UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) SEPTEMBER 9, 1996
GOLDEN BEAR GOLF, INC.
(Exact name of Registrant as specified in its charter)
Commission File No. 333-05581
FLORIDA 65-0680880
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
11780 U.S. HIGHWAY ONE NORTH PALM BEACH, FLORIDA 33408
(Address of principal executive offices) (Zip Code)
(561) 626-3900
(Registrant's telephone number, including area code)
SAME
(Former name, former address and former fiscal year, if changed since last
report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
ROLLANDIA GOLF PARK PLUS
On September 9, 1996, the Company consummated an asset purchase agreement and a
long-term lease agreement ("the agreements"), dated as of August 2, 1996 with
Sugar Creek Golf Course, Inc. ("Sugar Creek"). Under the terms of the
agreements, the Company acquired certain assets of an existing golf practice and
instruction facility located in the Dayton, Ohio area and is leasing the related
real property in exchange for an initial up-front payment of $1.1 million and
annual rental payments of $325,000 in year one, $350,000 in year two, $375,000
in years three through thirteen, $300,000 in year fourteen and $200,000 in years
fifteen through twenty. The Company is also required to invest at least $750,000
in improvements to the property within the first two years of the lease term and
will retain a principal of Sugar Creek as a consultant for a one year period for
a fee of $60,000. The Company has been granted certain options to purchase the
leased premises and a right of first refusal with respect to proposed sales of
the leased premises throughout the term of the lease.
The initial payment of $1.1 million was funded from the proceeds of the
Company's initial public offering. For financial statement purposes, the portion
of the long-term lease attributable to building and improvements is considered a
capital lease as the net present value of the future payments exceeds 90% of the
fair value of the properties.
EAST COAST FACILITIES
On September 11, 1996, the Company consummated the acquisition of certain assets
utilized in connection with an existing Golden Bear Golf Center located in
Columbus, Ohio and a Golden Bear Golf Center currently under development in Fort
Lauderdale, Florida and assumed existing leases related to the real property at
these locations, in accordance with agreements, dated as of July 31, 1996, among
the Company and East Coast Golf Centers, Inc. ("East Coast"), East Coast Golf
Centers of Columbus, Ltd., and East Coast Golf Centers of Fort Lauderdale, Inc.
The facility in Fort Lauderdale, Florida is expected to open in October, 1996.
The purchase price for the facilities was approximately $5.9 million, of which
$5.3 million was paid in cash at the closing and $600,000 is evidenced by
promissory notes. Additionally, the Company previously granted, pursuant to
consulting agreements, certain principals of East Coast options to purchase
37,500 shares of the Company's Class A Common Stock. The options fully vested on
September 11, 1996, are exercisable at any time and expire on August 31, 1997.
The promissory notes are non-interest bearing and mature on August 31, 1997
unless any options are exercised at an earlier date, in which case the proceeds
to the Company upon exercise of the options must be used to repay an equal
amount of the promissory notes. The $5.3 million paid at closing was funded from
the proceeds of the Company's initial public offering.
2
<PAGE>
HIGHLANDER FACILITIES
On September 13, 1996 the Company consummated the acquisition of the Golden Bear
Golf Center located in Carrollton, Texas and entered into a lease of the Golden
Bear Golf Center located in Moreno Valley, California, in accordance with
agreements, dated as of September 13, 1996, among the Company and Highlander
Golf Corp. Ltd. ("Highlander"). The purchase price for the Texas facility was
$2.25 million, of which $1.5 million was paid at closing, with the remainder of
the purchase price evidenced by a promissory note. The note requires payments of
interest only for five years at a rate of 8% per annum, with the entire
principal amount due in five years. The Company has also entered into a ground
lease for the underlying real property of the Texas facility with an entity
affiliated with Highlander. The ground lease is for a term of 15 years, and is
renewable for two additional 5-year terms. The annual rent under the ground
lease is equal to 8% of the gross sales attributable to the facility for years
one through five and 10% of gross sales thereafter. The minimum rent under the
ground lease is $122,500 per year, increasing 3% per year. The Company has a
right of first refusal with respect to proposed sales of the leased premises
throughout the term of the lease.
The lease of the facility located in California provides for a ground lease of
the real property and an operating lease of the facility. Both the ground lease
and the operating lease are for a period of ten years, renewable for two
additional five year terms. The annual rent due under the ground lease is equal
to 10% of the gross revenues attributable to the facility with a minimum rent of
$65,000 per year. The annual rent due under the operating lease is $50,000. The
annual rent under the operating lease and the minimum rent under the ground
lease increase 3% annually, effective every fifth lease year.
Item 7. Financial Statements and Exhibits
a. Financial Statements of Businesses acquired
1 Financial statements of Dallas Highlander, Ltd. for the year
ended December 31, 1995 and for the three months ended March 31,
1996 (incorporated herein by reference to the Prospectus of the
Company, dated July 31, 1996, which has been filed with the
Securities and Exchange Commission).
Financial statements of Dallas Highlander, Ltd. for the six
months ended June 30, 1996 will be provided through amendment at
a later date.
2 Financial statements of Sugar Creek Golf Course, Inc. and Magic
Castle, Inc. for the year ended December 31, 1995 and for the six
months ended June 30, 1996 (incorporated herein by reference to
the Prospectus of the Company, dated July 31, 1996, which has
been filed with the Securities and Exchange Commission).
3 Financial statements of East Coast Golf Centers, Inc., East Coast
Golf Centers of Columbus, Ltd. and East Coast Golf Centers of
Fort
3
<PAGE>
Lauderdale, Inc. for the year ended December 31, 1995 and
for the three months ended March 31, 1996 (incorporated herein
by reference to the Prospectus of the Company, dated July 31,
1996, which has been filed with the Securities and Exchange
Commission).
Financial statements of East Coast Golf Centers, Inc., East Coast
Golf Centers of Columbus, Ltd. and East Coast Golf Centers of
Fort Lauderdale, Inc. for the six months ended June 30, 1996 will
be provided through amendment at a later date.
b. Pro Forma Financial Information
Pro forma financial statements for the acquisitions of McDain
Golf Center of Monroeville, Cool Springs Golf Center, Tom's River
Golf Center, Rollandia Golf Park Plus, East Coast Facilities and
Highlander Facilities
c. Exhibits
The Company will furnish supplementally a copy of any omitted
schedule to the U.S. Securities and Exchange Commission upon request.
10.1 Agreement, dated August 2, 1996, between Sugar Creek Golf Course,
Inc. and Golden Bear Golf Centers, Inc.
10.2 Agreement, dated July 31, 1996, between East Coast Golf Centers
of Columbus, Ltd. and Golden Bear Golf Centers, Inc.
10.3 Agreement, dated July 31, 1996, between East Coast Golf Center of
Fort Lauderdale, Inc. and Golden Bear Golf Centers, Inc.
10.4 Agreement, dated July 31, 1996, between East Coast Golf Centers,
Inc.of and Golden Bear Golf Centers, Inc.
10.5 Purchase/Sale Agreement, dated September 13, 1996, between Golden
Bear Golf Centers, Inc. and Dallas Highlander, Ltd.
23 Consent of Arthur Andersen LLP
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Golden Bear Golf, Inc.
-------------------------------------------------
(Registrant)
September 20, 1996 /S/ Jack P. Bates
- ------------------------ --------------------------------------------------
Date Jack P. Bates
Senior Vice President and Chief Financial Officer
5
<PAGE>
GOLDEN BEAR GOLF, INC.
INTRODUCTION TO
UNAUDITED PRO FORMA FINANCIAL INFORMATION
GENERAL
The following Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 1996
and the Unaudited Pro Forma Consolidated Statements of Operations for the six
months ended June 30, 1996 and for the year ended December 31, 1995 reflect
adjustments to Golden Bear Golf, Inc.'s ("Golden Bear" or the "Company")
historical financial position and results of operations to give effect to the
transactions discussed below as if such transactions had been consummated at
June 30, 1996 for balance sheet purposes, or at the beginning of the period
presented for income statement purposes.
Golden Bear was formed on June 7, 1996 to enter into an exchange agreement which
was consummated on August 1, 1996 upon the closing of an initial public offering
of Golden Bear's Class A Common Stock. Parties to the plan of reorganization
included, among others, Golden Bear's affiliates, Golden Bear Golf Centers,
Inc., Paragon Golf Construction, Inc. (collectively, the "Companies") and Golden
Bear International, Inc. ("GBI"). Pursuant to the exchange agreement, Golden
Bear acquired all of the outstanding common stock of the Companies in exchange
for an aggregate of 1,668,000 shares of its Class A and Class B Common Stock. In
addition, Golden Bear acquired certain assets and assumed certain liabilities of
GBI ("GBI Carveout") in exchange for 1,332,000 shares of Class B Common Stock.
The transaction was accounted for on an historical cost basis in a manner
similar to a pooling of interests as Golden Bear and the Companies had common
stockholders and management.
The pro forma financial statements do not reflect the effect of expected
increases in levels of expenses as a result of an upgrade to Golden Bear's
management information systems, the addition of accounting personnel to support
its growth strategy and increased costs associated with operating the Company as
a separate public company. Such increases are not reflected because they are not
currently factually determinable or estimable.
The pro forma financial statements have been prepared by Golden Bear based, in
part, on the audited financial statements of certain of the businesses acquired
and to be acquired as required under the Securities Act, which financial
statements are included elsewhere in this report or in other filings of the
Company with the Securities and Exchange Commission, and the unaudited financial
statements of other businesses acquired, which financial statements are included
elsewhere in this report or in other filings of the Company with the Securities
and Exchange Commission, and the unaudited financial statements of other
businesses acquired which financial statements are, in certain circumstances,
not included herein, adjusted where necessary, with respect to pre-acquisition
periods, to the basis of accounting used in Golden Bear's historical financial
statements. These pro forma financial statements are not intended to be
indicative of the results that would have been achieved had the transactions
occurred on the dates indicated or which may be realized in the future.
<PAGE>
BUSINESSES ACQUIRED
During the period from April 15, 1996 through September 13, 1996, the Company
acquired through either purchase or lease eight golf practice and instruction
facilities. The businesses acquired were as follows.
MCDAIN GOLF CENTER
On April 15, 1996, the Company entered into a long-term lease agreement with
McDain Golf Center of Monroeville, a Pennsylvania limited partnership, for the
lease of an existing golf practice and instruction facility in the greater
Pittsburgh area and has begun operating the facility as a Golden Bear Golf
Center. The lease is for a term of twenty-nine years and calls for annual
payments of $325,000 with annual cost of living increases commencing after the
fifth year. The Company has been granted an option to purchase the leased
premises for $2,000,000 in 2001. The Company has not yet determined whether it
will acquire the leased premises pursuant to the option.
For financial statement purposes, the portion of the long-term lease
attributable to building and improvements is considered a capital lease as the
net present value of the future payments exceeds 90% of the fair value of the
properties.
COOL SPRINGS GOLF CENTER
On June 17, 1996, the Company purchased an existing golf practice and
instruction facility on 40.833 acres of land in Pittsburgh, Pennsylvania
pursuant to purchase and sale agreements with Cool Springs, Inc. and William T.
Duckworth. The purchase price for the land and assets was $2.9 million.
TOMS RIVER GOLF CENTER
On August 7, 1996, the Company consummated the acquisition of certain assets
utilized in connection with the Tom's River Golf Center (an existing golf
practice and instruction facility located in Tom's River, New Jersey) and the
lease of the related real property, in accordance with an agreement, dated as of
April 26, 1996, among the Company and First Sports Capital Development
Associates, Ltd., Inc. The lease is for a term of 20 years and may be extended
for two five-year terms. The purchase price for the assets was $1.9 million,
which was paid in cash at the closing from proceeds of the initial public
offering. For purposes of the pro forma financial statements the purchase price
is evidenced by a promissory note of $1.9 million for a term of three years with
an interest rate equal to the prime rate plus one and one half percent.
ROLLANDIA GOLF PARK PLUS
On September 9, 1996, the Company consummated an asset purchase agreement and a
long-term lease agreement ("the agreements"), dated as of August 2, 1996 with
Sugar Creek Golf Course, Inc. ("Sugar Creek"). Under the terms of the
agreements, the Company acquired certain assets of an existing golf practice and
instruction facility located in the Dayton, Ohio area and is leasing the related
real property in exchange for an initial up-front payment of $1.1 million and
annual rental payments of $325,000 in year one, $350,000 in year two, $375,000
in years three through thirteen, $300,000 in year fourteen and $200,000 in years
fifteen through twenty. The Company is also required to invest at least $750,000
in improvements to the property within the first two
<PAGE>
years of the lease term and will retain a principal of Sugar Creek as a
consultant for a one year period for a fee of $60,000. The Company has been
granted certain options to purchase the leased premises and a right of first
refusal with respect to proposed sales of the leased premises throughout the
term of the lease.
The initial payment of $1.1 million was funded from the proceeds of the
Company's initial public offering. For financial statement purposes, the portion
of the long-term lease attributable to building and improvements is considered a
capital lease as the net present value of the future payments exceeds 90% of the
fair value of the properties.
EAST COAST FACILITIES
On September 11, 1996, the Company consummated the acquisition of certain assets
utilized in connection with an existing Golden Bear Golf Center located in
Columbus, Ohio and a Golden Bear Golf Center currently under development in Fort
Lauderdale, Florida and assumed existing leases related to the real property at
these locations, in accordance with agreements, dated as of July 31, 1996, among
the Company and East Coast Golf Centers, Inc. ("East Coast"), East Coast Golf
Centers of Columbus, Ltd., and East Coast Golf Centers of Fort Lauderdale, Inc.
The facility in Fort Lauderdale, Florida is expected to open in October, 1996.
The purchase price for the facilities was approximately $5.9 million, of which
$5.3 million was paid in cash at the closing and $600,000 is evidenced by
promissory notes. Additionally, the Company previously granted, pursuant to
consulting agreements, certain principals of East Coast options to purchase
37,500 shares of the Company's Class A Common Stock. The options fully vested on
September 11, 1996, are exercisable at any time and expire on August 31, 1997.
The promissory notes are non-interest bearing and mature on August 31, 1997
unless any options are exercised at an earlier date, in which case the proceeds
to the Company upon exercise of the options must be used to repay an equal
amount of the promissory notes. The $5.3 million paid at closing was funded from
the proceeds of the Company's initial public offering.
HIGHLANDER FACILITIES
On September 13, 1996 the Company consummated the acquisition of the Golden Bear
Golf Center located in Carrollton, Texas and entered into a lease of the Golden
Bear Golf Center located in Moreno Valley, California, in accordance with
agreements, dated as of September 13, 1996, among the Company and Highlander
Golf Corp. Ltd. ("Highlander"). The purchase price for the Texas facility was
$2.25 million, of which $1.5 million was paid at closing, with the remainder of
the purchase price evidenced by a promissory note. The note requires payments of
interest only for five years at a rate of 8% per annum, with the entire
principal amount due in five years. The Company has also entered into a ground
lease for the underlying real property of the Texas facility with an entity
affiliated with Highlander. The ground lease is for a term of 15 years, and is
renewable for two additional 5-year terms. The annual rent under the ground
lease is equal to 8% of the gross sales attributable to the facility for years
one through five and 10% of gross sales thereafter. The minimum rent under the
ground lease is $122,500 per year, increasing 3% per year. The Company has a
right of first refusal with respect to proposed sales of the leased premises
throughout the term of the lease.
<PAGE>
The lease of the facility located in California provides for a ground lease of
the real property and an operating lease of the facility. Both the ground lease
and the operating lease are for a period of ten years, renewable for two
additional five year terms. The annual rent due under the ground lease is equal
to 10% of the gross revenues attributable to the facility with a minimum rent of
$65,000 per year. The annual rent due under the operating lease is $50,000. The
annual rent under the operating lease and the minimum rent under the ground
lease increase 3% annually, effective every fifth lease year.
<PAGE>
<TABLE>
<CAPTION>
GOLDEN BEAR GOLF, INC.
UNAUDITED PRO FORMA BALANCE SHEET
AS OF JUNE 30, 1996
(IN THOUSANDS)
ASSETS
BUSINESSES ACQUIRED
--------------------------------------------
PRO FORMA
TOM'S EAST ACQUISITION FOR
ACTUAL RIVER HIGHLANDER ROLLANDIA COAST ADJUSTMENTS ACQUISITIONS
------- -------- ----------- ---------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $89 -- $66 $10 $817 ($893)(b) $89
Accounts receivable, net 6,507 -- 1 5 -- (6)(b) 6,507
Costs and estimated earnings in excess
of billings on uncompleted contracts 1,437 -- -- -- -- -- 1,437
Prepaid expenses and other current assets 320 29 231 207 193 (660)(b) 320
-------- ---------- ---------- --------- ---------- ------------ -----------
Total current assets 8,353 29 298 222 1,010 (1,559) 8,353
PROPERTY AND EQUIPMENT, net 4,659 2,285 1,503 2,865 3,446 (256)(c) 14,502
OTHER ASSETS 1,119 36 3 383 399 (821)(b) 3,535
2,416 (c)
-------- ---------- ---------- --------- ---------- ------------ -----------
Total assets $14,131 $2,350 $1,804 $3,470 $4,855 ($220) $26,390
======== ========== ========== ========= ========== ============ ===========
(Continued)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN BEAR GOLF, INC.
UNAUDITED PRO FORMA BALANCE SHEET
AS OF JUNE 30, 1996
(IN THOUSANDS)
(CONTINUED)
LIABILITIES AND SHAREHOLDERS' EQUITY
BUSINESSES ACQUIRED
--------------------------------------------- PRO FORMA
TOM'S EAST ACQUISITION FOR
ACTUAL RIVER HIGHLANDER ROLLANDIA COAST ADJUSTMENTS ACQUISITIONS
-------- -------- ------------ ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CURRENT LIABILITIES:
Accounts payable $4,195 $53 $30 $199 $254 ($536)(b) $4,195
Accrued expenses 1,783 125 54 91 (270)(b) 1,783
Due to stockholder and affiliates 137 375 357 366 1,000 (2,098)(b) 137
Billings in excess of costs and estimated
earnings on uncompleted contracts 1,015 -- -- -- -- -- 1,015
Deferred revenue 923 -- -- -- -- -- 923
Current portion of long-term debt 2,118 28 410 -- (438)(b) 2,118
-------- -------- ------------ ----------- --------- ------------ --------
Total current liabilities 10,171 581 387 1,029 1,345 (3,342) 10,171
LONG-TERM DEBT, net of current portion 1,414 512 -- 2,151 2,202 (4,865)(b) 13,673
12,259 (d)
SHAREHOLDERS' EQUITY
Common stock 30 -- -- -- -- -- 30
Additional paid-in capital 5,340 1,354 1,823 362 2,315 (5,854)(b) 5,340
Deficit (2,824) (97) (406) (72) (1,007) 1,582 (b) (2,824)
-------- -------- ------------ ----------- --------- ------------ --------
Total shareholders' equity 2,546 1,257 1,417 290 1,308 (4,272) 2,546
-------- -------- ------------ ----------- --------- ------------ --------
Total liabilities and $14,131 $2,350 $1,804 $3,470 $4,855 ($220) $26,390
shareholders' equity ========= ======== ============ =========== ========= ============ ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN BEAR GOLF, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
BUSINESSES ACQUIRED
------------------------------------------------------------ PRO FORMA
COOL TOM'S AQUISITION FOR
ACTUAL MCDAIN SPRINGS RIVER HIGHLANDER ROLLANDIA EAST COAST ADJUSTMENTS ACQUISITIONS
------ ------ ------- ------ ---------- --------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
Golf division $1,518 $59 $389 $165 $556 $870 $465 ($80)(j) $3,890
($52)(k)
Construction division 7,172 -- -- -- -- -- -- -- 7,172
Marketing division 4,168 -- -- -- -- -- -- -- 4,168
------ ------ -------- ------ ---------- ---------- ---------- ---------- -------------
12,858 59 389 165 556 870 465 (132) 15,230
------ ------ -------- ------ ---------- ---------- ---------- ---------- -------------
OPERATING COSTS AND EXPENSES:
Construction and shaping costs 6,049 -- -- -- -- -- -- -- 6,049
Operating expenses 4,523 59 353 113 536 711 676 (110)(j) 6,976
(52)(k)
152 (f)
15 (a)
Compensation expense 3,000 -- -- -- -- -- -- -- 3,000
Corporate overhead 1,662 -- -- -- -- -- -- -- 1,662
Depreciation and amortization 164 17 8 31 98 71 91 61 (g) 541
------ ------ -------- ------ ---------- ---------- ---------- ---------- -------------
15,398 76 361 144 634 782 767 66 18,228
------ ------ -------- ------ ---------- ---------- ---------- ---------- -------------
Operating income (loss) (2,540) (17) 28 21 (78) 88 (302) (198) (2,998)
OTHER INCOME (EXPENSE) (26) -- 1 (15) (4) (141) -- 156 (h) (689)
------ ------ -------- ------ ---------- ---------- ---------- ---------- -------------
(660)(e)
Income (loss) before foreign
and pro forma provision for (2,566) (17) 29 6 (82) (53) (302) (702) (3,687)
income taxes
ACTUAL AND PRO FORMA TAX 11 -- 13 -- (32) -- -- (417)(i) (425)
PROVISIONS (BENEFITS) ------ ------ -------- ------ ---------- ---------- ---------- ---------- -------------
Net income (loss) ($2,577) ($17) $16 $6 ($50) ($53) ($302) ($285) ($3,262)
====== ====== ======== ======= ========== ========== ========== ========== =============
Net income (loss) per share ($0.86) ($1.08)
======= =============
Weighted average number of
common stock and common stock
equivalents outstanding 3,000 3,000
======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN BEAR GOLF, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
BUSINESSES ACQUIRED
------------------------------------------------------------- PRO FORMA
COOL TOM'S AQUISITION FOR
ACTUAL MCDAIN SPRINGS RIVER HIGHLANDER ROLLANDIA EAST COAST ADJUSTMENTS ACQUISITIONS
------ ------ -------- ------ ---------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
Golf division $2,298 $469 $1,523 $424 $611 $1,807 $549 ($244)(j) $7,397
(40)(k)
Construction division 19,177 -- -- -- -- -- -- -- 19,177
Marketing division 7,306 -- -- -- -- -- -- -- 7,306
------ ------ -------- ------ ---------- ---------- ---------- ----------- -------------
28,761 469 1,523 424 611 1,807 549 (284) 33,880
------ ------ -------- ------ ---------- ---------- ---------- ----------- -------------
OPERATING COSTS AND EXPENSES:
Construction and shaping costs 16,500 -- -- -- -- -- -- -- 18,500
Operating expenses 7,327 450 1,397 402 901 1,470 992 304(f) 12,919
(52)(a)
(336)(j)
(40)(k)
Corporate overhead 3,121 -- -- -- -- -- -- -- 3,121
Depreciation and amortization 233 67 60 72 115 132 103 123 (g) 905
------ ------ -------- ------ ---------- ---------- ---------- ----------- -------------
27,181 517 1,457 474 1,016 1,602 1,095 103 33,445
------ ------ -------- ------ ---------- ---------- ---------- ----------- -------------
Operating income (loss) 1,600 (48) 66 (50) (405) 205 (546) (387) 435
OTHER INCOME (EXPENSE) (1) (110) 12 (46) (4) (241) -- (1,380)(e) (1,353)
397 (h)
------ ------ -------- ------ ---------- ---------- ---------- ----------- -------------
Income (loss) before foreign
and pro forma provision for 1,599 (158) 78 (96) (409) (36) (546) (1,350) (918)
income taxes
ACTUAL AND PRO FORMA TAX 230 (62) 36 (37) (156) (14) -- (739)(i) (742)
PROVISIONS (BENEFITS) ------ ------ -------- ------ ---------- ---------- ---------- ----------- -------------
Net income (loss) $1,369 ($96) $42 (559) ($253) ($22) ($546) ($611) ($176)
====== ====== ======== ====== ========== ========== ========== =========== =============
Net income (loss) per share $0.46 ($0.06)
======= =============
Weighted average number of
common stock and common stock
equivalents outstanding 3,000 3,000
======= =======
</TABLE>
<PAGE>
GOLDEN BEAR GOLF, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(a) Represents lease expense which will be paid related to Highlander ($122,500
annually) in excess of amounts previously recorded by Highlander ($71,000 in
1995 and $46,000 during the six months ended June 30, 1996).
(b) As the acquisitions include only the purchase of certain property and
equipment, adjustment has been made to eliminate assets, liabilities and equity
which are excluded from the various acquisitions but which are included in the
historical financial statements of the acquired entities.
(c) Represents the purchase price of golf centers, the write-up to fair value of
the net assets acquired (primarily land and improvements) and the recording of
goodwill as follows (in thousands):
FAIR VALUE OF
PURCHASE NET ASSETS
PRICE ACQUIRED GOODWILL
-------------- -------------------- -----------------
Tom's River $ 1,900 $1,900 $ ---
Highlander 2,250 1,434 816
Rollandia (1) 2,309 2,309 ---
East Coast 5,800 4,200 1,600
-------------- -------------------- ------------------
$12,259 $9,843 $2,416
============== ==================== ==================
(1) Capital lease.
