geographic area, the court making such determination shall have the power to
reduce the duration or scope of the provision. The provision as modified shall
then be enforced.

 

(c) It is agreed by the Seller that Buyer would be irreparably damaged by reason
of any violation of this Section by the Seller, and that any remedy at law for
breach of such provisions would be inadequate. Therefore, the Buyer shall be
entitled to seek and obtain injunctive or other equitable relief (including, but
not limited to, a temporary restraining order, a temporary injunction or a
permanent injunction) against the Seller, for breach or threatened breach of
such provisions and without the necessity of proving actual monetary loss. It is
expressly understood by the Seller that this injunctive or other equitable
relief shall not be the Buyer’s exclusive remedy for any breach of this covenant
and the Buyer shall be entitled to seek any other relief or remedy that may be
available by contract, statute, law or otherwise for any breach hereof. It is
agreed that the Buyer shall also be entitled to recover any and all attorneys’
fees and expenses in the enforcement of the provisions hereof.

 

14.8 Name Change Amendment. Immediately following the Closing, the Seller
Responsible Parties shall cause to be filed with the Secretary of State of
Florida articles of

 

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amendment to the articles of organization of the Seller effectuating a change in
the Seller’s name from Miller Golf Company, LLC (or any reasonably similar name)
to a name which is substantially dissimilar.

 

Article 15. Conditions to Obligations of the Buyer.

 

The obligations of the Buyer to consummate the transactions contemplated by this
Agreement are, at its option, in its sole discretion, subject to satisfaction of
each of the following conditions:

 

15.1 Representations and Warranties. The representations and warranties of the
Seller contained herein shall be true and correct in all material respects
(other than those representations and warranties that are qualified by Material
Adverse Effect, which shall be true and correct in all respects) at and as of
the Closing Date as though each such representation and warranty were made at
and as of such time, other than such representations and warranties as are made
as of a specific date, in each case except for changes that are expressly
contemplated by this Agreement, and except for such failures to be true and
correct that (without regard to materiality concepts therein once such failure
is established) would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the business, results of
operations or financial condition of the Seller, taken as a whole.

 

15.2 Performance by the Seller. All of the covenants and agreements to be
complied with and performed by the Seller on or before the Closing Date shall
have been complied with or performed in all material respects.

 

15.3 Certificate. The Seller shall have delivered to the Buyer a certificate,
dated as of the Closing Date, executed on behalf of the Seller by its duly
authorized officers to the effect of Sections 5.1 and 5.2.

 

15.4 Consents; No Objections. All approvals for the Sale and all material
consents, waivers, approvals, orders and authorizations from third parties
required to be made or obtained for the authorization, execution, delivery and
performance of this Agreement, the consummation of the transactions contemplated
hereby and the continuation in force of any rights, licenses, permits,
authorizations, agreements, instruments or documents of the Seller, shall have
been obtained and become final and non-appealable (provided that if any appeal
or a petition for reconsideration is filed after any such approval has been
obtained, such approval shall be deemed to be final and non-appealable unless
the Buyer shall have delivered to the Seller an opinion of counsel rendered in
good faith that it is probable that such approval will be reversed and/or
vacated upon any such appeal or petition for reconsideration). Neither any
statute, rule, regulation, order, stipulation, decree, judgment, or injunction
shall be enacted, promulgated, entered, enforced, or deemed application to the
purchase nor any other action shall have been taken by any Government Entity (i)
which prohibits the consummation of the transactions contemplated by this
Agreement; (ii) which prohibits Buyer’s ownership or operation of all or any
material portion of the Business or the Purchased Assets, or which compels the
Buyer to dispose of or hold separately all or any portion of the Buyer’s or the
Seller’s business or the Purchased Assets as a result of the transaction
contemplated herein; (iii) which makes the purchase of, or payment for, some or
all of the Purchased Assets illegal; (iv) which imposes

 

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material limitations on the ability of the Buyer to acquire or hold or to
exercise effectively all rights of ownership of the Purchased Assets; or (v)
which imposes any limitations on the ability of the Buyer effectively to control
in any material respect the Business or operations of the Seller.

 

15.5 No Proceedings or Litigation. There shall not have been instituted, pending
or threatened any action or proceeding (or any investigation or other inquiry
that might result in such an action or proceeding) by or before any Government
Entity (i) which prohibits the consummation of the transactions contemplated by
this Agreement; (ii) which prohibits Buyer’s ownership or operation of all or
any of the Business or the Purchased Assets, or which compels the Buyer to
dispose of or hold separately all or any portion of the Buyer’s or the Seller’
business or assets as a result of the transaction contemplated herein; (iii)
which makes the purchase of, or payment for, some or all of the Purchased Assets
illegal; (iv) which imposes limitations on the ability of the Buyer to acquire
or hold or to exercise effectively all rights of ownership of the Purchased
Assets; or (v) which imposes any limitations on the ability of the Buyer
effectively to control in any material respect the Business or operations of the
Seller. No preliminary or permanent injunction or other order issued by any
United States federal or state Governmental Authority, nor any Law promulgated
or enacted by any United States federal or state Governmental Authority, that
restrains, enjoins or otherwise prohibits the transactions contemplated hereby
or limits the ability in any respect of the rights of the Seller to hold its
assets and conduct its present, planned or prospective business, or imposes
civil or criminal penalties on any stockholder, director or officer of the Buyer
if such transactions are consummated, shall be in effect.

