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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
July 5, 1996
FAMILY GOLF CENTERS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-25908 11-3223246
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
225 Broadhollow Road
Melville, New York 11747
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(Address of principal executive offices)
Registrant's Telephone Number, including
area code: (516) 694-1666
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(Former Address, if changed since last report)
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Item 5. Other Events.
Acquisition.
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Pursuant to a Stock Purchase Agreement dated July 5, 1996, (the "Stock
Purchase Agreement"), Family Golf Centers, Inc. (the "Company") consummated the
purchase of Pin High Golf Center, a California corporation ("Pin High"), which
owns (i) a golf recreational facility located on a 25-acre parcel of leased
property in San Jose, California and (ii) certain equipment, fixtures and
personal property used in connection with the operation of the golf center (the
"Acquired Assets").
Pursuant to the Stock Purchase Agreement, among Michael J. Santin,
Donald G. Rumpf, Pin High and the Company, the Company purchased the Acquired
Assets in exchange for a combination of cash and promissory notes.
The Company intends to continue operating the "San Jose Family Golf
Center" as a golf center and to make various capital improvements to it.
The foregoing summary of the acquisition and related transactions is
incomplete and is qualifed in its entirety by reference to the copy of the
agreement filed as Exhibit 1 annexed hereto.
Exercise of Over-Allotment.
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On July 9, 1996 the Company completed a public offering of 3,450,000
shares of Common Stock at $27.00 per share, including 450,000 shares sold by
several selling stockholders upon the exercise of the underwriters' over-
allotment option. The net proceeds to the Company from the public offering were
$75,330,000.
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Exhibit
1. Stock Purchase Agreement, dated as of July 5, 1996, among Michael
J. Santin, Donald G. Rumpf and Pin High Golf Center, a California corporation
and Family Golf Centers, Inc.
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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.
July 25, 1996
FAMILY GOLF CENTERS, INC.
By: /s/ Krishnan P. Thampi
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Krishnan P. Thampi,
Chief Operating Officer
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, made as of the 5th day of July, 1996
(this "Agreement"), by and between MICHAEL J. SANTIN, having an address at 104
Prospect Court, San Jose, California 95032 ("Santin") and DONALD G. RUMPF,
having an address at 14968 Granita Court, Saratoga, California 95070 ("Rumpf",
and, together with Santin, "Seller"), PIN HIGH GOLF CENTER, a California
corporation having an address at 4701 North First Street, San Jose, California
95002-0280 ("Acquired Corporation"), and FAMILY GOLF CENTERS, INC., a Delaware
corporation having an address at 225 Broadhollow Road, Suite 106E, Melville,
New York 11747 ("Purchaser").
W I T N E S S E T H :
WHEREAS, Seller is the owner of all of the outstanding shares of
capital stock of Acquired Corporation (the "Stock"); and
WHEREAS, Seller wants to sell to Purchaser, and Purchaser wants
to purchase from Seller, the Stock on the terms, and subject to the
conditions, set forth herein.
NOW, THEREFORE, in consideration of TEN ($10.00) DOLLARS, the
terms and conditions set forth herein, and other good and valuable
consideration, the mutual receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree to the foregoing and as follows:
1. Agreement to Sell and Purchase. Seller shall sell, assign,
transfer, and convey to Purchaser at the Closing all of the outstanding shares
of capital stock of Acquired Corporation. Seller shall deliver at the Closing
certificates representing such shares duly endorsed in blank or accompanied by
stock powers duly endorsed in blank, in each case in proper form for transfer,
and
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with all stock transfer and any other required documentary stamps affixed
thereto.
2. Consideration; Repayment of Indebtedness.
2.1 Consideration. In consideration for the Stock, at the
Closing Purchaser shall deliver to each of Santin and Rumpf (a) One Thousand
One Hundred Fifty and 00/100 Dollars ($1,150.00) by bank or certified check or
wire transfer and (b) a note (the "Notes"), each in the amount of Four Hundred
Eighty Thousand and 00/100 Dollars ($480,000.00) and otherwise in form and
substance agreed upon by the parties and each secured by a Security Agreement
pursuant to which Purchaser has pledged the stock to Santin and Rumpf, as
applicable (the "Security Agreements").
2.2 Repayment of Indebtedness to Seller. On the Closing Date,
immediately after the Closing, Purchaser shall pay to each of Santin and Rumpf
Ninety Eight Thousand Eight Hundred Fifty and 00/100 Dollars ($98,850.00) by
bank or certified check or wire transfer in partial satisfaction of those two
(2) certain notes (the "Original Seller Notes"), made by Acquired Corporation
in favor of Santin and Rumpf, respectively, each in the amount of Three
Hundred Forty Eight Thousand Eight Hundred Fifty and 00/100 Dollars
($348,850.00). In addition, on the Closing Date, immediately after the
Closing, Purchaser shall cause Acquired Corporation to deliver to each of
Santin and Rumpf a note (the "Restated Seller Notes"), each in the amount of
Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) and otherwise in
form and substance agreed upon by the parties, amending and restating the
terms of the Original Seller Notes (as reduced pursuant to the
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payments referred to in the immediately preceding sentence) which Restated
Seller Notes shall be guaranteed by Purchaser and secured by the stock
pursuant to the Security Agreements.
