SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) January 18, 2000
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GOLFROUNDS.COM, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-10093 22-3664872
- ---------------------------- ---------------------- -----------------
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
376 Main Street, P.O. Box 74, Bedminster, New Jersey 07921
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (908) 901-9250
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 1. Changes in Control of Registrant
On January 18, 2000, six stockholders of GolfRounds.com, Inc.
(the "Company") entered into a stock purchase agreement (the "Stock Purchase
Agreement") with seven purchasers pursuant to which the sellers have agreed to
sell to the purchasers an aggregate of 500,000 shares of common stock of the
Company at a price of $1.375 per share. In connection with the execution of the
Stock Purchase Agreement, the Company and its directors, Paul O. Koether, John
W. Galuchie, Jr. and Thomas K. Van Herwarde, entered into a separate agreement
with the purchasers (the "Side Agreement") pursuant to which, among other
things, Messrs. Koether, Galuchie and Van Herwarde have agreed to resign as
directors and appoint new directors designated by the purchasers of the shares.
The purchasers have designated Robert H. Donehew, Larry Grossman and John F.
McCarthy, III, for appointment to the board of directors of GolfRounds upon the
resignations of the current directors. Mr. Koether has also agreed to give a
designee of the purchasers irrevocable proxies to vote an additional 449,690
shares of the Company's common stock that he or entities controlled by him own.
Upon consummation of the transactions contemplated by the two
agreements, the purchasers' designees will constitute all of the directors of
the Company. Additionally, the purchasers, as a group, and their designee will
have the right to vote an aggregate of 949,690, or approximately 45%, of the
2,099,491 outstanding shares of the Company's common stock.
The shares to be sold, the purchase price therefor, the
resignations and Mr. Koether's proxy have been deposited in escrow pending the
closing of the sale of the shares, which is expected to occur on or about
January 20, 2000. The Company has agreed that, simultaneously with the closing,
the Company will file a statement with the Commission pursuant to Section 14(f)
of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 14f-1
thereunder (the "14(f) Statement") and mail the 14(f) Statement to its
stockholders. The resignations of Messrs. Koether, Galuchie and Van Herwarde,
and the appointment of Messrs, Donehew, Grossman and McCarthy, will be effective
10 days after the date the 14(f) Statement is mailed to the Company's
stockholders. The Company's stockholders are not being asked to vote with
respect to the appointment of the new directors and no proxies are being
solicited.
The sellers include Asset Value Holdings, Inc., a Delaware
corporation of which Mr. Galuchie is the Treasurer, Bradford Trading Company, a
Delaware corporation, Paul O. Koether, Shamrock Associates, a New Jersey limited
partnership of which Mr. Koether is the General Partner, Sun Equities
Corporation, a Delaware corporation of which Mr. Galuchie is Vice President, and
Mr. Van Herwarde. The following table lists the sellers and the number of shares
to be sold by each:
Name of Seller Number of Shares
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Asset Value Holdings, Inc. 200,000
Bradford Trading Company 25,000
Paul O. Koether 10,000
Shamrock Associates 208,000
Sun Equities Corporation 7,000
Thomas K. Van Herwarde 50,000
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The purchasers include The Rachel Beth Heller 1997 Trust Dated
7/9/97, of which Lawrence Kupferberg is trustee, The Evan Todd Heller 1997 Trust
dated 6/17/97, of which Mr. Kupferberg is trustee, Martan & Co., a New Jersey
corporation, Donehew Fund Limited Partnership, a Georgia limited partnership,
Jonathan & Nancy Glaser Family Trust dated 12/16/98, of which Jonathan and Nancy
Glaser are the trustees, W. Robert Ramsdell, and the Nagelberg Family Trust
dated 9/24/97, of which David S. Nagelberg and Bette Nagelberg are the trustees.
The following table lists the purchasers and the number of shares to be
purchased by each:
Name of Purchaser Number of Shares
----------------- ----------------
The Rachel Beth Heller 1997 Trust Dated 70,000
7/9/97
The Evan Todd Heller 1997 Trust Dated 70,000
6/17/97
Martan & Co. 70,000
Donehew Fund Limited Partnership 70,000
Jonathan & Nancy Glaser Family Trust 40,000
Dated 12/16/98
W. Robert Ramsdell 40,000
Nagelberg Family Trust Dated 9/24/97 140,000
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Item 7. Financial Statements and Exhibits
Exhibit Number Description
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2.1 Stock Purchase Agreement dated as of January 18, 2000.
2.2 Agreement dated as of January 18, 2000.
99.1 Press release of GolfRounds.com, Inc. dated January
19, 2000.
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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.
Dated: January 19, 2000 GOLFROUNDS.COM, INC.
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(Registrant)
/s/ John W. Galuchie, Jr.
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John W. Galuchie, Jr.
Vice President
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EXHIBIT INDEX
Exhibit Number Description
-------------- ------------
2.1 Stock Purchase Agreement dated as of January 18, 2000.
2.2 Agreement dated as of January 18, 2000.
99.1 Press release of GolfRounds.com, Inc. dated January
19, 2000.
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STOCK PURCHASE AGREEMENT, dated as of January 18, 2000
("Agreement"), among each of the sellers listed on Schedule A hereto
(individually a "Seller" and collectively the "Sellers"), each of the buyers
listed on Schedule B hereto (individually a "Buyer" and collectively the
"Buyers") and Graubard Mollen & Miller, a law firm having an office at 600 Third
Avenue, New York, New York 10016 ("Escrow Agent").
WHEREAS, the Sellers desire to sell to the Buyers, and the
Buyers desire to purchase from the Sellers, an aggregate of 500,000 shares of
common stock, $.01 par value per share ("Common Stock"), of GolfRounds.com,
Inc., a Delaware corporation ("GolfRounds"), on the terms and conditions set
forth in this Agreement.
