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Exhibit 2.1
PURCHASE AGREEMENT
SUMMARY SHEET
Buyer: Granite Golf Group, Inc., a Nevada corporation
Seller: Brassie Golf Corporation, a Delaware corporation.
Effective Date: June 18, 1997
Company: Club Operations and Property Management, Inc. a
wholly owned subsidiary of Seller; and Brassie Golf
Management Services, Inc. a wholly owned subsidiary
of Seller.
Notice Address
of Seller: Brassie Golf Corporation
0000-X Xxxxxxxxxxxx Xxxxxxx
Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
with a copy to: Xxxxx X. Xxxxxxx, Esq.
At the same address as above
Notice Address
of Buyer: Granite Golf Group, Inc.
0000 X. 00xx Xx., Xxxxx 000
Xxxxxxx, XX 00000
Attention: X. Xxxxxx Xxxxxxx
with a copy to: Xx. Xxxx X. Xxxxxx
Xxxxxxxxx Xxxxx
0000 X. Xxxxxxx Xxx. Suite 2600
Phoenix, AZ 85012-2913
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into by
and between Buyer and Seller.
RECITALS:
X. Xxxxxx is the owner of all of the issued and outstanding Capital Stock
(the "Shares") of that certain corporation named Brassie Golf Management
Services, Inc. (hereinafter known as "BGMS").
B. Subject to the terms of this Agreement, Seller hereby agrees to sell to
Xxxxx, and Xxxxx hereby agrees to buy from Seller, all of Seller's right,
title and interest in and to the following:
1. All the Shares, assets, rights, privileges, and licenses of
BGMS.
2. All Management Contracts as hereinafter defined.
3. All tangible personal property including, but without
limitation, office equipment, office furniture, more
specifically described in Exhibit A attached hereto.
4. All intangible personal property owned or possessed by Seller
and used in connection with ownership or operation of BGMS,
including, but without limitation, all goodwill, promotional
and marketing materials, general intangibles, business
records, licenses, permits and approvals.
5. All the Shares, assets, rights privileges and licenses of Club
Operations Property Management, Inc., a wholly owned
subsidiary of BGMS.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
undertakings of the parties hereinafter set forth, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties, it is agreed:
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ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
1.1 Definitions. Capitalized terms not otherwise defined herein shall have the
meanings set forth on the Summary Sheet. The following terms shall have the
indicated meanings:
a. "Accounts Payable" shall mean those amounts payable for
goods and services provided to BGMS as of the Closing Date
described in Exhibit B.
b. "Accounts Receivable" shall mean those amounts receivable for
goods and services provided by BGMS as of the Closing Date
described in Exhibit C.
c. "Act of Bankruptcy" shall mean if a party to this agreement or
any general partner thereof shall (a) apply for or consent to
the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property, (b) admit in writing
its inability to pay its debts as they become due, (c) make a
general assignment for the benefit of its creditors, (d) file
a voluntary petition or commence a voluntary case or
proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect) or any other jurisdiction's bankruptcy
statute, (e) be adjudicated bankrupt or insolvent, (f) file a
petition seeking to take advantage of any other law relating
to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, (g) fail to controvert in
a timely and appropriate manner, or acquiesce in writing to,
any petition filed against it in an involuntary case or
proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect) or any other jurisdiction's bankruptcy
statute, or (h) take any corporate or partnership action for
the purpose of effecting any of the foregoing; or if a
proceeding or case shall be commenced, without the application
or consent of a party hereto or any general partner thereof,
in any court of competent jurisdiction seeking (1) the
liquidation, reorganization, dissolution or winding-up, or the
composition or readjustment of debts, of such party or general
partner, (2) the appointment of a receiver, custodian, trustee
or liquidator or such party or general partner or all or any
substantial part of its assets, or (3) other similar relief
under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of
debts, and such proceeding or case shall continue undismissed;
or an order (including an order for relief entered in an
involuntary case under the Federal Bankruptcy Code, as now or
hereafter in effect) judgment or decree approving or ordering
any of the foregoing shall be entered and continue unstayed
and in effect, for a period of sixty (60) consecutive days.