2.3 Repayment of Indebtedness to San Jose National Bank.
Within thirty (30) days after the Closing, Purchaser shall cause to be paid to
San Jose National Bank all outstanding principal and interest due in respect
of certain financings in the approximate aggregate original principal amount
of One Million Three Hundred Thousand and 00/100 Dollars ($1,300,000.00) by
bank or certified check or wire transfer, provided that the Bank return to
Acquired Corporation all notes and satisfactions or terminations of all
mortgages, deeds of trust, financing statements and other security instruments
delivered in connection with such financing.
2.4 Repayment of Indebtedness for Certain Equipment. On the
Closing Date, Purchaser shall cause to be paid (a) to the Myers, Santin and
Claus Pension and Profit Sharing Plan $10,000 and (b) to Rumpf $6,800, in
respect of the indebtedness in such amounts owing to said parties in respect
of the A-Star Video Swing Analysis equipment recently purchased by Acquired
Corporation with funds borrowed from such parties. Seller represents and
warrants that said amounts represent the total indebtedness to said parties
(or any other parties) in respect of said equipment.
3. Apportionments.
3.1 The parties hereto agree that (i) all operating expenses
of Acquired Corporation (i.e., cost of goods sold, rent, advertising,
collections, fees, hired services, insurance,
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miscellaneous expenses, postage, repairs and maintenance, supplies, taxes,
utilities and wages, but specifically not including professional fees and
expenses, travel and lodging or depreciation), and (ii) all income of Acquired
Corporation, including accounts receivable, shall be apportioned between
Seller and Purchaser as of June 14, 1996 (the "Effective Date") based on the
portion of each such expense or revenue attributable to the period falling on
or before the Effective Date on the one hand, which Seller shall bear the
responsibility and benefit of, and the portion of each such expense or revenue
attributable to the period falling after the Effective Date, on the other
hand, which Purchaser shall bear the responsibility and benefit of (the
"Adjustment"); provided, however, that Purchaser shall bear responsibility for
$40,000 of the expenses attributable to the period prior to the Effective Date
described on Exhibit C attached hereto and made a part hereof. Purchaser shall
receive a credit towards the Adjutment for all amounts paid to San Jose
National Bank pursuant to Section 2.3 hereof in excess of $1,300,000. The net
Adjustment will be paid by the party owing the same to the other in cash or by
certified or official bank check or wire transfer at Closing. The expenses and
liabilities for which Seller shall be liable pursuant to this Section shall be
referred to herein as "Retained Liabilities").
3.2 To the extent that any of the prorations made upon the
Closing Date pursuant to this Article are based upon estimates of payments to
be made and/or expenses to be incurred by Purchaser subsequent to the
Effective Date, or either party
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discovers any errors in or omissions in respect of the Adjustment, Seller and
Purchaser agree to adjust such prorations promptly upon receipt by Seller or
Purchaser, as the case may be, of such payments or of bills or other
documentation setting forth the actual amount of such expenses.
3.3 Seller and Purchaser shall maintain and make available to
each other any books or records necessary for the adjustment of any item
pursuant to this Article. The provisions of this Article 3 shall survive the
Closing.
4. The Closing. The closing of the transaction provided for in
this Agreement (the "Closing") shall take place simultaneously with the
execution and delivery of this Agreement (the actual date of the Closing being
referred to herein as the "Closing Date"), at the offices of Squadron,
Ellenoff, Plesent & Sheinfeld, LLP, 551 Fifth Avenue, New York, New York
10176, or at such other place as may be mutually agreed to by Seller and
Purchaser.
5. Representations and Warranties of Seller.
Each Seller hereby jointly and severally represents and
warrants to Purchaser as of the date hereof as follows:
5.1 Organization and Qualification. Acquired Corporation does
not own any interest in any corporation or other enterprise. Acquired
Corporation is a corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation, with all
requisite power and authority, and all necessary consents, authorizations,
approvals, orders, licenses, certificates, and permits of and from, and
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declarations and filings with, all federal, state, local, and other
governmental authorities and all courts and tribunals, to own, lease, license,
and use its properties and assets and to carry on the business in which it is
now engaged and the business in which it contemplates engaging. Acquired
Corporation is duly qualified to transact the business in which it is engaged
and is in good standing as a foreign corporation in every jurisdiction in
which its ownership, leasing, licensing, or use of property or assets or the
conduct of its business makes such qualification necessary.