NOW THEREFORE, the parties hereto agree as follows:
1. Purchase and Sale of Shares. Subject to the terms and
conditions herein set forth, each Seller hereby agrees to sell shares of Common
Stock ("Purchased Shares") in the amount set forth opposite such Seller's name
on Schedule A, and each Buyer hereby agrees to purchase Purchased Shares in the
amount set forth opposite such Buyer's name on Schedule B, in each case for a
price of $1.375 per Purchased Share ("Purchase Price").
2. Deposit of Purchased Shares and Purchase Price in Escrow.
On or before January 19, 2000, the Sellers shall deposit with Escrow Agent stock
certificates representing all of the Purchased Shares, registered in the Buyers'
names and for the numbers of shares set forth on Schedule B ("Stock
Certificates"), and each Buyer shall deposit with Escrow Agent a wire transfer
for the full amount of the Purchase Price for the Purchased Shares set forth
opposite such Buyer's name on Schedule B (in the aggregate, the "Purchase
Funds").
3. Closing. The closing of the purchase and sale of the
Purchased Shares ("Closing") shall take place at the offices of the Escrow Agent
commencing at 10:00 a.m. on the first day on which all of the conditions to the
obligations of the parties to consummate the transactions contemplated hereby,
as set forth in Section 8, hereof are satisfied ("Closing Date"); provided,
however, that the Closing Date shall be no later than January 21, 2000. At the
Closing, Escrow Agent shall (i) deliver the Stock Certificates to the Buyers,
(ii) transfer to each Seller the aggregate Purchase Price for the shares sold by
such Seller in accordance with wire transfer instructions provided by the
Seller, and (iii) release the Proxies (as hereinafter defined) to the Buyers. If
the Closing does not take place on or before January 21, 2000, to the extent any
of the Stock Certificates, any portion of the Purchase Funds and/or the Proxies
have been or are thereafter delivered to Escrow Agent, Escrow Agent shall return
such Stock Certificates to the Sellers, and such Purchase Funds to the Buyers
and the Proxies to Koether (as hereinafter defined).
4. Representations of Sellers. Each Seller hereby
represents and warrants, severally and not jointly, to the Buyers as follows.
Each of such representations and warranties shall be deemed to have been given
as of the date hereof and as of the date of the Closing:
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(a) Seller is the holder of record and beneficial
owner of the Purchased Shares set forth opposite such Seller's name on Schedule
A, free and clear of any security interests, liens or encumbrances, and Seller
has not granted to any person or persons any options or other rights to buy, or
proxies or other rights to vote, such Purchased Shares.
(b) Seller has full legal power to execute and
deliver this Agreement and to perform his or its obligations hereunder. All acts
required to be taken by Seller to enter into this Agreement and to carry out the
transactions contemplated hereby have been, or prior to the Closing Date shall
have been, properly taken; and this Agreement constitutes a legal, valid and
binding obligation of Seller, enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by Seller in accordance
with its terms will not, with or without the giving of notice or the passage of
time, or both, conflict with, result in a default, right to accelerate or loss
of rights under, or result in the creation of any encumbrance pursuant to, or
require the consent of any third party or governmental authority pursuant to,
(i) any provision of the certificate of incorporation or by-laws, if any, of
Seller, or (ii) any franchise, mortgage, indenture or deed of trust or any
material lease, license or other agreement or any law, regulation, order,
judgment or decree to which Seller is a party or by which Seller (or any of his
or its assets, properties, operations or businesses) may be bound, subject to or
affected.
(c) Seller does not know of any facts that would
cause him or it to believe that any of the documents filed by GolfRounds since
January 1, 1999 pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act"), or the rules and regulations thereunder, contained an untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances in which they were made, not misleading. Seller is
not aware of any material change in the business, properties or condition,
financial or otherwise, of GolfRounds since the date on which the most recent
report filed by GolfRounds pursuant to the Exchange Act was filed.
5. Representation and Warranty of Koether. In addition to his
representations and warranties as a Seller, Paul O. Koether ("Koether") hereby
represents and warrants as of the date hereof and as of the date of the Closing
that he is, and/or entities controlled by him are, the holder(s) of record and
beneficial owner(s) of the Proxy Shares (as hereafter defined) free and clear of
any security interests, liens or encumbrances, and neither he nor any of such
entities has granted to any person or persons any options or other rights to
buy, or proxies or other rights to vote, the Proxy Shares.
6. Representations and Warranties of Buyer. Each Buyer hereby
represents and warrants, severally and not jointly, to the Sellers as follows.
Each of such representations and warranties shall be deemed to have been given
as of the date hereof and as of the date of the Closing:
(a) Buyer has full legal power to execute and
deliver this Agreement and to perform his or its obligations hereunder. All acts
required to be taken by Buyer to enter into this Agreement and to carry out the
transactions contemplated hereby have been, or prior to the Closing Date shall
have been, properly taken; and this Agreement constitutes a legal, valid and
binding obligation of Buyer, enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by Buyer in accordance
with its terms will not, with or without the giving of notice or the passage of
time, or both, conflict with, result in a default, right to accelerate or loss
of rights under, or result in the creation of any encumbrance pursuant to, or
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require the consent of any third party or governmental authority pursuant to (i)
any provision of the certificate of incorporation or by-laws, if any, of Buyer,
or (ii) any franchise, mortgage, indenture or deed of trust or any material
lease, license or other agreement or any law, regulation, order, judgment or
decree to which Buyer is a party or by which Buyer (or any of his or its assets,
properties, operations or businesses) may be bound, subject to or affected.
(b) The Purchased Shares to be received by Buyer
pursuant to the terms hereof are being acquired for investment for Buyer's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof. Buyer understands that the Purchased Shares
have not been registered under the Securities Act of 1933, as amended
("Securities Act"), and may not be resold or otherwise transferred unless they
have been registered under the Securities Act or an exemption from registration
under the Securities Act is applicable. Buyer acknowledges that GolfRounds or
its transfer agent may place a legend denoting such restrictions on the
certificate for the Purchased Shares Buyer is purchasing hereunder.