(d) Represents debt assumed to have been incurred for pro forma purposes in
connection with the acquisitions as follows (in thousands):
Tom's River $ 1,900
East Coast 5,800
Highlander 2,250
Rollandia 2,309
----------
$12,259
==========
<PAGE>
Actual debt incurred at the respective dates of acquisition was less than that
assumed to have been incurred for pro forma purposes as the Company utilized
cash from the proceeds of its initial public offering to pay a substantial
portion of the purchase price.
Actual debt incurred at the respective dates of acquisition in connection with
these transactions was as follows (in thousands):
Tom's River $ --
East Coast 600
Highlander 750
Rollandia 1,200
----------
$2,550
==========
(e) Represents incremental interest expense on debt resulting from the
acquisitions as follows (in thousands):
SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31, JUNE 30,
DEBT RATE 1995 1996
---------- ----- --------------- ----------------
McDain $ 1,226 9% $ 110 $ 35
Tom's River 1,900 9% 171 86
East Coast 5,800 9% 522 261
Highlander 2,250 9% 203 101
Rollandia 2,309 9% 208 104
Nicklaus Note 1,625 9% 146 73
---------- ---------------- ----------------
$15,110 $1,360 $660
========== ================ ================
(f) Represents the impact of employment agreements to be entered into upon
consummation of the offering. Historically, Richard Bellinger, Jack Bates and
Mark Hesemann spent approximately 50% of their efforts, and Jack Nicklaus spent
approximately 15% of his efforts in connection with the businesses included in
the Reorganization. Accordingly, approximately 50% of the employment costs with
respect to Messrs. Bellinger, Bates and Hesemann, and 15% of the employment
costs with respect to Mr. Nicklaus were included in the Company's historical
financial statements. These individuals now have fixed employment contracts.
<PAGE>
(g) Represents amortization expense related to goodwill resulting from the
acquisitions as follows (in thousands):
SIX MONTHS
YEAR ENDED ENDED
AMORTIZATION DECEMBER 31, JUNE 30,
AMOUNT PERIOD 1995 1996
-------- --------------- ------------- -------------
Cool Springs $ 300 30 years $ 10 $ 5
Highlander 816 25 years 33 16
East Coast 1,600 20 years 80 40
-------- ------------- -------------
$2,716 $123 $61
======== ============= =============
(h) Represents the elimination of interest expense on debt of the Acquired
Businesses which will not be assumed in the acquisition.
(i) Represents the tax effect of the pro forma adjustments at an effective
rate of 39%.
(j) Represents the elimination of revenue and expenses from the operation of
Cool Spring's roller skating center which is excluded from the acquisition.
(k) Represents the elimination of licensing fees paid by Highlander and East
Coast to the Company as follows:
SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31, JUNE 30,
1995 1996
-------------- ----------------
Highlander $22,000 $27,000
East Coast 18,000 25,000
-------------- ----------------
$40,000 $52,000
============== ================
AGREEMENT
THIS AGREEMENT, made and entered into as of the _____ day of
_______, 1996, by and between SUGAR CREEK GOLF COURSE, INC. an Ohio corporation
("Sugar Creek"), having an address of 4990 Wilmington Pike, Dayton, Ohio 45440;
The Magic Castle, Inc., an Ohio corporation ("Magic Castle") having an address
of 4990 Wilmington Pike, Dayton, Ohio 45440; and Golden Bear Golf Centers, Inc.,
a Florida corporation with an address of 11780 U.S. Highway #1, North Palm
Beach, Florida 33408 ("Golden Bear"), recites and provides as follows:
RECITALS
A. Sugar Creek is the sole owner of legal and equitable
title of a fee simple estate in the real estate described on Exhibit "A" hereto
(the "Real Property").
B. Sugar Creek and Magic Castle are the owners of certain
of the assets located at the Real Property including the building and other
leasehold improvements thereon (the "Improvements") and the "Assets" described
on Exhibit "B" hereto. The Assets include that tangible and intangible personal
property (e.g. contracts, licenses and permits) described on Exhibit "B".
Exhibit "B" indicates which Assets are owned by Sugar Creek and which Assets are
owned by Magic Castle.
C. Sugar Creek has agreed to grant to Golden Bear the
right to enter into a lease (the "Lease") of the Real Property, the Improvements
and all other personal property (except the Assets) utilized by Sugar Creek and
Magic Castle in connection with the business known as Rollandia Golf Park Plus
and The Magic Castle (the "Project"). Sugar Creek and Magic Castle have agreed
to grant to Buyer the right to purchase the Assets.
D. Magic Castle and Sugar Creek are sometimes hereinafter
collectively referred to as "Seller", it being understood and agreed that when
such term is
<PAGE>
used, Sugar Creek and Magic Castle, respectively, shall each only be bound with
respect to that portion of the Project owned by it.
FOR AND IN CONSIDERATION of the sum of TEN DOLLARS ($10.00) and
other good and valuable consideration, the receipt of which is hereby
acknowledged,
THE PARTIES HERETO DO HEREBY MUTUALLY COVENANT AND AGREE AS
FOLLOWS:
1. AGREEMENT.
A. Sugar Creek hereby grants to Golden Bear the exclusive
right to enter into the Lease on the terms and conditions hereinafter described.
B. Sugar Creek and Magic Castle hereby grant to Golden
Bear the exclusive right to purchase the Assets on the terms and conditions
hereinafter described.
2. LEASE.
It is understood and agreed that the Lease shall be in the form
attached hereto as Exhibit "C".
3. PURCHASE OF PERSONAL PROPERTY.
A. At Closing, Golden Bear shall acquire the Assets listed
on Exhibit "B".
B. At Closing, Golden Bear shall also pay the
consideration referred to on Exhibit "B-1" attached hereto. Golden Bear shall
own the Assets listed on Exhibit "B" free and clear, except subject to a lien in
favor of Huntington Bank and Northside Bank (the "Existing Lenders"). Golden
Bear is not assuming bank debt but will make lease payments to the Existing
Lenders to be applied against the loans if requested to do so by the Seller.
Seller will make any additional loan payments required and comply with all other
requirements to the Existing Lenders. If Seller defaults on loans, Buyer may pay
<PAGE>
loans and will receive credit against lease payments.
4. CLOSING.
A. The right to enter into the Lease and acquire the
Assets may be exercised by Golden Bear giving written notice of its desire to
close to Seller prior to expiration of the Examination Period. This notice shall
require the parties to proceed with Closing on or before August 31, 1996,
subject to the provisions of Section 4.F. below. All appropriate sums due Seller
or Golden Bear shall be ascertained at Closing or, if not capable of
ascertainment at Closing, within ninety (90) days thereafter at the reasonable
request of either Golden Bear or Seller.
<PAGE>
B. At the Closing, Golden Bear and Seller shall execute
all documents reasonably necessary to carry out the provisions hereof, including
but not limited to, the Lease and memorandum thereof for recordation; a General
Assignment of all applicable contract rights and other intangible personal
property (including all construction warranties and all applicable licenses and
permits); a Closing Statement; a so-called FIRPTA Affidavit; a No-Lien, Gap and
Parties in Possession Affidavit; a Consultant Agreement; a Bill of Sale; and a
letter to all vendors. Seller shall also provide evidence of good standing,
corporate resolution (with incumbency certificate), the agreements required of
the Existing Lenders referred to herein, and any other items reasonably required
by Golden Bear or the title insurer.
C. At Closing, Golden Bear shall pay Seller the
consideration as provided herein, and Seller shall pay off any existing liens
and related matters set forth in Schedule B-1 of Golden Bear's title commitment,
except for the "Existing Mortgages" for the benefit of the Existing Lenders.
D. Golden Bear shall pay all recording costs, costs for
inspections, its attorneys' fees, the owner's leasehold title insurance premium
and the cost of the Survey. Seller shall pay all state or federal taxes
chargeable to Seller by virtue of the transactions contemplated hereby, and
Seller's attorneys' fees.
E. At Closing, possession of the Project shall be
delivered to Golden Bear.
<PAGE>
F. At Closing, Seller shall deliver all agreements and
consents of the Existing Lenders required hereunder. If not available on or
before August 31, 1996, Closing shall be extended to September 15, 1996. If not
available on or before September 15, 1996, Golden Bear may terminate this
Agreement; provided, that, Seller may extend the Closing Date to October 15,
1996, provided that it has reasonable expectations of obtaining these agreements
and consents before such date.
5. CONDITIONS TO CLOSING.
Golden Bear's obligation to close hereunder is subject to all
matters set forth herein. Seller and Golden Bear each agree to proceed in good
faith and take such action as is reasonably within its control in order to
consummate the transaction contemplated hereby, in accordance with the
provisions hereof.
A. During the Examination Period, Golden Bear shall obtain
a commitment (the "Title Commitment") issued by a nationally recognized title
company (the "Title Company") for an A.L.T.A. Form B leasehold title insurance
policy (the "Title Policy"), showing title to the Real Property in Sugar Creek
and subject only to those matters acceptable to Golden Bear (the "Permitted
Exceptions") in the exercise of its reasonable discretion.
(2) If the Title Commitment contains exceptions other
than Permitted Exceptions, Golden Bear shall notify Seller of its approval or
rejection of such exceptions prior to the expiration of the Examination Period.
Failure to so notify Seller shall be a waiver of this right to reject. All such
"Unpermitted Exceptions" and "Survey Defects" (as defined below), shall be
corrected at Seller's expense, and/or removed of record in a manner satisfactory
to Golden Bear, and shall not appear on the Title Policy when issued; provided,
however, that Seller shall not be obligated to expend more than $100,000.00 to
cure any such Unpermitted Exceptions. If Seller is unable to correct
<PAGE>
and/or remove of record any Unpermitted Exception(s) by the date of Closing set
forth herein, then Golden Bear may, upon written notice to Seller, postpone and
repostpone the Closing for a period totalling in the aggregate not more than
ninety (90) days so as to permit Seller to correct and/or remove of record such
Unpermitted Exception(s). If Seller is not obligated to or is unable to cure of
record any Unpermitted Exceptions, Golden Bear shall either (i) proceed to
Closing with no adjustment to the Purchase Price, or (ii) terminate this
Contract.
B. During the Examination Period, Golden Bear, at its
sole cost and expense, shall obtain a current survey of the Property (the
"Survey") certified to Sugar Creek, Golden Bear and to the Title Company, and
dated as of the then current date. The Survey shall be reasonably satisfactory
to Golden Bear in form and substance, shall locate all Improvements and show all
building set-back lines (public and private) and applicable Schedule B
exceptions on the Title Commitment, shall include flood plain designations, and
shall be in such form as the Title Company shall require to delete the standard
survey exceptions in the Title Policy. The Survey shall indicate that the
Property does not include any gaps, hiatuses, encroachments, encumbrances,
drainage canals or other matters not acceptable to Golden Bear for the operation
of the golf center. In the operation of a golf center facility, any survey
matters which cause the Survey not to comply with the requirements are referred
to herein as "Survey Defects".
<PAGE>
C. In addition to all other matters set forth herein,
Golden Bear shall have no obligation to consummate the within contemplated
transaction unless and until the following conditions have either been satisfied
or waived by Golden Bear in writing. If all such conditions are neither
satisfied nor waived, Golden Bear may thereafter terminate this Agreement upon
written notice to Seller. Such conditions are as follows:
(a) All representations, warranties and covenants of
Seller shall be true and correct on the Closing Date and Golden Bear shall have
received such evidence thereof as Golden Bear may reasonably request;
(b) Between the date of this Agreement and the Closing
Date, there shall have been no intervening destruction or damage to or
condemnation of the Project or any portion thereof, or any material adverse
change in the profitability of the Project; and
(c) Seller shall have performed all of its other
obligations under this Agreement.
D. Prior to Closing, the parties shall utilize reasonable
best efforts to reach agreement on the following
matters with respect to the Existing Mortgages
described on Exhibit "D",
(a) Subordination to Lease.
(b) Notice and right to cure to Golden Bear.
(c) Consent to Lease.
(d) Release of two of Seller's existing guarantors.
If these matters are not satisfactorily resolved, either party may
terminate this Agreement.
6. DEFAULT. Upon a default by either party hereunder, the
non-defaulting party shall have all rights and remedies available at law or in
equity,
<PAGE>
including, but not limited to, the right of specific performance.
7. ACCESS TO PREMISES.
A. Terminating at noon E.S.T., on August 6, 1996
the "Examination Period"), Golden Bear and Golden Bear's agents shall have the
right to enter the Real Property at all reasonable times to examine the Project,
provided that Golden Bear shall not interfere with Seller's operation of the
Project. In the event this Agreement is terminated, the right of entry granted
hereby shall likewise be terminated.
B. Without limiting the generality of the foregoing,
Golden Bear may perform or cause to be performed soil tests, inspections, radon
and asbestos investigations, environmental audits, surveying and engineering
services, appraisals and to otherwise view and inspect the Project and all
components thereof, any and all of Seller's financial and other records in
connection therewith. Any such entry upon the Real Property shall be at Golden
Bear's sole risk and expense and Golden Bear shall indemnify and hold Seller
harmless from any such entry, and of and from any and all costs, expenses, loss,
damage, claim or liability, arising out of or incurred or claimed in connection
with the exercise by Golden Bear of such right of entry, and any such entry
shall be performed in such a manner so as to minimize damage to the Real
Property. This indemnity shall survive termination hereof or Closing.
C. Seller also hereby expressly grants Golden Bear
permission to investigate and to examine any and all governmental records and to
conduct interviews with any and all relevant governmental and regulatory
authorities with respect to the use and ownership of the Project, all of which
examinations and inspections shall be undertaken at the sole cost and expense of
Golden Bear.
D. Immediately upon the execution hereof, Seller
shall make available to Golden Bear for inspection or copying: any and all
zoning and platting
<PAGE>
information; all site plans and the like; any soil tests; any existing title
insurance policies and commitments; the Existing Mortgages and all documents and
correspondence in connection therewith; all governmental approvals, permits and
licenses (the "Licenses"); any existing surveys, together with as-built plans
and specifications; all construction contracts and records; sales tax returns
for the last twelve (12) months; real estate tax bills; all architectural and
construction contracts; existing insurance policies; all Project agreements and
any correspondence in connection therewith; all appraisals, marketing studies
and the like; all management and service contracts; all operating and expense
reports; all books and records of Seller or Seller's agents concerning the
Project and any other documents concerning the Project reasonably requested by
Golden Bear and which are in the possession or control of Seller or its agents.
E. Golden Bear may terminate this Agreement for any bona
fide reason in the exercise of Golden Bear's business judgment by written notice
to Seller prior to the termination of the Examination Period. In such event,
neither party shall have any further rights or obligations hereunder.
<PAGE>
8. REPRESENTATIONS BY SELLER.
Seller represents and warrants to Golden Bear as follows:
A. MARKETABLE TITLE. Seller has good, marketable and
insurable fee simple title to the Real Property, and Seller has good and
marketable title to the Assets, free and clear of all mortgages, liens and
security interests, except for the Existing Mortgages.
B. CONDEMNATION PENDING OR THREATENED. There is no
pending or threatened condemnation or similar proceeding affecting the Real
Property or any portion thereof, nor has Seller knowledge that any such action
is presently contemplated.
C. ADVERSE INFORMATION. Seller has no information or
knowledge of any change contemplated in any applicable laws, ordinances, or
restrictions, or any judicial or administrative action, or any action by
adjacent landowners, or natural or artificial conditions upon the Real Property,
or the condition thereof, which would prevent, limit, impede, or render more
costly Golden Bear's use thereof.
D. COMPLIANCE WITH LAWS. Seller has complied with all
applicable laws, ordinances, regulations, statutes, rules and restrictions
pertaining to and affecting the Project. Performance of this Agreement will not
result in any breach of, or constitute any default under, or result in the
imposition of, any lien or encumbrance upon the Project under any agreement or
other instrument to which Seller is a party or by which Seller or the Project
might be bound.
E. PENDING LITIGATION. Except as shown on Exhibit "H",
there are no legal actions, suits, or other legal or administrative proceedings,
including condemnation cases, pending or threatened, against the Project, and
Seller is not aware of any facts which might result in any such action, suit or
other proceedings.
F. DISCLOSURE OF ADVERSE FACTS. To the knowledge of
Seller, there is
<PAGE>
no significant adverse fact or condition relating to the Project or its
continued use by Golden Bear which has not been specifically disclosed in
writing by Seller to Golden Bear, and Seller knows of no fact or condition of
any kind or character whatsoever which adversely affects such intended use of
the Project by Golden Bear.
G. BUILDING PERMITS. All building permits required for
the Project are in good standing and were validly issued by the appropriate
governmental authorities, and all required certificates of occupancy have been
issued and are outstanding; except final inspections for the miniature golf
course and batting cages (electrical), which are the responsibility of Sellers.
H. EXISTING IMPROVEMENTS. All buildings and improvements
have been completed and installed in accordance with the plans and
specifications approved by the various governmental authorities having
jurisdiction and permanent certificates of occupancy, all licenses, permits,
authorizations, and approvals required by all governmental authorities having
jurisdiction and the requisite certificates of the local board of fire
underwriters (or other body exercising similar functions) have been issued for
the buildings and improvements and have been paid for (except for the Existing
Mortgages).
I. NO VIOLATIONS OF LAWS, ETC. No building, or similar
law, ordinance or regulation is, or as of the Closing will be, violated by the
continued maintenance, operation, or use of any buildings, improvements, or
structures presently erected on the Real Property or by the continued
maintenance, operation, or use of the parking areas. There are no uncured
violations of federal, state, or municipal laws, ordinances, orders,
regulations, or requirements affecting any portion of the Project. No heating
equipment, incinerators or other burning devices violate, or as of the Closing
will violate, any applicable federal, state, or municipal laws, ordinances,
orders, regulations or
<PAGE>
requirements.
J. SERVICE CONTRACTS. There are no contracts, oral or
written, with any employees nor any service contract, maintenance contract nor
any other contract or agreement relating to the Project which are not terminable
at will (except for those indicated on Exhibit "E").
K. CONDITION. To Seller's knowledge, there are no
material defects in any buildings or operating equipment and all such
improvements are suitable for the purposes intended.
L. HAZARDOUS SUBSTANCES. Seller hereby represents and
warrants to Golden Bear that, to the best of Seller's knowledge, (i) the Project
is not contaminated with any hazardous substance; (ii) Seller has not caused and
will not cause, and to the best of Seller's knowledge, there never has occurred,
the release of any hazardous substance on the Real Property; (iii) the Real
Property is not subject to any federal, state or local "superfund" lien,
proceedings, claim, liability or action, or the threat or likelihood thereof,
for the cleanup, removal, or remediation of any such hazardous substance from
the Real Property or from any other real property owned or controlled by Seller
or in which Seller has any interest, legal or equitable; (iv) there is no
asbestos (or other regulated material) in any of the improvements; (v) there are
no underground storage tanks on the Real Property; (vi) by leasing the Real
Property, Golden Bear will not incur or be subjected to any "superfund"
liability for the cleanup, removal or remediation of any hazardous substance
from the Real Property or any liability, cost, or expense for the removal of any
asbestos or underground storage tank from the Real Property; and (vii) Seller
will indemnify, defend, and hold Golden Bear harmless from and against any and
all claims, demands, liabilities, damages, suits, actions, judgments, fines,
penalties, loss, cost and expense (including, without limitation, attorneys
fees) arising or resulting from,
<PAGE>
or suffered, sustained or incurred by Golden Bear as a result of, the material
untruth or inaccuracy of any of the foregoing representations and warranties of
Seller to Golden Bear, which indemnity shall survive the closing. The terms
"hazardous substance," "release" and "removal" as used herein shall have the
same meaning and definition as set forth in paragraphs (14), (22) and (23),
respectively, of Title 42 US.C. ss.9601 and under any applicable Texas law
provided, however, that the term "hazardous substance" as used herein also shall
include "hazardous waste" as defined in paragraph (5) of 42 U.S.C. ss.6903 and
"petroleum" as defined in paragraph (8) of 42 U.S.C. ss.6991. The term
"superfund" as used herein means the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, being Title 42 U.S.C. ss.9601 et
seq., as amended, and any similar state statute or local ordinance applicable to
the Property, and all rules and regulations promulgated, administered and
enforced by any governmental agency or authority pursuant thereto. The term
"underground storage tank" as used herein shall have the same meaning and
definition as set forth in paragraph (1) of 42 U.S.C. ss.6991, and applicable
Ohio law.
Golden Bear is aware that Seller uses chemicals normally
associated with the operation of a golf facility and Golden Bear has the right
to inspect the chemicals used in the operation of the business. Seller is not
responsible for chemicals that are not presently considered "hazardous" but
become so labelled after the closing. Golden Bear warrants and represents to
Seller that it will not cause to be released any hazardous substance during its
Examination Period and leasehold and agrees to indemnify and hold harmless and
reimburse Seller for any release of hazardous substances.
N. AUTHORITY. Seller has the authority and power to enter
into this Agreement and to consummate the transaction provided for by this
Agreement. Consummation of this transaction will not breach any agreement to
which Seller is a
<PAGE>
party.
O. ORGANIZATION. Seller and Magic Castle are each duly
organized and existing in good standing under the laws of the State of Ohio.
P. STATEMENTS. Exhibit "I" attached hereto is a true,
correct and complete revenue and expense statement for the Project to date.
Q. LIENS. There are no mortgages or deeds of trust or
security agreements (other than the Existing Mortgages) encumbering the Real
Property or the Assets. At Closing, Seller shall deliver an appropriate release
agreement from each such lienholder.
R. LIABILITIES. All liabilities and obligations of Seller
with respect to the Project are clearly and completely reflected on the
Statements attached hereto as Exhibit "J". Except for those liabilities set
forth on Exhibit "J-1" which are to be assumed by Golden Bear, all of such
liabilities shall be paid in full by Seller as of Closing.
S. LEASE AND CONCESSIONARY AGREEMENTS.
Except as shown on Exhibit "K", there are no lease agreements
affecting the Real Property or any portion thereof.
T. ZONING. The Property is zoned to permit the Project,
without special exception; and the Project is not a non-conforming use. Seller
has no knowledge of any fact, action or proceeding, whether actual, pending, or
threatened, which could result in a modification or the termination of such
zoning.
U. NO SPECIAL ASSESSMENTS. No portion of the Property is
affected by any special assessments, whether or not constituting a lien thereon.
V. PARTIES IN POSSESSION. There are no parties in
possession of any portion of the Property as lessees, licensees,
concessionaries, tenants at sufference or
<PAGE>
trespassers, except (a) as set forth in Section 27 hereof and (b) a sports
display board.
W. INSURANCE. Seller currently maintains, and shall
maintain until Closing, the insurance set forth on Supplement "B" hereto.
X. EMPLOYEE CONTRACTS/PLANS. There are no union
contracts, collective bargaining agreements, ERISA Employee Benefit Plans,
health benefit plans, or employment agreements with respect to the Project.
<PAGE>
Y. TAXES.
a. All federal, state and local returns, forms or reports
required to be filed with respect to any Tax (as defined below) liability of
Seller or the Project have been filed in a timely manner (taking into account
all extensions of due dates) and any tax of Seller that is due and payable has
been paid and no deficiencies for any Tax in respect of Seller or the Project
have been asserted or assessed against Seller or the Project in writing which
remain unpaid. Any Tax attributable to periods prior to the closing Date, but
not yet payable shall be paid when due by Seller.
b. "Tax" means any federal, state or local income, gross
receipts, franchise, privilege, estimated, alternative minimum, add-on minimum,
sales, use, transfer, registration, value added, excise, natural resources,
severance, stamp, occupation, premium, windfall profit, customs, duties, real
property, personal property, ad valorem, capital, stock, social security,
unemployment, disability, payroll, license, employee or other withholding, or
other tax, of any kind whatsoever, and including any interest, penalties or
additions to tax. For purposes of this Agreement, income taxes shall mean taxes
based on or measured by net income but shall not include franchise, capital,
stock, minimum, gross receipts or other taxes not based solely on net income.
9. OPINION OF SELLER'S COUNSEL. At Closing, Seller shall
deliver to Golden Bear an opinion of Seller's counsel or a certificate of Craig
Fanning and Lynn Fry dated on the date of closing to the following effect:
(a) Sugar Creek and Magic Castle is each a duly organized and
validly existing corporation in good standing under the laws of the State of
Ohio.
(b) Sugar Creek and Magic Castle each has the power to carry on
its business as it is presently being conducted, to enter into this Agreement,
to assign, transfer, and deliver to Golden Bear the properties, assets and
business of Seller as
<PAGE>
contemplated by this Agreement.
(c) All proceedings required by law or by the provisions of ech
of Seller's articles of incorporation or bylaws to be taken on or before the
date of this Agreement in connection with the consummation of the transactions
contemplated by this Agreement have been duly and validly taken.
(d) This Agreement and the instruments executed and delivered to
Golden Bear pursuant to this Agreement have been fully and properly authorized,
executed and delivered and constitute the legal, valid and binding obligation of
Seller, enforceable in accordance with their terms.
(e) The performance of this Agreement and the consummation of
the transactions contemplated by this Agreement will not result in any breach or
violation of any of the terms or provisions of, Seller's articles of
incorporation or bylaws.
(f) Except as shown on Exhibit "H", there is no litigation,
proceeding or governmental investigation (whether state or federal) or labor
dispute or labor trouble pending or threatened against or relating to Seller or
its properties, assets or business.