5.2 Capitalization. The authorized capital stock of Acquired
Corporation consists only of 1,000,000 shares of common stock, no par value
per share, of which 2,000 shares are outstanding. Each of such outstanding
shares of Acquired Corporation is validly authorized, validly issued, fully
paid and nonassessable, has not been issued and is not owned or held in
violation of any preemptive right of stockholders, and is owned of record and
beneficially by each of the individual comprising Seller in accordance with
the following table:
Name of Seller Number of Shares
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Michael J. Santin 1,000
Donald G. Rumpf 1,000
free and clear of all liens, security interests, pledges, charges,
encumbrances, stockholders' agreements, and voting trusts. There is no
commitment, plan, or arrangement to issue, and no outstanding option, warrant,
or other right calling for the issuance of, any share of capital stock of
Acquired Corporation or
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any security or other instrument convertible into, exercisable for, or
exchangeable for capital stock of Acquired Corporation. There is outstanding
no security or other instrument convertible into or exchangeable for capital
stock of Acquired Corporation. Except as otherwise provided in this Agreement,
all indebtedness of Acquired Corporation to Seller shall be deemed satisfied
in connection with the Closing. Michael Santin and Donald Rumpf are the only
officers and directors of Acquired Corporation, and each of them hereby resign
as officers and directors of Acquired Corporation.
5.3 Financial Condition. Acquired Corporation has delivered
to the Purchaser true and correct copies of the following, initialled by the
chief executive officer of Acquired Corporation: an audited balance sheet of
Acquired Corporation as of December 31, 1995; an unaudited balance sheet of
Acquired Corporation as of June 14, 1996 (the "Closing Balance Sheet"); an
unaudited profit and loss statement for January 1 through June 14, 1996 (the
"Profit and Loss Statement"). Each of the above-referenced balance sheets
presents fairly the financial condition, assets, liabilities, and
stockholders' equity of Acquired Corporation as of its date and the Profit and
Loss Statement presents fairly the results of operations of Acquired
Corporation for the period indicated and presents fairly the information
purported to be shown therein. The financial statements referred to in this
Section 5.3 have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved and
are in accordance with the
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books and records of Acquired Corporation. Since December 31, 1995:
5.3.1 There has at no time been a material adverse change
in the financial condition, results of operations, business,
properties, assets or liabilities of Acquired Corporation.
5.3.2 Acquired Corporation has not authorized, declared,
paid, or effected any dividend or liquidating or other
distribution in respect of its capital stock or any direct or
indirect redemption, purchase, or other acquisition of any stock
of Acquired Corporation.
5.3.3 The operations and business of Acquired Corporation
have been conducted in all respects only in the ordinary course.
5.3.4 Acquired Corporation has not suffered an
extra-ordinary loss (whether or not covered by insurance) or
waived any right of substantial value.
5.3.5 Acquired Corporation has not paid or incurred any
tax, other liability, or expense resulting from the preparation
of, or the transactions contemplated by, this Agreement, it
being understood that Seller shall have paid or will pay all
such taxes (including stock transfer taxes resulting from this
Agreement or the transactions contemplated hereby), liabilities,
and expenses.
5.4 Tax and Other Liabilities. Acquired Corporation has no
liability of any nature, accrued or contingent, including
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without limitation liabilities for federal, state, local, or foreign taxes and
penalties, interest, and additions to tax ("Taxes") and liabilities to
customers or suppliers, other than the following:
5.4.1 Liabilities for which full provision has been made
on the Closing Balance Sheet and the notes thereto as of June
14, 1996 (the "Closing Balance Sheet Date") referred to in
Section 5.3; and
5.4.2 Other liabilities arising since the Last Balance
Sheet Date and prior to the Closing in the ordinary course of
business (which shall not include liabilities to customers on
account of defective products or services) which are not
inconsistent with the representations and warranties of any
Seller or any other provision of this Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for Taxes on the Closing Balance Sheet are sufficient for all
accrued and unpaid Taxes of Acquired Corporation, whether or not due and
payable and whether or not disputed, under tax laws, as in effect on the
Closing Balance Sheet Date or now in effect, for the period ended on such date
and for all fiscal periods prior thereto. The execution, delivery, and
performance of this Agreement by Acquired Corporation will not cause any Taxes
to be payable (other than by Seller) or cause any lien, charge, or encumbrance
to secure any Taxes to be created either immediately or upon the nonpayment of
any Tax (other than on the properties or assets of Seller). Acquired
Corporation has
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filed all federal, state, local, and foreign tax returns required to be filed
by it; has delivered to the Purchaser a true and correct copy of each such
return which was filed in the past five (5) years, initialled by the chief
executive officer of Acquired Corporation; has paid all Taxes, assessments,
and other governmental charges payable or remittable by it or levied upon it
or its properties, assets, income, or franchises which are due and payable;
and has delivered to the Purchaser a true and correct copy, so initialled, of
any report as to adjustments received by it from any taxing authority during
the past five (5) years and a statement, so initialled, as to any litigation,
governmental or other proceeding (formal or informal), or investigation
pending, threatened, or in prospect with respect to any such report or the
subject matter of such report. Acquired Corporation has validly elected and at
all times validly maintained its status as a Subchapter S corporation in
accordance with all applicable laws and regulations.