(c) Buyer has been given an opportunity to ask
questions and receive answers from Sellers regarding the Purchased Shares and
GolfRounds and to obtain any additional information Sellers possessed or could
have acquired without unreasonable effort or expense.
(d) Buyer has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Purchased Shares and has obtained, in Buyer's
judgment, sufficient information from the Company to evaluate the merits and
risks of an investment in the Company.
(e) Buyer represents and warrants that he or it is
an "accredited investor" within the meaning of Rule 501(a) under the Securities
Act.
7. Covenants of Koether. In addition to his agreements
hereunder as a Seller, Koether hereby covenants that, on or prior to the Closing
Date, he shall have deposited in escrow with the Escrow Agent irrevocable
proxies ("Proxies"), which proxies shall state that they are coupled with an
interest, in favor of a designee selected by the Buyers giving such designee the
right to vote an aggregate of 449,690 shares of Common Stock that Koether or
entities controlled by Koether shall continue to own after the Closing Date
("Proxy Shares") for three years after the Closing Date.
8. Conditions.
(a) The obligations of the Buyers to consummate the
purchase of the Purchased Shares are subject to satisfaction of the following
conditions:
(i) All of the representations and
warranties of the Sellers herein are true and complete on the date hereof and on
the Closing Date.
(ii) Simultaneously with the execution of
this Agreement, GolfRounds, Koether, Thomas K. Van Herwarde ("Van Herwarde"),
John W. Galuchie, Jr. ("Galuchie") and each of the Buyers shall have executed an
agreement in the form of Exhibit A hereto ("Side Agreement").
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(iii) All of the actions to be taken by
GolfRounds, Koether, Van Herwarde and Galuchie pursuant to the Side Agreement
shall have been taken at the times and in the manner specified in the Side
Agreement;
(iv) Prior to or simultaneously with the
Closing, the Asset Purchase Agreement between PKG Design, Inc., Van Herwarde and
American Metals Service, Inc. dated May 17, 1999, and the Escrow Agreement dated
as of May 17, 1999 by and among American Metals Service, Inc., PKG Design, Inc.
and Rosenman & Colin LLP, shall each have been amended to release GolfRounds
from any obligation to deliver to PKG Design, Inc. or Van Herwarde any of the
280,000 shares of Common Stock placed in escrow pursuant to the Escrow Agreement
and to permit and cause such shares to be returned to GolfRounds, and such
shares shall have been released from escrow, returned to GolfRounds and
canceled. At the Closing the Sellers shall provide the Buyers with evidence,
satisfactory to counsel to the Buyers, that this condition has been met.
(v) On or prior to the Closing Date,
Koether shall have deposited the Proxies in escrow with the Escrow Agent.
(vi) On the Closing Date, the Sellers
shall have provided evidence, satisfactory to counsel for the Buyers, that
GolfRounds continues to have at least $1,900,000 of cash and cash equivalents in
its bank and brokerage accounts.
(b) The obligations of the Sellers to consummate
the sale of the Purchased Shares are subject to satisfaction of the following
conditions:
(i) All of the representations and
warranties of the Buyers herein are true and complete on the date hereof and on
the Closing Date;
(ii) Simultaneously with the execution
of this Agreement, each of the Buyers shall have executed the Side Agreement;
(iii) The 14(f) Statement shall be in a
form reasonably satisfactory to Rosenman & Colin LLP, counsel for the Sellers;
(iv) At the Closing, the Buyers shall
deliver to the Sellers a copy of the written consent of the New Directors (as
defined in the Side Agreement) described in Section 8 of the Side Agreement; and
(v) At the Closing, the Buyers shall
deliver to the Sellers an indemnification letter in the form of Exhibit D to the
Side Agreement from each of the New Directors.
9. Escrow Agent. Escrow Agent is serving hereunder solely as a
convenience to the parties to facilitate a Closing and Escrow Agent's sole
obligation under this Agreement is to act with respect to the Stock
Certificates, Purchase Funds and Proxies as described in Section 2 of this
Agreement. Escrow Agent shall not be liable to any Seller or any Buyer or any
other person or entity in respect of any act or failure to act by Escrow Agent
hereunder or otherwise in connection with serving as Escrow Agent unless Escrow
Agent has acted in a manner constituting gross negligence or willful misconduct.
Escrow Agent shall be indemnified by the Sellers and the Buyers, jointly and
severally, against any claim made against it (including reasonable attorney's
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fees) by reason of its acting or failing to act in connection with this
transaction except as a result of its gross negligence or willful misconduct.
Each Seller acknowledges that Escrow Agent is serving as counsel to the Buyers
in this transaction and its services as the escrow agent to facilitate the
Closing shall not prevent or disqualify Escrow Agent from serving as counsel to
any of the Buyers now or in the future.
10. Indemnification. Each Seller, severally and not jointly,
shall indemnify and hold harmless the Buyers and their respective heirs,
executors, legal representatives, successors and assigns from and against any
losses, damages, expenses or liabilities, including, without limitation,
reasonable attorneys' fees, that may be sustained, suffered or incurred by
Buyers, their respective heirs, executors, legal representatives, successors and
assigns, arising from or in connection with the breach of any of such Sellers'
covenants, representations, warranties, agreements, obligations or undertakings
hereunder. Each Buyer, severally and not jointly, shall indemnify and hold
harmless the Sellers and their respective heirs, executors, legal
representatives, successors, and assigns, from and against any losses, damages,
expenses or liabilities, including, without limitation, reasonable attorneys'
fees, that may be sustained, suffered or incurred by the Sellers arising from or
in connection with the breach of any of such Buyer's representations or
warranties hereunder.