10. ASSIGNMENT. Golden Bear shall have the right to assign
this Agreement to a related or affiliated entity with financial stability equal
to or greater than Golden Bear.
11. LIABILITIES OF SELLER. Golden Bear shall not, except
as expressly set forth herein, assume or become liable for any costs, expenses,
liabilities or obligations of Seller or the Project and Seller agrees to defend,
indemnify and hold Golden Bear harmless from any such liabilities. This
indemnity shall survive termination hereof at closing.
Seller shall comply with all relevant "bulk sales act" or
similar requirements with respect to any Project vendors or creditors.
<PAGE>
12. BROKERAGE. Golden Bear and Seller each represent to
the other that they have dealt with no broker in connection with this
transaction. Any fees or commissions which may be claimed by any agent, salesman
or broker shall be the sole responsibility of the party who has dealt with any
such agent, salesman or broker. Each party agrees to indemnify and hold harmless
the other party hereto for any and all judgments, costs of suit, attorneys' fees
and other reasonable expenses that the indemnitee may incur by reason of any
action or claim made against the indemnitee by any agent, salesman or broker
dealing, or claiming to have dealt, with indemnitors. This provision shall
survive Closing, or termination of this Agreement, for a period of five (5)
years.
13. NOTICES. Any notice provided for by this Agreement and
any other notice or communication that one party may wish to send to another
shall be in writing and sent by overnight commercial courier service (i.e.,
Federal Express or Purolator) addressed to the party for which such notice or
communication is intended, at such party's address set forth below or at any
other address provided in writing by such party to the other party by notice
complying with this Section.
Seller: Craig Fanning
5015 Glenmina Drive
Dayton, Ohio 45440
With a copy to: Stuart Brinn, Esq.
Strauss & Troy
2100 PNC Center
210 East Fifth Street
Cincinnati, Ohio 45202
Golden Bear: Golden Bear Golf Centers, Inc.
11780 U.S. Highway #1
North Palm Beach, FL 33408
Attention: Mr. Gary Rosmarin,
President
With a copy to: David M. Shaw, Esq.
Fleming, Haile & Shaw, P.A.
440 Royal Palm Way, Suite 100
<PAGE>
Palm Beach, Florida 33480
14. ATTORNEYS' FEES. If either party commences an action
against the other to enforce any of the terms of this Agreement or because of
the breach by either party of any of the terms hereof, the losing or defaulting
party shall pay to the prevailing party the reasonable attorneys' fees, costs
and expenses incurred in connection with the prosecution or defense of such
action, at trial and all appellate levels. Each party agrees to jurisdiction and
venue in Montgomery County, Ohio.
15. CONFIDENTIALITY. The terms of this Agreement and the
information made available as a result of the investigations which preceded the
consummation of the transactions contemplated by this Agreement are confidential
and are personal or trade or business secrets of the parties. The parties shall
not disclose to any other person the nature, terms, or conditions of this
Agreement or any information concerning the respective parties unless required
by this Agreement or as a result of litigation relating to this Agreement or the
respective parties.
16. NON-COMPETE. As part of the consideration to Golden
Bear for entering into and consummating this transaction, Seller, Craig Fanning
and Lynn Fry covenant and agree not to enter into any competing or similar
business within a 10-mile radius of the Real Property. Seller and Golden Bear
covenant and agree that this provision may be enforced by injunction or other
equitable relief without the necessity of Golden Bear placing a bond with the
Court. Any violation of the covenants (or any of them) set forth herein by
Seller and Golden Bear would materially and irrevocably harm Golden Bear and its
business. This provision shall survive closing for a period of five (5) years.
17. SURVIVAL. All representations, warranties and
indemnities of Seller, and all applicable covenants and agreements of Golden
Bear and Seller, shall
<PAGE>
survive execution of the Lease Agreement and closing hereunder for a period of
two (2) years and shall not merge into such agreement or the closing instruments
hereunder. Seller shall indemnify and hold Golden Bear harmless from any loss,
cost, damage or expense whatsoever arising from a breach of any such
representation, warranty, covenant or agreement. This indemnity shall be secured
by a right of set-off under the Lease.
18. COOPERATION. Golden Bear and Seller will cooperate
with respect to all matters pertaining to Closing hereunder.
19. MAINTENANCE AND RISK OF LOSS. Commencing with the
date hereof, Seller shall maintain the Project in its current condition and
with the same standard of care as it presently maintains the Project. All risk
of loss to the Project prior to the Closing shall be upon the Seller.
20. AUTHORITY OF SELLER. Each party signing on behalf of
Seller hereby represents and warrants to Golden Bear that he has full authority
to sign this Agreement and bind the Seller.
21. AUTHORITY OF GOLDEN BEAR. The undersigned represents
that it has full power and authority to execute this Agreement on behalf of the
Golden Bear.
22. LICENSES. Seller shall cooperate with, and execute
all necessary documents requested by, Golden Bear in the transfer (and issuance
as applicable) of all Licenses in the name of Golden Bear.
23. AUDIT. Seller shall make the books and records for the
Project available to Golden Bear for a period of three (3) years after the
Closing to permit Golden Bear's accountants to conduct an audit at Golden Bear's
cost. In connection with such audit, Seller agrees to cooperate with such
auditors and to execute and deliver a letter in the form of Exhibit "L" hereto.
The provisions of this paragraph shall survive Closing.
24. PREPARATION OF AGREEMENT. Although this document has
been
<PAGE>
prepared by counsel to Golden Bear, it reflects extensive negotiations with
the Seller and Seller's counsel and shall not be construed against Golden Bear.
25. EFFECTIVE DATE. The date of this Agreement ("Effective
Date") shall be the date upon which the last one of Seller and Golden Bear has
signed this Agreement.
26. TIME FOR ACCEPTANCE. If this Agreement is not executed
by Seller and returned to Golden Bear on or before August 7, 1996, the offer set
forth herein shall terminate.
27. NEW LEASE. Sugar Creek contemplates entering into a
lease of a small portion of the Property to a telecommunications company. During
the Examination Period, Seller and Golden Bear will cooperate to coordinate all
matters with respect thereto. All income from this lease will be the property of
Sugar Creek.
28. INVENTORY. During the Examination Period, Golden Bear
shall determine what inventory (if any) it shall purchase at the Closing, at the
purchase price agreed to by Golden Bear and Seller.
29. MANAGEMENT AGREEMENT. If deemed appropriate by Golden
Bear, Seller shall enter into a "Management Agreement" substantially in the form
of Supplement "A" hereto to facilitate the transfer of the existing liquor
license.
30. FACSIMILE. The parties agree that a facsimile
transmission of the signed agreement constitutes an original and binding
document.
31. COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
<PAGE>
32. CONSULTING AGREEMENT. At Closing, Golden Bear shall
enter into a Consulting Agreement with Craig Fanning, providing for (i) the term
of one year, (ii) total compensation of $60,000.00 payable in equal monthly
installments, and (iii) such other terms as are approved by the parties, which
approval shall not be unreasonable withheld.
33. SURVIVAL. This Agreement shall survive Closing and
shall not be merged into the documents delivered at Closing.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement for
themselves, their respective heirs, executors, personal representatives,
successors and assigns as of the date and year first above written.
BUYER:
GOLDEN BEAR GOLF CENTERS, INC.
By: /S/ GARY ROSMARIN
------------------------------
Name: Gary Rosmarin
Title: President
SELLER:
SUGAR CREEK GOLF COURSE, INC.
By: /S/ CRAIG FANNING, its
------------------------------
Name: Craig Fanning
Title: President
THE MAGIC CASTLE, INC.
By: /S/ CRAIG FANNING, its
------------------------------
Name: Craig Fanning
Title: President
/S/ CRAIG FANNING
-----------------------------
Craig Fanning
<PAGE>
SCHEDULE OF EXHIBITS
Exhibit "A" Real Estate
Exhibit "B" Assets
Exhibit "B-1" Additional Consideration
Exhibit "C" Lease
Exhibit "D" Existing Mortgages
Exhibit "E" Service Contracts
Exhibit "F" Intentionally Deleted
Exhibit "G" Intentionally Deleted
Exhibit "H" Litigation
Exhibit "I" Operating Statement
Exhibit "J" Liabilities
Exhibit "J-1" Liabilities Assumed by Golden Bear
Exhibit "K" Existing Lease Agreements
Exhibit "L" Audit Letter
Supplement "A" Management Agreement
Supplement "B" Insurance
AGREEMENT
THIS AGREEMENT, made and entered as of the _____ day of _______,
1996, by and between EAST COAST GOLF CENTERS OF COLUMBUS, LTD. ("Seller"),
having an address of c/o The DeMatteis Organizations, EAB Plaza, Uniondale, New
York 11556-0102 and Golden Bear Golf Centers, Inc., a Florida corporation with
an address of 11780 U.S. Highway #1, North Palm Beach, Florida 33408 ("Buyer" or
"Purchaser"), recites and provides as follows:
RECITALS
A. Seller is the sole owner of legal and equitable title of
a fee simple leasehold estate in the real estate described on Exhibit "A" hereto
(the "Real Property").
B. Seller is also the owner of the business and assets
located at the Real Property (including the "Improvements" thereon) and
described on Exhibit "B" hereto (the "Assets"). The Assets include that
intangible personal property (e.g. contracts, licenses and permits) described on
Exhibit "B".
C. Seller has agreed to grant to Buyer the right to (i)
assume the existing lease of the Real Property and (ii) purchase the Assets. The
Real Property and Assets are collectively referred to herein as the "Project."
FOR AND IN CONSIDERATION of the sum of TEN DOLLARS ($10.00) and
other good and valuable consideration, the receipt of which is hereby
acknowledged,
THE PARTIES HERETO DO HEREBY MUTUALLY COVENANT AND AGREE AS
FOLLOWS:
1. AGREEMENT.
A. Seller hereby grants to Buyer the exclusive right to
assume the lease of the Real Property (the "Ground Lease"), including any option
to purchase or right
<PAGE>
of first refusal in connection therewith, on the terms and conditions
hereinafter described.
B. Seller hereby grants to Buyer the exclusive right to
purchase the Assets on the terms and conditions hereinafter described.
2. GROUND LEASE.
Subject to the terms and conditions hereinafter stated, Buyer
shall have the right to lease the Project by executing the Assignment and
Assumption of Ground Lease (the "Lease Assignment") in the form of Exhibit "C"
hereto.
3. PURCHASE PRICE.
A. During the "Examination Period" hereinafter described, the
parties shall negotiate the Purchase Price for the Project on the basis of total
"Costs" of Seller as set forth on Exhibit "D" hereto, including all costs of
acqisition, improvements and operating shortfall; plus 1/3 of East Coast Golf
Centers, Inc.'s development costs and operating losses; the total Puchase Price
being approximately $2,534.000. Seller shall provide Buyer with appropriate
evidence of all components of these Costs. The Purchase Price shall be allocated
as set forth on Exhibit "E" hereto.
B. If the Purchase Price is determined to be greater than
$2,660,700.00 during the Examination Period, Buyer shall notify Seller. Seller
shall have five (5) days to notify Buyer of its election to waive the overage.
If Seller notifies Buyer of its election to waive the overage, Buyer shall
proceed to Closing as provided herein. If Seller notifies Buyer it does not
elect to waive the overage, Buyer shall have five (5) days to notify Seller of
its election to terminate this Agreement or proceed to Closing based on such
Purchase Price.
C. A portion of the purchase price shall be payable by a
non-interest bearing "Note" of Buyer in the amount and form agreed to by Buyer
and Seller during the Examination Period. The maturity date shall be thirteen
months from Closing with no penalty for prepayment. Mandatory prepayments shall
be due equal to any payments
<PAGE>
made by the Optionee under the Stock Option Agreement attached hereto. The
aggregate face amount of the Note delivered hereunder and under each of the
"Other Agreements" hereinafter referred to shall not exceed $600,000.00.
4. CLOSING.
A. The right to purchase granted hereunder may be exercised by
Buyer giving written notice of its desire to close to Seller prior to expiration
of the Examination Period. This notice shall require the parties to proceed with
Closing with respect to the Assignment and the purchase and sale of the Assets.
Closing shall occur within fifteen (15) business days of Seller's receipt of
such notice from Buyer. All appropriate sums due Seller or Buyer shall be
ascertained at Closing or, if not capable of ascertainment at Closing, within
ninety (90) days thereafter at the reasonable request of either Buyer or Seller.
B. At the Closing, Buyer and Seller shall execute all documents
reasonably necessary to carry out the provisions hereof and to transfer its
interest in the Ground Lease and the Real property and all Assets to Buyer,
including but not limited to the Lease Assignment; a General Assignment of all
applicable contract rights and other intangible personal property (including all
construction warranties and all applicable licenses and permits); a Bill of Sale
conveying all Assets; a Closing Statement; a so-called FIRPTA Affidavit; a
No-Lien, Gap and Parties in Possession Affidavit; and a letter to all vendors.
Seller shall also provide evidence of good standing, corporate resolution (with
incumbency certificate) and any other items reasonably required by Buyer or the
title insurer.
C. At Closing, Buyer shall pay Seller the Purchase Price as
provided herein, and Seller shall pay off the "Permitted Liens" hereinafter
described.
D. Buyer shall pay all closing costs (but not Seller's
attorney's fees) incident to the transaction as part of the Purchase Price. The
closing costs are included in the Costs shown on Exhibit "D".
<PAGE>
E. Upon payment of the Purchase Price, possession of the
Project shall be made available to the Purchaser on the day of Closing.
F. At Closing, Seller shall deliver an appropriate release
and termination agreement with respect to that certain Development Agreement
dated August 15, 1994, as amended on July 25, 1995.
5. CONDITIONS TO CLOSING.
Buyer's obligation to purchase the Project is subject to all
matters set forth herein. Seller and Buyer each agree to proceed in good faith
and take such action as is reasonably within its control in order to consummate
the transaction contemplated hereby, in accordance with the provisions hereof.
A. During the Examination Period, Buyer shall obtain a
commitment (the "Title Commitment") issued by a nationally recognized title
company (the "Title Company") for an A.L.T.A. Form B leasehold title insurance
policy (the "Title Policy"), showing title to the Real Property in Seller and
subject only to those matters acceptable to Buyer (the "Permitted Exceptions")
in the exercise of its sole discretion.
(2) If the Title Commitment contains exceptions other
than Permitted Exceptions, Buyer shall notify Seller of its approval or
rejection of such exceptions prior to the expiration of the Examination Period.
All such "Unpermitted Exceptions" and "Survey Defects" (as defined below), shall
be corrected at Seller's expense, and/or removed of record in a manner
satisfactory to Buyer, and shall not appear on the Title Policy when issued;
provided, however, that Seller shall not be obligated to expend more than
$100,000.00 to cure any such Unpermitted Exceptions. If Seller is unable to
correct and/or remove of record any Unpermitted Exception(s) by the date of
Closing set forth herein, then Buyer may, upon written notice to Seller,
postpone and repostpone the Closing for a period totalling in the aggregate not
more than ninety (90) days so as to permit Seller to correct and/or remove of
record such Unpermitted Exception(s). If Seller is not obligated to or is unable
to cure of record any Unpermitted
<PAGE>
Exceptions, Buyer shall either (i) proceed to Closing with no adjustment to the
Purchase Price, or (ii) terminate this Contract.
B. During the Examination Period, Buyer, at its sole cost and
expense, shall obtain a current survey of the Property (the "Survey") certified
to the Seller, Buyer and to the Title Company, and dated as of the then current
date. The Survey shall be reasonably satisfactory to Buyer in form and
substance, shall locate all Improvements and show all building set-back lines
(public and private) and applicable Schedule B exceptions on the Title
Commitment, shall include flood plain designations, and shall be in such form as
the Title Company shall require to delete the standard survey exceptions in the
Title Policy. The Survey shall indicate that the Property does not include any
gaps, hiatuses, encroachments, encumbrances, drainage canals or other matters
not acceptable to Buyer. Any survey matters which cause the Survey not to comply
with the requirements are referred to herein as "Survey Defects".
C. In addition to all other matters set forth herein, Buyer
shall have no obligation to consummate the within contemplated transaction
unless and until the following conditions have either been satisfied or waived
by Buyer in writing. If all such conditions are neither satisfied nor waived,
Buyer may thereafter terminate this Agreement upon written notice to Seller.
Such conditions are as follows:
(a) All representations, warranties and covenants of
Seller hereby shall be true and correct on the Closing Date and Buyer shall have
received such evidence thereof as Buyer may reasonably request;
(b) Between the date of this Agreement and the Closing
Date, there shall have been no intervening destruction or material, uninsured
damage to or condemnation of the Premises or any portion thereof, or any
material adverse change in the profitability of the Project.
(c) Seller shall have performed all of its other
obligations under this Agreement; and
<PAGE>
(d) The Seller shall not be in default under, and Buyer
shall not have terminated, any of the "Other Agreements" executed simultaneously
herewith and described on Supplement "A" hereto; provided, however, if Buyer
determines not to proceed under the Charlotte Agreement described on Supplement
"A", such Charlotte Agreement shall not be one of the "Closing Agreements" for
purposes hereof. It is understood and agreed that the closing hereunder and the
closing under the Other Agreements shall occur simultaneously and neither Buyer
nor Seller shall be obligated hereunder in the event a closing does not so occur
under the Other Agreements.
6. DEFAULT. Upon a default by either party hereunder, the
non-defaulting party shall have all rights and remedies available at law or in
equity, including, but not limited to, the right of specific performance.
7. ACCESS TO PREMISES.
A. Commencing on the Effective Date and terminating
on thirty (30) days thereafter (the "Examination Period"), Buyer and Buyer's
agents shall have the right to enter the Real Property at all reasonable times
to examine the Project, provided that Buyer shall not interfere with Seller's
operation of the Project. In the event this Agreement is terminated, the right
of entry granted hereby shall likewise be terminated.
B. Without limiting the generality of the foregoing,
Buyer may perform or cause to be performed soil tests, inspections, radon and
asbestos investigations, environmental audits, surveying and engineering
services, appraisals and to otherwise view and inspect the Project and all
components thereof, any and all of Seller's financial and other records in
connection therewith. Any such entry upon the Real Property shall be at Buyer's
sole risk and expense and Buyer shall indemnify and hold Seller harmless from
any such entry, and of and from any and all costs, expenses, loss, damage, claim
or liability, arising out of or incurred or claimed in connection with the
exercise by Buyer of such right of entry, and any such entry shall be performed
in
<PAGE>
such a manner so as to minimize damage to the Real Property. This indemnity
shall survive termination hereof or Closing.
C. Seller also hereby expressly grants Buyer
permission to investigate and to examine any and all governmental records and to
conduct interviews with any and all relevant governmental and regulatory
authorities with respect to the use and ownership of the Project, all of which
examinations and inspections shall be undertaken at the sole cost and expense of
Buyer.
D. Immediately upon the execution hereof, Seller
shall make available to Buyer for inspection or copying: any and all zoning and
platting information; all site plans and the like; any soil tests; any existing
title insurance policies and commitments; the Ground Lease and all documents and
correspondence in connection therewith; all governmental approvals, permits and
licenses (the "Licenses"); any existing surveys, together with as-built plans
and specifications; all construction contracts and records; sales tax returns
for the last twelve (12) months; real estate tax bills; all architectural and
construction contracts; existing insurance policies; all Project agreements and
any correspondence in connection therewith; all appraisals, marketing studies
and the like; all management and service contracts; all operating and expense
reports prepared by or for Seller; all books and records of Seller or Seller's
agents concerning the Project and any other documents concerning the Project
reasonably requested by Buyer and which are in the possession or control of
Seller or its agents.
E. In addition to the provisions of Section 3.B. hereof, if any
of the inspections or investigations referred to hereinabove are not
satisfactory in the exercise of Buyer's reasonable business judgment, Buyer may
terminate this Agreement by written notice to Seller prior to the termination of
the Examination Period. In such event, neither party shall have any further
rights or obligations hereunder.
<PAGE>
8. REPRESENTATIONS BY SELLER.
Seller represents and warrants to Buyer as follows:
A. MARKETABLE TITLE. Seller has good, marketable and
insurable leasehold title to the Real Property, and Seller has good and
marketable title to the Assets, free and clear of all mortgages, liens and
security interests, except as shown on Exhibit "G" hereto (the "Interim Liens").
B. CONDEMNATION PENDING OR THREATENED. There is no pending
or threatened condemnation or similar proceeding affecting the Real Property or
any portion thereof, nor has Seller knowledge that any such action is presently
contemplated.
C. ADVERSE INFORMATION. Seller has no information or
knowledge of any change contemplated in any applicable laws, ordinances, or
restrictions, or any judicial or administrative action, or any action by
adjacent landowners, or natural or artificial conditions upon the Real Property,
or the condition thereof, which would prevent, limit, impede, or render more
costly Buyer's use of the Premises.
D. COMPLIANCE WITH LAWS. To the best of Seller's knowledge,
Seller has complied with all applicable laws, ordinances, regulations, statutes,
rules and restrictions pertaining to and affecting the Project. Performance of
this Agreement will not result in any breach of, or constitute any default
under, or result in the imposition of, any lien or encumbrance upon the Project
under any agreement or other instrument to which Seller is a party or by which
Seller or the Project might be bound.
E. PENDING LITIGATION. Except as shown on Exhibit "H",
there are no legal actions, suits, or other legal or administrative proceedings,
including condemnation cases, pending or threatened, against the Project, and
Seller is not aware of any facts which might result in any such action, suit or
other proceedings.
F. DISCLOSURE OF ADVERSE FACTS. To the knowledge of Seller,
there is
<PAGE>
no significant adverse fact or condition relating to the Project or its
continued use by Buyer which has not been specifically disclosed in writing by
Seller to Buyer, and Seller knows of no fact or condition of any kind or
character whatsoever which adversely affects such intended use of the Project by
Buyer.
G. BUILDING PERMITS. To the best of Seller's knowledge,
all building permits required for the Project are in good standing and were
validly issued by the appropriate governmental authorities, and all required
certificates of occupancy have been issued and are outstanding.
<PAGE>
H. EXISTING IMPROVEMENTS. To the best of Seller's
knowledge, all buildings and improvements have been completed and installed in
accordance with the plans and specifications approved by the various
governmental authorities having jurisdiction and permanent certificates of
occupancy, all licenses, permits, authorizations, and approvals required by all
governmental authorities having jurisdiction and the requisite certificates of
the local board of fire underwriters (or other body exercising similar
functions) have been issued for the buildings and improvements and have been
paid for.
I. NO VIOLATIONS OF LAWS, ETC. To the best of Seller's
knowledge, no building, or similar law, ordinance or regulation is, or as of the
Closing will be, violated by the continued maintenance, operation, or use of any
buildings, improvements, or structures presently erected on the Real Property or
by the continued maintenance, operation, or use of the parking areas. There are
no uncured violations of federal, state, or municipal laws, ordinances, orders,
regulations, or requirements affecting any portion of the Project. To the best
of Seller's knowledge, no heating equipment, incinerators or other burning
devices violate, or as of the Closing will violate, any applicable federal,
state, or municipal laws, ordinances, orders, regulations or requirements.
J. SERVICE CONTRACTS. There are no contracts, oral or
written, with any employees nor any service contract, maintenance contract nor
any other contract or agreement relating to the Project which are not terminable
at will. Copies of all such existing agreements shall have been delivered to
Buyer during the Examination Period.
K. CONDITION. To the best of Seller's knowledge, all
building and operating equipment and all Assets are in good and proper operating
order and the improvements are in good structural condition, free of termite
infestation, roof leakage, wood rot or decay or any structural defect which
substantially impairs the value or life
<PAGE>
expectancy.
L. HAZARDOUS SUBSTANCES. Seller hereby represents and
warrants to Buyer that (i) to the best of Seller's knowledge, the Project is not
contaminated with any hazardous substance; (ii) Seller has not caused and will
not cause, and to the best of Seller's knowledge, there never has occurred, the
release of any hazardous substance on the Real Property; (iii) to the best of
Seller's knowledge, the Real Property is not subject to any federal, state or
local "superfund" lien, proceedings, claim, liability or action, or the threat
or likelihood thereof, for the cleanup, removal, or remediation of any such
hazardous substance from the Real Property or from any other real property owned
or controlled by Seller or in which Seller has any interest, legal or equitable;
(iv) to the best of Seller's knowledge, there is no asbestos (or other regulated
material) in any of the improvements; (v) to the best of Seller's knowledge,
there are no underground storage tanks on the Real Property; (vi) to the best of
Seller's knowledge, by acquiring the Real Property, Buyer will not incur or be
subjected to any "superfund" liability for the cleanup, removal or remediation
of any hazardous substance from the Real Property or any liability, cost, or
expense for the removal of any asbestos or underground storage tank from the
Real Property; and (vii) Seller will indemnify, defend, and hold Buyer harmless
from and against any and all claims, demands, liabilities, damages, suits,
actions, judgments, fines, penalties, loss, cost and expense (including, without
limitation, attorneys fees) arising or resulting from, or suffered, sustained or
incurred by Buyer as a result of, the material untruth or inaccuracy of any of
the foregoing representations and warranties of Seller to Buyer, which indemnity
shall survive the closing. The terms "hazardous substance," "release" and
"removal" as used herein shall have the same meaning and definition as set forth
in paragraphs (14), (22) and (23), respectively, of Title 42 US.C. section 9601
and under any applicable Ohio law provided, however, that the
<PAGE>
term "hazardous substance" as used herein also shall include "hazardous waste"
as defined in paragraph (5) of 42 U.S.C. section 6903 and "petroleum" as defined
in paragraph (8) of 42 U.S.C. section 6991. The term "superfund" as used herein
means the Comprehensive Environmental Response, Compensation and Liability Act,
as amended, being Title 42 U.S.C. section 9601 et seq., as amended, and any
similar state statute or local ordinance applicable to the Property, and all
rules and regulations promulgated, administered and enforced by any governmental
agency or authority pursuant thereto. The term "underground storage tank" as
used herein shall have the same meaning and definition as set forth in paragraph
(1) of 42 U.S.C. section 6991, and applicable Ohio law.