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d. "Bill of Sale - Personal Property" shall mean a bill of sale
conveying title to the Tangible Personal Property and
Intangible Personal Property from Seller to Buyer,
substantially in the form of Exhibit D attached hereto.
e. "Buyer" shall mean Granite Golf Group, Inc., a Nevada
corporation. At the sole discretion of Buyer, it may assign
all interest in this transaction to a majority owned
affiliated company, provided any such assignment shall not
relieve Granite Golf Group, Inc. of any of its obligations or
liabilities hereunder, including its obligations to pay the
Purchase Price, including the deferred portions of the
Purchase Price.
f. "Companies" shall mean collectively Club Operations ad
Property Management, Inc., Summit Golf Corporation, Inc., and
Brassie Golf Management Services, Inc., all of which are
Florida corporations.
g. "Closing" shall mean the time each of the deliveries to be
made by Seller (as provided in Section 6.2) and Buyer (as
provided in Section 6.3) are made and each of the Closing
conditions of Buyer and Seller in Sections 5.1 and 5.2,
respectively, have been satisfied or waived.
h. "Closing Date" shall mean the date on which the Closing
occurs.
i. "Closing Statements" shall have the meaning set forth in
Section 6.4(a).
j. "Current Assets" shall mean cash, accounts receivable and
Inventory (as hereinafter defined) according to a Balance
Sheet, which is attached as Exhibit D.
k. "Disclosure Schedule" shall have the meaning set forth in
Section 2.2(e) as defined by the Letter of Intent between the
parties, as amended.
l. "Effective Date" shall mean the date at which all parties
have executed this agreement.
m. "Environmental Claim" shall mean any administrative,
regulatory or judicial action, suit, demand, letter, claim,
lien, notice of non-compliance or violation, investigation or
proceeding relating in any way to any Environmental Laws or
any permit issued under any Environmental Law including,
without limitation, (i) by governmental or regulatory
authorities for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any
applicable Environmental Laws, and (ii) by any third party
seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous
Substances or arising from alleged injury or threat of injury
to health, safety or the environment.
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n. "Escrow Agent" shall mean the firm of Xxxx, Xxxx & Xxxxxxxxx
o. "FIRPTA Certificate" shall mean the affidavit of Seller under
Section 1445 of the Internal Revenue Code certifying that
Seller is not a foreign corporation, foreign partnership,
foreign trust, foreign estate or foreign person (as those
terms are defined in the Internal Revenue Code and the Income
Tax Regulations), substantially in the form of Exhibit E
attached hereto.
p. "Governmental Body" shall mean any federal state, municipal or
other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign.
q. "Intangible Personal Property" shall have the meaning set
forth in Recital B(4).
r. "Inventory" shall mean any merchandise located in any pro shop
or similar facility and held for sale in the ordinary course
of Seller's business.
s. Management Contracts" shall mean all management contracts,
accounting contracts, or other agreements maintained by the
Seller, BGMS, all other affiliates or subsidiaries, including
prospective contracts or letters of intent, as set forth on
Exhibit A attached hereto.
t. "Management Contract Gross Revenues" shall mean those revenues
resulting from monthly fees, but shall not include payments
for reimburseable expenses or salary of General Managers or
other employees.
u. "Purchase Price" shall mean the sum of One Million One
Hundred Thousand ($1,100,000), payable upon terms listed in
Exhibit F of this Agreement.
v. "Registration Rights Agreement" shall mean that agreement
between the parties, attached as Exhibit G.
w. "Security Agreement" shall mean that agreement between the
parties, attached as Exhibit H.
x. "State" shall mean the state or commonwealth in which the BGMS
is domiciled.
y. "Summary Sheet" shall mean the summary page attached to this
Agreement and incorporated herein by reference.
z. "Tangible Personal Property" shall have the meaning set forth
in Recital B(3).
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aa. "Seller's Organizational Documents" shall mean the current
organizational documents of Seller.
ab. "WARN Act" shall mean the Worker Adjustment Retraining and
Notification Act, as amended.