 

15.6 Due Diligence. The Buyer shall have completed a due diligence review,
including a legal and financial review of the Seller, the Business and the
Purchased Assets, which review shall be satisfactory to the Buyer, in its sole
and absolute discretion.

 

15.7 Financial Information. The Seller shall have obtained, to the extent the
Buyer requires audited or reviewed financial statements of the Seller in order
to comply with the reporting requirements of the SEC set forth in Regulations
S-K and S-X, (or, if Buyer proposes to have its auditors audit any such
financial statements, the Seller has provided audited balance sheets as of the
end of the fiscal years hereinafter described and income statements and
statements of cash flows and changes in equity for such periods, in each case,
for the Seller in the form required by Regulations S-K and S-X), the required
audited or reviewed financial statements of the Seller covering the years ended
December 31, 2003, 2002 and 2001 and each subsequent fiscal quarter, reasonably
sufficient and timely enough to permit the Buyer reasonably to satisfy such
obligations, including, without limitation, having provided reasonable access to
any auditors engaged by the Buyer for such purpose and delivering one or more
representation letters from the Seller to any such auditors as may be reasonably
requested by the Buyer to allow such auditors to complete any such audit or
review and to issue an opinion on such financial statements acceptable to the
SEC.

 

15.8 Transition Services Agreement. The parties shall have entered into the
Transition Services Agreement in the form of Exhibit B attached hereto.

 

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Article 16. Conditions to Obligations of the Seller.

 

The obligations of the Seller to consummate the transactions contemplated by
this Agreement are, at its option, in its sole discretion, subject to
satisfaction of each of the following conditions:

 

16.1 Representations and Warranties. The representations and warranties of the
Buyer contained herein shall be true and correct in all material respects (other
than those representations and warranties that are qualified by Material Adverse
Effect, which shall be true and correct in all respects) at and as of the
Closing Date as though each such representation and warranty were made at and as
of such time, other than such representations and warranties as are made as of a
specific date, in each case except for changes that are expressly contemplated
by this Agreement, and except for such failures to be true and correct that
(without regard to materiality concepts therein once such failure is
established) would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the business, results of operations or
financial condition of the Buyer, taken as a whole.

 

16.2 Performance by the Buyer. All of the covenants and agreements to be
complied with and performed by the Buyer on or prior to the Closing Date shall
have been complied with or performed in all material respects.

 

16.3 Certificate. The Buyer shall have delivered to the Seller a certificate,
dated as of the Closing Date, executed on behalf of the Buyer by its duly
authorized officers to the effect of Sections 6.1 and 6.2.

 

16.4 No Proceedings or Litigation. There shall not have been instituted, pending
or threatened any action or proceeding (or any investigation or other inquiry
that might result in such an action or proceeding) by or before any Government
Entity (i) which prohibits the consummation of the transactions contemplated by
this Agreement; (ii) which prohibits Seller’s sale of all or any of the Business
or the Purchased Assets, or which compels the Seller to dispose of or hold
separately all or any portion of the Seller’ business or assets as a result of
the transaction contemplated herein; (iii) which makes the sale of, or receipt
of payment for, some or all of the Purchased Assets illegal; or (iv) which
imposes limitations on the ability of the Seller to sell all rights of ownership
of the Purchased Assets. No preliminary or permanent injunction or other order
issued by any United States federal or state Governmental Authority, nor any Law
promulgated or enacted by any United States federal or state Governmental
Authority, that restrains, enjoins or otherwise prohibits the transactions
contemplated hereby or limits the ability in any respect of the rights of the
Seller to hold its assets and conduct its present, planned or prospective
business, or imposes civil or criminal penalties on any stockholder, director or
officer of the Buyer if such transactions are consummated, shall be in effect.

 

16.5 Datrek Golf Acquisition. The closing of the purchase of the assets of
Datrek Professional Bags, Inc., in accordance with the terms set forth on
Exhibit C attached hereto, shall occur simultaneously with the Closing of the
transactions contemplated hereby.

 

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16.6 Securities Purchase Agreement. SVCH shall have entered into a Securities
Purchase Agreement with Datrek Acquisition, Inc. in the form of Exhibit D
attached hereto.

 

16.7 Transition Services Agreement. The parties shall have entered into the
Transition Services Agreement in the form of Exhibit B attached hereto.

 

Article 17. Tax Matters.