M. AUTHORITY. Seller has the authority and power to enter
into this Agreement and to consummate the transaction provided for by this
Agreement. Consummation of this transaction will not breach any agreement to
which Seller is a party.
N. ORGANIZATION. Seller is duly organized and existing in
good standing under the laws of the State of Ohio.
O. STATEMENTS. Exhibit "I" attached hereto is a true,
correct and complete revenue and expense statement for the Project to date.
P. LIENS. There are no mortgages or deeds of trust or
security agreements (other than those matters referred to on Exhibit "G" hereto)
encumbering the Real Property or the Assets. At Closing, Seller shall deliver an
appropriate release agreement from each such lienholder.
Q. LIABILITIES. All liabilities and obligations of Seller
with respect to the Project are clearly and completely reflected on the
Statements attached hereto as Exhibit "J". Except for those liabilities set
forth on Exhibit "J-1" which are to be assumed by Buyer, all of such liabilities
shall be paid in full by Seller as of Closing.
<PAGE>
R. GROUND LEASE.
(a) The Ground Lease shown on Exhibit "K" is true, accurate and
complete. No other lease agreement affects the Real Property or any portion
thereof.
(b) The Ground Lease is in full force and effect, unmodified and
no event of default by lessor or lessee exists thereunder.
(c) The Ground Lease will not be changed, modified or altered
without the prior written consent of Buyer.
(d) At closing, Ground Lessor shall execute the Lease
Assignment.
S. ZONING. To the best of Seller's knowledge, (i) the
Property is zoned to permit the Project, without special exception; and (ii) the
Property is not a non-conforming use. Seller has no knowledge of any fact,
action or proceeding, whether actual, pending, or threatened, which could result
in a modification or the termination of such zoning.
T. NO SPECIAL ASSESSMENTS. To the best of Seller's
knowledge, no portion of the Property is affected by any special assessments,
whether or not constituting a lien thereon.
U. PARTIES IN POSSESSION. There are no parties in
possession of any portion of the Property as lessees, licensees,
concessionaries, tenants at sufference or trespassers.
V. INSURANCE. Seller currently maintains, and shall
maintain until Closing, the insurance set forth on Supplement "B" hereto. At
Buyer's election, this insurance can be assumed at Closing.
W. EMPLOYEE CONTRACTS/PLANS. Seller warrants that there
are no union contracts, collective bargaining agreements, ERISA Employee Benefit
Plans, health benefit plans, or employment agreements with respect to the
Project.
<PAGE>
X. TAXES.
a. All federal, state and local returns, forms or reports
required to be filed with respect to any Tax (as defined below) liability of
Seller or the Project have been filed in a timely manner (taking into account
all extensions of due dates) and any tax of Seller that is due and payable has
been paid and no deficiencies for any Tax in respect of Seller or the Project
have been asserted or assessed against Seller or the Project in writing which
remain unpaid. Any Tax attributable to periods prior to the closing Date, but
not yet payable shall be paid when due by Seller.
b. "Tax" means any federal, state or local income, gross
receipts, franchise, privilege, estimated, alternative minimum, add-on minimum,
sales, use, transfer, registration, value added, excise, natural resources,
severance, stamp, occupation, premium, windfall profit, customs, duties, real
property, personal property, ad valorem, capital, stock, social security,
unemployment, disability, payroll, license, employee or other withholding, or
other tax, of any kind whatsoever, and including any interest, penalties or
additions to tax. For purposes of this Agreement, income taxes shall mean taxes
based on or measured by net income but shall not include franchise, capital,
stock, minimum, gross receipts or other taxes not based solely on net income.
9. OPINION OF SELLER'S COUNSEL. At Closing, Seller shall
deliver to Buyer an opinion of Seller's counsel dated on the date of closing to
the following effect:
(a) Seller is a duly organized and validly existing corporation
in good standing under the laws of the State of Ohio.
(b) Seller has the power to carry on its business as it is
presently being conducted, to enter into this Agreement, to assign, transfer,
and deliver to Buyer the properties, assets and business of Seller as
contemplated by this Agreement.
(c) All proceedings required by law or by the provisions of
Seller's
<PAGE>
operating agreement to be taken by the Seller on or before the date of this
Agreement in connection with the consummation of the transactions contemplated
by this Agreement have been duly and validly taken.
(d) This Agreement and the instruments executed and delivered to
Buyer pursuant to this Agreement have been fully and properly authorized,
executed and delivered and constitute the legal, valid and binding obligation of
Seller, enforceable in accordance with their terms.
(e) The performance of this Agreement and the consummation of
the transactions contemplated by this Agreement will not result in any breach or
violation of any of the terms or provisions of, Seller's articles of
incorporation or bylaws.
(f) Seller's counsel has no knowledge of any litigation,
proceeding or governmental investigation (whether state or federal) or labor
dispute or labor trouble pending or threatened against or relating to Seller or
its properties, assets or business.
10. ASSIGNMENT. Buyer shall have the right to assign this
Agreement to a related or affiliated entity.
11. LIABILITIES OF SELLER. Buyer shall not, except as
expressly set forth herein, assume or become liable for any costs, expenses,
liabilities or obligations of Seller or the Project and Seller agrees to defend,
indemnify and hold Buyer harmless from any such liabilities. This indemnity
shall survive termination hereof at closing.
Seller shall comply with all relevant "bulk sales act" or
similar requirements with respect to any Project vendors or creditors.
12. BROKERAGE. Buyer and Seller each represent to the other
that they have dealt with no broker in connection with this transaction. Any
fees or commissions which may be claimed by any agent, salesman or broker shall
be the sole responsibility of the party who has dealt with any such agent,
salesman or broker. Each party agrees to
<PAGE>
indemnify and hold harmless the other party hereto for any and all judgments,
costs of suit, attorneys' fees and other reasonable expenses that the indemnitee
may incur by reason of any action or claim made against the indemnitee by any
agent, salesman or broker dealing, or claiming to have dealt, with indemnitors.
This provision shall survive Closing, or termination of this Agreement, for a
period of five (5) years.
13. NOTICES. Any notice provided for by this Agreement and
any other notice or communication that one party may wish to send to another
shall be in writing and sent by overnight commercial courier service (i.e.,
Federal Express or Purolator) addressed to the party for which such notice or
communication is intended, at such party's address set forth below or at any
other address provided in writing by such party to the other party by notice
complying with this Section.
Seller: Mr. Donald Schaeffer
c/o The DeMatteis Organizations
EAB Plaza
Uniondale, New York 11556-0102
With a copy to: Arnold L. Bartfeld, Esq.
Alter, Bartfeld & Mantel, LLP
90 Park Avenue 35th Floor
New York, New York 10016
Buyer: Golden Bear Golf Centers, Inc.
11780 U.S. Highway #1
North Palm Beach, FL 33408
Attention: Mr. Gary Rosmarin, President
With a copy to: David M. Shaw, Esq.
Fleming, Haile & Shaw, P.A.
440 Royal Palm Way, Suite 100
Palm Beach, Florida 33480
<PAGE>
14. ATTORNEYS' FEES. If either party commences an action
against the other to enforce any of the terms of this Agreement or because of
the breach by either party of any of the terms hereof, the losing or defaulting
party shall pay to the prevailing party the reasonable attorneys' fees, costs
and expenses incurred in connection with the prosecution or defense of such
action, at trial and all appellate levels. Each party agrees to jurisdiction and
venue in Palm Beach County, Florida.
15. CONFIDENTIALITY. The terms of this Agreement and the
information made available as a result of the investigations which preceded the
consummation of the transactions contemplated by this Agreement are confidential
and are personal or trade or business secrets of the parties. The parties shall
not disclose to any other person the nature, terms, or conditions of this
Agreement or any information concerning the respective parties unless required
by this Agreement or as a result of litigation relating to this Agreement or the
respective parties.
16. NON-COMPETE. As part of the consideration to Buyer for
entering into and consummating this transaction, Seler and Indemnitors covenant
and agree not to (i) enter into any competing or similar business within a
25-mile radius of the Real Property. Seller and Buyer covenant and agree that
this provision may be enforced by injunction or other equitable relief without
the necessity of Buyer placing a bond with the Court. Any violation of the
covenants (or any of them) set forth herein by Seller and Buyer would materially
and irrevocably harm Buyer and its business. This provision shall survive
closing for a period of five (5) years.
<PAGE>
17. SURVIVAL. All representations, warranties and
indemnities of Seller, and all applicable covenants and agreements of Buyer and
Seller, shall survive execution of the Lease Assignment and closing hereunder
for a period of [six months] [one (1) year] and shall not merge into such
agreement or the closing instruments hereunder. Seller shall indemnify and hold
Buyer harmless from any loss, cost, damage or expense whatsoever arising from a
breach of any such representation, warranty, covenant or agreement. This
indemnity shall be secured by [$50,000.00] placed in an interest bearing escrow
account at Closing in accordance with the escrow agreement attached hereto as
Supplement C.
18. COOPERATION. Buyer and Seller will cooperate with
respect to all matters pertaining to Closing hereunder.
19. MAINTENANCE AND RISK OF LOSS. Commencing with the date
hereof, Seller shall maintain the Project in its current condition and with the
same standard of care as it presently maintains the Project. All risk of loss to
the Project prior to the Closing shall be upon the Seller.
20. AUTHORITY OF SELLER. Each party signing on behalf of
Seller hereby represents and warrants to Buyer that he has full authority to
sign this Agreement and bind the Seller on behalf of the Seller.
21. AUTHORITY OF THE BUYER. The undersigned represents that
it has full power and authority to execute this Agreement on behalf of the
Buyer.
22. LICENSES. Seller shall cooperate with, and execute all
necessary documents requested by, Buyer in the transfer (and issuance as
applicable) of all Licenses in the name of Buyer.
23. AUDIT. Seller shall make the books and records for the
Project available to Buyer for a period of three (3) years after the Closing to
permit Buyer's
<PAGE>
accountants to conduct an audit at Buyer's cost. In connection with such audit,
Seller agrees to execute and deliver a letter in the form of Exhibit "L" hereto.
The provisions of this paragraph shall survive Closing.
24. PREPARATION OF AGREEMENT. Although this document has
been prepared by counsel to Buyer, it reflects extensive negotiations with the
Seller and Seller's counsel and shall not be construed against Buyer.
25. EFFECTIVE DATE. The date of this Agreement ("Effective
Date") shall be the date upon which the last one of Seller and Buyer has signed
this Agreement.
26. TIME FOR ACCEPTANCE. If this Agreement is not executed
by Seller and returned to Buyer on or before ____________________, the offer set
forth herein shall terminate.
27. FACSIMILE. The parties agree that a facsimile
transmission of the signed agreement constitutes an original and binding
document.
28. COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement for
themselves, their respective heirs, executors, personal representatives,
successors and assigns as of the date and year first above written.
BUYER:
GOLDEN BEAR GOLF CENTERS, INC.
By: /S/ GARY ROSMARIN
------------------------------
Name: Gary Rosmarin
Title: President
SELLER:
EAST COAST GOLF CENTERS OF
COLUMBUS, LTD.
By: /S/ LAWRENCE RAFFERTY, its
-----------------------------
Name: Lawrence Rafferty
Title: Member/Sec., Treas.
<PAGE>
SCHEDULE OF EXHIBITS
Exhibit "A" Real Estate
Exhibit "B" Improvements and Assets
Exhibit "C" Form of Assignment
Exhibit "D" Calculation of Purchase Price
Exhibit "E" Allocation of Purchase Price
Exhibit "F" Operating Statements
Exhibit "G" Interim Liens
Exhibit "H" Litigation
Exhibit "I" Operating Statement
Exhibit "J" Liabilities
Exhibit "J-1" Liabilities Assumed by Buyer
Exhibit "K" Ground Lease
Exhibit "L" Audit Letter
Supplement "A" Other Agreements
Supplement "B" Insurance
Supplement "C" Escrow Agreement
Schedule "A" Stock Option Agreement
NOTE: Any Exhibits hereto shall be initialled by Buyer and Seller. Any Exhibits
not appended hereto on the Effective Date shall be agreed to during the
Inspection Period. In the event of a material dispute as to any of the Exhibits,
either party may terminate this Agreement.
In the event of termination hereof, the Stock Option Agreement
shall terminate.
AGREEMENT
THIS AGREEMENT, made and entered as of the _____ day of _______,
1996, by and between EAST COAST GOLF CENTER OF FORT LAUDERDALE, INC., a Florida
corporation ("Seller"), having an address of c/o The DeMatteis Organizations,
EAB Plaza, Uniondale, New York 11556-0102 and Golden Bear Golf Centers, Inc., a
Florida corporation with an address of 11780 U.S. Highway #1, North Palm Beach,
Florida 33408 ("Buyer" or "Purchaser"), recites and provides as follows:
RECITALS
A. Seller is the sole owner of legal and equitable title of a
fee simple leasehold estate in the real estate described on Exhibit "A" hereto
(the "Real Property").
B. Seller is also the owner of the assets located at the Real
Property (including the "Improvements" thereon) and described on Exhibit "B"
hereto (the "Assets"). The Assets include that intangible personal property
(e.g. contracts, licenses and permits) described on Exhibit "B".
C. Seller has agreed to grant to Buyer the right to (i) assume
the existing lease of the Real Property and (ii) purchase the Assets. The Real
Property and Assets are collectively referred to herein as the "Project."
FOR AND IN CONSIDERATION of the sum of TEN DOLLARS ($10.00) and
other good and valuable consideration, the receipt of which is hereby
acknowledged,
THE PARTIES HERETO DO HEREBY MUTUALLY COVENANT AND AGREE AS
FOLLOWS:
1. AGREEMENT.
A. Seller hereby grants to Buyer the exclusive right to assume
the lease of the Real Property (the "Ground Lease"), including any option to
purchase or right of first refusal in connection therewith, on the terms and
conditions hereinafter described.
<PAGE>
B. Seller hereby grants to Buyer the exclusive right to purchase
the Assets on the terms and conditions hereinafter described.
2. GROUND LEASE.
Subject to the terms and conditions hereinafter stated, Buyer
shall have the right to lease the Project by executing the Assignment and
Assumption of Ground Lease (the "Lease Assignment") in the form of Exhibit "C"
hereto.
3. PURCHASE PRICE.
A. During the "Examination Period" hereinafter described, the
parties shall agree to the Purchase Price for the Project on the basis of total
"Costs" of Seller as set forth on Exhibit "D" hereto, plus cost of financing
(approximately $15,000), plus 1/3 of East Coast Golf Centers, Inc.'s development
costs and operating losses; the total Purchase Price being approximately
$2,844,000. Seller shall provide Buyer with appropriate evidence of all
components of these Costs. The Purchase Price shall be allocated as set forth on
Exhibit "E" hereto.
B. If the Purchase Price is determined to be greater than
$2,986,200.00 during the Examination Period, Buyer shall notify Seller. Seller
shall have five (5) days to notify Buyer of its election to waive the overage.
If Seller notifies Buyer of its election to waive the overage, Buyer shall
proceed to Closing as provided herein. If Seller notifies Buyer it does not
elect to waive the overage, Buyer shall have five (5) days to notify Seller of
its election to terminate this Agreement or proceed to Closing based on such
Purchase Price.
C. A portion of the purchase price shall be payable by a
non-interest bearing "Note" of Buyer in the amount and form agreed to by Buyer
and Seller during the Examination Period. The maturity date shall be thirteen
months from Closing with no penalty for prepayment. Mandatory prepayments shall
be due equal to any payments made by the Optionee under the Stock Option
Agreement attached hereto. The aggregate face amount of the Note delivered
hereunder and under each of the "Other Agreements"
<PAGE>
hereinafter referred to shall not exceed $600,000.00.
4. CLOSING.
A. The right to purchase granted hereunder may be exercised by
Buyer giving written notice of its desire to close to Seller prior to expiration
of the Examination Period. This notice shall require the parties to proceed with
Closing with respect to the Assignment and the purchase and sale of the Assets.
Closing shall occur within fifteen (15) business days of Seller's receipt of
such notice from Buyer. All appropriate sums due Seller or Buyer shall be
ascertained at Closing or, if not capable of ascertainment at Closing, within
ninety (90) days thereafter at the reasonable request of either Buyer or Seller.
B. At the Closing, Buyer and Seller shall execute all documents
reasonably necessary to carry out the provisions hereof and to transfer its
interest in the Ground Lease and the Real property and all Assets to Buyer,
including but not limited to the Lease Assignment; a General Assignment of all
applicable contract rights and other intangible personal property (including all
construction warranties and all applicable licenses and permits); a Bill of Sale
conveying all Assets; a Closing Statement; a so-called FIRPTA Affidavit; a
No-Lien, Gap and Parties in Possession Affidavit; and a letter to all vendors.
Seller shall also provide evidence of good standing, corporate resolution (with
incumbency certificate) and any other items reasonably required by Buyer or the
title insurer.
C. At Closing, Buyer shall pay Seller the Purchase Price as
provided herein, and Seller shall pay off the "Permitted Liens" hereinafter
described.
D. Buyer shall pay all closing costs (but not Seller's
attorney's fees) incident to the transaction as part of the Purchase Price. The
closing costs are included in the Costs shown on Exhibit "D".
E. Upon payment of the Purchase Price, possession of the Project
<PAGE>
shall be made available to the Purchaser on the day of Closing.
F. At Closing, Seller shall deliver an appropriate release and
termination agreement with respect to that certain Development Agreement dated
August 15, 1994, as amended on July 25, 1995.
5. CONDITIONS TO CLOSING.
Buyer's obligation to purchase the Project is subject to all
matters set forth herein. Seller and Buyer each agree to proceed in good faith
and take such action as is reasonably within its control in order to consummate
the transaction contemplated hereby, in accordance with the provisions hereof.
A. During the Examination Period, Buyer shall obtain a
commitment (the "Title Commitment") issued by a nationally recognized title
company (the "Title Company") for an A.L.T.A. Form B leasehold title insurance
policy (the "Title Policy"), showing title to the Real Property in Seller and
subject only to those matters acceptable to Buyer (the "Permitted Exceptions")
in the exercise of its sole discretion.
(2) If the Title Commitment contains exceptions other
than Permitted Exceptions, Buyer shall notify Seller of its approval or
rejection of such exceptions prior to the expiration of the Examination Period.
All such "Unpermitted Exceptions" and "Survey Defects" (as defined below), shall
be corrected at Seller's expense, and/or removed of record in a manner
satisfactory to Buyer, and shall not appear on the Title Policy when issued;
provided, however, that Seller shall not be obligated to expend more than
$100,000.00 to cure any such Unpermitted Exceptions. If Seller is unable to
correct and/or remove of record any Unpermitted Exception(s) by the date of
Closing set forth herein, then Buyer may, upon written notice to Seller,
postpone and repostpone the Closing for a period totalling in the aggregate not
more than ninety (90) days so as to permit Seller to correct and/or remove of
record such Unpermitted
<PAGE>
Exception(s). If Seller is not obligated to or is unable to cure of record any
Unpermitted Exceptions, Buyer shall either (i) proceed to Closing with no
adjustment to the Purchase Price, or (ii) terminate this Contract.
B. During the Examination Period, Buyer, at its sole cost and
expense, shall obtain a current survey of the Property (the "Survey") certified
to the Seller, Buyer and to the Title Company, and dated as of the then current
date. The Survey shall be reasonably satisfactory to Buyer in form and
substance, shall locate all Improvements and show all building set-back lines
(public and private) and applicable Schedule B exceptions on the Title
Commitment, shall include flood plain designations, and shall be in such form as
the Title Company shall require to delete the standard survey exceptions in the
Title Policy. The Survey shall indicate that the Property does not include any
gaps, hiatuses, encroachments, encumbrances, drainage canals or other matters
not acceptable to Buyer. Any survey matters which cause the Survey not to comply
with the requirements are referred to herein as "Survey Defects".
C. As of the date hereof, Seller has not completed the
construction of the Improvements. Closing hereunder shall not occur until
"substantial completion" thereof. For purposes hereof, "substantial completion"
shall be evidenced by a certificate of occupancy and the appropriate architect's
certificate. Any incomplete or punch-list items shall be completed by Seller, to
the reasonable satisfaction of Buyer, as quickly as practicable after Closing.
All costs thereof (including retainage) shall be paid by Buyer in accordance
with the provisions of Exhibit "D" hereto.
D. In addition to all other matters set forth herein, Buyer
shall have no obligation to consummate the within contemplated transaction
unless and until the following conditions have either been satisfied or waived
by Buyer in writing. If all such conditions are neither satisfied nor waived,
Buyer may thereafter terminate this
<PAGE>
Agreement upon written notice to Seller. Such conditions are as follows:
(a) All representations, warranties and covenants of
Seller hereby shall be true and correct on the Closing Date and Buyer shall have
received such evidence thereof as Buyer may reasonably request;
(b) Between the date of this Agreement and the Closing
Date, there shall have been no intervening destruction or material, uninsured
damage to or condemnation of the Premises or any portion thereof, or any
material adverse change in the profitability of the Project.
(c) Seller shall have performed all of its other
obligations under this Agreement; and
(d) The Seller shall not be in default under, and Buyer
shall not have terminated, any of the "Other Agreements" executed simultaneously
herewith and described on Supplement "A" hereto; provided, however, if Buyer
determines not to proceed under the Charlotte Agreement described on Supplement
"A", such Charlotte Agreement shall not be one of the "Closing Agreements" for
purposes hereof. It is understood and agreed that the closing hereunder and the
closing under the Other Agreements shall occur simultaneously and neither Buyer
nor Seller shall be obligated hereunder in the event a closing does not so occur
under the Other Agreements.
6. DEFAULT. Upon a default by either party hereunder, the
non-defaulting party shall have all rights and remedies available at law or in
equity, including, but not limited to, the right of specific performance.
7. ACCESS TO PREMISES.
A. Commencing on the Effective Date and terminating on
thirty (30) days thereafter (the "Examination Period"), Buyer and Buyer's agents
shall have the right to enter the Real Property at all reasonable times to
examine the Project,
<PAGE>
provided that Buyer shall not interfere with Seller's operation of the Project.
In the event this Agreement is terminated, the right of entry granted hereby
shall likewise be terminated.
B. Without limiting the generality of the foregoing,
Buyer may perform or cause to be performed soil tests, inspections, radon and
asbestos investigations, environmental audits, surveying and engineering
services, appraisals and to otherwise view and inspect the Project and all
components thereof, any and all of Seller's financial and other records in
connection therewith. Any such entry upon the Real Property shall be at Buyer's
sole risk and expense and Buyer shall indemnify and hold Seller harmless from
any such entry, and of and from any and all costs, expenses, loss, damage, claim
or liability, arising out of or incurred or claimed in connection with the
exercise by Buyer of such right of entry, and any such entry shall be performed
in such a manner so as to minimize damage to the Real Property. This indemnity
shall survive termination hereof or Closing.
C. Seller also hereby expressly grants Buyer permission
to investigate and to examine any and all governmental records and to conduct
interviews with any and all relevant governmental and regulatory authorities
with respect to the use and ownership of the Project, all of which examinations
and inspections shall be undertaken at the sole cost and expense of Buyer.
D. Immediately upon the execution hereof, Seller shall
make available to Buyer for inspection or copying: any and all zoning and
platting information; all site plans and the like; any soil tests; any existing
title insurance policies and commitments; the Ground Lease and all documents and
correspondence in connection therewith; all governmental approvals, permits and
licenses (the "Licenses"); any existing surveys, together with as-built plans
and specifications; all construction contracts and
<PAGE>
records; sales tax returns for the last twelve (12) months; real estate tax
bills; all architectural and construction contracts; existing insurance
policies; all Project agreements and any correspondence in connection therewith;
all appraisals, marketing studies and the like; all management and service
contracts; all operating and expense reports prepared by or for Seller; all
books and records of Seller or Seller's agents concerning the Project and any
other documents concerning the Project reasonably requested by Buyer and which
are in the possession or control of Seller or its agents.
E. In addition to the provisions of Section 3.B. hereof, if any
of the inspections or investigations referred to hereinabove are not
satisfactory in the exercise of Buyer's reasonable business judgment, Buyer may
terminate this Agreement by written notice to Seller prior to the termination of
the Examination Period. In such event, neither party shall have any further
rights or obligations hereunder.