1.2 Rules of Construction. The following rules shall apply to the
construction and interpretation of this Agreement:
a. Gender. Singular words shall connote the plural number as
well as the singular and vice versa, and the masculine shall
include the feminine and the neuter.
b. Section References. All references herein to particular
articles, sections, subsections, clauses or exhibits are
references to articles, sections, subsections, clauses or
exhibits of this Agreement.
c. Headings. The table of contents and headings contained herein
are solely for convenience of reference and shall not
constitute a part of this Agreement nor shall they affect its
meaning, construction or effect.
d. Construction. Each party hereto and its counsel have reviewed
and revised (or requested revisions of) this Agreement and
have participated in the preparation of this Agreement, and
therefore any usual rules of construction requiring that
ambiguities are to be resolved against a particular party
shall not be applicable in the construction and interpretation
of this Agreement or any exhibits hereto.
ARTICLE II
PURCHASE AND SALE; PAYMENT OF PURCHASE PRICE
2.1 Purchase and Sale. Xxxxxx agrees to sell and Xxxxx agrees to acquire
all the property listed in Recital B, for the Purchase Price.
2.2 Payment of Purchase Price. The Purchase Price shall be paid to Seller
upon terms listed on Exhibit F.
2.3 Section 338(h)(10) Election. Seller will join with the Buyer in
making an election under sections 338(g) and 338(h)(10) of the Internal Revenue
Code (and any corresponding elections under state local or foreign tax law)
with respect to the purchase and sale of all shares of BGMS. Buyer and Seller
shall be solely responsible for all taxes resulting from such election.
2.4 Accounts Receivable and Accounts Payable. Included in the Purchase
Price shall be
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all Accounts Receivable related to existing or pending Management Contracts.
Xxxxx also agrees to assume all Accounts Payable related to existing or pending
Management Contracts.
ARTICLE III
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
To induce Buyer to enter into this Agreement and to purchase BGMS, and to pay
the Purchase Price therefor, Seller hereby makes the following representations,
warranties and covenants with respect to BGMS, upon each of which Seller
acknowledges and agrees that Xxxxx is entitled to rely and has relied:
3.1 Organization and Power. Seller is duly formed or organized, validly
existing and in good standing under the laws of the state of its formation and
is qualified to transact business in the State and has all requisite powers and
all governmental licenses, authorizations, consents and approvals to carry on
its business as now conducted and to enter into and perform its obligations
under this Agreement and under any document or instrument required to be
executed and delivered by or on behalf of Seller under this Agreement.
3.2 Authorization and Execution. This Agreement has been, and each of the
agreements and certificates of Seller to be delivered to Buyer at Closing as
provided in Section 5.1 will be duly authorized by all necessary action on the
part of the Board of Directors of Seller, has been duly executed and delivered
by Seller, constitutes the valid and binding agreement of Seller and is
enforceable against Seller in accordance with its terms. All action required
pursuant to this Agreement necessary to effectuate the transactions
contemplated herein has been, or will at Closing be, taken promptly and in good
faith by Seller and its representatives and agents.
3.3 Non-contravention. The execution and delivery of, and the performance by
Seller of its obligations under, this Agreement do not and will not contravene,
or constitute a default under Seller's Organizational Documents or any
agreement, judgment, injunction, order, decree or other instrument binding upon
Seller, or result in the creation of any lien or other encumbrance on any asset
of Seller. There are no outstanding agreements (written or oral) pursuant to
which Seller (or any predecessor to or representative of Seller) has agreed to
contribute or has granted an option or right of first refusal to purchase BGMS
or any part thereof. There are no purchase contracts, options or other
agreements of any kind, written or oral, recorded or unrecorded, whereby any
person or entity other than Seller will have acquired or will have any basis to
assert any right, title or interest in, or right to possession, use, enjoyment
or proceeds of, all or any portion of BGMS. There are no rights, subscriptions,
warrants, options, conversion rights or agreements of any kind outstanding to
purchase or to otherwise acquire any interest or profit participation of any
kind in BGMS or any part thereof.
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3.4 No Special Taxes. Seller has no knowledge of, nor has it received any
notice of, any special taxes or assessments relating to BGMS or any part
thereof.
