STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, made as of April 2, 1997 (this "AGREEMENT"), by
and between XXXXX XXXXXXXX, having an address at X/X Xxxxxx Xxxxxxxxx, 000
Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxx 00000 (the "SELLER"), GREEN OAK GOLF
PRACTICE CENTER, INC., a Texas corporation having an address at 0000 XX Xxxxx
Xxxx Xxxxx, Xxxxxxxxx, Xxxxx 00000 ("ACQUIRED CORPORATION"), and FAMILY GOLF
CENTERS, INC., a Delaware corporation having an address at 000 Xxxxxxxxxxx
Xxxx, Xxxxx 000X, Xxxxxxxx, Xxx Xxxx 00000 ("PURCHASER").
W I T N E S S E T H :
WHEREAS, Seller is the 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 the promises and mutual covenants
herein contained, and other good and valuable consideration, the mutual
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Agreement to Sell and Purchase. Seller shall sell, assign, transfer,
and convey to Purchaser all of the outstanding shares of capital stock of
Acquired Corporation and shall deliver to the Purchaser at the Closing (as
hereinafter defined) 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
with all stock transfer and any other required documentary stamps affixed
thereto.
2. Consideration. In consideration for the Stock, at the Closing
Purchaser shall:
2.1 pay to Seller the sum of $500,000.00 subject to adjustment as
hereinafter provided, payable in cash, by certified or bank check or by the
wire transfer of funds;
2.2 deposit with an escrow agent $50,000.00 under the Escrow
Agreement dated the date hereof (the "ESCROW AGREEMENT") to be held and
distributed by the escrow agent appointed thereunder (the "ESCROW AGENT") as
provided in the Escrow Agreement;
2.3 issue 7,500 validly issued, fully paid and non-assessable shares
of common stock, par value $.01 per share, of Purchaser (the "FGC STOCK") and
to deliver at Closing, free and clear of all liens, claims and encumbrances a
certificate representing 7,500 shares of FGC Stock registered in the name of
the Seller; and
2.4 assume the liabilities listed on Schedule I hereto (the "ASSUMED
LIABILITIES").
3. Apportionments.
3.1 The parties hereto agree that (a) all operating expenses of
Acquired Corporation (i.e., cost of goods sold, rent, advertising,
collections, fees, hired services, insurance, miscellaneous expenses, postage,
repairs and maintenance, supplies, taxes, utilities and wages, but
specifically not including professional fees and expenses, or other
indebtedness of Acquired Corporation, travel and lodging or
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depreciation), and (b) all income of Acquired Corporation, including accounts
receivable, shall be apportioned between Seller and Purchaser as of the
Closing Date (as hereinafter defined) based on the portion of each such
expense or revenue attributable to the period falling before the Closing Date
on the one hand, which Seller shall bear the responsibility and benefit of,
and the portion of each such expense or revenue attributable to the period
falling on and after the Closing Date, on the other hand, which Purchaser
shall bear the responsibility and benefit of (the "ADJUSTMENT"). The net
Adjustment will be paid by the party owing the same to the other in cash or by
certified or official bank check or wire transfer at Closing.
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 Closing Date, or
either party 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 such place as may be mutually agreed to
by Seller and Purchaser.
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5. Representations and Warranties of Seller. The Seller hereby represents
and warrants to Purchaser as of the date hereof as follows:
5.1 Organization and Qualification. Acquired Corporation is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Texas , with all requisite power and authority, and all
necessary consents, authorizations, approvals, orders, licenses, certificates,
and permits of and from, and 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 to perform this Agreement. 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. The Acquired
Corporation does not own or have the right to vote at least a majority of the
shares of stock, partnership interests or other securities with voting rights
in any corporation, partnership, trust, or other entity ("Subsidiaries") and
does not own any interest in any other enterprise (whether or not such
enterprise is a partnership, trust, corporation or other entity).
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5.2 Capitalization. The authorized capital stock of Acquired
Corporation consists of 1,000,000 shares of common stock, no par value per
share, of which 1,000 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 the Seller 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 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.