5.5 Litigation and Claims. There is no litigation,
arbitration, claim, governmental or other proceeding (formal or informal), or
investigation pending, or to the best knowledge of Seller threatened or in
prospect (or any basis therefor known to Acquired Corporation or any Seller),
with respect to Acquired Corporation, any Seller, or any of its or his
respective businesses, properties, or assets. Acquired Corporation is not
affected by any present or threatened strike or other labor disturbance nor to
the knowledge of any Seller is any union attempting to represent any employee
of Acquired Corporation as
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collective bargaining agent. Acquired Corporation is not in violation of, or
in default with respect to, any law, rule, regulation, order, judgment, or
decree; nor is Acquired Corporation or any Seller required to take any action
in order to avoid such violation or default.
5.6 The Lease. Attached hereto as Exhibit A is a true and
correct copy of the Standard Industrial/Commercial Lease, dated February 3,
1993 and all amendments or modifications thereto (as so amended, the "Lease"),
between Sainte Claire Corporation ("Landlord") and Seller, which Lease has
been assigned to Acquired Corporation. The Lease is in full force and effect,
has not been modified or amended in any way except as stated above and neither
Landlord nor Acquired Corporation is in default, or sent or received any
notice of default, in respect of the Lease. No event has occurred or
circumstance exists which, with the giving of notice or the passage of time,
or both, would constitute a default under the Lease. Neither Acquired
Corporation nor Landlord has exercised any right or option, or stated its
intent, to terminate or cancel the Lease. Acquired Corporation has not
assigned, mortgaged, pledged, transferred or conveyed the Lease or any
interest therein, or granted any right or option with respect thereto, to any
party other than Purchaser. The initial term of the Lease will expire on July
31, 2009.
5.7 Properties. Acquired Corporation does not have any
interest in any real property other than under the Lease. Acquired Corporation
has good title to all other properties and assets used in its business or
owned by it, free and clear of all
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liens, mortgages, security interests, pledges, charges, and encumbrances.
5.7.1 All accounts and notes receivable reflected on the
Closing Balance Sheet, or arising since the Closing Balance
Sheet Date, have been collected, or are and will be good and
collectible, in each case at the aggregate recorded amounts
thereof without right of recourse, defense, deduction, return of
goods, counterclaim, offset, or set off on the part of the
obligor.
5.7.2 All inventory is merchantable and fit for the
particular purposes for which it is intended.
5.7.3 Attached as Exhibit B is a true and complete list
of all properties and assets owned by Acquired Corporation or
leased or licensed by Acquired Corporation from or to a third
party, including with respect to such properties and assets
owned by Acquired Corporation a statement of cost, book value
and (except for land) reserve for depreciation of each item for
tax purposes, and net book value of each item for financial
reporting purposes, and, with respect to such properties and
assets leased or licensed by Acquired Corporation, a description
of such lease or license. All such properties and assets
(including Intangibles) owned by Acquired Corporation are
reflected on the Closing Balance Sheet (except for acquisitions
subsequent to the Closing Balance Sheet Date and prior to the
Closing which are either noted
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in Exhibits B or C). All real and other tangible properties and
assets owned, leased, or licensed by Acquired Corporation are in
good and usable condition (reasonable wear and tear which is not
such as to affect adversely the operation of the business of
Acquired Corporation excepted).
5.7.4 No real property owned, leased, or licensed by
Acquired Corporation lies in an area which is, or to the
knowledge of Acquired Corporation or any Seller will be, subject
to zoning, use, or building code restrictions which would
prohibit, and no state of facts relating to the actions or
inaction of another person or entity or his or its ownership,
leasing, licensing, or use of any real or personal property
exists or to the best knowledge of Seller will exist which would
prevent, the continued effective ownership, leasing, licensing,
or use of such real property in the business in which Acquired
Corporation is now engaged.
5.7.5 The real and other properties and assets (including
Intangibles) owned by Acquired Corporation or leased or licensed
by Acquired Corporation from a third party constitute all such
properties and assets which are necessary to the business of
Acquired Corporation as presently conducted.
5.8 Corporate Instruments. Acquired Corporation has furnished
to the Purchaser (a) the articles of incorporation (or other charter document)
and by laws of Acquired Corporation and
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all amendments thereto, as presently in effect, certified by the Secretary of
the corporation. The stock ledgers and stock transfer books and the minute
book records of Acquired Corporation relating to all issuances and transfers
of stock by Acquired Corporation and all proceedings of the stockholders and
the Board of Directors and committees thereof of Acquired Corporation since
its incorporation made available to the Purchaser's counsel are the original
stock ledgers and stock transfer books and minute book records of Acquired
Corporation or exact copies thereof. Acquired Corporation is not in violation
or breach of, or in default with respect to, any term of its articles of
incorporation (or other charter document) or by laws. Rumpf and Santin are the
sole stockholders, officers and directors of Acquired Corporation. Acquired
Corporation is not a member of a customer or user organization or of a trade
association.