3.5 Compliance with Existing Laws. Seller possesses all Board of Director
Authorizations ("Authorizations"), each of which is valid and in full force and
effect, and no provision, condition or limitation of any of the Authorizations
has been breached or violated. Seller has not misrepresented or failed to
disclose any relevant fact in obtaining all Authorizations, and Xxxxxx has no
knowledge of any change in the circumstances under which any of those
Authorizations were obtained that result in their termination, suspension,
modification or limitation. Seller has not taken any action (or failed to take
any action), the omission of which would result in the revocation of any of the
Authorizations. Seller has no knowledge, nor has it received notice within the
past three years, of any existing or threatened violation of any provision of
any applicable building, zoning, subdivision, environmental or other
governmental ordinance, resolution, statute, rule, order or regulation,
including but not limited to those of environmental agencies or insurance
boards of underwriters, with respect to the ownership, operation, use,
maintenance or condition of BGMS or any part thereof, or requiring any repairs
or alterations other than those that have been made prior to the Effective
Date.
3.6 No Taxes Payable. Seller has fully complied with the payment of any and
all taxes, including employee-related taxes.
3.7 Personal Property. All of the Tangible Personal Property and
Intangible Personal Property of BGMS being conveyed by Seller to Buyer is free
and clear of all liens and encumbrances and will be so on the Closing Date and
Seller has good title thereto.
3.8 Management Agreements. Seller has performed all of its obligations
under each of the Management Agreements and to Seller's knowledge, there is no
material fact or circumstance which has occurred which, by itself or with the
passage of time or the giving of notice or both, would constitute a default
under any of the Management Agreements. Seller shall not enter into any new
Management Agreements, supply contract, vending or service contract or other
agreements with respect to BGMS, nor shall Seller enter into any agreements
modifying the Management Agreements, unless (a) any such agreement or
modification will not bind Buyer or BGMS after the Closing Date, or (b) Seller
has obtained Buyer's prior written consent to such agreement or modification.
3.9. Insurance. All of Seller's insurance policies related to BGMS are valid
and in full force and effect, all premiums for such policies were paid when due
until thirty (30) days after Closing. Seller shall not cancel or voluntarily
allow to expire, any of Seller's insurance policies related to BGMS unless such
policy is replaced, without any lapse of coverage, by another policy or
policies providing coverage at least as extensive as the policy or policies
being replaced. Seller has not received any notice from any insurance company
of any defect or inadequacies in BGMS to any part thereof which would adversely
affect the insurability of BGMS, or which would increase the cost of insurance
beyond that which would ordinarily and customarily be charged for similar
business activities. BGMS is fully insured in accordance with prudent and
customary practice. Seller shall allow Buyer thirty (30) days after Closing to
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replace current insurance coverage. All costs of Seller in maintaining said
policies after closing shall be included in Allocated Expenses, as described in
Section 6.6.
3.10 Litigation. Except as disclosed in writing to Buyer in Schedule 3.10
which is attached hereto, there is no action, suit or proceeding pending or
known to be threatened against or affecting Seller or any of its properties,
including but not limited to BGMS, in any court, before any arbitrator or
before or by any Governmental Body which (i) in any manner raises any question
affecting the validity or enforceability of this Agreement or any other
agreement or instrument to which Seller is a party or by which it is bound and
that is or is to be used in connection with, or is contemplated by, this
Agreement, (ii) could materially and adversely affect the business, financial
position or results of operations of BGMS, (iii) could materially and adversely
affect the ability of Seller to perform its obligations under this Agreement,
or under any document to be delivered pursuant hereto, (iv) could create a lien
on BGMS, any part thereof or any interest therein, (v) the subject matter of
which concerns any past or present employee of BGMS, or (vi) could otherwise
adversely materially affect BGMS.
3.11 Labor Disputes and Agreements. There are no labor disputes pending or,
to Seller's knowledge, threatened as to the operation or maintenance of BGMS or
any part thereof. Seller is not a party to any union or other collective
bargaining agreement with employees employed in connection with the ownership,
operation or maintenance of BGMS. Seller is not a party to any employment
contracts or agreements, other than those disclosed in writing to Buyer, and
Seller will not, between the Effective Date and the Closing Date, enter into
any new employment contracts or agreements related to BGMS, amend any existing
Employment Agreement, except with the prior written consent of Buyer. Seller
acknowledges that Buyer will not assume any of the Employment Agreements and
Seller has complied with and shall be responsible for compliance with the WARN
Act and any other applicable employment-related laws or ordinances. To Seller's
knowledge, BGMS has complied with the requirements of the federal Immigration
and Reform Control Act respecting the employment of undocumented workers.