8. REPRESENTATIONS BY SELLER.
Seller represents and warrants to Buyer as follows:
A. MARKETABLE TITLE. Seller has good, marketable and insurable
leasehold title to the Real Property, and Seller has good and marketable title
to the Assets, free and clear of all mortgages, liens and security interests,
except as shown on Exhibit "G" hereto (the "Interim Liens").
B. CONDEMNATION PENDING OR THREATENED. There is no pending or
threatened condemnation or similar proceeding affecting the Real Property or any
portion thereof, nor has Seller knowledge that any such action is presently
contemplated.
C. ADVERSE INFORMATION. Seller has no information or knowledge
of any change contemplated in any applicable laws, ordinances, or restrictions,
or any judicial or administrative action, or any action by adjacent landowners,
or natural or artificial conditions upon the Real Property, or the condition
thereof, which would
<PAGE>
prevent, limit, impede, or render more costly Buyer's use of the Premises.
D. COMPLIANCE WITH LAWS. To the best of Seller's knowledge,
Seller has complied with all applicable laws, ordinances, regulations, statutes,
rules and restrictions pertaining to and affecting the Project. Performance of
this Agreement will not result in any breach of, or constitute any default
under, or result in the imposition of, any lien or encumbrance upon the Project
under any agreement or other instrument to which Seller is a party or by which
Seller or the Project might be bound.
E. PENDING LITIGATION. Except as shown on Exhibit "H", there are
no legal actions, suits, or other legal or administrative proceedings, including
condemnation cases, pending or threatened, against the Project, and Seller is
not aware of any facts which might result in any such action, suit or other
proceedings.
F. DISCLOSURE OF ADVERSE FACTS. To the knowledge of Seller,
there is no significant adverse fact or condition relating to the Project or its
continued use by Buyer which has not been specifically disclosed in writing by
Seller to Buyer, and Seller knows of no fact or condition of any kind or
character whatsoever which adversely affects such intended use of the Project by
Buyer.
G. BUILDING PERMITS. To the best of Seller's knowledge, all
building permits required for the Project are in good standing and were validly
issued by the appropriate governmental authorities, and all required
certificates of occupancy have been issued and are outstanding.
H. EXISTING IMPROVEMENTS. To the best of Seller's knowledge, all
buildings and improvements shall be completed and installed in accordance with
the plans and specifications approved by the various governmental authorities
having jurisdiction and permanent certificates of occupancy, all licenses,
permits, authorizations, and approvals required by all governmental authorities
having jurisdiction and the
<PAGE>
requisite certificates of the local board of fire underwriters (or other body
exercising similar functions) have been issued for the buildings and
improvements and have been paid for.
I. NO VIOLATIONS OF LAWS, ETC. To the best of Seller's
knowledge, no building, or similar law, ordinance or regulation is, or as of the
Closing will be, violated by the continued maintenance, operation, or use of any
buildings, improvements, or structures presently erected on the Real Property or
by the continued maintenance, operation, or use of the parking areas. There are
no uncured violations of federal, state, or municipal laws, ordinances, orders,
regulations, or requirements affecting any portion of the Project. To the best
of Seller's knowledge, no heating equipment, incinerators or other burning
devices violate, or as of the Closing will violate, any applicable federal,
state, or municipal laws, ordinances, orders, regulations or requirements.
<PAGE>
J. SERVICE CONTRACTS. There are no contracts, oral or written,
with any employees nor any service contract, maintenance contract nor any other
contract or agreement relating to the Project which are not terminable at will.
Copies of all such existing agreements shall have been delivered to Buyer during
the Examination Period.
K. INTENTIONALLY DELETED.
L. HAZARDOUS SUBSTANCES. Seller hereby represents and warrants
to Buyer that (i) to the best of Seller's knowledge, the Project is not
contaminated with any hazardous substance; (ii) Seller has not caused and will
not cause, and to the best of Seller's knowledge, there never has occurred, the
release of any hazardous substance on the Real Property; (iii) to the best of
Seller's knowledge, the Real Property is not subject to any federal, state or
local "superfund" lien, proceedings, claim, liability or action, or the threat
or likelihood thereof, for the cleanup, removal, or remediation of any such
hazardous substance from the Real Property or from any other real property owned
or controlled by Seller or in which Seller has any interest, legal or equitable;
(iv) to the best of Seller's knowledge, there is no asbestos (or other regulated
material) in any of the improvements; (v) to the best of Seller's knowledge,
there are no underground storage tanks on the Real Property; (vi) to the best of
Seller's knowledge, by acquiring the Real Property, Buyer will not incur or be
subjected to any "superfund" liability for the cleanup, removal or remediation
of any hazardous substance from the Real Property or any liability, cost, or
expense for the removal of any asbestos or underground storage tank from the
Real Property; and (vii) Seller will indemnify, defend, and hold Buyer harmless
from and against any and all claims, demands, liabilities, damages, suits,
actions, judgments, fines, penalties, loss, cost and expense (including, without
limitation, attorneys fees) arising or resulting from, or suffered, sustained or
incurred by Buyer as a result of, the material untruth or inaccuracy of any of
the foregoing representations and
<PAGE>
warranties of Seller to Buyer, which indemnity shall survive the closing. The
terms "hazardous substance," "release" and "removal" as used herein shall have
the same meaning and definition as set forth in paragraphs (14), (22) and (23),
respectively, of Title 42 US.C. ss.9601 and under any applicable Florida law
provided, however, that the term "hazardous substance" as used herein also shall
include "hazardous waste" as defined in paragraph (5) of 42 U.S.C. ss.6903 and
"petroleum" as defined in paragraph (8) of 42 U.S.C. ss.6991. The term
"superfund" as used herein means the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, being Title 42 U.S.C. ss.9601 et
seq., as amended, and any similar state statute or local ordinance applicable to
the Property, and all rules and regulations promulgated, administered and
enforced by any governmental agency or authority pursuant thereto. The term
"underground storage tank" as used herein shall have the same meaning and
definition as set forth in paragraph (1) of 42 U.S.C. ss.6991, and applicable
Florida law.
M. AUTHORITY. Seller has the authority and power to enter into
this Agreement and to consummate the transaction provided for by this Agreement.
Consummation of this transaction will not breach any agreement to which Seller
is a party.
N. ORGANIZATION. Seller is duly organized and existing in good
standing under the laws of the State of Florida.
O. STATEMENTS. Exhibit "I" attached hereto is a true, correct
and complete revenue and expense statement for the Project to date.
P. LIENS. There are no mortgages or deeds of trust or security
agreements (other than those matters referred to on Exhibit "G" hereto)
encumbering the Real Property or the Assets. At Closing, Seller shall deliver an
appropriate release agreement from each such lienholder.
<PAGE>
Q. LIABILITIES. All liabilities and obligations of Seller with
respect to the Project are clearly and completely reflected on the Statements
attached hereto as Exhibit "J". Except for those liabilities set forth on
Exhibit "J-1" which are to be assumed by Buyer, all of such liabilities shall be
paid in full by Seller as of Closing.
R. GROUND LEASE.
(a) The Ground Lease shown on Exhibit "K" is true, accurate and
complete. No other lease agreement affects the Real Property or any portion
thereof.
(b) The Ground Lease is in full force and effect, unmodified and
no event of default by lessor or lessee exists thereunder.
(c) The Ground Lease will not be changed, modified or altered
without the prior written consent of Buyer.
(d) At closing, Ground Lessor shall execute the Lease
Assignment.
S. ZONING. To the best of Seller's knowledge, (i) the Property
is zoned to permit the Project, without special exception; and (ii) the Property
is not a non-conforming use. Seller has no knowledge of any fact, action or
proceeding, whether actual, pending, or threatened, which could result in a
modification or the termination of such zoning.
T. NO SPECIAL ASSESSMENTS. To the best of Seller's knowledge, no
portion of the Property is affected by any special assessments, whether or not
constituting a lien thereon.
U. PARTIES IN POSSESSION. There are no parties in possession of
any portion of the Property as lessees, licensees, concessionaries, tenants at
sufference or trespassers.
V. INSURANCE. Seller currently maintains, and shall maintain
until Closing, the insurance set forth on Supplement "B" hereto. At Buyer's
election, this
<PAGE>
insurance can be assumed at Closing.
W. EMPLOYEE CONTRACTS/PLANS. Seller warrants that there are no
union contracts, collective bargaining agreements, ERISA Employee Benefit Plans,
health benefit plans, or employment agreements with respect to the Project.
X. TAXES.
a. All federal, state and local returns, forms or reports
required to be filed with respect to any Tax (as defined below) liability of
Seller or the Project have been filed in a timely manner (taking into account
all extensions of due dates) and any tax of Seller that is due and payable has
been paid and no deficiencies for any Tax in respect of Seller or the Project
have been asserted or assessed against Seller or the Project in writing which
remain unpaid. Any Tax attributable to periods prior to the closing Date, but
not yet payable shall be paid when due by Seller.
b. "Tax" means any federal, state or local income, gross
receipts, franchise, privilege, estimated, alternative minimum, add-on minimum,
sales, use, transfer, registration, value added, excise, natural resources,
severance, stamp, occupation, premium, windfall profit, customs, duties, real
property, personal property, ad valorem, capital, stock, social security,
unemployment, disability, payroll, license, employee or other withholding, or
other tax, of any kind whatsoever, and including any interest, penalties or
additions to tax. For purposes of this Agreement, income taxes shall mean taxes
based on or measured by net income but shall not include franchise, capital,
stock, minimum, gross receipts or other taxes not based solely on net income.
9. OPINION OF SELLER'S COUNSEL. At Closing, Seller shall deliver
to Buyer an opinion of Seller's counsel dated on the date of closing to the
following effect:
(a) Seller is a duly organized and validly existing corporation
in good standing under the laws of the state of Florida.
<PAGE>
(b) Seller has the power to carry on its business as it is
presently being conducted, to enter into this Agreement, to assign, transfer,
and deliver to Buyer the properties, assets and business of Seller as
contemplated by this Agreement.
(c) All proceedings required by law or by the provisions of
Seller's articles of incorporation or bylaws to be taken by the Seller on or
before the date of this Agreement in connection with the consummation of the
transactions contemplated by this Agreement have been duly and validly taken.
(d) This Agreement and the instruments executed and delivered to
Buyer pursuant to this Agreement have been fully and properly authorized,
executed and delivered and constitute the legal, valid and binding obligation of
Seller, enforceable in accordance with their terms.
(e) The performance of this Agreement and the consummation of
the transactions contemplated by this Agreement will not result in any breach or
violation of any of the terms or provisions of, Seller's articles of
incorporation or bylaws.
(f) Seller's counsel has no knowledge of any litigation,
proceeding or governmental investigation (whether state or federal) or labor
dispute or labor trouble pending or threatened against or relating to Seller or
its properties, assets or business.
10. ASSIGNMENT. Buyer shall have the right to assign this
Agreement to a related or affiliated entity.
11. LIABILITIES OF SELLER. Buyer shall not, except as expressly
set forth herein, assume or become liable for any costs, expenses, liabilities
or obligations of Seller or the Project and Seller agrees to defend, indemnify
and hold Buyer harmless from any such liabilities. This indemnity shall survive
termination hereof at closing.
Seller shall comply with all relevant "bulk sales act" or
similar requirements with respect to any Project vendors or creditors.
<PAGE>
12. BROKERAGE. Buyer and Seller each represent to the other that
they have dealt with no broker in connection with this transaction. Any fees or
commissions which may be claimed by any agent, salesman or broker shall be the
sole responsibility of the party who has dealt with any such agent, salesman or
broker. Each party agrees to indemnify and hold harmless the other party hereto
for any and all judgments, costs of suit, attorneys' fees and other reasonable
expenses that the indemnitee may incur by reason of any action or claim made
against the indemnitee by any agent, salesman or broker dealing, or claiming to
have dealt, with indemnitors. This provision shall survive Closing, or
termination of this Agreement, for a period of five (5) years.
13. NOTICES. Any notice provided for by this Agreement and any
other notice or communication that one party may wish to send to another shall
be in writing and sent by overnight commercial courier service (i.e., Federal
Express or Purolator) addressed to the party for which such notice or
communication is intended, at such party's address set forth below or at any
other address provided in writing by such party to the other party by notice
complying with this Section.
Seller: Mr. Donald Schaeffer
c/o The DeMatteis Organizations
EAB Plaza
Uniondale, New York 11556-0102
With a copy to: Arnold L. Bartfeld, Esq.
Alter, Bartfeld & Mantel, LLP
90 Park Avenue 35th Floor
New York, New York 10016
Buyer: Golden Bear Golf Centers, Inc.
11780 U.S. Highway #1
North Palm Beach, FL 33408
Attention: Mr. Gary Rosmarin, President
With a copy to: David M. Shaw, Esq.
Fleming, Haile & Shaw, P.A.
440 Royal Palm Way, Suite 100
<PAGE>
Palm Beach, Florida 33480
14. ATTORNEYS' FEES. If either party commences an action against
the other to enforce any of the terms of this Agreement or because of the breach
by either party of any of the terms hereof, the losing or defaulting party shall
pay to the prevailing party the reasonable attorneys' fees, costs and expenses
incurred in connection with the prosecution or defense of such action, at trial
and all appellate levels. Each party agrees to jurisdiction and venue in Palm
Beach County, Florida.
15. CONFIDENTIALITY. The terms of this Agreement and the
information made available as a result of the investigations which preceded the
consummation of the transactions contemplated by this Agreement are confidential
and are personal or trade or business secrets of the parties. The parties shall
not disclose to any other person the nature, terms, or conditions of this
Agreement or any information concerning the respective parties unless required
by this Agreement or as a result of litigation relating to this Agreement or the
respective parties.
16. NON-COMPETE. As part of the consideration to Buyer for
entering into and consummating this transaction, Seler and Indemnitors covenant
and agree not to (i) enter into any competing or similar business within a
25-mile radius of the Real Property. Seller and Buyer covenant and agree that
this provision may be enforced by injunction or other equitable relief without
the necessity of Buyer placing a bond with the Court. Any violation of the
covenants (or any of them) set forth herein by Seller and Buyer would materially
and irrevocably harm Buyer and its business. This provision shall survive
closing for a period of five (5) years.
17. SURVIVAL. All representations, warranties and indemnities of
Seller, and all applicable covenants and agreements of Buyer and Seller, shall
survive execution of the Lease Assignment and closing hereunder for a period of
[six months]
<PAGE>
[one (1) year] and shall not merge into such agreement or the closing
instruments hereunder. Seller shall indemnify and hold Buyer harmless from any
loss, cost, damage or expense whatsoever arising from a breach of any such
representation, warranty, covenant or agreement. This indemnity shall be secured
by [$50,000.00] placed in an interest bearing escrow account at Closing in
accordance with the escrow agreement attached hereto as Supplement C.
18. COOPERATION. Buyer and Seller will cooperate with respect to
all matters pertaining to Closing hereunder.
19. MAINTENANCE AND RISK OF LOSS. Commencing with the date
hereof, Seller shall maintain the Project in its current condition and with the
same standard of care as it presently maintains the Project. All risk of loss to
the Project prior to the Closing shall be upon the Seller.
20. AUTHORITY OF SELLER. Each party signing on behalf of Seller
hereby represents and warrants to Buyer that he has full authority to sign this
Agreement and bind the Seller on behalf of the Seller.
21. AUTHORITY OF THE BUYER. The undersigned represents that it
has full power and authority to execute this Agreement on behalf of the Buyer.
22. LICENSES. Seller shall cooperate with, and execute all
necessary documents requested by, Buyer in the transfer (and issuance as
applicable) of all Licenses in the name of Buyer.
23. AUDIT. Seller shall make the books and records for the
Project available to Buyer for a period of three (3) years after the Closing to
permit Buyer's accountants to conduct an audit at Buyer's cost. In connection
with such audit, Seller agrees to execute and deliver a letter in the form of
Exhibit "L" hereto. The provisions of this paragraph shall survive Closing.
<PAGE>
24. PREPARATION OF AGREEMENT. Although this document has been
prepared by counsel to Buyer, it reflects extensive negotiations with the Seller
and Seller's counsel and shall not be construed against Buyer.
25. EFFECTIVE DATE. The date of this Agreement ("Effective
Date") shall be the date upon which the last one of Seller and Buyer has signed
this Agreement.
26. TIME FOR ACCEPTANCE. If this Agreement is not executed by
Seller and returned to Buyer on or before , the offer set forth herein shall
terminate.
27. FACSIMILE. The parties agree that a facsimile transmission
of the signed agreement constitutes an original and binding document.
28. COUNTERPARTS. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement for
themselves, their respective heirs, executors, personal representatives,
successors and assigns as of the date and year first above written.
BUYER:
GOLDEN BEAR GOLF CENTERS, INC.
By: /S/ GARY ROSMARIN
-----------------
Name: Gary Rosmarin
Title: President
SELLER:
EAST COAST GOLF CENTERS OF
FORT LAUDERDALE, INC.
By: /S/ LAWRENCE RAFFERTY
---------------------
Name: Lawrence Rafferty
Title: Sec., Treasurer
<PAGE>
SCHEDULE OF EXHIBITS
Exhibit "A" Real Estate
Exhibit "B" Improvements and Assets
Exhibit "C" Form of Assignment
Exhibit "D" Calculation of Purchase Price
Exhibit "E" Allocation of Purchase Price
Exhibit "F" Operating Statements
Exhibit "G" Interim Liens
Exhibit "H" Litigation
Exhibit "I" Operating Statement
Exhibit "J" Liabilities
Exhibit "J-1" Liabilities Assumed by Buyer
Exhibit "K" Ground Lease
Exhibit "L" Audit Letter
Supplement "A" Other Agreements
Supplement "B" Insurance
Supplement "C" Escrow Agreement
Schedule "A" Stock Option Agreement
NOTE: Any Exhibits hereto shall be initialled by Buyer and Seller. Any Exhibits
not appended hereto on the Effective Date shall be agreed to during the
Inspection Period. In the event of a material dispute as to any of the Exhibits,
either party may terminate this Agreement.
In the event of termination hereof, the Stock Option Agreement
shall terminate.
AGREEMENT
THIS AGREEMENT, made and entered as of the ____ day of ________,
1996, by and between EAST COAST GOLF CENTERS, INC. ("Seller"), having an address
of c/o The DeMatteis Organizations, EAB Plaza, Uniondale, New York 11556-0102
and Golden Bear Golf Centers, Inc., a Florida corporation with an address of
11780 U.S. Highway #1, North Palm Beach, Florida 33408 ("Buyer" or "Purchaser"),
recites and provides as follows:
RECITALS
A. Seller is the sole owner of legal and equitable title of a
fee simple leasehold estate in the real estate described on Exhibit "A" hereto
(the "Real Property"). The Real property includes all intangible personal
property (e.g. contracts, licenses and permits) applicable thereto.
B. The Real Property is vacant, unimproved land.
C. Seller has agreed to grant to Buyer the right to (i) assume
the existing lease of the Real Property and (ii) purchase all of Seller's
rights, title and interest in all development and other rights in connection
therewith. The use of the Real property as a "golf center" is referred to herein
as the "Project."
FOR AND IN CONSIDERATION of the sum of TEN DOLLARS ($10.00) and
other good and valuable consideration, the receipt of which is hereby
acknowledged,
THE PARTIES HERETO DO HEREBY MUTUALLY COVENANT AND AGREE AS
FOLLOWS:
1. AGREEMENT.
Seller hereby grants to Buyer the exclusive right to assume the
lease of the Real Property (the "Ground Lease"), including any option to
purchase or right of first
<PAGE>
refusal in connection therewith, on the terms and conditions hereinafter
described.
2. GROUND LEASE.
Subject to the terms and conditions hereinafter stated, Buyer
shall have the right to assume the Ground Lease by executing the Assignment and
Assumption of Ground Lease (the "Lease Assignment") in the form of Exhibit "C"
hereto.
3. PURCHASE PRICE.
A. During the "Examination Period" hereinafter described, the
parties shall agree to the Purchase Price for the Project on the basis of total
"Costs" of Seller as set forth on Exhibit "D" hereto plus 1/3 of East Coast Golf
Centers Inc.'s development costs and operating losses; the total Purchase Price
being approximately $364,000.00 (but no more than $382,200.00). Seller shall
provide Buyer with appropriate evidence of all components of these Costs. The
Purchase Price shall be allocated as set forth on Exhibit "E" hereto.
B. A portion of the purchase price shall be payable by a
non-interest bearing "Note" of Buyer in the amount and form agreed to by Buyer
and Seller during the Examination Period. The maturity date shall be thirteen
months from Closing with no penalty for prepayment. Mandatory prepayments shall
be due equal to any payments made by the Optionee under the Stock Option
Agreement attached hereto. The aggregate face amount of the Note delivered
hereunder and under each of the "Other Agreements" hereinafter referred to shall
not exceed $600,000.00.
4. CLOSING.
A. The right to purchase granted hereunder may be exercised by
Buyer giving written notice of its desire to close to Seller prior to expiration
of the Examination Period. This notice shall require the parties to proceed with
Closing hereunder. Closing shall occur within fifteen (15) business days of
Seller's receipt of such notice from Buyer. All appropriate sums due Seller or
Buyer shall be ascertained at Closing or, if not capable of ascertainment at
Closing, within ninety (90) days thereafter
<PAGE>
at the reasonable request of either Buyer or Seller.
B. At the Closing, Buyer and Seller shall execute all documents
reasonably necessary to carry out the provisions hereof and to transfer its
interest in the Ground Lease and the Real property to Buyer, including but not
limited to the Lease Assignment; a General Assignment of all applicable contract
rights and other intangible personal property (including any applicable licenses
and permits); a Closing Statement; a so-called FIRPTA Affidavit; a No-Lien, Gap
and Parties in Possession Affidavit; and a letter to all vendors. Seller shall
also provide evidence of good standing, corporate resolution (with incumbency
certificate) and any other items reasonably required by Buyer or the title
insurer.
C. At Closing, Buyer shall pay Seller the Purchase Price as
provided herein, and Seller shall pay off the "Permitted Liens" hereinafter
described.
D. Buyer shall pay all closing costs (but not Seller's
attorney's fees) incident to the transaction as part of the Purchase Price.
The closing costs are included in the Costs shown on Exhibit "D".
E. Upon payment of the Purchase Price, possession of the
Real Property shall be made available to the Purchaser on the day of Closing.
F. At Closing, Seller shall deliver an appropriate release and
termination agreement with respect to that certain Development Agreement dated
August 15, 1994, as amended on July 25, 1995.
5. CONDITIONS TO CLOSING.
Buyer's obligation to purchase the Project is subject to all
matters set forth herein. Seller and Buyer each agree to proceed in good faith
and take such action as is reasonably within its control in order to consummate
the transaction contemplated hereby, in accordance with the provisions hereof.
<PAGE>
A. During the Examination Period, Buyer shall obtain a
commitment (the "Title Commitment") issued by a nationally recognized title
company (the "Title Company") for an A.L.T.A. Form B leasehold title insurance
policy (the "Title Policy"), showing title to the Real Property in Seller and
subject only to those matters acceptable to Buyer (the "Permitted Exceptions")
in the exercise of its sole discretion.
(2) If the Title Commitment contains exceptions other
than Permitted Exceptions, Buyer shall notify Seller of its approval or
rejection of such exceptions prior to the expiration of the Examination
Period. All such "Unpermitted Exceptions" and "Survey Defects" (as defined
below), shall be corrected at Seller's expense, and/or removed of record in
a manner satisfactory to Buyer, and shall not appear on the Title Policy
when issued; provided, however, that Seller shall not be obligated to
expend more than $100,000.00 to cure any such Unpermitted Exceptions. If
Seller is unable to correct and/or remove of record any Unpermitted
Exception(s) by the date of Closing set forth herein, then Buyer may, upon
written notice to Seller, postpone and repostpone the Closing for a period
totalling in the aggregate not more than ninety (90) days so as to permit
Seller to correct and/or remove of record such Unpermitted Exception(s). If
Seller is not obligated to or is unable to cure of record any Unpermitted
Exceptions, Buyer shall either (i) proceed to Closing with no adjustment to
the Purchase Price, or (ii) terminate this Contract.
B. During the Examination Period, Buyer, at its sole cost and
expense, shall obtain a current survey of the Property (the "Survey") certified
to the Seller, Buyer and to the Title Company, and dated as of the then current
date. The Survey shall be reasonably satisfactory to Buyer in form and
substance, shall locate all Improvements and show all building set-back lines
(public and private) and applicable Schedule B exceptions on the Title
Commitment, shall include flood plain designations,
<PAGE>
and shall be in such form as the Title Company shall require to delete the
standard survey exceptions in the Title Policy. The Survey shall indicate
that the Property does not include any gaps, hiatuses, encroachments,
encumbrances, drainage canals or other matters not acceptable to Buyer. Any
survey matters which cause the Survey not to comply with the requirements
are referred to herein as "Survey Defects".
C. In addition to all other matters set forth herein, Buyer
shall have no obligation to consummate the within contemplated transaction
unless and until the following conditions have either been satisfied or waived
by Buyer in writing. If all such conditions are neither satisfied nor waived,
Buyer may thereafter terminate this Agreement upon written notice to Seller.