 

17.1 Liability for Taxes.

 

(a) The Seller shall be liable for and shall indemnify the Buyer, for (i) all
Taxes (as defined below) imposed on the Seller, or for which the Seller may
otherwise be liable, for any taxable year or period that ends on or before the
Closing Date (“Pre-Closing Tax Periods”) and, with respect to any portion of a
taxable year or period beginning before and ending after the Closing Date
(“Straddle Period”), the portion of such Straddle Period ending on and including
the Closing Date, and (ii) all liabilities imposed on the Seller on or before
the Closing Date under Treasury Regulations Section 1.1502-6 (or any similar
provision of state, local or foreign law) for Taxes of the Seller or any other
corporation which is affiliated with the Seller (other than the Seller).

 

(b) The Buyer shall be liable for, and shall indemnify the Seller and its
Affiliates for, all Taxes imposed on the Seller or any of its Affiliates with
respect to the Seller for any taxable year or period that begins after the
Closing Date and, with respect to a Straddle Period, the portion of such
Straddle Period beginning after the Closing Date.

 

(c) For purposes of this Section 7.1, whenever it is necessary to determine the
liability for Taxes of the Seller for a portion of a Straddle Period:

 

(i) real, personal and intangible property Taxes (“Property Taxes”) for the
Pre-Closing Tax Period shall be equal to the amount of such Property Taxes for
the entire Straddle Period multiplied by a fraction, the numerator of which is
the number of days during the Straddle Period that are in the Pre-Closing Tax
Period and the denominator of which is the number of days in the Straddle
Period; and

 

(ii) all other Taxes for the Pre-Closing Tax Period shall be determined by
assuming that the Seller had a taxable year or period that ended at the close of
the Closing Date.

 

17.2 Adjustment to Purchase Price. The Buyer and the Seller agree to report any
indemnification payment made by the Seller under Section 7.1 as an adjustment to
the Purchase Price, contribution to capital, or other non-taxable amount to the
extent that there is substantial authority for such reporting position under
applicable law.

 

17.3 Transfer and Conveyance Taxes. The Seller shall be liable for and shall pay
all applicable sales, transfer, recording, deed, stamp and other similar taxes
resulting from the consummation of the transactions contemplated by this
Agreement.

 

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17.4 Survival. Claims for indemnification under Section 7.1 shall survive until
the expiration of the applicable statute of the limitations (including any
extensions or waivers of such statutes).

 

Article 18. Survival; Indemnification.

 

18.1 Survival of Representations, Warranties, Covenants and Agreements. All
representations, warranties, covenants and agreements made by any Party to this
Agreement will survive for a period of two years from the Closing. No
investigation by or knowledge of Buyer or its representatives will affect in any
manner the representations, warranties, covenants or agreements of Sellers set
forth in this Agreement (or in any document to be delivered in connection with
the consummation of the transactions contemplated by this Agreement) or Buyer’s
right to rely thereon, and such representations, warranties and covenants will
survive any such investigation.

 

18.2 Indemnification by the Seller. Subject in all respects to the provisions of
this Article 8, the Seller hereby agrees to indemnify and hold harmless the
Buyer and its Affiliates, officers, directors, employees, agents and
representatives after the Closing Date from and against any Claims and Damages
incurred by them arising out of or resulting from:

 

(a) any breach on the part of the Seller of (i) any representation or warranty
made herein or in any certificate delivered by the Seller pursuant to this
Agreement or (ii) any covenant or agreement made by the Seller in this
Agreement; or

 

(b) any third party claim existing as of the Closing Date, including those in
which the Seller is a plaintiff or defendant or any dispute initiated by the
Seller prior to the Closing, including without limitation arising out of any
third party claim initiated within twelve months following the Closing arising
out of any event that occurred at or prior to the Closing (a “Liability Claim”).

 

18.3 Indemnification by the Buyer. Subject in all respects to the provisions of
this Article 8, the Buyer hereby agrees to indemnify and hold harmless the
Seller and its Affiliates, officers, directors, employees, agents and
representatives after the Closing Date from and against any Claims and Damages
incurred by them arising out of or resulting from any breach on the part of the
Buyer of (i) any representation or warranty made by the Buyer in Article 3
hereof or in any certificate delivered pursuant to this Agreement, (ii) any
covenant or agreement made by the Buyer in this Agreement, or (iii) from the use
or ownership of the Purchased Assets arising solely following the Closing.

 

18.4 Limitations on Indemnification Claims and Liability.

 

(a) The respective representations and warranties of the Seller and the Buyer
set forth in this Agreement or in any certificate delivered pursuant to this
Agreement, and the opportunity to make a claim for indemnification, or otherwise
be indemnified or held harmless, under this Article 8 with respect thereto or
with respect to (i) any covenant or agreement relating to any action required by
this Agreement to be taken prior to or at the Closing or (ii) any Liability
Claim shall survive until a final, unappealable order is entered with respect to
such Liability Claim and indemnification is made by the Seller as provided
herein. Any and all

 

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covenants and agreements relating to any action required by this Agreement to be
taken after the Closing shall survive for a period of two years from the
Closing.