5.9 Employees. Acquired Corporation does not have or
contribute to any pension, profit-sharing, option, other incentive plan, or
any other type of Employee Benefit Plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or
have any obligation to or customary arrangement with employees for bonuses,
incentive compensation, vacations, severance pay, insurance, or other
benefits. Acquired Corporation does not have any obligation to provide
post-retirement medical benefits or life insurance coverage to any present or
former employees. Acquired Corporation neither currently contributes to or
since September 16, 1980 has effectuated either a complete or partial
withdrawal from any
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multiemployer Pension Plan within the meaning of Section 3(37) of ERISA. There
are no union or employment contracts or agreements (written or oral) involving
employees of Acquired Corporation.
5.10 Patents, Trademarks, Et Cetera. Acquired Corporation
does not own or have pending, or is licensed under, any patent, patent
application, trademark, trademark application, trade name, service mark,
copyright, franchise, or other intangible property or asset (all of the
foregoing being herein called "Intangibles"). Acquired Corporation has not
infringed, is infringing, or has received notice of infringement with asserted
Intangibles of others.
5.11 Authority to Sell. Acquired Corporation and Seller have
all requisite power and authority to execute, deliver, and perform this
Agreement. All necessary corporate proceedings of Acquired Corporation have
been duly taken to authorize the execution, delivery, and performance of this
Agreement by Acquired Corporation. This Agreement has been duly authorized,
executed, and delivered by Acquired Corporation, has been duly executed and
delivered by Seller, constitutes the legal, valid, and binding obligation of
Acquired Corporation and Seller, and is enforceable as to them in accordance
with its terms. No consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with, any federal,
state, local, or other governmental authority or any court or other tribunal
is required by Acquired Corporation or any Seller for the execution, delivery,
or performance of this Agreement by Acquired Corporation or any Seller. No
consent of any party to any contract,
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agreement, instrument, lease, license, arrangement, or understanding to which
Acquired Corporation or any Seller is a party, or to which it or he or any of
its or his respective businesses, properties, or assets are subject, is
required for the execution, delivery, or performance of this Agreement, except
for the consent of Landlord, which consent has been obtained; and the
execution, delivery, and performance of this Agreement will not violate,
result in a breach of, conflict with, or (with or without the giving of notice
or the passage of time or both) entitle any party to terminate or call a
default under, entitle any party to rights and privileges that such party was
not receiving or entitled to receive immediately before this Agreement was
executed under, or create any obligation on the part of Acquired Corporation
that it was not paying or obligated to pay immediately before this Agreement
was executed under, any term of any such contract, agreement, instrument,
lease, license, arrangement, or understanding, or violate or result in a
breach of any term of the certificate of incorporation (or other charter
document) or by-laws of Acquired Corporation or violate, result in a breach
of, or conflict with any law, rule, regulation, order, judgment, or decree
binding on Acquired Corporation or any Seller or to which it or he or any of
its or his respective businesses, properties, or assets are subject. Upon the
Closing, Purchaser will have good title to all the capital stock of Acquired
Corporation, free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements, and voting trusts.
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5.12 Exemption from Registration. The offer, sale, and
delivery of the Stock as contemplated by this Agreement constitute exempted
transactions under the Securities Act of 1934 (as amended, the "Securities
Act"), and registration of such shares under the Securities Act is not
required in connection with any such offer, sale, or delivery of such shares.
5.13 Contracts. Except for the Lease, Acquired Corporation is
not a party to any leases, contracts, orders or agreements (written or
otherwise).
5.14 Condition of the Improvements. There are no material
structural or mechanical defects in the improvements located on the land
covered by the Lease, and there are no leaks in any roof on any such
improvement.
5.15 Environmental Matters.
5.15.1 As used in this Agreement "Hazardous Material"
shall mean: (i) any "hazardous substance" as now defined
pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. ss.
9601(33); (ii) any "pollutant or contaminant" as defined in 42
U.S.C. ss. 9601(33); (iii) any material now defined as
"hazardous waste" pursuant to 40 C.F.R. Part 261; (iv) any
petroleum, including crude oil and any fraction thereof; (v)
natural or synthetic gas usable for fuel; (vi) any "hazardous
chemical" as defined pursuant to 29 C.F.R. Part 1910; (vii) any
asbestos, asbestos containing material, polychlorinated biphenyl
("PCB"), or isomer of dioxin, or any material or thing
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containing or composed of such substance or substances; and
(viii) any other pollutant, contaminant, chemical, or industrial
or hazardous, toxic or dangerous waste, substance or material,
defined or regulated as such in (or for purposes of any
Environmental Law (as hereinafter defined) and any other toxic,
reactive or flammable chemicals.
5.15.2 There is no Hazardous Material at, under or on the
premises covered by the Lease (the "Premises") and there is no
ambient air, surface water, groundwater or land contamination
within, under, originating from or relating to the Premises.