Such conditions are as follows:
(a) All representations, warranties and covenants of
Seller hereby shall be true and correct on the Closing Date and Buyer shall
have received such evidence thereof as Buyer may reasonably request;
(b) Between the date of this Agreement and the Closing
Date, there shall have been no intervening destruction or damage to or
condemnation of the Premises or any portion thereof.
(c) Seller shall have performed all of its other
obligations under this Agreement; and
(d) The Seller shall not be in default under, and Buyer
shall not have terminated, any of the "Other Agreements" executed simultaneously
herewith and described on Supplement "A" hereto. It is understood and agreed
that the closing hereunder and the closing under the Other Agreements shall
occur simultaneously and Buyer and Seller shall not be obligated hereunder in
the event a closing does not so occur under the Other Agreements.
6. DEFAULT. Upon a default by either party hereunder, the
<PAGE>
non-defaulting party shall have all rights and remedies available at law or in
equity, including, but not limited to, the right of specific performance.
7. ACCESS TO PREMISES.
A. Commencing on the Effective Date and terminating
on thirty (30) days thereafter (the "Examination Period"), Buyer and Buyer's
agents shall have the right to enter the Real Property at all reasonable times
to examine the Project, provided that Buyer shall not interfere with Seller's
operation of the Project. In the event this Agreement is terminated, the right
of entry granted hereby shall likewise be terminated.
B. Without limiting the generality of the foregoing,
Buyer may perform or cause to be performed soil tests, inspections, radon
and asbestos investigations, environmental audits, surveying and
engineering services, appraisals and to otherwise view and inspect the
Project and all components thereof, any and all of Seller's financial and
other records in connection therewith. Any such entry upon the Real
Property shall be at Buyer's sole risk and expense and Buyer shall
indemnify and hold Seller harmless from any such entry, and of and from any
and all costs, expenses, loss, damage, claim or liability, arising out of
or incurred or claimed in connection with the exercise by Buyer of such
right of entry, and any such entry shall be performed in such a manner so
as to minimize damage to the Real Property. This indemnity shall survive
termination hereof or Closing.
C. Seller also hereby expressly grants Buyer permission
to investigate and to examine any and all governmental records and to conduct
interviews with any and all relevant governmental and regulatory authorities
with respect to the use and ownership of the Project, all of which examinations
and inspections shall be undertaken at the sole cost and expense of Buyer.
<PAGE>
D. Immediately upon the execution hereof, Seller shall
make available to Buyer for inspection or copying: any and all zoning and
platting information; all site plans and the like; any soil tests; any existing
title insurance policies and commitments; the Ground Lease and all documents and
correspondence in connection therewith; all governmental approvals, permits and
licenses (the "Licenses"); any existing surveys, together with any preliminary
plans and specifications; all construction bids and bid packages; real estate
tax bills; all proposed architectural and construction contracts; existing
insurance policies; all Project agreements and any correspondence in connection
therewith; all appraisals, marketing studies and the like; all management and
service contracts; all operating and expense reports prepared by or for Seller;
all books and records of Seller or Seller's agents concerning the Project and
any other documents concerning the Project reasonably requested by Buyer and
which are in the possession or control of Seller or its agents.
E. During the Examination Period, Buyer (with
Seller's prior approval) shall have the right to attempt to renegotiate the
Ground Lease.
F. In addition to the provisions of Section 3.B. hereof
if any of the inspections or investigations referred to hereinabove are not
satisfied, Buyer may terminate this Agreement in the exercise of Buyer's
business judgment by written notice to Seller prior to the termination of the
Examination Period. In such event, neither party shall have any further rights
or obligations hereunder.
G. In the event Buyer terminates this Agreement and
proceeds to Close under the Other Agreements, Buyer shall pay to Seller the
Costs agreed to during the Examination Period, provided, if Buyer and Seller do
not agree on these Costs, Buyer shall pay to Seller the Purchase Price as set
forth on Section 3A. hereof. Upon such payment and closing under the Other
Agreements, Seller shall comply with the provisions
<PAGE>
of Section 4.F. hereof.
8. REPRESENTATIONS BY SELLER.
Seller represents and warrants to Buyer as follows:
A. MARKETABLE TITLE. Seller has good, marketable and insurable
leasehold title to the Real Property, and Seller has good and marketable title
to the Assets, free and clear of all mortgages, liens and security interests,
except as shown on Exhibit "G" hereto (the "Interim Liens").
B. CONDEMNATION PENDING OR THREATENED. There is no pending or
threatened condemnation or similar proceeding affecting the Real Property or any
portion thereof, nor has Seller knowledge that any such action is presently
contemplated.
C. ADVERSE INFORMATION. Seller has no information or knowledge
of any change contemplated in any applicable laws, ordinances, or restrictions,
or any judicial or administrative action, or any action by adjacent landowners,
or natural or artificial conditions upon the Real Property, or the condition
thereof, which would prevent, limit, impede, or render more costly Buyer's
development of the Project.
D. COMPLIANCE WITH LAWS. To the best of Seller's knowledge,
Seller has complied with all applicable laws, ordinances, regulations, statutes,
rules and restrictions pertaining to and affecting the Project. Performance of
this Agreement will not result in any breach of, or constitute any default
under, or result in the imposition of, any lien or encumbrance upon the Project
under any agreement or other instrument to which Seller is a party or by which
Seller or the Project might be bound.
E. PENDING LITIGATION. Except as shown on Exhibit "H", there are
no legal actions, suits, or other legal or administrative proceedings, including
condemnation cases, pending or threatened, against the Project, and Seller is
not aware of any facts which might result in any such action, suit or other
proceedings.
<PAGE>
F. DISCLOSURE OF ADVERSE FACTS. To the knowledge of Seller,
there is no significant adverse fact or condition relating to the Project which
has not been specifically disclosed in writing by Seller to Buyer, and Seller
knows of no fact or condition of any kind or character whatsoever which
adversely affects such intended use of the Project by Buyer.
G. NO VIOLATIONS OF LAWS, ETC. There are no uncured violations
of federal, state, or municipal laws, ordinances, orders, regulations, or
requirements affecting any portion of the Real Property.
H. SERVICE CONTRACTS. There are no contracts, oral or written,
with any employees nor any service contract, maintenance contract nor any other
contract or agreement relating to the Project which are not terminable at will.
Copies of all such existing agreements shall have been delivered to Buyer during
the Examination Period.
I. HAZARDOUS SUBSTANCES. Seller hereby represents and warrants
to Buyer that (i) to the best of Seller's knowledge, the Real Property is not
contaminated with any hazardous substance; (ii) Seller has not caused and will
not cause, and to the best of Seller's knowledge, there never has occurred, the
release of any hazardous substance on the Real Property; (iii) to the best of
Seller's knowledge, the Real Property is not subject to any federal, state or
local "superfund" lien, proceedings, claim, liability or action, or the threat
or likelihood thereof, for the cleanup, removal, or remediation of any such
hazardous substance from the Real Property or from any other real property owned
or controlled by Seller or in which Seller has any interest, legal or equitable;
(iv) to the best of Seller's knowledge, there is no asbestos (or other regulated
material) in any of the improvements; (v) to the best of Seller's knowledge,
there are no underground storage tanks on the Real Property; (vi) to the best of
Seller's knowledge, by acquiring the Real Property, Buyer will not incur or be
subjected to any "superfund" liability for the cleanup,
<PAGE>
removal or remediation of any hazardous substance from the Real Property or any
liability, cost, or expense for the removal of any asbestos or underground
storage tank from the Real Property; and (vii) Seller will indemnify, defend,
and hold Buyer harmless from and against any and all claims, demands,
liabilities, damages, suits, actions, judgments, fines, penalties, loss, cost
and expense (including, without limitation, attorneys fees) arising or resulting
from, or suffered, sustained or incurred by Buyer as a result of, the material
untruth or inaccuracy of any of the foregoing representations and warranties of
Seller to Buyer, which indemnity shall survive the closing. The terms "hazardous
substance," "release" and "removal" as used herein shall have the same meaning
and definition as set forth in paragraphs (14), (22) and (23), respectively, of
Title 42 US.C. ss.9601 and under any applicable North Carolina law provided,
however, that the term "hazardous substance" as used herein also shall include
"hazardous waste" as defined in paragraph (5) of 42 U.S.C. ss.6903 and
"petroleum" as defined in paragraph (8) of 42 U.S.C. ss.6991. The term
"superfund" as used herein means the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, being Title 42 U.S.C. ss.9601 et
seq., as amended, and any similar state statute or local ordinance applicable to
the Property, and all rules and regulations promulgated, administered and
enforced by any governmental agency or authority pursuant thereto. The term
"underground storage tank" as used herein shall have the same meaning and
definition as set forth in paragraph (1) of 42 U.S.C. ss.6991, and applicable
North Carolina law.
J. AUTHORITY. Seller has the authority and power to enter into
this Agreement and to consummate the transaction provided for by this Agreement.
Consummation of this transaction will not breach any agreement to which Seller
is a party.
K. ORGANIZATION. Seller is duly organized and existing in good
<PAGE>
standing under the laws of the State of Ohio.
L. STATEMENTS. Exhibit "I" attached hereto is a true, correct
and complete revenue and expense statement for the Project to date.
M. LIENS. There are no mortgages or deeds of trust or security
agreements (other than those matters referred to on Exhibit "G" hereto)
encumbering the Real Property. At Closing, Seller shall deliver an appropriate
release agreement from each such lienholder.
N. LIABILITIES. All liabilities and obligations of Seller with
respect to the Project are clearly and completely reflected on the Statements
attached hereto as Exhibit "J". Except for those liabilities set forth on
Exhibit "J-1" which are to be assumed by Buyer, all of such liabilities shall be
paid in full by Seller as of Closing.
O. GROUND LEASE.
(a) The Ground Lease shown on Exhibit "K" is true, accurate and
complete. No other lease agreement affects the Real Property or any portion
thereof.
(b) The Ground Lease is in full force and effect, unmodified and
no event of default by lessor or lessee exists thereunder.
(c) The Ground Lease will not be changed, modified or altered
without the prior written consent of Buyer.
(d) At closing, Ground Lessor shall execute the Lease
Assignment.
P. ZONING. To the best of Seller's knowledge, the Property is
zoned to permit the Project, without special exception. Seller has no knowledge
of any fact, action or proceeding, whether actual, pending, or threatened, which
could result in a modification or the termination of such zoning.
Q. NO SPECIAL ASSESSMENTS. To the best of Seller's knowledge, no
portion of the Property is affected by any special assessments, whether or not
constituting
<PAGE>
a lien thereon.
R. PARTIES IN POSSESSION. There are no parties in possession of
any portion of the Property as lessees, licensees, concessionaries, tenants at
sufference or trespassers.
S. INSURANCE. Seller currently maintains, and shall maintain
until Closing, the insurance set forth on Supplement "B" hereto. At Buyer's
election, this insurance can be assumed at Closing.
T. EMPLOYEE CONTRACTS/PLANS. Seller warrants that there are no
union contracts, collective bargaining agreements, ERISA Employee Benefit Plans,
health benefit plans, or employment agreements with respect to the Project.
U. TAXES.
a. All federal, state and local returns, forms or reports
required to be filed with respect to any Tax (as defined below) liability of
Seller or the Project have been filed in a timely manner (taking into account
all extensions of due dates) and any tax of Seller that is due and payable has
been paid and no deficiencies for any Tax in respect of Seller or the Project
have been asserted or assessed against Seller or the Project in writing which
remain unpaid. Any Tax attributable to periods prior to the closing Date, but
not yet payable shall be paid when due by Seller.
b. "Tax" means any federal, state or local income, gross
receipts, franchise, privilege, estimated, alternative minimum, add-on minimum,
sales, use, transfer, registration, value added, excise, natural resources,
severance, stamp, occupation, premium, windfall profit, customs, duties, real
property, personal property, ad valorem, capital, stock, social security,
unemployment, disability, payroll, license, employee or other withholding, or
other tax, of any kind whatsoever, and including any interest, penalties or
additions to tax. For purposes of this Agreement, income taxes shall
<PAGE>
mean taxes based on or measured by net income but shall not include franchise,
capital, stock, minimum, gross receipts or other taxes not based solely on net
income.
9. OPINION OF SELLER'S COUNSEL. At Closing, Seller shall deliver
to Buyer an opinion of Seller's counsel dated on the date of closing to the
following effect:
(a) Seller is a duly organized and validly existing corporation
in good standing under the laws of the State of Ohio and is qualified to do
business under the laws of the State of North Carolina.
(b) Seller has the power to carry on its business as it is
presently being conducted, to enter into this Agreement, to assign, transfer,
and deliver to Buyer the properties, assets and business of Seller as
contemplated by this Agreement.
(c) All proceedings required by law or by the provisions of
Seller's articles of incorporation or bylaws to be taken by the Seller on or
before the date of this Agreement in connection with the consummation of the
transactions contemplated by this Agreement have been duly and validly taken.
(d) This Agreement and the instruments executed and delivered to
Buyer pursuant to this Agreement have been fully and properly authorized,
executed and delivered and constitute the legal, valid and binding obligation of
Seller, enforceable in accordance with their terms.
(e) The performance of this Agreement and the consummation of
the transactions contemplated by this Agreement will not result in any breach or
violation of any of the terms or provisions of, Seller's articles of
incorporation or bylaws.
(f) Seller's counsel has no knowledge of any litigation,
proceeding or governmental investigation (whether state or federal) or labor
dispute or labor trouble pending or threatened against or relating to Seller or
its properties, assets or business.
10. ASSIGNMENT. Buyer shall have the right to assign this
Agreement
<PAGE>
to a related or affiliated entity.
11. LIABILITIES OF SELLER. Buyer shall not, except as expressly
set forth herein, assume or become liable for any costs, expenses, liabilities
or obligations of Seller or the Project and Seller agrees to defend, indemnify
and hold Buyer harmless from any such liabilities. This indemnity shall survive
termination hereof at closing.
If applicable, Seller shall comply with any relevant "bulk sales
act" or similar requirements with respect to any Project vendors or creditors.
12. BROKERAGE. Buyer and Seller each represent to the other that
they have dealt with no broker in connection with this transaction. Any fees or
commissions which may be claimed by any agent, salesman or broker shall be the
sole responsibility of the party who has dealt with any such agent, salesman or
broker. Each party agrees to indemnify and hold harmless the other party hereto
for any and all judgments, costs of suit, attorneys' fees and other reasonable
expenses that the indemnitee may incur by reason of any action or claim made
against the indemnitee by any agent, salesman or broker dealing, or claiming to
have dealt, with indemnitors. This provision shall survive Closing, or
termination of this Agreement, for a period of five (5) years.
13. NOTICES. Any notice provided for by this Agreement and any
other notice or communication that one party may wish to send to another shall
be in writing and sent by overnight commercial courier service (i.e., Federal
Express or Purolator) addressed to the party for which such notice or
communication is intended, at such party's address set forth below or at any
other address provided in writing by such party to the other party by notice
complying with this Section.
Seller: Mr. Donald Schaeffer
c/o The DeMatteis Organizations
EAB Plaza
Uniondale, New York 11556-0102
With a copy to: Arnold L. Bartfeld, Esq.
<PAGE>
Alter, Bartfeld & Mantel, LLP
90 Park Avenue 35th Floor
New York, New York 10016
Buyer: Golden Bear Golf Centers, Inc.
11780 U.S. Highway #1
North Palm Beach, FL 33408
Attention: Mr. Gary Rosmarin,
President
With a copy to: David M. Shaw, Esq.
Fleming, Haile & Shaw, P.A.
440 Royal Palm Way, Suite 100
Palm Beach, Florida 33480
14. ATTORNEYS' FEES. If either party commences an action against
the other to enforce any of the terms of this Agreement or because of the breach
by either party of any of the terms hereof, the losing or defaulting party shall
pay to the prevailing party the reasonable attorneys' fees, costs and expenses
incurred in connection with the prosecution or defense of such action, at trial
and all appellate levels. Each party agrees to jurisdiction and venue in Palm
Beach County, Florida.
15. CONFIDENTIALITY. The terms of this Agreement and the
information made available as a result of the investigations which preceded the
consummation of the transactions contemplated by this Agreement are confidential
and are personal or trade or business secrets of the parties. The parties shall
not disclose to any other person the nature, terms, or conditions of this
Agreement or any information concerning the respective parties unless required
by this Agreement or as a result of litigation relating to this Agreement or the
respective parties.
16. NON-COMPETE. As part of the consideration to Buyer for
entering into and consummating this transaction, Seler and Indemnitors covenant
and agree not to (i) enter into any competing or similar business within a
25-mile radius of the Real Property. Seller and Buyer covenant and agree that
this provision may be enforced by
<PAGE>
injunction or other equitable relief without the necessity of Buyer placing a
bond with the Court. Any violation of the covenants (or any of them) set forth
herein by Seller and Buyer would materially and irrevocably harm Buyer and its
business. This provision shall survive closing for a period of five (5) years.
17. SURVIVAL. All representations, warranties and indemnities of
Seller, and all applicable covenants and agreements of Buyer and Seller, shall
survive execution of the Lease Assignment and closing hereunder for a period of
[six months] [one (1) year] and shall not merge into such agreement or the
closing instruments hereunder. Seller shall indemnify and hold Buyer harmless
from any loss, cost, damage or expense whatsoever arising from a breach of any
such representation, warranty, covenant or agreement. [This indemnity shall be
secured by $50,000 placed in an interest bearing escrow account at Closing in
accordance with the escrow agreement attached hereto as Supplement C.]
18. COOPERATION. Buyer and Seller will cooperate with respect to
all matters pertaining to Closing hereunder.
19. MAINTENANCE AND RISK OF LOSS. Commencing with the date
hereof, Seller shall maintain the Real Property in its current condition and
with the same standard of care as it presently maintains the Real Property. All
risk of loss to the Real Property prior to the Closing shall be upon the Seller.
20. AUTHORITY OF SELLER. Each party signing on behalf of Seller
hereby represents and warrants to Buyer that he has full authority to sign this
Agreement and bind the Seller on behalf of the Seller.
21. AUTHORITY OF THE BUYER. The undersigned represents that it
has full power and authority to execute this Agreement on behalf of the Buyer.
22. LICENSES. Seller shall cooperate with, and execute all
necessary
<PAGE>
documents requested by, Buyer in the transfer (and issuance as applicable) of
all Licenses in the name of Buyer.
23. AUDIT. Seller shall make the books and records for the
Project available to Buyer for a period of three (3) years after the Closing to
permit Buyer's accountants to conduct an audit at Buyer's cost. In connection
with such audit, Seller agrees to execute and deliver a letter in the form of
Exhibit "L" hereto. The provisions of this paragraph shall survive Closing.
24. PREPARATION OF AGREEMENT. Although this document has been
prepared by counsel to Buyer, it reflects extensive negotiations with the Seller
and Seller's counsel and shall not be construed against Buyer.
25. EFFECTIVE DATE. The date of this Agreement ("Effective
Date") shall be the date upon which the last one of Seller and Buyer has signed
this Agreement.
26. TIME FOR ACCEPTANCE. If this Agreement is not executed by
Seller and returned to Buyer on or before __________, the offer set forth herein
shall terminate.
27. FACSIMILE. The parties agree that a facsimile transmission
of the signed agreement constitutes an original and binding document.
28. COUNTERPARTS. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement for
themselves, their respective heirs, executors, personal representatives,
successors and assigns as of the date and year first above written.
BUYER:
GOLDEN BEAR GOLF CENTERS, INC.
By: /S/ GARY ROSMARIN
_______________________
Name: Gary Rosmarin
Title: President
SELLER:
EAST COAST GOLF CENTERS, INC.
By: /S/ LAWRENCE RAFFERTY
_______________________
Name: Lawrence Rafferty
Title: Sec., Treasurer
<PAGE>
SCHEDULE OF EXHIBITS
Exhibit "A" Real Estate
Exhibit "B" Intentionally Deleted
Exhibit "C" Form of Assignment
Exhibit "D" Calculation of Purchase Price
Exhibit "E" Allocation of Purchase Price
Exhibit "F" Expense Statements
Exhibit "G" Interim Liens
Exhibit "H" Litigation
Exhibit "I" Operating Statement
Exhibit "J" Liabilities
Exhibit "J-1" Liabilities Assumed by Buyer
Exhibit "K" Ground Lease
Exhibit "L" Audit Letter
Supplement "A" Other Agreements
Supplement "B" Insurance
Supplement "C" Escrow Agreement
Schedule "A" Stock Option Agreement
NOTE: Any Exhibits hereto shall be initialled by Buyer and Seller. Any Exhibits
not appended hereto on the Effective Date shall be agreed to during the
Inspection Period. In the event of a material dispute as to any of the Exhibits,
either party may terminate this Agreement.
In the event of termination hereof, the Stock Option Agreement
shall terminate.
THIS PURCHASE/SALE AGREEMENT (the "AGREEMENT") is made as of this day of
September, 1996 by and between Golden Bear Golf Centers, Inc., a Florida
corporation ("PURCHASER"), and Dallas Highlander, Ltd., a Texas limited
partnership ("SELLER");
W I T N E S S E T H:
A. Seller is the sole owner of legal and equitable title of a leasehold
estate in the Land (as hereinafter defined).
B. Seller is the sole owner of the Fixtures and Tangible Personal
Property and the Miscellaneous Facility Assets (as such terms are hereinafter
defined) located on the Land and described in EXHIBIT C hereto.
C. Seller has agreed to convey, and Purchaser has agreed to acquire,
Seller's interest in the Property (as hereinafter defined) on the terms and
conditions of this Agreement.
In consideration of the mutual covenants and agreements contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
I. DEFINITIONS. When used herein, the following terms shall have the
respective meanings set forth opposite each such term:
ACQUISITION AND
DEVELOPMENT
AGREEMENT: That certain Acquisition and Development Agreement between
Purchaser and Seller for, among other things, the
development and operation of golf practice centers in the
form attached hereto as EXHIBIT G.
<PAGE>
AGREEMENT: This Agreement, including the following Exhibits hereto which
are incorporated herein and made a part hereof by this reference:
Exhibit A: Legal Description of the Land
Exhibit B: Title Commitment issued by Commonwealth Land Title
Insurance Company dated July 25, 1996
Exhibit C: Fixtures and Tangible Personal Property
Exhibit D: First Amendment to Ground Lease and Assignment of
Tenant's Interest in Ground Lease and Landlord
Estoppel
Exhibit E: First Leasehold Deed of Trust
Exhibit F: Purchase Money Note
Exhibit G: Acquisition and Development Agreement
Exhibit H: Allocation of Purchase Price
Exhibit I: Contracts
Exhibit J: Employment Agreements
Exhibit K: Revenue and Expense Statement
Exhibit L: Seller's Insurance
AGREEMENT TO
ENTER
INTO LEASE: That certain Agreement to Enter into Lease between Highlander
Towngate, Ltd. and Purchaser for certain property located in
Moreno Valley California.
CLOSING DATE: Five (5) business days after the expiration of the Contingency
Period, subject to extension in the event of (i) Survey Defects
as provided in Section 5 hereof, or (ii) unpermitted title
exceptions as provided in Section 6 hereof, or such other date as
is mutually agreed upon by the parties for closing of the
transaction contemplated hereby.
CLOSING
ESCROW: As defined in Section 8 of this Agreement.
COMPENSATION: The direct salaries and wages paid to, or accrued for the
benefit of, any Employee (as hereinafter defined), incentive
compensation, vacation pay, severance pay and employer's
contributions under F.I.C.A., unemployment compensation, workers'
compensation, or other employment taxes.
<PAGE>
CONSUMABLES: All engineering and maintenance supplies; and other supplies of
all kinds, in each case whether partially used, unused or held in
reserve storage for future use in connection with the maintenance
and operation of the Facility which are on hand on the date
hereof (other than the Retail Items), subject to such depletion
and restocking as shall occur and shall be made in the normal
course of business but in accordance with present standards.
CONTINGENCY
PERIOD: As defined in Section 13(a) of this Agreement.
CONTRACTS: All service, maintenance, purchase orders, leases and other
contracts or agreements, including equipment leases capitalized
for accounting purposes, and any amendments thereto, with respect
to the ownership, maintenance, operation, provisioning or
equipping of the Facility, or any of the Property, as well as
written warranties and guarantees relating thereto, if any,
including, but not limited to, those relating to heating and
cooling equipment and/or mechanical equipment and which are
listed on EXHIBIT I hereto, but exclusive, however, of (i)
insurance policies, and (ii) the Employment Agreements.
CUT-OFF TIME: 12:01 a.m. on the Closing Date.
DECLARATION: That certain Declaration of Covenants, Restrictions and
Development Standards Applicable to Texas Highland dated July 6,
1993 by Mission Land Company, a California corporation, a copy of
which is attached to the Ground Lease as Exhibit F.
EMPLOYEE(S): All persons employed by Seller pursuant to Employment Agreements.
EMPLOYMENT
AGREEMENT(S): Those agreements, oral or written, with all or any of the
executives, staff and employees of Seller for work in or in
connection with the Facility including, but not limited to,
individual employment agreements, union agreements, employee
handbooks, group health insurance plans, life insurance plans and
disability insurance plans and which are listed on EXHIBIT J
hereto.
FACILITY: The golf training facility located and operated at the Real
Property.