 

(b) An Indemnifying Party shall not be obligated to indemnify of hold harmless
any Indemnified Party under Section 8.2 for any Claims or Damages incurred by
such Indemnified Party in connection with any individual occurrence or related
series of occurrences unless and until Claims or Damages in respect to the
indemnification obligations of the Indemnifying Party exceed in the aggregate
$100,000, following which (subject to the provisions of this Article 8) the
Indemnifying Party shall be obligated to indemnify or hold harmless an
Indemnified Party for all Claims or Damages. Once the Claims or Damages exceed
$100,000, the Indemnifying Party shall be responsible for all Claims or Damages,
from the first dollar as if such limitation never existed and shall be deducted
from the Shares based on a value of $1.00 per Share. Neither Indemnifying Party
shall be liable for any such Claims and Damages to the extent that they exceed,
in the aggregate, the sum of $3,000,000.

 

18.5 Computation of Claims and Damages. Whenever an Indemnifying Party is
required to indemnify and hold harmless an Indemnified Party from and against
and hold the Indemnified Party harmless from, or to reimburse the Indemnified
Party for, any item of Claim or Damage under this Agreement, the Indemnifying
Party will, subject to the provisions of this Article 8, pay the Indemnified
Party the amount of the Claim or Damage reduced by (i) any amounts to which the
Indemnified Party actually recovers from third parties in connection with such
Claim or Damage (“Reimbursements”), and reduced by (ii) the Net Proceeds of any
insurance policy payable to the Indemnified Party with respect to such Claim or
Damage. For purposes of this Section 8.4, “Net Proceeds” shall mean the
insurance proceeds actually paid, less any deductibles, co-payments, premium
increases, retroactive premiums or other payment obligations (including
attorneys’ fees and other costs of collection) that relates to or arises from
the making of the claim for indemnification. The Indemnified Party shall use
reasonable efforts to pursue Reimbursements or Net Proceeds that may reduce or
eliminate Claims and Damages and otherwise to mitigate Claims and Damages. If
any Indemnified Party receives any Reimbursement or Net Proceeds after an
indemnification payment is made which relates thereto, the Indemnified Party
shall promptly repay to the Indemnifying Party such amount of the
indemnification payment as would not have been paid had the Reimbursement or Net
Proceeds reduced the original payment at such time or times as and to the extent
that such Reimbursement or Net Proceeds is actually received. The Indemnified
Party shall make available to the Indemnifying Party and its agents and
representatives all pertinent records, materials and information, and provide
reasonable access during normal business hours to the Indemnified Party’s
employees, properties, books and records, and shall otherwise cooperate with and
assist the Indemnifying Party and its agents and representatives in reviewing
the propriety and the amount of any Claims or Damages, including, without
limitation, the availability and/or amounts of Reimbursements and Net Proceeds.

 

18.6 Notice of Claims. Upon obtaining actual Knowledge of any Claim or Damage
which has given rise to, or could reasonably give rise to, a claim for
indemnification hereunder, the party seeking indemnification (the “Indemnified
Party”) shall, as promptly as reasonably practicable (but in no event later than
30 days) following the date the Indemnified Party has obtained such Knowledge,
give written notice (a “Notice of Claim”) of such claim to the party or parties
from which indemnification is or will be sought under this Article 8 (the

 

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Indemnifying Party”). The Indemnified Party shall furnish to the Indemnifying
Party in good faith and in reasonable detail such information as the Indemnified
Party may have with respect to such indemnification claim (including copies of
any summons, complaint or other pleading which may have been served on it and
any written claim, demand, invoice, billing or other document evidencing or
asserting the same). No failure or delay by the Indemnified Party in the
performance of the foregoing shall reduce or otherwise affect the obligation of
the Indemnifying Party to indemnify and hold the Indemnified Party harmless,
except to the extent that such failure or delay shall have materially adversely
affected the Indemnifying Party’s ability to defend against, settle or satisfy
any liability, damage, loss, claim or demand for which such Indemnified Party is
entitled to indemnification hereunder.

 