11. Miscellaneous.
(a) The warranties, representations, covenants
and indemnities of the Sellers and the Buyers contained in or made pursuant to
this Agreement shall survive the closing of the transaction contemplated by this
Agreement and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of any of the Buyers or Sellers.
(b) This Agreement shall be binding upon and
inure to the benefit of each party hereto, and its respective heirs, executors,
legal representatives, successors and assigns. This Agreement constitutes the
entire understanding and agreement between the parties with regard to the
subject matter hereof and may not be amended or modified except by a written
agreement specifically referring to this Agreement signed by all the parties. No
waiver of any breach or default hereunder shall be considered valid unless in
writing and signed by the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default of the same or similar
nature.
(c) This Agreement shall be governed by and
construed under the internal laws of the State of New York, disregarding any
principles of conflicts of laws.
(d) This Agreement may be executed 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.
(e) The Sellers represent that, except for a
finder's fee of $0.025 per share that they have agreed to pay T.R. Winston &
Co., Inc. and Tyler Runnels, they neither are nor will be obligated for any
finder's fee or commission in connection with this transaction. The Buyers
represents that they neither are nor will be obligated for any finder's fee or
commission in connection with this transaction. Each Seller agrees, severally
and not jointly, to indemnify and hold harmless the Buyers from any liability
for any commission or compensation in the nature of a finder's fee (and the
costs and expenses of defending against such liability or asserted liability)
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for which such Seller or any of his or its representatives is responsible. Each
Buyer agrees, severally and not jointly, to indemnify and hold harmless the
Sellers from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Buyer or any of his or its representatives is
responsible.
(f) In the event that any provision of this
Agreement would be held to be invalid, prohibited or unenforceable in any
jurisdiction for any reason, unless such provision is narrowed by judicial
construction, this Agreement shall, as to such jurisdiction, be construed as if
such invalid, prohibited or unenforceable provision had been more narrowly drawn
so as not to be invalid, prohibited or unenforceable. If, notwithstanding the
foregoing, any provision of this Agreement would be held to be invalid,
prohibited or unenforceable in any jurisdiction for any reason, such provision,
as to such jurisdiction, shall be ineffective to the extent of such invalidity,
prohibition or unenforceability, without invalidating the remaining portion of
such provision or the other provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
(g) Any notice required or permitted under this
Agreement shall be given in writing and shall either be delivered personally or
sent by certified mail, return receipt requested, postage prepaid, or by Federal
Express next business day service with signed receipt required, if to a Seller,
at his or its address set forth on Schedule A, if to a Buyer, at his or its
address as set forth on Schedule B, and if to the Escrow Agent, to its address
set forth above, attention David Alan Miller, Esq., or to such other address as
either shall have specified by notice in writing to the other, and shall be
deemed duly given hereunder when so delivered. A copy of any notice to a Buyer
shall be sent to David Alan Miller, Esq., Graubard Mollen & Miller, 600 Third
Avenue, New York, New York 10016-2097, and a copy of any notice to a Seller
shall be sent to Guy Lander, Esq., Rosenman & Colin LLP, 575 Madison Avenue, New
York, New York 10022-2585.
(h) The section headings are inserted only as a
matter of convenience and for reference and in no way define, limit or describe
the scope or intent of any provision of this Agreement.
(i) This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the parties.
(j) The failure of the Closing to occur and the
return by the Escrow Agent of all documents, monies and other things deposited
with it pursuant to this Agreement and the Side Agreement shall not act as a
waiver by any party of any claims such party may have against any other party
for any breach of this Agreement or the Side Agreement.
[The remainder of this page has been left blank intentionally.]
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IN WITNESS WHEREOF, the parties have duly executed and
delivered this Agreement as of the date first above written.
SELLERS: BUYERS:
ASSET VALUE HOLDINGS, INC. THE RACHEL BETH HELLER 1997 TRUST
DATED 7/9/97
/s/ John W. Galuchie, Jr. /s/ Lawrence Kupferberg
By: _____________________________ By:_______________________________
John W. Galuchie, Jr. Name: Lawrence Kupferberg
Treasurer Title: Trustee
BRADFORD TRADING COMPANY THE EVAN TODD HELLER TRUST DATED
6/17/97
/s/ Howard F. Bovers /s/ Lawrence Kupferberg
By:_______________________________ By:_______________________________
Howard F. Bovers Name: Lawrence Kupferberg
President Title: Trustee
/s/ Paul O. Koether
_________________________________ MARTAN & CO.
Paul O. Koether
/s/ Michael Silvestri
By:_______________________________
SHAMROCK ASSOCIATES Name: Michael Silvestri
Title: President
/s/ Paul O. Koether
By:_____________________________
Paul O. Koether DONEHEW FUND LIMITED PARTNERSHIP
General Partner Donehew Capital LLC, General
Partner
/s/ Robert H. Donehew
By:_______________________________
SUN EQUITIES CORPORATION Name: Robert H. Donehew
Title: Manager, Donehew Capital
/s/ John W. Galuchie, Jr. LLC, General Partner
By:_____________________________
Name: John W. Galuchie, Jr. JONATHAN & NANCY GLASER FAMILY
Title: Vice President TRUST DATED 12/16/98
/s/ Jonathan Glaser
/s/ Thomas K. Van Herwarde By:_______________________________
________________________________ Name: Jonathan Glaser
Thomas K. Van Herwarde Title: Trustee
/s/ W. Robert Ramsdell
__________________________________
W. Robert Ramsdell
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NAGELBERG FAMILY TRUST DATED
9/24/97
/s/ David S. Nagelberg
By:_______________________________
David S. Nagelberg
Trustee
ESCROW AGENT:
GRAUBARD MOLLEN & MILLER
/s/ David Alan Miller
By: ______________________________
David Alan Miller, Partner
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Schedule A
Sellers Shares Being Sold
- ------- ------------------
Asset Value Holdings, Inc. 200,000
376 Main Street
P.O. Box 74
Bedminster, New Jersey 07921
John W. Galuchie, Jr.-- Treasurer
(Delaware corporation)
Bradford Trading Company 25,000
2855 Ocean Drive, Suite D-3
Vero Beach, Florida 32963
Howard F. Bovers-- President
(Delaware corporation)
Paul O. Koether 10,000
211 Pennbrook Road
Far Hills, New Jersey 07931
Shamrock Associates 208,000
376 Main Street
P.O. Box 74
Bedminster, New Jersey 07921
Paul O. Koether-- General Partner
(New Jersey limited partnership)
Sun Equities Corporation 7,000
376 Main Street
P.O. Box 74
Bedminster, New Jersey 07921
John W. Galuchie, Jr.-- Vice President
(Delaware corporation)
Thomas K. Van Herwarde 50,000
P.O. Box 441
Keyston Court #4
Vernon, New Jersey 07462
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Schedule B
Buyers Shares Being Purchased
- ------ ---------------------
The Rachel Beth Heller 1997 Trust dated 70,000
7/9/97
Lawrence Kupferberg, Trustee
74 Farview Road
Tenafly, New Jersey 07670
SS #: ###-##-####
The Evan Todd Heller 1997 Trust dated 70,000
6/17/97
Lawrence Kupferberg, Trustee
74 Farview Road
Tenafly, New Jersey 07670
SS #: ###-##-####
Martan & Co. 70,000
525 Washington Blvd., 34th Floor
Jersey City, New Jersey 07310
Eugene Whitehouse, Vice President
Tax ID#: 13-1924455
Donehew Fund Limited Partnership 70,000
Donehew Capital LLC General Partner
111 Village Parkway, Building #2
Marietta, Georgia 30067
Attn: Robert H. Donehew
Tax ID #: 83-0316971
Jonathan & Nancy Glaser Family Trust dated 40,000
12/16/98
Jonathan & Nancy Ellen Glaser, Trustee
1999 Avenue of the Stars, Suite 2530
Los Angeles, California 90067
Tax ID #: ###-##-####
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W. Robert Ramsdell 40,000
474 Paseo Miramar
Pacific Palisades, California 90272
SS #: ###-##-####
Nagelberg Family Trust dated 9/24/97 140,000
David S. Nagelberg &
Bette Nagelberg, Trustees
P.O. Box 2142
Rancho Santa Fe, California 92067
Tax ID #: 12-2442177
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AGREEMENT
AGREEMENT, dated as of January 18, 2000, by and among Paul O.
Koether ("Koether"), Thomas K. Van Herwarde ("Van Herwarde"), John W. Galuchie,
Jr. ("Galuchie"), GolfRounds.com, Inc., a Delaware corporation ("GolfRounds"
and, collectively with Koether, Van Herwarde and Galuchie, the "GolfRounds
Parties"), each of the parties listed on Schedule A hereto (individually a
"Buyer" and collectively the "Buyers"), and Graubard Mollen & Miller, a law firm
having an office at 600 Third Avenue, New York, New York 10016 ("Escrow Agent").
WHEREAS, simultaneously with the execution of this Agreement,
the Buyers are entering into a stock purchase agreement ("Stock Purchase
Agreement") with certain Sellers named therein ("Sellers") pursuant to which the
Sellers are selling to the Buyers an aggregate of 500,000 shares of common
stock, par value $.01 per share ("Common Stock"), of GolfRounds; and
WHEREAS, it is a condition to the closing of the purchase and
sale contemplated by the Stock Purchase Agreement ("Closing") that the parties
hereto enter into this Agreement and take the actions contemplated hereby.
NOW THEREFORE, the parties hereto agree as follows:
1. Press Release. GolfRounds agrees that, promptly after the
execution of this Agreement and the Stock Purchase Agreement, GolfRounds shall
issue a press release in the form attached hereto as Exhibit A ("Press Release")
through the Businesswire, and shall file a report on Form 8-K with the
Securities and Exchange Commission ("SEC"), which report shall be in the form
attached hereto as Exhibit B ("Form 8-K"). The Press Release shall be filed as
an exhibit to the Form 8-K.
2. Board Consent. The GolfRounds Parties hereby represent and
warrant that attached hereto as Exhibit C is a unanimous written consent of the
Board of Directors of GolfRounds ("Consent"), executed by each director of the
Company, that the Consent is in full force and effect and will not be modified,
amended, supplemented or rescinded prior to the effectiveness of the
Resignations (as hereinafter defined) and that it contains resolutions of the
Board:
(a) Approving the purchase of the Purchased
Shares (as defined in the Stock Purchase Agreement) by the Buyers as
contemplated by the Stock Purchase Agreement;
(b) Appointing John F. McCarthy, III, Larry
Grossman and Robert H. Donehew (collectively, the "New Directors") to the Board,
conditioned upon the Closing and effective on the tenth day following the date
the 14(f) Statement (as hereinafter defined) has been mailed to the stockholders
of GolfRounds;
(c) Approving the issuance of the Press Release
and the filing of the Form 8-K with the SEC; and
<PAGE>
(d) Approving the filing by GolfRounds with the
SEC of an information statement ("14(f) Statement") conforming to the
requirements of Section 14(f) of the Securities Exchange Act of 1934 ("Exchange
Act") and Rule 14f-1 thereunder.
3. Resignations. Simultaneously with the execution of this
Agreement, Koether, Van Herwarde and Galuchie shall deposit with the Escrow
Agent letters containing their irrevocable resignations from the Board of
Directors of GolfRounds ("Resignations"), which Resignations shall be
conditioned upon the Closing and effective on the tenth day following the date
on which the 14(f) Statement is mailed to the stockholders of GolfRounds. At the
Closing, the Escrow Agent shall release the Resignations to the Buyers. In the
event the Closing does not occur on or before January 21, 2000, the Resignations
shall be void and the Escrow Agent shall destroy them.