Acquired Corporation has not, and has not caused to be,
manufactured, processed, distributed, used, treated, stored,
disposed of, transported or handled any Hazardous Material at,
on or under the Premises in violation of Environmental Law.
5.15.3 Acquired Corporation has no obligation or
liability imposed or based upon any provision under any foreign,
federal, state or local law, rule, or regulation or common law,
or under any code, order, decree, judgment or injunction
applicable to Acquired Corporation or the Premises or any
notice, or request for information issued, promulgated, approved
or entered thereunder, or under the common law, or any tort,
nuisance or absolute liability theory, relating to public health
or safety, worker health or safety, or pollution, damage to or
protection to the environment, including without limitation,
laws relating
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to emissions, discharges, releases or threatened releases of
Hazardous Material into the environment (including without
limitation, ambient air, surface water, groundwater, land
surface or subsurface), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
generation, disposal, transport or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes (hereinafter collectively referred to as
"Environmental Laws").
5.15.4 Acquired Corporation has not been subject to any
civil, criminal or administrative action, suit, claim, hearing,
notice of violation, investigation, inquiry or proceeding for
failure to comply with, or received notice of any violation or
potential liability under the Environmental Laws in respect of
the Premises.
5.15.5 The Premises are not (a) listed or to the best
knowledge of Seller proposed for listing on the National
Priority List or (b) listed on the Comprehensive Environmental
Response, Compensation, Liability Information System List
("CERCLIS") promulgated pursuant to CERCLA, 42 U.S.C. ss.
9601(9), or any comparable list maintained by any foreign, state
or local government authority.
5.15.6 There are no underground storage tanks at the
Premises.
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5.16 Tax Proceedings. There are no proceedings pending
regarding the reduction of real estate taxes or assessments in respect of the
Premises.
5.17 Utilities. All water, storm and sanitary sewer, gas,
electricity, telephone and other utilities adequately service the Premises,
enter the Premises through lands as to which valid public or private easements
exist that will inure to the benefit of Purchaser and the Premises are
furnished by facilities of public utilities and the cost of installation of
such utilities has been fully paid.
5.18 Access. To the best of Seller's knowledge, there are no
federal, state, county, municipal or other governmental plans to change the
highway or road system in the vicinity of the Premises which could materially
restrict or change access from any such highway or road to the Premises or any
pending or threatened condemnation or eminent domain proceedings relating to
or affecting the Premises. All roads bounding the Premises are public roads.
5.19 Insurance. Seller has delivered to Purchaser or its
counsel true and correct copies of all insurance policies carried by Seller or
Acquired Corporation for the benefit of Acquired Corporation or relating to
the Premises. All such policies have been fully paid for and are and have at
all times since their commencement date been in full force and effect. Seller
or Acquired Corporation have at all times since the formation of Acquired
Corporation maintained such policies or substantially similar policies in
effect. All requirements or
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recommendations by any insurer or by any board of fire underwriters or similar
body in respect of the Premises have been satisfied.
5.20 Work at the Premises. No services, material or work have
been supplied to the Premises for which payment has not been made in full.
5.21 Full Disclosure. To the best knowledge of Seller, none
of the information supplied by Seller herein or in the exhibits hereto
contains any untrue statement of a material fact or omits to state a material
fact required to be stated herein or necessary in order to make the statements
herein, in light of the circumstances under which they are made, not
misleading.
6. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as of the date hereof and as of the Closing
Date as follows:
6.1 Organization; Power and Authority. Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite power and authority to
carry on its business as it is now being conducted, to execute, deliver and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby.
6.2 Due Authorization and Execution; Effect of Agreement. The
execution, delivery and performance by Purchaser of this Agreement and the
consummation by Purchaser of the transactions contemplated hereby have been
duly authorized by all
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necessary corporate action required to be taken on the part of Purchaser. This
Agreement has been duly and validly executed and delivered by Purchaser and
constitutes the valid and binding obligation of Purchaser, enforceable in
accordance with its terms, except to the extent that such enforceability (a)
may be limited by bankruptcy, insolvency, or other similar laws relating to
creditors' rights generally, and (b) is subject to general principles of
equity. The execution, delivery and performance by Purchaser of this Agreement
and the consummation by Purchaser of the transactions contemplated hereby will
not, with or without the giving of notice or the lapse of time, or both, (i)
violate any provision of any law, rule or regulation to which Purchaser is
subject; (ii) violate any order, judgment or decree applicable to Purchaser;
or (iii) conflict with or result in a breach of or a default under any term or
condition of Purchaser's Certificate of Incorporation or By-Laws or any
agreement or other instrument to which Purchaser is a party or by which it or
its assets may be bound, except in each case, for violations, conflicts,
breaches or defaults which in the aggregate would not materially hinder or
impair the consummation of the transactions contemplated hereby.
7. Survival. The representations and warranties of the parties
made in Articles 5 and 6 hereof shall survive the Closing.