18.7 Defense of Third Party Claims. If any claim set forth in the Notice of
Claim given by an Indemnified Party pursuant to Section 8.5 hereof is a claim
asserted by a third party, the Indemnifying Party shall have 30 days after the
date that the Notice of Claim is given or deemed given by the Indemnified Party
to notify the Indemnified Party in writing of the Indemnifying Party’s election
to defend such third party claim on behalf of the Indemnified Party. If the
Indemnifying Party elects to defend such third party claim, the Indemnified
Party shall make available to the Indemnifying Party and its agents and
representatives all witnesses, pertinent records, materials and information in
the Indemnified Party’s possession or under the Indemnified Party’s control as
is reasonably required by the Indemnifying Party and shall otherwise cooperate
with and assist the Indemnifying Party in the defense of such third party claim.
Regardless of which party is defending such third party claim, the Indemnified
Party shall not pay, settle or compromise such third party claim without the
consent of the Indemnifying Party. If the Indemnifying Party elects to defend
such third party claim, the Indemnified Party shall have the right to
participate in the defense of such third party claim, at the Indemnified Party’s
own expense. In the event, however, that the Indemnified Party reasonably
determines that representation by counsel to the Indemnifying Party of both the
Indemnifying Party and the Indemnified Party may present such counsel with a
conflict of interest, then such Indemnified Party may employ separate counsel to
represent or defend it in any such action or proceeding and the Indemnifying
Party will, subject to the provisions of this Article 8, pay the reasonable fees
and disbursements of such counsel when due under such counsel’s customary
billing practices. If the Indemnifying Party does not elect to defend such third
party claim or does not defend such third party claim in good faith, the
Indemnified Party shall have the right, in addition to any other right or remedy
it may have hereunder, at the Indemnifying Party’s expense, to defend such third
party claim; provided, however, that such Indemnified Party’s defense of or its
participation in the defense of any such third party claim shall not in any way
diminish or lessen the indemnification obligations of the Indemnifying Party
under this Article 8. If the Indemnifying Party subsequently reasonably
determines that the Indemnified Party is not defending such third party claim in
good faith, the Indemnifying Party shall have the right, in addition to any
other right or remedy it may have hereunder, to elect to assume the defense of
such third party claim and, to the extent that the Indemnified Party has not
defended such third party claim in good faith, and whether or not the
Indemnifying Party shall have subsequently assumed the defense thereof, the
indemnification obligations of the Indemnifying Party under this Article 9 shall
be reduced or eliminated to the extent that such failure to defend in good faith
shall have materially adversely affected the Indemnifying Party’s ability to
defend against, settle or satisfy any liability, damage, loss, claim or demand
for which such Indemnified Party is otherwise entitled to indemnification
hereunder.

 

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18.8 Right of Setoff. Once a claim for indemnification has been made under this
Article 8, each Indemnified Party may, as one of its remedies to effect
indemnification under this Article 8, withhold or cause to be withheld and
setoff any amounts payable (under this Agreement or otherwise) following the
Closing to the Indemnifying Party, including any amounts from the Contingent
Payments or due under the Notes. The right to setoff will be exercisable whether
the claim for indemnification is liquidated or unliquidated, whether or not the
claim for indemnification has been reduced to judgment, and regardless of any
difficulty or uncertainty in determining or computing the ultimate amount of the
indemnification claim. The exercise of a right of setoff in good faith, whether
or not ultimately deemed to be justified, will not constitute a default of any
obligation against which such setoff is made. Any amount withheld by an
Indemnified Party in setoff and which is ultimately determined not to be payable
by the Indemnifying Party will be promptly paid to the Indemnifying Party.

 

Article 19. Definitions.

 

Unless otherwise stated in this Agreement, the following capitalized terms have
the following meanings:

 

“Action” means any action, suit, claim, arbitration, or proceeding or
investigation commenced by or pending before any Governmental Authority.

 

“Affiliate” means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such specified Person.

 

“Agreement” or “this Agreement” means this Purchase Agreement dated as of the
date first above written (including the Annexes, Schedules and Exhibits hereto)
and all amendments hereto made in accordance with the provisions of Section 10.7
hereof.

 

“Audited Financial Statements” has the meaning set forth in Section 2.6(a)
hereof.

 

“Business Day” means any day that is not a Saturday, a Sunday or other day on
which banks are required or authorized by law to be closed in the City of Miami,
Florida.

 

“Buyer” has the meaning specified in the introductory paragraph to this
Agreement.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980.

 

“Claims and Damages” means, except as otherwise expressly provided in this
Agreement, any and all losses, claims, demands, liabilities, obligations,
actions, suits, orders, statutory or regulatory compliance requirements, or
proceedings asserted by any Person (including, without limitation, Governmental
Authorities), and all damages, costs, expenses, assessments, judgments,
recoveries and deficiencies, including, to the extent required pursuant to
Article 8, reasonable attorneys’ fees and costs, incurred by or awarded against
a party to the extent indemnified in accordance with Article 8 hereof, but shall
not include any consequential, special, multiple, punitive or exemplary damages,
except to the extent such damages have been

 

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recovered by a third party and are the subject of a third party claim for which
indemnification is available under the express terms of Article 8 hereof.

 

“Closing” has the meaning set forth in Section 1.10 hereof.

 

“Closing Date” has the meaning set forth in Section 1.10 hereof.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Contracts” has the meaning set forth in Section 1.4(b) hereof.

 

“Control” (including the terms “controlled by” and “under common control with”),
with respect to the relationship between or among two or more Persons, means the
possession, directly or indirectly, of the power to direct or to cause the
direction of the affairs or management of a Person, whether through the
ownership of voting securities, by contract or otherwise, including, without
limitation, the ownership, directly or indirectly, of securities having the
power to elect a majority of the board of directors or similar body governing
the affairs of such Person.

 

“December 31, 2003 Balance Sheet” means the audited balance sheet of the Seller
as of December 31, 2003.