4. 14(f) Statement. GolfRounds shall file the 14(f) Statement
with the SEC and cause its transfer agent to mail the 14(f) Statement to its
stockholders simultaneously with the Closing. The 14(f) Statement shall be in a
form satisfactory to GolfRounds and the Buyers and their respective counsel.
5. No Actions Outside the Ordinary Course. Each of the
GolfRounds parties hereby covenants and agrees that from and after the date
hereof he or it shall not take any actions with respect to GolfRounds outside
the ordinary course of business of GolfRounds or that require the approval of
GolfRounds' board of directors.
6. Bank Account Signatories. Prior to the Closing, the
GolfRounds Parties shall take all necessary steps to cause their control over
all bank accounts held by GolfRounds to be terminated, and control over such
accounts to be transferred to Robert H. Donehew, in each case effective on the
tenth day after the 14(f) Statement is mailed to GolfRounds' stockholders.
7. Books and Records. The GolfRounds Parties shall
cause all of the books and records of GolfRounds to be delivered to the Escrow
Agent within 10 days after the Closing.
8. Indemnification.
(a) GolfRounds agrees to indemnify and hold
harmless each of Koether, Van Herwarde and Galuchie (each a "Resigning Director"
and collectively the "Resigning Directors") and each of the Sellers (each
Resigning Director and each Seller is hereinafter referred to as an "Indemnified
Party") against any and all losses, claims, damages, costs, liabilities and
expenses (including, without limitation, attorneys' fees and expenses and the
costs of investigation incurred by each Indemnified Party in or for any action
or proceeding between such Indemnified Party and any third party or otherwise)
("Damages") to which such Indemnified Party may become subject, insofar as such
Damages (or actions in respect thereof) arise or are based upon (i) any untrue
statement or alleged untrue statement of a material fact relating to the New
Directors or the Buyers contained in, or omission or alleged omission of a
material fact relating to the New Directors or the Buyers from, the Press
Release, Form 8-K or 14(f) Statement made in reliance upon and in conformity
with written information that is furnished to GolfRounds by the Buyers or those
acting on their behalf for inclusion in the Press Release, Form 8-K or 14(f)
Statement, or (ii) any liability or claim, contingent or direct, known or
unknown, matured or unmatured (including but not limited to liabilities for
taxes) arising in any way from any services rendered, or action taken by, or
relating to the operations of, GolfRounds commencing from the date of
resignation of the Resigning Directors and thereafter.
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<PAGE>
(b) Notwithstanding the indemnification
obligations of GolfRounds set forth in subsection (a) above, from and after the
date hereof for a period of six years, except for amendments or modifications
required by law, GolfRounds shall not amend or modify any rights to
indemnification now existing in favor of the present and former directors,
officers and employees of GolfRounds provided in the Certificate of
Incorporation and Bylaws of GolfRounds in a manner adverse to any such director,
officer or employee, and the resignation of each Resigning Director shall not
diminish the obligations of GolfRounds to indemnify each Resigning Director.
(c) If any claim is asserted against any
Indemnified Party, or any Indemnified Party is made a party defendant in any
action or proceeding, and such claim, action or proceeding involves a matter
that is subject of this indemnification, then such Indemnified Party shall give
prompt written notice to GolfRounds of such claim, action or proceeding, and
GolfRounds shall have the right to join in the defense of said claim, action or
proceeding at GolfRound's own cost and expense and, if GolfRounds agrees in
writing to be bound by and to promptly pay the full amount of any final judgment
from which no further appeal may be taken and if such Indemnified Party is
reasonably assured of GolfRounds' ability to satisfy such agreement, then at the
option of such Indemnified Party, GolfRounds may take over the defense of such
claim, action or proceeding, except that, in such case, the Indemnified Party
being indemnified shall have the right to join in the defense of said claim,
action or proceeding at its own cost and expense.
(d) The Indemnified Parties shall have no
liability to GolfRounds or the Buyers for the sale of the Purchased Shares to
the Buyers except for (i) any breach of any of the Resigning Directors' and
Sellers' representations, warranties and covenants or undertakings in this
Agreement or the Stock Purchase Agreement and (ii) any claims relating to the
accuracy or completeness of any information provided to the Buyers that is in
conformity with written information contained in reports filed by GolfRounds
under the Exchange Act.
(e) At the Closing, the Buyers shall deliver to
the Sellers a copy of a written consent of the New Directors, effective upon the
effectiveness of the New Directors' appointment as directors of GolfRounds,
ratifying GolfRounds' obligations pursuant to this Section 8.
(f) At the Closing, the Buyers shall deliver to
the Sellers an agreement in the form of Exhibit D hereto, signed by each of the
New Directors, pursuant to which each of the New Directors shall agree to
indemnify Koether, Van Herwarde and Galuchie as set forth therein.
9. Office Space. Koether represents that the office space
presently occupied by GolfRounds at 376 Main Street, Bedminster, New Jersey is
currently owned by Kent Financial Services, Inc. ("Kent"), an entity controlled
by Koether. Koether agrees that GolfRounds and its directors, officers and
employees shall be entitled to continue to occupy and utilize such space in the
same manner as GolfRounds and its directors, officers and employees currently
occupy and utilize such space until March 31, 2000, except that GolfRounds shall
pay a pro rata portion of the rent and other reasonable expenses payable by Kent
with respect to such space for such period. The Sellers acknowledge that such
amounts have been paid by GolfRounds to Kent prior to the date hereof.