5.3 Financial Condition. Acquired Corporation has delivered or shall
deliver no later than 30 days after the Closing, to the Purchaser true and
correct copies of: (a) an audited balance sheet and income statement of
Acquired Corporation as of December 31, 1996 ("CLOSING BALANCE SHEET"); and
(b) internal reports for the months of January and February and March 1, 1997
through the date hereof. The above-referenced balance sheets present fairly
the financial condition, assets, liabilities, and stockholders' equity of
Acquired Corporation as of its date and each of the above-referenced income
statements 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
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prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved and are in accordance
with the books and records of Acquired Corporation. Since December 31, 1996
(the "CLOSING BALANCE SHEET DATE"):
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 extraordinary 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. The Acquired Corporation does not have
any liability of any nature, accrued or contingent, including without
limitation, liabilities for federal, state, local, foreign, income, estimated,
excise, sales, gross receipts, franchise,
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employment and payroll related, property and import taxes and penalties,
interest, and additions to tax ("TAXES") and liabilities to customers or
suppliers, other than liabilities for which full provision has been made on
the Closing Balance Sheet and which will be paid off at Closing or which are
listed on Schedule I hereto to be assumed by Purchaser. The Acquired
Corporation has filed all federal, state, local and foreign tax returns
required to be filed by it; has delivered to Purchaser a true and correct copy
of each such return which was filed in the past six years; has paid, or has
established on the Closing Balance Sheet a reserve for, 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 Purchaser a true and correct copy of any
report as to adjustments received by it from any taxing authority during the
past six years and a statement 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.
The Acquired Corporation has paid or shall pay by the close of business on the
date hereof all liabilities listed on Schedule II hereto.
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 the Seller), with respect to
Acquired Corporation, the 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 the
Seller is any union attempting to represent any employee of Acquired
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Corporation as 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 the 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 Sublease, dated as of October 28, 1994, by and between Acquired
Corporation as Tenant and CCA Golf Center--Arlington, Inc., a Texas
corporation, as Landlord (the "SUBLEASE"). The Sublease is in full force and
effect, has not been modified or amended in any way and neither the Landlord
nor Acquired Corporation is in default, or sent or received any notice of
default, in respect of the Sublease. 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 Sublease. Neither Acquired Corporation nor the
Landlord has exercised any right or option, or stated its intent, to terminate
or cancel the Sublease. Acquired Corporation has not assigned, mortgaged,
pledged, transferred or conveyed the Sublease or any interest therein, or
granted any right or option with respect thereto, to any party other than
Purchaser. As of the date hereof, the Acquired Corporation has paid $19,196.58
in Percentage Rent toward the purchase option under the Sublease.
5.7 Properties. Acquired Corporation does not have any interest in
any real property other than under the Sublease. Acquired Corporation has good
title to all other properties and assets used in its business or owned by it,
free and clear of all liens, mortgages, security interests, pledges, charges,
and encumbrances.
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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 and there exists as of the date
hereof, inventory valued at no less than $50,000.00 on a cost basis.
5.7.3 Attached as EXHIBIT B is a true and complete list of
all properties and assets used by Acquired Corporation to operate its
business, owned by Acquired Corporation or leased by Acquired Corporation from
or to a third party, including with respect to such properties and assets
leased by Acquired Corporation, a description of such lease or Sublease. 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 the 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
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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 true and correct copies of: (a) the articles of incorporation (or
other charter document) and by-laws of Acquired Corporation and all amendments
thereto, as presently in effect, certified by the Secretary of the corporation
and (b) all contracts, agreements, leases and licenses to which Acquired
Corporation is a party, each of which is listed on EXHIBIT C hereto. 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. Xxxxx Xxxxxxxx and Xxxx Xxxxxx are the officers of the
Acquired Corporation and Xxxxx Xxxxxxxx is the sole director, each of whom
will tender their resignation at the Closing.
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
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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 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 xxxx, 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
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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,
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; 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
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Corporation, free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements, and voting trusts.
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 and the other contracts listed
on EXHIBIT C hereto, Acquired Corporation is not a party to any leases,
contracts, orders or agreements (written or otherwise).
5.14 Environmental Matters.
5.14.1 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,
42 U.S.C. ' 9601(33); (ii) any "pollutant or contaminant" as defined in 42
U.S.C. ' 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 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
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such in (or for purposes of any Environmental Law (as hereinafter defined) and
any other toxic, reactive or flammable chemicals.
5.14.2 To the best knowledge and belief of Seller, and its
principal officers, 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.
5.14.3 Acquired Corporation has been given no notice of any
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 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").
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5.14.4 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.
5.14.5 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.
Section 9601(9), or any comparable list maintained by any foreign, state or
local government authority.
5.14.6 There are no underground storage tanks at the
Premises.
5.15 Tax Proceedings. There are no proceedings pending regarding the
reduction of real estate taxes or assessments in respect of the Premises.
5.16 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.
5.17 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.
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5.18 Work at the Premises. No services, material or work have been
supplied to the Premises for which payment has not been made in full.
5.19 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 recommendations by any insurer or by any board of
fire underwriters or similar body in respect of the Premises have been
satisfied.