8. Further Assurances. At any time and from time to time after
the Closing Date, each of the parties hereto shall, at the request of any of
the others, execute and deliver any further instruments or documents and take
all such further action as may be reasonably requested in order to further
consummate the
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transactions contemplated by this Agreement. This Article shall survive the
Closing.
9. Brokers. Seller and Purchaser warrant and represent to each
other that they dealt with no broker, finder or similar agent or party who or
which might be entitled to a commission or compensation on account of
introducing the parties, the negotiation or execution of this Agreement and/or
the closing of the transaction provided for herein. Purchaser and Seller
hereby respectively agree to indemnify and hold harmless the other party from
and against all loss, liability, damage and expense (including, without
limitation, attorneys' fees) imposed upon or incurred by the other party by
reason of any claim for commissions or other compensation for bringing about
this transaction by any broker, finder or similar agent or party who claims to
have dealt with the indemnifying party in connection with this transaction.
The provisions of this Article shall survive the Closing or any termination of
this Agreement.
10. Indemnification.
10.1 Indemnification by Seller. Subject to the further
provisions of this Article, Seller shall protect, defend, hold harmless and
indemnify Purchaser, its officers, directors, shareholders, employees, agents
and affiliates, and their respective successors and assigns, from, against and
in respect of any and all losses, liabilities, deficiencies, penalties, fines,
costs, damages and expenses whatsoever (including without limitation,
reasonable professional fees and costs of investigation, litigation,
settlement, and judgment and interest)
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("Losses") that may be suffered or incurred by any of them arising from or by
reason of (i) any Retained Liability; (ii) the breach of any representation,
warranty, covenant or agreement of Seller contained in this Agreement or in
any document or other writing delivered pursuant to this Agreement; and (iv)
any and all actions, suits, proceedings, claims, demands, assessments,
judgments, costs and expenses (including without limitation, interest,
penalties, reasonable legal fees and accounting fees) incident to the
foregoing and the enforcement of the provisions of this Section 10.1.
10.2 Indemnification by Purchaser. Subject to the further
provisions of this Article, Purchaser shall protect, defend, hold harmless and
indemnify each Seller, and their respective partners, employees and agents,
and its successors and assigns from, against and in respect of any and all
Losses that may be suffered or incurred by any of them arising from or by
reason of (i) the breach of any representation, warranty, covenant or
agreement of Purchaser contained in this Agreement or in any document or other
writing delivered pursuant to this Agreement; and (ii) any and all actions,
suits, proceedings, claims, demands, assessments, judgments, costs and
expenses (including without limitation, interest, penalties, reasonable legal
fees and accounting fees) incident to the foregoing and the enforcement of the
provisions of this Section 10.2.
10.3 Notice and Defense of Claims. Whenever a party hereto
(such party and each of its affiliates which is entitled to indemnification
pursuant to any provision of this Agreement, an
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"Indemnified Party") shall learn after the Closing of a claim that, if allowed
(whether voluntarily or by judicial or quasi-judicial tribunal or agency),
would give rise to an obligation of another party (the "Indemnifying Party")
to indemnify the Indemnified Party under any provision of this Agreement,
before paying the same or agreeing thereto, the Indemnified Party shall
promptly notify the Indemnifying Party in writing of all such facts within the
Indemnified Party's knowledge with respect to such claim and the amount
thereof (a "Notice of Claim"). If, prior to the expiration of fifteen (15)
days from the mailing of a Notice of Claim, the Indemnifying Party shall
request, in writing, that such claim not be paid, the Indemnified Party shall
not pay the same, provided the Indemnifying Party proceeds promptly, at its or
their own expense (including employment of counsel reasonably satisfactory to
the Indemnified Party), to settle, compromise or litigate, in good faith, such
claim. After notice from the Indemnifying Party requesting the Indemnified
Party not to pay such claim and the Indemnifying Party's assumption of the
defense of such claim at its or their expense, the Indemnifying Party shall
not be liable to the Indemnified Party for any legal or other expense
subsequently incurred by the Indemnified Party in connection with the defense
thereof. However, the Indemnified Party shall have the right to participate at
its expense and with counsel of its choice in such settlement, compromise or
litigation. The Indemnified Party shall not be required to refrain from paying
any claim which has matured by a court judgment or decree, unless an appeal is
duly taken therefrom
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and execution thereof has been stayed, nor shall the Indemnified Party be
required to refrain from paying any claim where the delay in paying such claim
would result in the foreclosure of a lien upon any of the property or assets
then held by the Indemnified Party. The failure to provide a timely Notice of
Claim as provided in this Section 10.3 shall not excuse the Indemnifying Party
from its or their continuing obligations hereunder; however, the Indemnified
Party's claim shall be reduced by any damages to the Indemnifying Party
resulting from the Indemnified Party's delay or failure to provide a Notice of
Claim as provided in this Section 10.3.