3.12 Financial Information. To Seller's knowledge, all of Seller's financial
information, including, without limitation, all books and records and financial
statements, is correct and complete in all material respects and presents
accurately the results of the operations of BGMS for the periods indicated.
Provided, however that Xxxxxx makes no representation as to the collectability
of the Accounts Receivable listed in Exhibit C.
3.13 Organizational Documents. Seller's Organizational Documents are in full
force and effect and have not been modified or supplemented, and no fact or
circumstance has occurred that, by itself or with the giving of notice or the
passage of time or both, would constitute a default thereunder.
3.14 Operation of BGMS. Seller covenants that between the Effective Date and
the Closing Date, it will (i) operate BGMS in the usual, regular and ordinary
manner consistent with Seller's prior practice, (ii) maintain its books of
account and records in the usual, regular and ordinary manner, in accordance
with sound accounting principles applied on a basis consistent
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with the basis used in keeping its books in prior years and (iii) use all
reasonable efforts to preserve intact BGMS's present business organization,
keep available the services of BGMS's present officers, partners and employees
and preserve BGMS's relationships with suppliers and others having business
dealings with it. Except as otherwise permitted hereby, from the Effective
Date until Closing, Seller shall not take any action or fail to take action the
result of which would have a material adverse effect on BGMS or Buyer's ability
to continue the operation thereof after the Closing Date in substantially the
same manner as presently conducted, or which would cause any of the
representations and warranties contained in this Article III to be untrue as of
Closing.
3.15 Bankruptcy. No Act of Bankruptcy has occurred with respect to Seller.
3.16 Environmental Claims. To Seller's knowledge, there are no current,
pending, or threatened Environmental Claims against BGMS. Furthermore, to
Seller's knowledge, BGMS has not violated any applicable environmental laws or
regulations.
3.17 Non-Compete. Seller covenants that as a result of this Agreement, it
will no longer have any interest in the management of golf facilities for which
it does not have an ownership interest. Seller further covenants that until
the sooner of (i) two years from the Closing, (ii) Seller exercises its
repurchase rights as set forth in Exhibit F, (iii) Buyer sells, conveys or
otherwise transfers any of the Shares or the Management Contracts to any party
other than a majority-owned affiliate of Buyer, or (iv) Buyer is required to
pay the outstanding balance due under Exhibit F as a result of failing to make
timely payments, Seller, its assigns, officers, or directors will not provide
management services similar to those now provided by BGMS.
3.18 Survival of Representations. Each of the representations, warranties and
covenants contained in this Article III are intended for the benefit of Buyer.
Each of said representations, warranties and covenants shall survive the
Closing for a period of two (2) years, at which time they shall expire unless
prior to such time Buyer has made a formal, written claim alleging a breach of
one or more of the representations, warranties or covenants. No investigation,
audit, inspection, review or the like conducted by or on behalf of Buyer shall
be deemed to terminate the effect of any such representations, warranties and
covenants, it being understood that Buyer has the right to rely thereon and
that each such representation, warranty and covenant constitutes a material
inducement to Buyer to execute this Agreement and to close the transaction
contemplated hereby and to pay the Purchase Price to Seller. As used herein,
the term "Seller's Knowledge" shall mean the actual knowledge of Seller's
Directors, officers, or employees.
ARTICLE IV
BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
To induce Seller to enter into this Agreement and to sell BGMS, Xxxxx
hereby makes the following representations, warranties and covenants, upon each
of which Xxxxx acknowledges and agrees that Seller is entitled to rely and has
relied:
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4.1 Organization and Power. Buyer is duly formed or organized, validly
existing and in good standing under the laws of the state of its formation and
has all governmental licenses, Authorizations, consents and approvals required
to carry on its business as now conducted and to enter into and perform its
obligations under this Agreement and any document or instrument required to be
executed and delivered on behalf of Buyer under this Agreement.