5.20 Investment Intent. The Seller is acquiring the FGC Stock for his
own account (and not for the account of others) and not with a view to the
distribution or resale thereof. The Seller understands that (i) the FGC Stock
is deemed to be "restricted securities" as such term is defined under Rule 144
of the Securities Act; (ii) that he may not sell or otherwise transfer the FGC
Stock in the absence of an effective registration statement covering such
shares or an exemption from the registration provision of the Securities act;
and (iii) that the FGC Stock shall contain a legend to the foregoing effect.
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.
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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 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
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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 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 other than C. B. Commercial Realty
("C.B."). 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, other than C.B., who claims to have dealt with the
indemnifying party in connection with this transaction. The Seller hereby
agrees to pay to C.B. any and all
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fees, expenses and commissions due to C.B. 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) ("LOSSES") that may be suffered or
incurred by any of them arising from or by reason of (i) any liability which
was not adequately disclosed in this Agreement or on the Closing Balance
Sheet; (ii) the breach of any representation, warranty, covenant or agreement
of Seller contained in this Agreement or in any document or other writing
delivered pursuant to this Agreement (determined for this purpose as if all
reference to knowledge and materiality contained in Section 5 are deleted);
and (iii) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses (including without limitation,
interest, penalties, reasonable legal fees and accounting fees) incident to
the foregoing and the enforcement of the provisions of this Section 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
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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 "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
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expense subsequently incurred by the Indemnified Party in connection with the
defense thereof. However, the Indemnified Party shall have the right to
participate at its expense and with counsel of its choice in such settlement,
compromise or litigation. The Indemnified Party shall not be required to
refrain from paying any claim which has matured by a court judgment or decree,
unless an appeal is duly taken therefrom and execution thereof has been
stayed, nor shall the Indemnified Party be required to refrain from paying any
claim where the delay in paying such claim would result in the foreclosure of
a lien upon any of the property or assets then held by the Indemnified Party.
The failure to provide a timely Notice of Claim as provided in this Section
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.
10.5 Escrow. The obligation of Seller under Section 10.1 shall be
satisfied first from the Escrow Account and, if the Escrow Account is
inadequate to provide indemnification to Purchaser, then from Seller directly.
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11. Costs and Fees. The parties shall pay for their own legal and other
advisers retained in connection with this transaction. The Seller shall pay up
to $5,000 for the (i) Phase I environmental study and report, and (ii) an ALTA
Survey. The Purchaser shall pay for the cost of obtaining audited financial
statements. The provisions of this Article shall survive the Closing.
12. Notices. All notices, demands, requests, consents or other
communications ("NOTICES") which either party may desire or be required to
give to the other hereunder shall be in writing and shall be delivered by
hand, overnight express carrier, or sent by registered or certified mail,
return receipt requested, postage prepaid, in either event, addressed to the
parties at their respective addresses first above set forth. A copy of any
Notice given by Seller to Purchaser shall simultaneously be given in either
manner provided above to Family Golf Centers, Inc., 000 Xxxxxxxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx 00000, Attention: General Counsel. A copy of any Notice
given by Purchaser to Seller shall simultaneously be given in either manner
provided above to Xxxxxxxx & Xxxxxxxx, 14785 Preston Road, L.B. 65, Xxxxxx,
Xxxxx 00000, Attention: Xxxxxx Xxxxxxxx. 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.
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13. Miscellaneous.
13.1 Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors and assigns.
13.2 Governing Law. This Agreement shall be governed by, interpreted
under and construed and enforced in accordance with, the laws of the State of
Delaware.
13.3 Captions. The captions or article headings in this Agreement are
for convenience only and do not constitute part of this Agreement.
13.4 Construction. This Agreement has been fully negotiated by the
parties and rules of construction construing ambiguities against the party
responsible for drafting agreements shall not apply.
13.5 Entire Agreement. This Agreement (including the Exhibits annexed
hereto) contain the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior understandings, if any, with
respect thereto.
13.6 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.
13.7 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
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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.
13.8 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.
____________________________
XXXXX XXXXXXXX
GREEN OAK GOLF PRACTICE CENTER, INC.
By: ________________________
Name:
Title:
FAMILY GOLF CENTERS, INC.
By: ________________________
Name:
Title:
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INDEX OF EXHIBITS AND SCHEDULES
EXHIBIT A THE SUBLEASE
EXHIBIT B PERSONAL PROPERTY
EXHIBIT C CONTRACTS AND AGREEMENTS
SCHEDULE I ASSUMED LIABILITIES
SCHEDULE II DEBT TO BE PAID AT CLOSING
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