10.4 Assertions Deemed True. For purposes of this Article,
any assertion of fact and/or law by a third party that, if true, would
constitute a breach of a representation or warranty made by a party to this
Agreement or make operational an indemnification obligation hereunder, shall,
on the date that such assertion is made, immediately invoke the Indemnifying
Party's obligation to protect, defend, hold harmless and indemnify the
Indemnified Party pursuant to this Article.
11. Release by Stockholders. Each Seller fully and
unconditionally releases and discharges all claims and causes of action which
he or his heirs, personal representatives, successors, or assigns ever had,
now have, or hereafter may have against Purchaser, Acquired Corporation and,
when acting as such, their respective officers, directors, employees, counsel,
agents, and stockholders, in each case past, present, or as they may exist at
any time after the date of this Agreement, and each person, if
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any, who controls, controlled, or will control any of them within the meaning
of Section 15 of the Securities Act, except claims and causes of action
arising out of, based upon, or in connection with this Agreement or any other
agreement or instrument executed and delivered in connection with this
Agreement, including without limitation the Notes and the Restated Seller
Notes.
12. Costs and Fees. Seller shall provide an ALTA leasehold
policy of title insurance for Purchaser insuring Purchaser's leasehold
interest in the Premises, a Phase I environmental study of the Premises, an
ALTA/ASCM survey of the Premises and the audited and unaudited financial
reports described in Section 5.3 hereof, provided that Purchaser shall pay the
costs thereof in excess of $5,000. The parties shall pay for their own legal
and other advisers retained in connection with this transaction. The
provisions of this Article shall survive the Closing.
13. Notices. All notices, demands, requests, consents or other
communications ("Notices") which either party may desire or be required to
give to the other hereunder shall be in writing and shall be delivered by
hand, overnight express carrier, or sent by registered or certified mail,
return receipt requested, postage prepaid, in either event, addressed to the
parties at their respective addresses first above set forth. A copy of any
Notice given by Seller to Purchaser shall simultaneously be given in either
manner provided above to Squadron, Ellenoff, Plesent & Sheinfeld, LLP, 551 Fifth
Avenue, New York, New York 10176, Attention: Alan Schacter, Esq. A copy of any
Notice given by
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Purchaser to Seller shall simultaneously be given in either manner provided
above to Reed, Elliott, Creech & Roth, 99 Aldamen Boulevard, Eighth Floor, San
Jose, California 95113-1606, Attention: Steven J. Roth Esq. Notices given in the
manner aforesaid shall be deemed to have been given three (3) business days
after the day so mailed, the day after delivery to any overnight express carrier
and on the day so delivered by hand. Either party shall have the right to change
its address(es) for the receipt of Notices by giving Notice to the other party
in either manner aforesaid. Any Notice required or permitted to be given by
either party may be given by that party's attorney.
14. Miscellaneous.
14.1 Successors and Assigns; Joint and Several Liability.
This Agreement shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns. The agreements, obligations,
representations and warranties of Rumpf and Santin hereunder shall be deemed
to be the joint and several agreements, obligations, representations and
warranties of each of Rumpf and Santin.
14.2 Governing Law. This Agreement shall be governed by,
interpreted under and construed and enforced in accordance with, the laws of
the State of New York.
14.3 Captions. The captions or article headings in this
Agreement are for convenience only and do not constitute part of this
Agreement.
14.4 Construction. This Agreement has been fully negotiated
by the parties and rules of construction construing
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ambiguities against the party responsible for drafting agreements shall not
apply.
14.5 Entire Agreement. This Agreement (including the
Exhibits annexed hereto) the Notes, the Restated Seller Notes and the security
documents executed in connection therewith, contain the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior understandings, if any, with respect thereto.
14.6 Amendments. This Agreement may not be modified,
changed, supplemented or terminated, nor may any obligations hereunder be
waived, except by written instrument signed by the party to be charged or by
its agent duly authorized in writing or as otherwise expressly permitted
herein.
14.7 No Waiver or Extension. No waiver of any breach of any
agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof or of any other agreement or provision
herein contained. No extension of the time for performance of any obligations
or acts shall be deemed an extension of the time for performance of any other
obligations or acts.
14.8 Counterparts. This Agreement may be executed in one or
more counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which taken together shall constitute but one
and the same original.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
/s/ Michael J. Santin
-----------------------------------
MICHAEL J. SANTIN
/s/ Donald G. Rumpf
-----------------------------------
DONALD G. RUMPF
PIN HIGH GOLF CENTER
By: /s/ Michael J. Santin
--------------------------------
Name: Michael J. Santin
Title: President
FAMILY GOLF CENTERS, INC.
By: /s/ Garrett Kelleher
--------------------------------
Name: Garrett Kelleher
Title: Vice President
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INDEX OF EXHIBITS AND SCHEDULES
EXHIBIT A THE LEASE (not included)
EXHIBIT B PERSONAL PROPERTY (not included)
EXHIBIT C ACCRUED EXPENSES AS OF 6/14/96 (not included)
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