4.2 Non-contravention. The execution and delivery of this Agreement, the
documents contemplated hereby, and the performance by Xxxxx of its obligations
hereunder and thereunder, do not and will not contravene, or constitute a
default under, any provisions of applicable law or regulation, or any
agreement, judgment, injunction, order, decree or other instrument binding upon
Buyer or result in the creation of any lien or other encumbrance on any asset
of Buyer.
4.3 Litigation. There is no action, suit or proceeding, pending or known to be
threatened, against or affecting Buyer in any court or before any arbitrator or
before any administrative panel or otherwise that (a) could materially and
adversely affect the business, financial position or results of operations of
Buyer, or (b) could materially and adversely affect the ability of Buyer to
perform its obligations under this Agreement, or under any document to be
delivered pursuant hereto.
4.4 Bankruptcy. No Act of Bankruptcy has occurred with respect to Buyer.
4.5 Authorization and Execution. This Agreement has been, and each of the
agreements and certificates of Buyer to be delivered to Seller at Closing as
provided in Section 5.2 will be, duly authorized by all necessary action on the
part of Buyer, has been duly executed and delivered by Buyer, constitutes the
valid and binding agreement of Buyer and is enforceable against Buyer in
accordance with its terms. All action required pursuant to this Agreement
necessary to effectuate the transactions contemplated herein has been, or will
at Closing be, taken promptly and in good faith by Xxxxx and its
representatives and agents.
4.6 Financial Information. Buyer shall provide Seller appropriate financial
information on a regular basis. Such information shall be equivalent to that
provided to Granite Golf Group, Inc. shareholders, including quarterly and
annual financial statements, and notice of material adverse event. Financial
statements delivered by Buyer shall be true and correct.
4.7 Securites Registration. If Granite Golf Group, Inc. files a
registration statement in compliance with the Securities Act of 1933, Granite
shall comply with the Registration Rights Agreement executed by the parties and
attached as Exhibit G.
ARTICLE V
CONDITIONS AND ADDITIONAL COVENANTS
5.1 As to Buyer's Obligations. Buyer's obligations under this Agreement are
subject to the satisfaction of the following conditions precedent and the
compliance by Seller with the following covenants:
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a. Seller's Deliveries. Seller shall have delivered to or for
the benefit of Buyer, as the case may be, on or before the
Closing Date, all of the documents and other information
required of Seller pursuant to this Agreement. Seller shall
deliver all documents, rights and transfers necessary to
complete the transaction. Such transfers may be required from
BGMS, Seller, affiliates, partners, or officers.
b. Representations, Warranties and Covenants. All of Seller's
representations and warranties made in this Agreement shall be
true and correct as of the Effective Date and as of the
Closing Date as if then made, there shall have occurred no
material adverse change in the condition or financial results
of the operation of BGMS since the Effective Date. Seller
shall have performed all of its covenants and other
obligations under this Agreement and Seller shall have
executed and delivered to Buyer on the Closing Date a
certificate dated as of the Closing Date to the foregoing
effect in the form of Exhibit I attached hereto.
c. Financing. On or before the Effective Date, Buyer shall have
obtained financing for Buyer's purchase of BGMS, on terms and
conditions acceptable to Buyer in its sole and absolute
discretion.
d. Inspection of Documents. Seller shall make available to
Buyer, its agents, auditors, engineers, attorneys and other
designees, for inspection and/or copying, copies of all
audits and reviews, books, records, tax returns, bank
statements, financial statements, fee schedules and any and
all other material or information relating to BGMS which are
in, or come into, Seller's possession or control, or which
Seller may attain.
e. Disclosure Schedule. Seller shall deliver to Buyer a
disclosure schedule that accurately and completely identifies
and describes Employment Agreements, if any, and the names of
all employees, their social security number, wage or salary,
accrued vacation benefits, other fringe benefits, etc.
f. UCC Search. Seller shall deliver to Buyer current searches of
all Uniform Commercial Code financing statements filed
with the Secretary of State of the State of Florida
respecting Seller, and BGMS and its subsidiaries, together
with searches for pending litigation, tax liens and bankruptcy
filings.
g. Financial Statements. Seller has delivered, and shall
continue to deliver to Buyer, all financial statements for
BGMS.
h. Tax Clearance Certificates. Delivery of Tax Clearance
Certificates if available under applicable law from each
jurisdiction assessing taxes against any property or
business thereon.