 

“Employee Benefit Plans” means all “employee benefit plans” within the meaning
of Section 3(3) of ERISA, all bonus, stock option, stock purchase, incentive,
deferred compensation, retirement, supplemental retirement, severance and other
employee benefit plans, programs, policies or arrangements, and all employment,
retention, change of control or compensation agreements, in each case for the
benefit of, or relating to, any current employee or former employee of either of
the Seller, other than any de minimis, fringe or unwritten benefit plans,
programs, policies or arrangements, the costs of which, to the Seller, are not
material.

 

“Encumbrance” means any security interest, pledge, mortgage, lien (including,
without limitation, tax liens), charge, encumbrance, easement, adverse claim,
preferential arrangement, restriction or defect in title.

 

“Environmental Claims” means any and all actions, suits, demands, demand
letters, claims, liens, notices of non-compliance or violation, investigations,
proceedings, consent orders or consent agreements relating in any way to any
Environmental Law, any Environmental Permit, Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the environment,
including, without limitation (a) by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages and (b) by any
Person for damages, contributions, indemnification, cost recovery, compensation
or injunctive relief.

 

“Environmental Law” means any Law relating to the environment, health, safety or
Hazardous Materials, in force and effect on the date hereof or, in the case of
the Seller’ certificate to be delivered in accordance with the provisions of
Section 5.3 hereof, on the Closing Date (exclusive of any amendments or changes
to such Law or any regulations promulgated thereunder or orders, decrees or
judgments issued pursuant thereto which are enacted, promulgated or issued after
the date hereof, or in the case of such certificate, on or after the Closing
Date), including but not limited to, CERCLA; the Resource Conservation and
Recovery

 

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Act of 1986 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C.
(S)(S)6901 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
(S)(S)6901 et seq.; the Clean Water Act, 33 U.S.C. (S)(S)1251 et seq.; the Toxic
Substances Control Act of 1976, 15 U.S.C. (S)(S)2601 et seq.; the Clean Air Act
of 1966, as amended, 42 U.S.C. (S)(S)7401 et seq.; the Safe Drinking Water Act,
42 U.S.C. (S)(S)300f et seq.; the Atomic Energy Act, 42 U.S.C. (S)(S)2011 et
seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. (S)(S)136
et seq.; and the Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. (S)(S)1101 et seq.

 

“Environmental Permits” means all permits, approvals, identification numbers,
licenses and other authorizations required under any applicable Environmental
Law.

 

“Equipment” means all of the tangible personal property, machinery, equipment,
vehicles, rolling stock, furniture, and fixtures in which the Seller has an
interest, by ownership or lease, together with any replacements thereof, or
additions thereto made in the ordinary course of business.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate” has the meaning set forth in Section 2.19 hereof.

 

“GAAP” means United States generally accepted accounting principles and
practices as in effect from time to time.

 

“Golf” means Golf Acquisition, Inc., a corporation organized under the laws of
the State of Florida.

 

“Governmental Authority” means any United States federal, state or local
government or any foreign government, any governmental, regulatory, legislative,
executive or administrative authority, agency or commission or any court,
tribunal, or judicial body.

 

“Governmental Order” means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority. Governmental Orders shall not include Permits.

 

“Hazardous Materials” means petroleum and petroleum products, byproducts or
breakdown products, radioactive materials, and any other chemicals, materials,
or substances designated, classified or regulated as being “hazardous” or
“toxic”, or words of similar import, under any Environmental Law.

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.

 

“Indebtedness” means obligations with regard to borrowed money and leases
classified or accounted for as capital or financing leases on financial
statements, but shall expressly not include either accounts payable or accrued
liabilities that are incurred in the ordinary course of business or obligations
under operating leases classified or accounted for as such on financial
statements.

 

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“Indemnified Party” has the meaning set forth in Section 8.5 hereof.

 

“Indemnifying Party” has the meaning set forth in Section 8.5 hereof.

 

“Intellectual Property Rights” means all patents, trademarks, trade names,
domain names, service marks and copyrights, and applications for any of the
foregoing, and other intellectual property, including, without limitation,
computer software and programs, whether owned or used by, or licensed to, of the
Seller.

 

“Interim Balance Sheet” has the meaning set forth in Section 2.12 hereof.

 

“Interim Financial Statements” has the meaning set forth in Section 2.12 hereof.

 

“Knowledge” with respect to a party means such information as any of its
officers or key employees actually knew or should with the exercise of due
diligence have known.

 

“Law” means any federal, state, local or foreign constitution, statute, law,
ordinance, regulation, rule, code, injunction, judgment, order, decree or other
requirement, restriction or rule of law.

 

“Liability Claim” has the meaning set forth in Section 8.2(b) hereof.

 

“Material Adverse Effect” means any circumstance, change in, or effect on the
Seller that has a material adverse effect on the business, results of
operations, condition (financial or otherwise), or prospects of the Seller taken
as a whole.