<PAGE>
FIXTURES AND
TANGIBLE
PERSONAL
PROPERTY: All fixtures, furniture, furnishings, fittings, equipment,
machinery, apparatus, signage, appliances, draperies, carpeting
and other articles of personal property now located on the Real
Property and used or useable in connection with any part of the
Facility and which are listed on EXHIBIT C hereto subject to such
depletions, resupplies, substitutions and replacements as shall
occur and be made in the normal course of business but in
accordance with present standards excluding, however: (i)
Consumables; (ii) Improvements; and (iii) the Retail Items.
GAP
UNDERTAKING: As defined in Section 15 of this Agreement.
GROUND
LEASE: That certain Ground Lease dated March 1, 1995 between Trinity
Mills - Midway Partners, Ltd., a Texas limited partnership, as
landlord, and Seller, as tenant, as amended by the Lease
Amendment (as hereinafter defined).
IMPROVE-
MENTS: The buildings, structures (surface and sub-surface) and other
improvements, including such fixtures as shall constitute real
property, located on the Land.
LAND: The parcel of real estate described in EXHIBIT A hereto.
LEASE
AMENDMENT: That certain First Amendment to Ground Lease and Assignment of
Tenant's Interest in Ground Lease and Landlord Estoppel in the
form attached hereto as EXHIBIT D.
LEASEHOLD
DEED OF TRUST: That certain First Leasehold Deed of Trust in the form attached
hereto as EXHIBIT E from Purchaser to Seller to secure the
Purchase Money Note.
<PAGE>
MISCELLANEOUS
FACILITY
ASSETS: All contract rights, leases, concessions, trademarks, logos,
copyrights, assignable warranties and other items of intangible
personal property owned by Seller and relating to the ownership
or operation of the Facility but such term shall not include (i)
Contracts; (ii) cash or other funds, whether in petty cash or
house banks, or on deposit in bank accounts or in transit for
deposit; (iii) books and records; (iv) receivables; (v) refunds,
rebates or other claims, or any interest thereon, for periods or
events occurring prior to the Cut-off Time; (vi) utility and
similar deposits; (vii) prepaid insurance or other prepaid items;
(viii) prepaid license and permit fees; or (ix) good will; except
to the extent that Seller receives a credit on the closing
statement prepared pursuant to this Agreement for any such item
or matter.
OTHER LIENS: As defined in Section 6 of this Agreement.
PERMITTED
TITLE
EXCEPTIONS: Those exceptions to title to the Property (a) shown as
exceptions to the Title Commitment (as hereinafter defined), (b)
relating to the acts of Purchaser or those claiming by, through
or under Purchaser, (c) relating to the Leasehold Deed of Trust,
(d) relating to the Ground Lease, or (e) as are specifically
designated as Permitted Title Exceptions in this Agreement or are
approved by Purchaser as provided in Sections 5 and 6 hereof.
PERSONAL
PROPERTY: All of the Property other than the Real Property and the Retail
Items.
PROPERTY: (i) The Real Property; (ii) the Fixtures and Tangible Personal
Property; (iii) the Consumables; (iv) the transferable right,
title and interest of Seller in, to and under the Contracts and
(v) all other Miscellaneous Facility Assets.
PURCHASE
MONEY NOTE: That certain Purchase Money Note in the original principal amount
of Seven Hundred Fifty Thousand Dollars ($750,000.00), in the
form attached hereto as EXHIBIT F from Purchaser to the order of
Seller.
PURCHASE
PRICE: Two Million Two Hundred Fifty Thousand Dollars ($2,250,000.00).
PURCHASER: Golden Bear Golf Centers, Inc., a Florida corporation.
PURCHASER'S
DESIGNATED
PARTIES: As defined in Section 4(b) of this Agreement.
<PAGE>
REAL
PROPERTY: The leasehold interest in the Land created by the Ground Lease
together with the Improvements located on the Land.
RETAIL ITEMS: Those items of personal property which are located on the
Property and are offered for sale to the public in the retail
store located at the Property.
SELLER: Dallas Highlander, Ltd., a Texas limited partnership.
SURVEY: Current survey of the Property prepared by a surveyor licensed
by the State of Texas and certified to the Purchaser, Seller, the
Title Insurer, and such other parties as Purchaser shall
designate, to be in accordance with the standards for Land Title
Surveys of American Title Association and American Congress on
Surveying and Mapping (1986).
TERMINATION
AND MUTUAL
RELEASE: Collectively, that certain Termination Agreement and Mutual
Release of that certain Golden Bear Golf Center Development
Agreement dated June 1, 1994 between Highlander Golf Corporation.
a Texas corporation, and Purchaser and that certain Termination
Agreement and Mutual Release of that certain License Agreement
dated May 20, 1995 between Dallas Highlander, Ltd., a Texas
limited partnership, and Purchaser.
TITLE
COMMITMENT: The current commitment for a ALTA Form B Leasehold Title
Insurance Policy for the Property issued by the Title Insurer in
the full amount of the Purchase Price, which is attached hereto
as EXHIBIT B.
TITLE
INSURER: Commonwealth Land Title Insurance Company.
TITLE
OBJECTIONS: As defined in Section 6 of this Agreement.
I. PURCHASE AND SALE. Subject to the conditions and on the terms
contained in this Agreement, on the Closing Date, Purchaser agrees to acquire
from Seller, and Seller agrees to convey to Purchaser the Property, including
record and insurable leasehold title to the Real Property by the Lease
Amendment, subject only to the Permitted Title Exceptions.
A. PAYMENT OF PURCHASE PRICE. Purchaser agrees to pay to
Seller and Seller agrees to accept payment of the Purchase Price
as follows:
B. At closing, Purchaser shall execute and deliver to
Seller the Purchase Money Note. The Purchase Money Note shall be
secured by the
<PAGE>
Leasehold Deed of Trust granting a first lien on the leasehold
interest in the Land held by Purchaser as well as the
Improvements and the other Property owned by Purchaser. In
addition, Purchaser shall deliver to Seller at closing an ALTA
Leasehold Mortgage Title Insurance Policy (the "Leasehold
Mortgage Policy") issued by the Title Insurer in the amount of
the Purchase Money Note insuring the priority of the Leasehold
Deed of Trust. Purchaser shall grant such other security
interests and execute such other documents as may be required to
evidence and perfect such security interests granted to Seller
C. At closing, Purchaser shall pay to Seller the balance
of the Purchase Price, plus or minus prorations as hereinafter
provided, in cash or by wire transfer of immediately available
federal funds.
The Purchase Price shall be allocated in accordance with the values reasonably
attributable to the components of the Property as set forth in EXHIBIT H hereto.
I. INFORMATION RELATING TO THE PROPERTY; PURCHASER'S INSPECTION OF
PROPERTY.
A. Upon the execution hereof, Seller shall make available
to Purchaser for inspection or copying all building permits, certificates
of occupancy and other governmental licenses, permits, notices and
approvals, and plans, specifications, soil, compaction, engineering
reports, studies, tests and analysis relating to the Property which are
in the possession or control of Seller.
B. Seller shall permit representatives, agents, employees,
lenders, contractors, appraisers, architects and engineers designated by
Purchaser (collectively "PURCHASER'S DESIGNATED PARTIES") access to and
entry upon the Property to examine, inspect, measure and test the
Property for any reasonable purpose, provided that Purchaser shall not
interfere with Seller's operation of Seller's business at the Property.
Any such inspection, however, shall be at Purchaser's and Purchaser's
Designated Parties' sole risk and sole cost, shall be conducted in the
presence of Seller or Seller's agents, and Purchaser shall be required to
give Seller not less than twenty-four (24) hours advance notice prior to
conducting any such on-site inspection of the Property. Purchaser's right
to inspect the Property shall include the right to investigate and to
examine, to the extent permitted by law, any and all governmental records
and to conduct interviews with any and all relevant governmental and
regulatory authorities with respect to the Property, all of which shall
be undertaken at Purchaser's sole cost and expense. Purchaser agrees to
indemnify, defend and hold Seller harmless from and against any and all
loss, damage, liability and expense (including reasonable attorney's
fees, court costs and other litigation expenses) which Seller may suffer,
sustain or incur arising from property damage or personal injury or the
filing of liens or claims of lien against the Property resulting from the
activities permitted by this Section 4(b) and to provide Seller with
evidence of insurance coverages reasonably acceptable to Seller
protecting Seller from any claim for injury to or death of persons or
damage to property which may result from such activities. The provisions
of this Section 4(b) shall survive the closing of the transaction
contemplated by this Agreement or termination of this Agreement.
<PAGE>
II. SURVEY. No later than September 5, 1996, Purchaser shall
obtain the Survey and deliver a copy to Seller, at Purchaser's sole cost and
expense. If the Survey discloses any encroachments onto the Real Property from
any adjacent property, or encroachments by or from the Real Property onto any
adjacent property, or violation of any recorded building lines, restrictions or
easements affecting the Real Property (other than Permitted Title Exceptions) to
which Purchaser objects ("SURVEY DEFECTS"), Purchaser shall give Seller notice
of such objection within three (3) days following the date of Purchaser's
receipt of the Survey (but in no event later than September 5, 1996) (provided
that failure of Purchaser to give such notice of objection shall be deemed to be
acceptance by Purchaser of all matters disclosed by the Survey and such Survey
Defects shall be deemed "Permitted Title Exceptions" for purposes of this
Agreement), and Seller shall, at its option, have up to the Closing Date (but in
no event less than ten (10) days from the date of such notice) to have such
Survey Defects removed or insured over by the Title Insurer and provide evidence
thereof to Purchaser. If Seller fails to have such Survey Defects removed or
insured over, and if such Survey Defects would interfere in any material way
with Purchaser's use and enjoyment of the Real Property, Purchaser may elect, as
its sole remedy, by notice to Seller given within two (2) days following
expiration of the aforesaid cure period granted to Seller, to (i) terminate this
Agreement and, thereafter, the parties shall have no further rights or
obligations hereunder except for obligations which expressly survive the
termination of this Agreement, or (ii) accept the Real Property subject to such
Survey Defects without reduction in the Purchase Price. If Purchaser does not
elect to terminate this Agreement in a timely manner as provided hereinabove,
Purchaser shall be deemed to have waived its objection to such Survey Defects
and to have elected to accept title to the Real Property subject to such Survey
Defects (and such Survey Defects shall be deemed "Permitted Title Exceptions"
for purposes of this Agreement).
III. TITLE. Purchaser shall have the right to object in writing
to any title matters that are not Permitted Title Exceptions and that materially
adversely affect Purchaser's title to the Real Property which may appear on
supplemental title reports or updates to any Title Commitment issued at the
request of Purchaser after the date hereof (herein collectively called the
"OTHER LIENS") within five (5) days after the receipt thereof by Purchaser.
Unless Purchaser shall timely object to such Other Liens, all such Other Liens
and any matters which do not materially adversely affect Purchaser's title to
the Real Property which are set forth in any such supplemental reports or
updates shall be deemed to constitute additional Permitted Title Exceptions. Any
exceptions which are timely objected to by Purchaser shall be herein
collectively called the "TITLE OBJECTIONS." Seller may (but shall not be
obligated to) remove, or cause to be removed at its expense, any Title
Objections, and shall be entitled to a reasonable adjournment of the Closing
(not to exceed sixty (60) days) for the purpose of such removal, which removal
will be deemed effected by the issuance of title insurance eliminating or
insuring against the effect of the Title Objections. If Seller is unable or
unwilling (in its sole and absolute discretion) to remove or endorse over any
Title Objections prior to the Closing, Purchaser may elect to either (a)
terminate this Agreement, and, thereafter, the parties shall have no further
rights or obligations hereunder except for obligations which expressly survive
the termination of this Agreement, or (b) waive such Title Objections, in which
event such Title Objections shall be deemed "Permitted Title Exceptions" and the
Closing shall occur as herein provided without any reduction of or credit
against the Purchase Price. If on the Closing Date there are any Title
Objections which Seller has elected to pay and discharge, Seller may use any
portion of the balance of the Purchase Price to satisfy the same, provided
Seller shall deliver to Purchaser at the Closing instruments in recordable form
and sufficient to satisfy such
<PAGE>
Title Objections of record, together with the cost of recording or filing such
instruments, or provided that Seller shall cause the Title Company to insure
over the same, without any additional cost to Purchaser, whether such
insurance is made available in consideration of payment, bonding, indemnity of
Seller or otherwise. Notwithstanding anything to the contrary herein, Seller
hereby agrees that from and after the date hereof, it will not intentionally
create any Other Liens which will materially and adversely affect Purchaser's
title to the Real Property.
IV. POSSESSION, PRORATIONS AND EXPENSES.
A. POSSESSION. Sole and exclusive possession of the
Property, subject only to the Permitted Title Exceptions, shall be
delivered to Purchaser at and subject to closing of the transaction
contemplated hereby.
B. TAXES; RENTS. Seller shall pay or cause to be paid general
real estate taxes assessed against the Property for all calendar years
prior to the calendar year in which closing occurs. General real estate
taxes assessed against the Property for the calendar year in which
closing occurs and other state or city taxes, fees, charges and
assessments affecting the Property shall not be prorated as of the
Closing Date. Seller shall be responsible for the payment of all such
taxes for the calendar year of closing up to the Closing Date and
Purchaser shall be responsible for the payment of all such taxes from and
after the Closing Date in accordance with the terms of the Lease. The
parties shall prorate all prepaid rents under the Ground Lease and shall
prorate Percentage Rent (as defined in the Ground Lease) based upon 100%
percent of Percentage Rent paid under the Ground Lease during the
preceding Lease Year (as defined in the Ground Lease). Notwithstanding
anything to the contrary contained in this Agreement, all prorations made
pursuant to this Section 7(b) shall be final.
C. PRORATIONS. The following matters and items shall be
apportioned between the parties hereto or, where appropriate, credited in
total to a particular party, as of the Cut-off Time as provided below:
1. RECEIVABLES; TRADE ACCOUNTS PAYABLE. Receivables
and trade accounts payable shall be identified as of the Cut-off
Time. Purchaser is not purchasing receivables and is not assuming
trade accounts payable. Purchaser and Seller acknowledge and
agree that Purchaser is acquiring the assets of Seller and not
the business of Seller as contemplated by this Agreement and that
all financial liabilities of Seller not expressly assumed by
Purchaser herein or otherwise shall not be the obligation of
Purchaser. With respect to such receivables and trade accounts
payable, it is further agreed that:
(A) Seller shall be entitled to receive from
Purchaser, and Purchaser shall be obligated to pay to
Seller, all amounts actually received by Purchaser from
and after the Closing Date for the receivables as of the
Cut-off Time. Purchaser's obligation to pay Seller all
amounts received for such receivables in accordance with
the terms hereof shall survive the closing of the
transaction contemplated hereby.
<PAGE>
(B) Seller shall be responsible for the payment of
all trade accounts payable as of the Cut-off Time.
(C) In the event that Seller has received any
prepayments for merchandise or services (whether in the
form of gift certificates or otherwise) which as of the
Cut-off Time have not been redeemed by customers of the
Facility, Seller hereby agrees to pay to Purchaser on a
monthly basis following the Closing Date for the period up
to December 31, 1996 only, an amount equal to the prepaid
merchandise and/or services redeemed by customers from
Purchaser during each month period up to December 31,
1996. Purchaser shall provide written notice to Seller of
the amount of merchandise and/or services redeemed in the
subject month period (together with appropriate evidence
of the redemption of such merchandise or services) and
Seller shall reimburse Purchaser for such amount so
redeemed by Purchaser within ten (10) days of Seller's
receipt of such written notice as provided herein.
Seller's obligation hereunder shall survive the closing of
the transaction contemplated hereby.
1. UTILITY CONTRACTS. Telephone and telex contracts and
contracts for the supply of heat, steam, electric power, gas, lighting
and any other utility service shall be apportioned between the
parties, with Seller receiving a credit for each deposit, if any, made
by Seller as security under any such public service contracts if the
same is transferable and provided such deposit remains on deposit for
the benefit of Purchaser. Cut-off readings will be secured for all
utilities on the Closing Date or shall be estimated by the parties
based upon the most recent bill therefor.
2. CONTRACTS. Any amounts prepaid or payable under any
contracts which affect the Property shall be apportioned between the
parties. Any security deposits held by Seller with respect to any
contracts will be conveyed to Purchaser at closing.
3. EMPLOYMENT AGREEMENTS. Seller shall be responsible for,
and shall pay when due, all Compensation of Employees until the
Cut-off Time. Compensation of Employees shall be prorated as of the
Cut-off Time and Seller shall give Purchaser a credit on the closing
statement for all unpaid Compensation (including, but not limited to,
accrued vacation pay) which accrued prior to the Cut-off Time.
Purchaser shall be responsible for, and shall pay when due, all
Compensation of Employees accruing from and after the Cut-off Time and
all Compensation (including, but not limited to, accrued vacation pay)
of Employees to the extent it receives a credit therefor on the
closing statement.
<PAGE>
B. CLOSING STATEMENTS.
1. PREPARATION. Each party shall cause its designated
representatives to enter the Facility only at reasonable times and
without unreasonably interfering with operations, both before and
after the Closing Date, for the purpose of making such inventories,
examinations and audits of the Facility, and of the books and records
of the Facility, as they deem necessary to make the adjustments and
prorations required under this Section 7, or under any other
provisions of this Agreement. Based upon such inventories,
examinations and audits, at the Closing, the representatives of the
parties shall jointly prepare and deliver to each party a preliminary
closing statement which shall show the net amount due either to Seller
or Purchaser as a result thereof, and such net amount will be added
to, or subtracted from the payment of the cash balance of the Purchase
Price to be paid to Seller pursuant to Section 3 hereof. Within thirty
(30) days following the Closing Date, Seller and Purchaser shall agree
on a final closing statement setting forth the final determination of
all items to be included on the closing statement. The net amount due
Seller or Purchaser, if any, by reason of adjustments in the
preliminary closing statement as shown in the final closing statement,
shall be paid in cash by the party obligated therefor within ten (10)
days following the date of the final closing statement.
2. PERIOD FOR RECALCULATION. Notwithstanding the foregoing,
if at any time within six (6) months following the Closing Date,
either party discovers any items which should have been included in
the closing statement but were omitted therefrom or any items which
were incorrectly stated on the closing statement, then such items
shall be adjusted in the same manner as if their existence had been
known at the time of the preparation of the closing statement or shall
be otherwise corrected. The foregoing limitations shall not apply to
any items which, by their nature, cannot be finally determined within
the periods specified.
C. PAYMENT. Any net credit due to Seller as a result of the
adjustments and prorations hereunder shall be paid in cash at the time of
Closing.
D. RETAIL ITEMS. The day prior to the Closing Date, Seller and
Purchaser shall cause an inventory to be taken of the Retail Items
effective as of the Cut-off Time. At closing Purchaser's shall pay to
Seller, in addition to the Purchase Price, an amount equal to Seller's cost
for the Retail Items inventoried by Seller and Purchaser.
E. CASH. As provided in Section 1 in the definition of Miscellaneous
Facility Assets, cash or other funds will be retained by Seller and shall
not be conveyed to Purchaser at closing. Provided, however, petty cash at
the Facility in the amount of approximately $1,600 will be conveyed to
Purchaser provided that at closing Purchaser shall pay to Seller, in
addition to the Purchase Price, an amount equal to the petty cash so
conveyed.
F. EXPENSES. Purchaser shall pay all title charges and premiums for
the coverages provided for in Section 6 hereof, survey charges, any
<PAGE>
state, county and municipal stamp or transfer taxes, all recording charges
(except such charges incurred for clearance of title by Seller), and all
charges (including title charges and premiums) in connection with financing
obtained by Purchaser. The parties shall each be solely responsible for the
fees and disbursements of their respective counsel and other professional
advisers. Seller shall pay any federal, state or local income, sales, or
other tax incurred by reason of the transfer of the Property, except the
transfer tax, if any, imposed on the transfer of the Property by any
governmental authority which shall be the responsibility of Purchaser as
set forth above. The provisions of this Section 7(g) shall survive the
closing of the transaction contemplated by this Agreement.
II. ESCROWS. On or prior to the Closing Date, the parties, through their
respective attorneys, shall establish an escrow with the Title Insurer through
which the transaction contemplated hereby shall be closed (the "CLOSING
ESCROW"). The Closing Escrow instructions shall be in the form customarily used
by the Title Insurer, as escrowee, with such special provisions added thereto
(which are reasonably acceptable to the parties hereto) as may be required to
conform to the provisions of this Agreement. The Closing Escrow shall be
auxiliary to this Agreement, and this Agreement shall not be merged into nor in
any manner superseded by such escrow. All escrow costs and fees for the Closing
Escrow shall be paid by Purchaser.
III. BROKERAGE. Seller hereby represents and warrants to Purchaser that
Seller has not dealt with any broker or finder in respect to the transaction
contemplated hereby. Seller hereby agrees to indemnify and hold Purchaser
harmless from and against any claim for brokerage commission or finder's fee
asserted by any person, firm or corporation claiming to have been engaged by
Seller. Purchaser hereby represents and warrants to Seller that Purchaser has
not dealt with any broker or finder in respect to the transaction contemplated
hereby, and Purchaser hereby agrees to indemnify and hold Seller harmless from
and against for any claim for brokerage commission or finder's fee asserted by
any person, firm or corporation claiming to have been engaged by Purchaser. The
provisions of this Section 9 shall survive the closing of the transaction
contemplated by this Agreement or termination of this Agreement.
IV. EMINENT DOMAIN. If, prior to the Closing Date, all or any portion of
the Property is condemned or taken by eminent domain, Seller shall promptly give
Purchaser notice of such condemnation or taking. After receipt of notice of a
condemnation or taking which is substantial (as hereinafter described),
Purchaser shall have the option, exercisable by notice to Seller given within
ten (10) days following Seller's notice of such condemnation or taking, to
terminate this Agreement, whereupon this Agreement shall be terminated and
thereafter neither party shall have any further rights or obligations hereunder.
If (a) Purchaser does not elect to terminate this Agreement in the event of a
substantial condemnation or taking, or (b) such condemnation or taking is not
substantial, Seller shall convey the Property on the Closing Date to Purchaser
in its then condition, upon and subject to all of the other terms and conditions
of this Agreement, and assign to Purchaser all of Seller's right, title and
interest in and to any claims Seller may have to the condemnation awards and/or
any causes of action with respect to such condemnation or taking of the Property
and pay to Purchaser all payments theretofore made to Seller by such condemning
authorities. A condemnation or taking shall be deemed substantial if it results
in the inability of Purchaser to use the Property for its current use.
<PAGE>
V. REPRESENTATIONS AND COVENANTS OF SELLER. To induce Purchaser to execute,
deliver and perform this Agreement, Seller hereby represents to and covenants
with Purchaser as follows:
A. Seller has not received any written notice of any fire,
health, safety, building, pollution, environmental, zoning or other
violations of law statute, code, ordinance, rule, regulation or order with
respect to the Property, which have not been corrected or substantially
corrected to the satisfaction of the applicable governmental body or
agency. For purposes of this Section 11, notices received by Seller shall
be deemed to mean those written notices received by Fritz Duda, who is an
officer of the general partner of Seller.
B. This Agreement and all other documents executed and delivered,
or to be executed and delivered, by Seller in connection with the
transaction contemplated herein have been, or at the appropriate time will
be, duly executed and delivered and constitute, or upon such execution and
delivery will constitute, the legal, valid and binding obligations of
Seller enforceable in accordance with their respective terms, subject,
however, to general principles of equity and to the effect of any
bankruptcy, reorganization, moratorium, insolvency or other laws affecting
the rights of creditors generally. Seller has taken all action, corporate
or otherwise, required to authorize its execution of this Agreement and
such other documents.
C. To the actual knowledge of Seller's general partner, there are
no litigation or other proceedings pending against Seller in respect to the
ownership, use, improvement or operation of the Property or any part
thereof (including disputes with governmental authorities, utilities,
contractors, adjoining land owners and suppliers of goods or services)
which could have a material adverse effect on Purchaser or the Property
following the closing. For purposes of this Section 11, the actual
knowledge of Seller's general partner shall be deemed to mean the actual
knowledge of Fritz Duda, who is an officer of such general partner.
D. To the actual knowledge of Seller's general partner,
Seller has not disposed of any hazardous materials on the Property in
quantities exceeding limits permitted by applicable law; and to the actual
knowledge of Seller's general partner, Seller has not received any written
notice of any violation of any environmental laws with respect to the
Property. Purchaser agrees and acknowledges that unless Purchaser elects to
terminate this Agreement during the Contingency Period, Purchaser will
acquire the Property subject to all environmental matters. Purchaser hereby
releases Seller, now and forever, from any and all claims, whether direct
or indirect, relating to or arising from, the existence of toxic or
hazardous wastes or materials of any kind on the Property or arising from
any use of the Property, other than claims relating to or arising from the
acts of Seller during Seller's ownership of the Property. The provisions of
this Section 11(f) shall survive the closing of the transaction
contemplated by this Agreement.
E. To the actual knowledge of Seller's general partner, without
independent inquiry, the operation of the Facility is permitted under local
zoning ordinances or other customary conditional use permits associated
with the operation of the Facility. To the actual knowledge of Seller's
general partner, without
<PAGE>
independent inquiry, the Property is not in violation of the Declaration
and no defaults by Seller or the declarant under the Declaration exist
thereunder.