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Each of the conditions and additional covenants contained in this Section are
intended for the benefit of Buyer and may be waived in whole or in part by
Buyer, but only by an instrument in writing signed by Xxxxx.
5.2 As to Seller's Obligations. Seller's obligations under this are subject to
the satisfaction of the following conditions precedent and the compliance by
Buyer with the following covenants:
a. Buyer's Deliveries. Buyer shall have delivered to or for the
benefit of Seller, on or before the Closing Date, all of the
documents and payments required of Buyer pursuant to this
Agreement.
b. Representations, Warranties and Covenants. All of Buyer's
representations and warranties made in this Agreement shall be
true and correct as of the Effective Date and as of the
Closing Date as if then made and Buyer shall have performed
all of its covenants and other obligations under this
Agreement.
Each of the conditions and additional covenants contained in this Section are
intended for the benefit of Seller and may be waived in whole or in part, by
Seller, but only by an instrument in writing signed by Seller.
ARTICLE VI
CLOSING
6.1 Closing. Closing shall be held on Thursday, June 19, 1997 at 10 p.m.
Pacific Standard Time, at the offices of the Buyer (or counsel to the Buyer).
Possession of the Shares and operations of BGMS shall be delivered to Buyer at
Closing.
6.2 Seller's Deliveries. At Closing, Seller shall deliver to Buyer all of the
following instruments, each of which shall have been duly executed and, where
applicable, acknowledged and/or sworn on behalf of Seller and shall be dated as
of the Closing Date:
a. Seller's Certificate. The certificate required by
Section 5.1 (b).
b. The Bill of Sale - Personal Property.
c. The FIRPTA Certificate.
d. Organizational Documents. BGMS's Organizational Documents,
including amendments.
e. Board Resolutions. Appropriate resolutions of the Board of
Directors of Seller, certified by the secretary or an
assistant secretary of Seller authorizing (i) the execution on
behalf of Seller of this Agreement and the
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documents to be executed and delivered by Seller prior to, at
or otherwise in connection with Closing, and (ii) the
performance by Seller of its obligations under this
Agreement and under such documents, or appropriate resolutions
of the partners of Seller, as the case may be.
f. Insurance Policies. Copy of each and every existing insurance
policy covering BGMS and certificates evidencing such
coverage.
g. Communication; Addresses. A written instrument executed by
Seller, conveying and transferring to Buyer all of Seller's
right, title and interest in any telephone numbers, fax
numbers or internet or electronic mail addresses (if
applicable) relating solely to BGMS, and, if Seller maintains
a post office box solely with respect to BGMS, conveying to
Buyer all of its interest in and to such post office box and
the number associated therewith, so as to assure a continuity
in operation and communication.
h. Tax Bills. Any current tax bills in Seller's possession or
under its control relating to the operations of BGMS.
i. Accounts Receivable and Accounts Payable. A list of Seller's
outstanding accounts receivable and Accounts Payable relating
to the operations of BGMS as of midnight on the date prior to
the Closing, specifying the name of each account and the
amount due Seller.
j. Tenant Notices. Written notice notifying all interested
parties, including leases of BGMS, that BGMS has been conveyed
to Buyer and directing that all payments, inquiries and the
like be forwarded to Buyer at the address to be provided by
Xxxxx.
k. Miscellaneous. Any other document or instrument reasonably
requested by Xxxxx with respect to BGMS.
6.3 Buyer's Deliveries. At Closing, Buyer shall pay or deliver to Seller the
following:
a. Purchase Price. The Purchase Price by federal funds wire to
an account designated by Seller.
b. Registration Rights Agreement. The Registration Rights
Agreement, executed and attached as Exhibit G.
c. Security Agreement. The Security Agreement, executed and
attached as Exhibit H.
d. Miscellaneous. Any other document or instrument reasonably
requested by Xxxxxx relating to the transaction contemplated
hereby.