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<PAGE>
10. Representations and Warranties of the Parties.
(a) Each GolfRounds Party hereby represents as
follows, and each of such representations and warranties shall be deemed to have
been given as of the date hereof and as of the date of the Closing: The
GolfRounds Party has full legal power to execute and deliver this Agreement and
to perform his or its obligations hereunder. All acts required to be taken by
the GolfRounds Party to enter into this Agreement and to carry out the
transactions contemplated hereby have been, or prior to the Closing Date shall
have been, properly taken; and this Agreement constitutes a legal, valid and
binding obligation of such GolfRounds Party, enforceable in accordance with its
terms. The execution, delivery and performance of this Agreement by the
GolfRounds Party in accordance with its terms will not, with or without the
giving of notice or the passage of time, or both, conflict with, result in a
default, right to accelerate or loss of rights under, or result in the creation
of any encumbrance pursuant to, or require the consent of any third party or
governmental authority pursuant to, (i) any provision of the certificate of
incorporation or by-laws, if any, of Seller, or (ii) any franchise, mortgage,
indenture or deed of trust or any material lease, license or other agreement or
any law, regulation, order, judgment or decree to which such GolfRounds Party is
a party or by which such GolfRounds Party (or any of his or its assets,
properties, operations or businesses) may be bound, subject to or affected.
(b) Each Buyer hereby represents as follows, and
each of such representations and warranties shall be deemed to have been given
as of the date hereof and as of the date of the Closing: Buyer has full legal
power to execute and deliver this Agreement and to perform his or its
obligations hereunder. All acts required to be taken by Buyer to enter into this
Agreement and to carry out the transactions contemplated hereby have been, or
prior to the Closing Date shall have been, properly taken; and this Agreement
constitutes a legal, valid and binding obligation of Buyer, enforceable in
accordance with its terms. The execution, delivery and perfor mance of this
Agreement by Buyer in accordance with its terms will not, with or without the
giving of notice or the passage of time, or both, conflict with, result in a
default, right to accelerate or loss of rights under, or result in the creation
of any encumbrance pursuant to, or require the consent of any third party or
governmental authority pursuant to, (i) any provision of the certificate of
incorporation or by-laws, if any, of Buyer, or (ii) any franchise, mortgage,
indenture or deed of trust or any material lease, license or other agreement or
any law, regulation, order, judgment or decree to which Buyer is a party or by
which Buyer (or any of his or its assets, properties, operations or businesses)
may be bound, subject to or affected.
11. Escrow Agent. The parties hereby agree that Escrow Agent
is serving hereunder solely as a convenience to the parties to facilitate the
Closing and Escrow Agent's sole obligation under this Agreement is to act with
respect to the Resignations as described in Section 3 of this Agreement. Escrow
Agent shall not be liable to any party hereto or any other person or entity in
respect of any act or failure to act by Escrow Agent hereunder or otherwise in
connection with serving as Escrow Agent unless Escrow Agent has acted in a
manner constituting gross negligence or willful misconduct. Escrow Agent shall
be indemnified by the parties, jointly and severally, against any claim made
against it (including reasonable attorney's fees) by reason of its acting or
failing to act in connection with this transaction except as a result of its
gross negligence or willful misconduct. Each of the GolfRounds Parties
acknowledges that Escrow Agent is serving as counsel to the Buyers in this
transaction and its services as the escrow agent to facilitate the Closing shall
not prevent or disqualify Escrow Agent from serving as counsel to any of the
Buyers now or in the future.
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<PAGE>
12. Miscellaneous.
(a) The warranties, representations, covenants
and indemnities of the parties contained in or made pursuant to this Agreement
shall survive the Closing and shall in no way be affected by any investigation
of the subject matter thereof made by or on behalf of any of the parties.
(b) This Agreement shall be binding upon and
inure to the benefit of each party hereto, and its respective heirs, executors,
legal representatives, successors and assigns. This Agreement constitutes the
entire understanding and agreement between the parties with regard to the
subject matter hereof and may not be amended or modified except by a written
agreement specifically referring to this Agreement signed by all the parties. No
waiver of any breach or default hereunder shall be considered valid unless in
writing and signed by the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default of the same or similar
nature.
(c) This Agreement shall be governed by and
construed under the internal laws of the State of New York, disregarding any
principles of conflicts of laws.
(d) This Agreement may be executed 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.
(e) In the event that any provision of this
Agreement would be held to be invalid, prohibited or unenforceable in any
jurisdiction for any reason, unless such provision is narrowed by judicial
construction, this Agreement shall, as to such jurisdiction, be construed as if
such invalid, prohibited or unenforceable provision had been more narrowly drawn
so as not to be invalid, prohibited or unenforceable. If, notwithstanding the
foregoing, any provision of this Agreement would be held to be invalid,
prohibited or unenforceable in any jurisdiction for any reason, such provision,
as to such jurisdiction, shall be ineffective to the extent of such invalidity,
prohibition or unenforceability, without invalidating the remaining portion of
such provision or the other provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
(f) Any notice required or permitted under this
Agreement shall be given in writing and shall either be delivered personally or
sent by certified mail, return receipt requested, postage prepaid, or by Federal
Express next business day service with signed receipt required, if to any of the
GolfRounds Parties, addressed to such party c/o GolfRounds.com, Inc., 376 Main
Street, P.O. Box 74, Bedminster, New Jersey 07921, if to a Buyer, at his or its
address as set forth on Schedule A, and if to the Escrow Agent, to its address
set forth above, attention David Alan Miller, Esq., or to such other address as
either shall have specified by notice in writing to the other, and shall be
deemed duly given hereunder when so delivered. A copy of any notice to a Buyer
shall be sent to David Alan Miller, Esq., Graubard Mollen & Miller, 600 Third
Avenue, New York, New York 10016-2097, and a copy of any notice to a GolfRounds
Party shall be sent to Guy Lander, Esq. Rosenman & Colin LLP, 575 Madison
Avenue, New York, New York 10022-2585.
(g) The section headings are inserted only as a
matter of convenience and for reference and in no way define, limit or describe
the scope or intent of any provision of this Agreement.
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<PAGE>
(h) This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the parties.
(i) The failure of the Closing to occur and the
return by the Escrow Agent of all documents, monies and other things deposited
with it pursuant to this Agreement and the Stock Purchase Agreement shall not
act as a waiver by any party of any claims such party has against any other
party for any breach of this Agreement or the Stock Purchase Agreement.