F. Seller's entry into this Agreement, execution hereof and
performance hereunder does not violate any other contract, mortgage,
instrument, private formative instrument (such as a charter, articles of
incorporation, by-laws, trust agreement or partnership agreement) order,
regulation, ordinance or law to which the Property or Seller is/are bound.
G. Seller shall maintain the Property free from waste and neglect
and in good order and repair and shall deliver possession of the Property
to Purchaser in the same condition it was in on the date of execution of
this Agreement, except for ordinary wear and tear and sales in the ordinary
course of business. Seller currently maintains, and shall maintain until
the Closing Date, the insurance set forth on EXHIBIT L hereto.
H. Exhibit K attached hereto is a true, correct and complete
revenue and expense statement for the Property as of the date set forth
therein.
I. There are no lease agreements affecting the Real Property or
any portion thereof, other than the Ground Lease. There are no parties in
possession of any portion of the Real Property as lessees, licensees,
concessionaires or tenants at sufferance, other than that certain
Licensing/Concession Agreement by and between Seller and Chuck's of Texas,
Inc., a Texas corporation.
J. The copy of the Ground Lease previously delivered by Seller to
Purchaser is true, correct and complete. The Ground Lease is in full force
and effect, unmodified and no event of default by lessor or lessee exists
thereunder. The Ground Lease will not be changed, modified or altered
without the prior written consent of Purchaser.
K. Seller shall comply with all bulk sales and similar laws
applicable to Seller in connection with the consummation of the
transactions contemplated by this Agreement and shall deliver to Purchaser
at closing a final sales tax certificate, to the extent the same is
available from the applicable governmental authority.
L. All federal, state and local returns, forms or reports
required to be filed with respect to any Tax (as hereinafter defined)
liability of Seller or the Property have been filed in a timely manner
(taking into account all extensions of due dates) and any Tax which is due
and payable has been paid and no deficiencies for any Tax in respect of
Seller or the Project have been asserted or assessed against Seller or the
Project in writing which remain unpaid. Any Tax attributable to periods
prior to the Closing Date but not yet due and payable shall be paid by
Seller when due, except to the extent Purchaser receives a credit therefor
on the closing statement or as otherwise specifically set forth herein. For
purposes of this subparagraph 11(l), "Taxes" shall mean any federal, state
or local income, gross receipts, franchise, privilege, sales, use,
registration, value added, excise, natural resources, severance,
occupation, windfall profit, customs, duties, real property, personal
property, ad valorem, capital, stock, social security, unemployment,
<PAGE>
disability, payroll, license, employee or other withholding, or other tax
of any kind whatsoever, and including any interest, penalties or additions
to such tax. For purposes of this subparagraph 11(l), income taxes shall
mean taxes based on or measured by net income but shall not include
franchise, capital, stock, minimum, gross receipts or other taxes not based
solely on net income.
M. Seller has not received any written notice of any pending, and
to the knowledge of Seller's general partner there exists no threatened,
condemnation proceedings or similar proceedings affecting all or any
portion of the Property.
If Purchaser discovers any breach of Seller's representations or covenants set
forth in this Section 11 prior to the expiration of the Contingency Period,
Purchaser shall immediately give notice thereof to Seller, and if closing
thereafter occurs, Purchaser shall be deemed to have waived any claim against
Seller with respect to any such breach of representation or covenant of Seller.
The provisions of this Section 11 shall survive the closing of the transaction
contemplated by this Agreement; provided that any claim by the Purchaser based
on a misrepresentation or breach of any covenant under this Section 11 shall be
deemed waived unless Purchaser has given Seller notice of such claim prior to
the expiration of six (6) months following the Closing Date.
I. REPRESENTATIONS AND COVENANTS OF PURCHASER. To induce Seller to execute,
deliver and perform this Agreement, Purchaser hereby represents and warrants to
and covenants with Seller as follows: (a) this Agreement and all other documents
executed and delivered, or to be executed and delivered, by Purchaser in
connection with the transaction contemplated herein have been, or at the
appropriate time will be, duly executed and delivered and constitute or, upon
such execution and delivery will constitute, the legal, valid and binding
obligations of Purchaser enforceable in accordance with their respective terms
and provisions, subject, however, to general principles of equity and to the
effect of any bankruptcy, reorganization, moratorium, insolvency or other laws
affecting the rights of creditors generally; (b) Purchaser has taken all action,
corporate or otherwise, required to authorize its execution of this Agreement
and such other documents; (c) there are no litigation or other proceedings
pending against Purchaser which could have a material adverse effect on
Purchaser's ability to consummate the transaction contemplated hereby; and (d)
Purchaser shall treat any and all information received with respect to the
Property (including, without limitation, the Title Commitment, title exception
documents, Survey, Environmental Audit, property agreements, reports, studies,
tests, plans and specifications and other information received from Seller or
its agents or discovered by Purchaser or its agents with respect to the
Property) as strictly confidential provided that Purchaser may disclose the same
to its attorneys, accountants and other consultants, and Purchaser shall use
reasonable efforts to cause such parties to keep the same confidential.
Purchaser or its agents shall not disclose any of such information to any third
party. If this Agreement is terminated, or for whatever other reason Purchaser
shall not acquire the Property pursuant to this Agreement, all information,
data, financial statements or reports, documents and other items relating to the
Property held by Purchaser shall be immediately delivered to Seller at no cost
to Seller. Purchaser agrees to comply with all of the terms, covenants and
conditions of the Declaration; the terms of this sentence shall survive the
closing of the transaction contemplated by this Agreement. If Seller discovers
any breach of Purchaser's representations or covenants set forth in this Section
12 on or prior to the Closing Date, Seller shall immediately give notice thereof
to Purchaser, and if closing thereafter occurs,
<PAGE>
Seller shall be deemed to have waived any claim against Purchaser with respect
to any such breach of representation or covenant of Purchaser. The provisions of
this Section 12 shall survive the closing of the transaction contemplated by
this Agreement; provided that any claim by the Seller based on a
misrepresentation or breach of any covenant under this Section 12 shall be
deemed waived unless Seller has given Purchaser notice of such claim prior to
the expiration of six (6) months following the Closing Date.
II. PURCHASER'S CONDITIONS PRECEDENT.
A. The obligation of Purchaser to close the transaction
contemplated hereby is, at the option of Purchaser, subject to the
following:
1. Purchaser's review and approval of the
information relating to the Property
set forth in Section 4 hereof, the
Survey, the Title Commitment and
related documents and instruments of
record, and Purchaser's inspection and
examination of the Property pursuant to
Section 4(b) hereof;
2. Purchaser's receipt of evidence,
reasonably satisfactory to Purchaser,
that all approvals, designations,
licenses and permits have been obtained
or received from all appropriate
governmental agencies or entities as
Purchaser reasonably deems necessary to
allow Purchaser to operate the Property
for its current use; and
3. Purchaser's receipt of evidence,
reasonably satisfactory to Purchaser,
that (x) all utility systems for the
transmission of gas, telephone,
electrical, energy, storm and sanitary
services and domestic water adequate to
support the current use at the Property
are available; (y) such utility systems
conform to all existing laws,
ordinances, rules, regulations and
requirements of every governmental
agency and authority having
jurisdiction over the Property; and (z)
Purchaser may use such utility systems
without obligation to pay any "cost
recovery" or "recapture" charge or
expense other than deposits with
utility companies and "tap-on" fees or
meter fees of uniform application.
If any condition precedent to closing set forth in this Section 13(a)
has not been satisfied or waived by Purchaser on or before September 5,
1996 (the "CONTINGENCY PERIOD"), then Purchaser may, at its option,
elect to terminate this Agreement by
<PAGE>
notice to Seller prior to the expiration of the Contingency Period;
provided that upon failure of Purchaser to give such notice of
termination to Seller prior to the expiration of the Contingency
Period, the conditions precedent set forth in this Section 13(a) shall
be conclusively deemed satisfied or waived, and the parties shall
proceed to close the transaction contemplated hereby in accordance
with the terms of this Agreement.
A. The obligation of Purchaser to close the transaction
contemplated hereby is, at Purchaser's option, further subject to (i)
all representations and warranties of Seller contained in this Agreement
being true and correct in all material respects at and as of the Closing
Date and all covenants of Seller contained in this Agreement to have
been performed on or before the Closing Date having been timely and duly
performed in all material respects, (ii) the concurrent closing of the
transaction contemplated by that certain Agreement to Enter into Lease,
(iii) the execution and delivery of the Acquisition and Development
Agreement, and (iv) the execution and delivery of the Termination and
Mutual Release. Upon failure of any condition precedent set forth in
this Section 13(b), Purchaser may, as its sole and exclusive remedy,
either elect to (i) terminate this Agreement, provided that Purchaser is
not itself in default, and neither party shall have any further rights,
duties or obligations hereunder except for those matters contained in
this Agreement which expressly survive the termination of this
Agreement, or (ii) enforce specific performance of the obligations of
Seller hereunder, provided, however, that any action by Purchaser to
seek such specific performance must be commenced within thirty (30)
calendar days of the occurrence of the alleged default by Seller. In no
event whatsoever shall Seller ever have any liability for damages as a
result of a default by Seller under this Agreement except as
specifically provided at Section 11 hereof.
II. SELLER'S CONDITION PRECEDENT. The obligation of Seller to close the
transaction contemplated hereby is, at Seller's option, subject to (i) all
representations and warranties of Purchaser contained in this Agreement being
true and correct in all material respects at and as of the Closing Date and all
covenants of Purchaser to have been performed on or before the Closing Date
(including payment of the Purchase Price) having been timely and duly performed
in all material respects, (ii) the concurrent closing of the transaction
contemplated by the Agreement to Enter into Lease, (iii) the execution and
delivery of the Acquisition and Development Agreement, and (iv) the execution
and delivery of the Termination and Mutual Release. Upon failure of any
condition precedent set forth in this Section 14, Seller may elect to (a)
terminate this Agreement, provided that Seller is not itself in default, in
which event neither party shall have any further rights, duties or obligations
hereunder except for those matters contained in this Agreement which expressly
survive the termination of this Agreement, or (b) seek any other remedy
available to Seller at law or in equity, including, without limitation, specific
performance of this Agreement.
<PAGE>
III. CLOSING.
A. The transaction contemplated hereby shall close at 9:00 a.m.
on the Closing Date at the offices of the Title Insurer, or at such
other time and place as the parties may mutually agree, pursuant to the
terms of the Closing Escrow instructions, containing terms consistent
with the terms and conditions of this Agreement, which shall be mutually
satisfactory to the parties. The cost of escrow shall be paid by
Purchaser. At the request of either party, and in lieu of or in addition
to the escrow closing, the transaction shall be closed with the
concurrent delivery of the documents of title, delivery of the title
policy in accordance with the Title Commitment, and the payment of the
Purchase Price. The Seller shall provide for any undertaking (the "GAP
UNDERTAKING") to the Title Insurer necessary for the aforesaid closing
and delivery of the aforesaid title policy to occur. Purchaser shall pay
the charges of the Title Insurer for such "New York Style" closing.
B. On the Closing Date, Seller shall deliver or cause to be
delivered to Purchaser the following closing documents:
1. The Lease Amendment;
2. a Bill of Sale, with special covenants
of title, transferring to Purchaser all
of Seller's right, title and interest
in and to each and every item of
Fixtures and Tangible Personal Property
and Consumables to be transferred
hereunder subject only to Permitted
Exceptions;
3. all of the Contracts (to the extent
such Contracts are assignable and have
not been terminated effective as of the
Closing Date) and tangible
Miscellaneous Facility Assets, together
with an assignment conveying and
transferring to Purchaser all of
Seller's right, title and interest in,
to and under the Contracts and all
Miscellaneous Facility Assets;
4. A title policy or commitment therefor
issued by the Title Insurer in
accordance with the Title Commitment
and subject only to the Permitted
Exceptions (at Purchaser's cost);
5. Any other document or instrument
necessary to transfer Seller's interest
in the Property to Purchaser;
6. Resolutions of Seller, a certificate of
existence for Seller and similar
documents to evidence Seller's
authority to
<PAGE>
consummate the transactions
contemplated by this Agreement;
7. ALTA Statement;
8. GAP Undertaking;
9. A FIRPTA Affidavit in customary form
duly executed by Seller.
C. On the Closing Date, Purchaser shall deliver to Seller the
balance of the Purchase Price as provided in Section 3(b), the amounts
payable for the Retail Items and petty cash (as set forth in Section
7(f) and (g) hereof), the Purchase Money Note, the Leasehold Deed of
Trust, the Leasehold Mortgage Policy, an ALTA Statement and resolutions
of Purchaser, a certificate of good standing for Purchaser and similar
documents to evidence Purchaser's authority to consummate the
transactions contemplated by this Agreement.
D. On the Closing Date, Seller and Purchaser shall jointly
execute and deliver or cause to be executed and delivered the following
closing documents: (i) an agreed proration statement; (ii) state, county
and local transfer tax declarations; (iii) the Acquisition and
Development Agreement, and (iv) the Termination and Mutual Release.
E. Seller and Purchaser shall cause the Leasehold Deed of Trust
to be recorded against the Property at closing.
IV. EMPLOYEES. Purchaser shall have the right to review all employment
records and files of, and to interview, Employees. From and after the Closing
Date and continuing to and including December 31, 1996, Purchaser agrees to
offer employment to all Employees upon the terms and conditions hereinafter set
forth and shall not terminate any Employee for the initial thirty (30) day
period of such employment, unless such Employee is terminated for cause. In
addition, with respect to any of the Employees listed below, Purchaser agrees to
pay, in the event that any such Employees are terminated for any reason other
than cause, severance pay in an amount equal to the number of weeks pay
(calculated at the rate of pay as of the date of termination and, to the extent
any such Employee's Compensation is based in whole or in part on commissions,
the commission portion of such Compensation shall be based on the average weekly
commissions payable to such Employee over the three (3) month period immediately
prior to termination) hereinafter set forth for each such Employee, which such
severance pay shall be in addition to any Compensation due and owing such
Employee:
EMPLOYEE SEVERANCE PAY
-------- -------------
Scott Adcock 8 weeks
Lisa Balch 4 weeks
Mark Maness 4 weeks
Alan Niederlitz 4 weeks
<PAGE>
Gregorio Bustos 2 weeks
Mario Bustos 2 weeks
Salvador Bustos 2 weeks
Tim Legate 4 weeks
Yasmine Helmi 2 weeks
Philip Hughes 2 weeks
After the Closing Date for a period of not less than thirty (30) days, all
Employees shall receive Compensation at least equal to such Employees'
Compensation immediately prior to the Closing Date and all Employees shall
receive benefits equal to the benefits provided to comparable employees of
Purchaser. In addition, at the closing of the subject transaction, Purchaser
shall receive a credit from Seller in an amount equal to all accrued unpaid
vacation pay earned by all Employees as of the Closing Date and Purchaser shall
thereafter be solely responsible for the payment of all such accrued unpaid
vacation pay to such Employees. The terms of this Section 16 shall survive the
closing of the transaction contemplated by this Agreement.
I. INDEMNITY. Seller agrees to indemnify and hold harmless Purchaser from
and against liabilities, damages, causes of action, expenses and reasonable
attorneys' fees incurred by Purchaser for any liabilities, damages or causes of
action which accrue under the Contracts prior to the Closing Date. Purchaser
agrees to indemnify and hold harmless Seller from and against any liabilities,
damages and causes of action, expenses and reasonable attorneys' fees incurred
by Seller for any liabilities, damages and causes of action which accrued under
the Contracts from and after the Closing Date. The terms of this Section 17
shall survive the closing of the transaction contemplated by this Agreement.
II. NOTICES. Any notice, request, demand, instruction or other
communication to be given or served hereunder or under any document or
instrument executed pursuant hereto shall be in writing and shall be delivered
personally or by nationally recognized overnight courier or by telecopier or
sent by United States certified mail, return receipt requested, postage prepaid
and addressed to the parties at their respective addresses set forth below, and
the same shall be effective upon receipt if delivered personally or by overnight
courier or by telecopier or three business days after deposit in the mails if
mailed. A party may change its address for receipt of notices by service of a
notice of such change in accordance herewith, which notice shall be effective
upon receipt by the other party.
If to Seller: Dallas Highlander, Ltd.
One Galleria Tower
13355 Noel Road LB3
Suite 1315
Dallas, Texas 75240-6603
Attn: Patrick Edgerton or Fritz Duda
<PAGE>
If to Purchaser: Golden Bear Golf Centers, Inc.
11780 U.S. Highway #1
North Palm Beach, Florida 33408
Attn: Gary Rosmarin
I. ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS. This Agreement contains the
entire agreement and understanding of the parties in respect to the subject
matter hereof, and the same may not be amended, modified or discharged nor may
any of its terms be waived except by an instrument in writing signed by the
party to be bound thereby or as otherwise expressly set forth in this Agreement.
II. "AS IS" SALE AND PURCHASER'S INVESTIGATION. Purchaser acknowledges
that, subject to Purchaser election to proceed to close the transaction
contemplated by this Agreement after the Contingency Period, Purchaser is
acquiring the Property "AS IS -WITH ALL FAULTS" and that, except as specifically
set forth in this Agreement, no representations, warranties, guarantees,
promises, statements or estimates of any nature whatsoever upon which Purchaser
is relying, whether written or oral, express or implied, in fact or in law, have
been made by Seller, any real estate broker, agent, employee, attorney-in-fact
or at law, or other person representing or purporting to represent Seller, or
otherwise, Purchaser having entered into this Agreement after having made and
relied solely on its own examination, investigation and judgment. Purchaser
hereby acknowledges and agrees that it understands that Seller has not
authorized any real estate broker, agent, employee, attorney-in-fact or at law,
or other person to make any representation, statement or agreement on behalf of
Seller. Further, Purchaser hereby waives any right of recision and all claims
for damages by reason of any statement, representation, warranty, promise and/or
agreement, if any, not contained in this Agreement.
III. FURTHER ASSURANCES. The parties each agree to do, execute, acknowledge
and deliver all such further acts, instruments and assurances and to take all
such further action before or after the closing as shall be necessary or
desirable to fully carry out this Agreement and to fully consummate and effect
the transactions contemplated hereby. Purchaser and Seller shall cooperate in
good faith with respect to all matters pertaining to the transactions
contemplated hereby. The terms of this Section 21 shall survive the closing of
the transaction contemplated by this Agreement.
IV. SURVIVAL AND BENEFIT. Except to the extent specifically stated to the
contrary elsewhere in this Agreement, all representations, warranties,
agreements and obligations of the parties contained in this Agreement shall be
merged with the deed at closing. Wherever in this Agreement there is a reference
to termination of this Agreement, such termination shall not be construed to
terminate the obligations of the parties with respect to representations,
warranties and agreements of the parties contained in this Agreement which by
their terms survive termination of this Agreement.
V. 1 SUCCESSORS AND ASSIGNS. The terms and conditions herein contained
shall inure to the benefit of and shall be binding upon the parties hereto and
their respective heirs, executors, administrators, successors and assigns. This
Agreement and Purchaser's rights or interests herein may not be assigned by
Purchaser without the prior written consent of Seller.
<PAGE>
VI. 1 NO THIRD PARTY BENEFITS. This Agreement is for the sole and exclusive
benefit of the parties hereto and their respective successors and assigns, and
no third party is intended to or shall have any rights hereunder.
VII. LITIGATION COSTS. In the event of any action or proceeding at law or
in equity between Seller and Purchaser to enforce any provision of this
Agreement or to protect or establish any right or remedy of either party
hereunder, the unsuccessful party to such litigation shall pay to the prevailing
party all costs and expenses, including reasonable attorneys' fees incurred
therein by such prevailing party, and if such prevailing party shall recover
judgment in any such action or proceeding, such costs and expenses (including
such attorneys' fees) shall be included in and as a part of such judgment.
VIII. RISK OF LOSS. All risk of loss to the Property prior to the closing
of the transaction contemplated hereby shall be upon Seller. If any portion of
the Property is materially (as hereinafter described) damaged prior to closing,
Seller shall promptly give Purchaser notice of such damage. After receipt of
such notice, Purchaser shall have the option, exercisable by notice to Seller
given within ten (10) days following Seller's notice of such damages, to
terminate this Agreement, whereupon this Agreement shall be terminated and
thereafter neither party shall have any further rights or obligations hereunder.
If (a) Purchaser does not elect to terminate this Agreement in the event of
material damage, or (b) such damage is not material, Seller shall convey the
Property on the Closing Date to Purchaser in its then condition, upon and
subject to all of the other terms and conditions of this Agreement, and assign
to Purchaser all of Seller's right, title and interest in and to any claims
Seller may have to the insurance proceeds and/or any causes of action with
respect to such damage to the Property and pay to Purchaser all payments
theretofore made to Seller in connection with such damage. Damage to the
Property shall be deemed substantial if it results in the inability of Purchaser
to use the Property for its current use.
IX. POST CLOSING ACCOUNTING.
At the request of Purchaser, Seller, from and after the Closing Date and
for a period not to exceed 12 months (unless otherwise agreed by the parties
hereto) shall continue to perform accounting services in connection with the
operations on the Property and Purchaser shall pay to Seller for such services
an amount to be agreed upon in writing on or before the Closing Date. Either
party may terminate such accounting services upon not less than 30 days prior
written notice.
I. MISCELLANEOUS.
A. The headings and captions herein are inserted for convenient
reference only, and the same shall not limit or construe the paragraphs or
sections to which they apply or otherwise affect the interpretation hereof.
B. The terms "hereby," "hereof," "hereto," "herein," "hereunder" and
any similar terms shall refer to this Agreement, and the term "hereafter"
shall mean after, and the term "heretofore" shall mean before, the date of
this Agreement.
C. Words of the masculine, feminine or neuter gender shall mean and
include the correlative words of other genders, and words importing the
singular number shall mean and include the plural number and vice versa.
<PAGE>
D. Words importing persons shall include firms, associations,
partnerships (including limited partnerships), trusts, corporations and
other legal entities, including public bodies, as well as natural persons.
E. The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without being limited to.
F. This Agreement and any document or instrument executed pursuant
hereto may be executed in any number of counterparts each of which shall be
deemed an original, but all of which together shall constitute one and the
same instrument.
G. Whenever under the terms of this Agreement the time for performance
of a covenant or condition or for giving a notice falls upon a Saturday,
Sunday or holiday, such time for performance or giving of notice shall be
extended to the next business day. Otherwise all references herein to
"days" shall mean calendar days.
H. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas.
I. Time is of the essence of this Agreement.
J. Neither this Agreement nor any memorandum hereof shall be recorded.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
Seller and Purchaser as of the day and year first written above.
PURCHASER: SELLER:
GOLDEN BEAR GOLF CENTERS, INC., DALLAS HIGHLANDER, LTD., a Texas
a Florida corporation limited partnership
By:____________________________ By:HIGHLANDER GOLF CORPORATION,
Name:_______________________ a Texas corporation, its general partner
Title:______________________
By:___________________________________
Name:______________________________
Title:_____________________________
<PAGE>
EXHIBIT A
TO
PURCHASE/SALE AGREEMENT
LEGAL DESCRIPTION OF THE LAND
<PAGE>
EXHIBIT B
TO
PURCHASE/SALE AGREEMENT
TITLE COMMITMENT
<PAGE>
EXHIBIT C
TO
PURCHASE/SALE AGREEMENT
FIXTURES AND TANGIBLE PERSONAL PROPERTY
<PAGE>
EXHIBIT D
TO
PURCHASE/SALE AGREEMENT
FIRST AMENDMENT TO GROUND LEASE AND ASSIGNMENT OF
TENANT'S INTEREST IN GROUND LEASE AND LANDLORD ESTOPPEL
<PAGE>
EXHIBIT E
TO
PURCHASE/SALE AGREEMENT
LEASEHOLD DEED OF TRUST
<PAGE>
EXHIBIT F
TO
PURCHASE/SALE AGREEMENT
PURCHASE MONEY NOTE
<PAGE>
EXHIBIT G
TO
PURCHASE/SALE AGREEMENT
ACQUISITION AND DEVELOPMENT AGREEMENT
<PAGE>
EXHIBIT H
TO
PURCHASE/SALE AGREEMENT
ALLOCATION OF PURCHASE PRICE
Intentionally Omitted.
<PAGE>
EXHIBIT I
TO
PURCHASE/SALE AGREEMENT
CONTRACTS
<PAGE>
EXHIBIT J
TO
PURCHASE/SALE AGREEMENT
EMPLOYMENT AGREEMENTS
<PAGE>
EXHIBIT K
TO
PURCHASE/SALE AGREEMENT
REVENUE AND EXPENSE STATEMENT
Intentionally Omitted. Prepared by Purchaser.
<PAGE>
EXHIBIT L
TO
PURCHASE/SALE AGREEMENT
SELLER'S INSURANCE
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this Form 8-K and in the Registration Statement on
Form S-8 No. 333-10467 of Golden Bear Golf, Inc. of our report dated July 16,
1996, with respect to the combined financial statements of Sugar Creek Golf
Course, Inc. and Magic Castle, Inc. included in Golden Bear Golf, Inc.'s
Prospectus dated July 31, 1996.
ARTHUR ANDERSEN LLP
West Palm Beach, Florida,
September 9, 1996.