 

“Material Contracts” means the written agreements, contracts, policies, plans,
mortgages, understandings, arrangements or commitments to which the Seller is a
party or by which any of the Purchased Assets are bound as described below: (i)
any agreement, contract, commitment, note, loan, evidence of indebtedness,
purchase order or letter of credit providing for payments by the Seller to any
Person in excess of $25,000 per year or $75,000 in the aggregate over the
five-year period commencing on the date hereof and not cancelable (without
further liability) on not more than 30 days’ notice; (ii) any employment
agreement or consulting agreement or similar contract; (iii) any retention or
severance agreement or contract; (iv) any distribution agreement associated with
the Business; (v) any lease of Equipment or Real Property or license with
respect to Intellectual Property Rights providing for payments to another Person
in excess of $10,000 in any year; (vi) any joint venture, partnership or similar
agreement or contract of the Seller; (vii) any agreement or contract under which
the Seller has borrowed or loaned any money in excess of $10,000 or issued or
received any note, bond, indenture or other evidence of indebtedness in excess
of $10,000 or directly or indirectly guaranteed indebtedness, liabilities or
obligations of others in an amount in excess of $10,000; (viii) any covenant not
to compete or contract or agreement, understanding, arrangement or any
restriction whatsoever limiting in any respect the ability of either of the
Seller to compete in any line of business or with any Person or in any area;
(ix) any contracts, commitments, licenses or permits containing any “change in
control” or “parachute payment” provision, as those terms are commonly
understood, including without limitation those which would be triggered by the
execution, delivery or consummation of the transactions contemplated by this
Agreement, including without limitation, any right of termination, right of
payment or acceleration of any other right under such contracts,

 

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commitments, licenses or permits; (x) contracts, commitments or agreements which
impose any duty of confidentiality or nondisclosure; (xii) Tax sharing or
similar agreements; and (ix) any of the contracts, agreements or arrangements,
listed on Schedule 2.15.

 

“Notice of Claim” has the meaning set forth in Section 8.6 hereof.

 

“Permits” has the meaning set forth in Section 2.17(a) hereof.

 

“Person” means any individual, partnership, firm, corporation, limited liability
company, association, trust, unincorporated organization or other entity, as
well as any syndicate or group that would be deemed to be a person under Section
13(d)(3) of the Securities Exchange Act of 1934, as amended.

 

“Pre-Closing Tax Periods” has the meaning set forth in Section 7.1(a) hereof.

 

“Premises” means the leased facility of the Seller located at 11 Commerce Road,
Rockland, Massachusetts 02370.

 

“Property Taxes” has the meaning set forth in Section 7.1(c)(i) hereof.

 

“Purchase Price” has the meaning set forth in Section 1.6 hereof.

 

“Real Property” means the real property and related mineral rights owned by, and
all easements, rights-of-way and other possessory interests in real estate of
the Seller, together with all buildings and other structures, facilities or
improvements currently or hereafter located thereon, all fixtures, systems,
equipment and items of personal property of the Seller attached or appurtenant
thereto, and all easements, licenses, rights and appurtenances relating to the
foregoing.

 

“Reimbursements” has the meaning set forth in Section 8.5 hereof.

 

“Release” means disposing, discharging, injecting, spilling, leaking, leaching,
dumping, emitting, escaping, emptying, seeping, placing and the like into or
upon any land or water or air or otherwise entering into the environment.

 

“Required Consents” means any consents, approvals, orders, authorizations,
registrations, declarations and filings required under or in relation to (a)
state securities or “blue sky” laws, (b) the Securities Act of 1933, as amended,
and (c) antitrust or other competition Laws of other jurisdictions.

 

“Seller” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Sale” has the meaning set forth in the recitals hereto.

 

“SEC” means the Securities and Exchange Commission.

 

“Shares” means 3,000,000 shares of the common stock of the Golf

 

“Purchased Assets” has the meaning set forth in Section 1.1 hereof.

 

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“Straddle Period” has the meaning set forth in Section 7.1(a) hereof.

 

“Subsidiary” of any Person means (i) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation is owned by such Person
directly or indirectly through Subsidiaries and (ii) any partnership, limited
partnership, limited liability company, associates, joint venture or other
entity in which such Person directly or indirectly through Subsidiaries has more
than a 50% equity interest.

 

“Tax” or “Taxes” means any and all taxes, fees, withholdings, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto), fees, surcharges, contributions, or other payments including
but not limited to administrative or regulatory fees, imposed by any local,
state, federal or foreign government or governmental agency or taxing authority,
including, without limitation, taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers’ compensation,
unemployment compensation, or net worth, taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added or gains taxes,
license, registration and documentation fees, and customs duties, tariffs and
similar charges.

 

“Tax Return” means any report, return, document, declaration or other
information or filing required to be supplied to any Tax authority or
jurisdiction (foreign or domestic) with respect to Taxes, including, without
limitation, information returns, any documents with respect to or accompanying
payments of estimated Taxes, or with respect to or accompanying requests for the
extension of time in which to file any such report, return, document,
declaration or other information.

 

“Union Employee” means an employee of either of the Seller whose terms and
conditions of employment are governed by the terms of any collective bargaining
agreement.

 

“1933 Act” has the meaning set forth in Section 2.30 hereof.

 

Article 20. Miscellaneous Provisions.