[The remainder of this page has been left blank intentionally]
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<PAGE>
IN WITNESS WHEREOF, the parties have duly executed and
delivered this Agreement as of the date first above written.
SELLERS: BUYERS:
ASSET VALUE HOLDINGS, INC. THE RACHEL BETH HELLER 1997 TRUST
DATED 7/9/97
/s/ John W. Galuchie, Jr. /s/ Lawrence Kupferberg
By: _____________________________ By:_______________________________
John W. Galuchie, Jr. Name: Lawrence Kupferberg
Treasurer Title: Trustee
BRADFORD TRADING COMPANY THE EVAN TODD HELLER TRUST DATED
6/17/97
/s/ Howard F. Bovers /s/ Lawrence Kupferberg
By:_______________________________ By:_______________________________
Howard F. Bovers Name: Lawrence Kupferberg
President Title: Trustee
/s/ Paul O. Koether
_________________________________ MARTAN & CO.
Paul O. Koether
/s/ Michael Silvestri
By:_______________________________
SHAMROCK ASSOCIATES Name: Michael Silvestri
Title: President
/s/ Paul O. Koether
By:_____________________________
Paul O. Koether DONEHEW FUND LIMITED PARTNERSHIP
General Partner Donehew Capital LLC, General
Partner
/s/ Robert H. Donehew
By:_______________________________
SUN EQUITIES CORPORATION Name: Robert H. Donehew
Title: Manager, Donehew Capital
/s/ John W. Galuchie, Jr. LLC, General Partner
By:_____________________________
Name: John W. Galuchie, Jr. JONATHAN & NANCY GLASER FAMILY
Title: Vice President TRUST DATED 12/16/98
/s/ Jonathan Glaser
/s/ Thomas K. Van Herwarde By:_______________________________
________________________________ Name: Jonathan Glaser
Thomas K. Van Herwarde Title: Trustee
/s/ W. Robert Ramsdell
__________________________________
W. Robert Ramsdell
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<PAGE>
NAGELBERG FAMILY TRUST DATED
9/24/97
/s/ David S. Nagelberg
By:_______________________________
David S. Nagelberg
Trustee
ESCROW AGENT:
GRAUBARD MOLLEN & MILLER
/s/ David Alan Miller
By: ______________________________
David Alan Miller, Partner
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<PAGE>
Schedule A
Buyers
- --------
The Rachel Beth Heller 1997 Trust Nagelberg Family Trust dated
dated 7/9/97 9/24/97
Lawrence Kupferberg, trustee David S. Nagelberg &
74 Farview Road Bette Nagelberg, Trustees
Tenafly, New Jersey 07670 P.O. Box 2142
SS #: ###-##-#### Rancho Santa Fe, California 92067
Tax ID #: 12-2442177
The Evan Todd Heller 1997 Trust dated 6/17/97
Lawrence Kupferberg, trustee
74 Farview Road
Tenafly, New Jersey 07670
SS #: ###-##-####
Martan & Co.
525 Washington Blvd., 34th Floor
Jersey City, New Jersey 07310
Attn: Eugene Whitehouse, Vice President
Tax ID#: 13-1924455
Donehew Fund Limited Partnership
Donehew capital LLC General Partner
111 Village Parkway, Building #2
Marietta, Georgia 30067
Attn: Robert H. Donehew
Tax ID #: 83-0316971
Jonathan & Nancy Glaser Family Trust dated
12/16/98
Jonathan & Nancy Ellen Glaser, Trustee
1999 Avenue of the Stars, Suite 2530
Los Angeles, California 90067
Tax ID #: ###-##-####
W. Robert Ramsdell
474 Paseo Miramar
Pacific Palisades, California 90272
SS #: ###-##-####
9
Exhibit 99.1
PRESS CONTACT:
Paul O. Koether
Chairman
(908) 901-9250
FOR IMMEDIATE RELEASE
GOLFROUNDS.COM, INC. BOARD TO RESIGN,
NEW BOARD TO BE APPOINTED
GolfRounds.com, Inc. (OTC-TEEE), which owns and operates the Internet websites
golfrounds.com and skiingusa.com, announced today that its directors, Paul O.
Koether, John W. Galuchie, Jr. and Thomas K. Van Herwarde, have agreed to resign
their directorships in connection with the sale by Messrs. Koether, Galuchie,
Van Herwarde and other persons and entities of an aggregate of 500,000 shares of
GolfRounds' common stock owned by them to several purchasers. Mr. Van Herwarde
has not resigned from his position as President of GolfRounds. The outgoing
directors have also agreed to appoint three individuals designated by the
purchasers to GolfRounds' board of directors. The purchasers have designated
Robert H. Donehew, Larry Grossman and John F. McCarthy, III, for appointment to
the board of directors of GolfRounds upon the resignations of the current
directors.
Mr. Koether has also agreed to give a designee of the purchasers irrevocable
proxies to vote an additional 449,690 shares that he or entities controlled by
him own.
The resignations and the appointment of the new directors will take effect 10
days after the closing of the sale of the shares, which is expected to occur on
or before January 19, 2000. Simultaneously with the closing GolfRounds will file
an information statement with the Securities and Exchange Commission and mail
copies of the information statement to all of its stockholders. The information
statement will contain information regarding the new directors and other
information required by applicable securities laws. GolfRounds' stockholders
will not be asked to vote with respect to the appointment of the new directors
and no proxies will be solicited.
The statements in this press release that relate to future plans, events or
performance are forward- looking statements that involve risks and
uncertainties, including risks associated with uncertainties pertaining to
customer orders, demand for products and services and other risks identified in
the Company's SEC filings. Actual results, events and performance may differ
materially. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
GolfRounds.com, Inc. undertakes no obligation to release publicly any revisions
to these forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
7