 

20.1 Expenses. Except as otherwise specifically provided in this Agreement, all
out-of-pocket costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred.

 

20.2 Notices. Any notice, demand, claim, notice of claim, request or
communication required or permitted to be given under the provisions of this
Agreement shall be in writing and shall be deemed to have been duly given (i)
upon delivery if delivered in person, (ii) on the date of mailing if mailed by
registered or certified mail, postage prepaid and return receipt requested,
(iii) on the date of delivery to a national overnight courier service, or (iv)
upon transmission by facsimile (if such transmission is confirmed by the
addressee) if delivered through such services

 

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to the following addresses, or to such other address as any party may request by
notifying in writing all of the other parties to this Agreement in accordance
with this Section 10.2.

 

If to the Seller:

 

Miller Golf Company, LLC

11 Commerce Road

Rockland, Massachusetts 02370

Attention: Michael S. Hedge

Telephone: (402) 926-5833

Facsimile: (781) 871-5180

 

If to the Buyer:

 

Miller Acquisition Inc.

11 Commerce Road

Rockland, Massachusetts 02370

Telephone: (402) 926-5833

Facsimile: (781) 871-5180

 

With a copy to:

 

Adorno & Yoss

2601 South Bayshore Drive

Suite 1600

Miami, FL 33133

Attention: Seth P. Joseph, Esq.

Telephone: (305) 858-5555

Facsimile: (305) 858-4777

 

Any such notice shall be deemed to have been received on the date of personal
delivery, the date set forth on the Postal Service return receipt, or the date
of delivery shown on the records of the overnight courier, as applicable.

 

20.3 Benefit and Assignment. This Agreement will be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. There shall be no assignment of any interest under this Agreement by
any party, except that the Buyer may assign its rights hereunder to any wholly
owned subsidiary of the Buyer; provided, however, that no such assignment shall
relieve the assignor of its obligations under this Agreement. Nothing herein,
express or implied, is intended to or shall confer upon any other Person any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.

 

20.4 Waiver. Any party to this Agreement may (a) extend the time for the
performance of any of the obligations or other acts of any other party, (b)
waive any inaccuracies in the representations and warranties of any other party
contained herein or in any document delivered by any other party pursuant hereto
or (c) waive compliance with any of the agreements

 

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or conditions of any other party contained herein. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the party
to be bound thereby. Any waiver of any term or condition shall not be construed
as a waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition, of this Agreement. The
failure of any party to assert any of its rights hereunder shall not constitute
a waiver of any such rights.

 

20.5 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any Law or public policy, all other
terms and provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.

 

20.6 Amendment. This Agreement may not be amended or modified except (a) by an
instrument in writing signed by, or on behalf of, the Seller and the Buyer or
(b) by a waiver in accordance with Section 10.5 hereof.

 

20.7 Effect and Construction of this Agreement. This Agreement embodies the
entire agreement and understanding of the parties with respect to the subject
matter hereof and supersedes any and all prior agreements, arrangements and
understandings, whether written or oral, relating to matters provided for
herein. The language used in this Agreement shall be deemed to be the language
chosen by the parties hereto to express their mutual agreement, and this
Agreement shall not be deemed to have been prepared by any single party hereto.

 

20.8 Headings. The headings of the sections and subsections of this Agreement
are inserted as a matter of convenience and for reference purposes only and in
no respect define, limit or describe the scope of this Agreement or the intent
of any section or subsection.

 

20.9 Counterparts. This Agreement may be executed in one or more counterparts
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.

 

20.10 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida, applicable to contracts
executed in and to be performed entirely within that State.

 

20.11 Entire Agreement. This Agreement, along with the Disclosure Schedules,
Exhibits and all other agreements, instruments or documents to be delivered in
connection with this Agreement, constitutes the entire agreement between the
parties hereto and supersedes all prior agreements, understandings, negotiations
and discussions, both written and oral, between the parties hereto with respect
to the subject matter hereof.

 

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20.12 Specific Performance. The Seller acknowledges and agrees that in the event
of any breach of this Agreement, the Buyer would be irreparably and immediately
harmed and could not be made whole by monetary damages. It is accordingly agreed
that the parties hereto (i) waive, in any action for specific performance, the
defense of adequacy of a remedy at law and (ii) shall be entitled, in addition
to any other remedy to which they may be entitled at law or in equity, to compel
specific performance of this Agreement in any action instituted in any state or
federal court sitting in Miami-Dade County, Florida.

 

20.13 Remedies Cumulative. No remedy made available by any of the provisions of
this Agreement is intended to be exclusive of any other remedy, and each and
every remedy is cumulative and is in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity.

 

[Signatures Begin on Following Page]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

BUYER: Miller Acquisition, Inc. By:   /s/    MICHAEL S. HEDGE        

Name:

  Michael S. Hedge

Title:

  President SELLER: Miller Golf Company, LLC By:   /s/    MICHAEL S.
HEDGE        

Name:

  Michael S. Hedge

Title:

  Chief Executive Officer

 

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