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6.4 Mutual Deliveries. At Closing, Xxxxx and Seller shall mutually execute and
deliver each other:
a. Closing Statements. A closing statement for Seller and a
closing statement for Buyer (collectively, the "Closing
Statements") reflecting the Purchase Price and the adjustments
and prorations required under this Agreement and the
allocation of income and expenses required hereby.
b. Miscellaneous. Such other and further documents, papers and
instruments as may be reasonably required by the parties
hereto or their respective counsel.
6.5 Closing Costs. Except as is otherwise provided in this Agreement, each
party hereto shall pay its own legal fees, costs and expenses.
6.6 Income and Expense Allocations. All income and expenses with respect to
BGMS, and applicable to the period of time before and after Closing, determined
in accordance with generally accepted accounting principles consistently
applied, shall be allocated between Seller and Buyer. Seller shall be entitled
to all income and shall be responsible for all expenses for the period of time
up to but not including the Closing Date, and Buyer shall be entitled to all
income and shall be responsible for all expenses for the period of time from,
after and including the Closing Date. Such adjustments shall be shown on the
Closing Statements (with such supporting documentation as the parties hereto
may require being attached as exhibits to the Closing Statements) and shall
increase or decrease (as the case may be) the Purchase Price payable by Buyer.
Without limiting the generality of the foregoing, the following items of income
and expense shall be prorated at Closing:
a. Rents and Fees. Current and prepaid rents or fees.
b. Taxes. Any taxes payable
c. Utilities. Utility charges (including but not limited to
charges for water, sewer and electricity).
d. License and Permit Fees. License and permit fees, where
transferable.
e. Income and Expenses. All other income and expenses of BGMS.
f. Miscellaneous Prorations. Such other items as are usually and
customarily prorated between Buyers and Sellers in equivalent
transactions.
6.8 Post-Closing Adjustments.
a. Availability of Bills. If accurate allocations and prorations
cannot be
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made at Closing because current bills are not obtainable (as,
for example, in the case of utility bills), the parties shall
allocate such income or expenses at Closing on the best
available information, subject to adjustment outside of escrow
upon receipt of the final bill or other evidence of the
applicable income or expense. Any income received or expense
incurred by Seller or Buyer with respect to BGMS after the
Closing Date shall be promptly allocated in the manner
described herein and the parties shall promptly pay or
reimburse any amount due. Seller shall pay at Closing all
accrued taxes applicable to BGMS.
b. Taxes & Insurance. The parties shall allocate appropriate tax
and insurance expenses payable, provided that Buyer shall not
be under any obligation to continue insurance coverage and
may choose to substitute equivalent or different coverage.
6.9 Post-Closing Sale by Xxxxxxx. If at any time after Closing, and
before any final installment of the Purchase Price has been paid, Granite sells
or otherwise transfers its interest in any of the Shares or property described
in Recital B to any entity other than Seller, or a majority owned affiliate of
Granite, any outstanding balance due under this Agreement shall be immediately
paid in cash.
ARTICLE VII
GENERAL PROVISIONS
7.1 Risk of Loss. The risk of any loss or damage to BGMS prior to the Closing
Date shall remain upon Seller. If any such loss or damage occurs prior to
Closing, Buyer shall have the right to terminate this Agreement pursuant to
Section 8.3. If Buyer elects not to terminate this Agreement, all insurance
proceeds and rights to proceeds arising out of such loss or damage shall be
paid or assigned, as applicable, to Buyer at Closing.
7.2 Confidentiality. Except as hereinafter provided, from and after the
execution of this Agreement, Buyer and Seller shall keep the terms, conditions
and provisions of this Agreement confidential and neither shall make any public
announcements hereof unless the other first approves of same in writing, nor
shall either disclose the terms, conditions and provisions hereof, except to
their respective attorneys, accountants, engineers, surveyors, financiers and
bankers. Seller and Xxxxx acknowledge and agree that both parties must comply
with all disclosure and applicable securities regulations, and shall be
permitted to do so.
ARTICLE VIII
LIABILITY OF BUYER AND SELLER;
INDEMNIFICATION BY BUYER AND SELLER;
TERMINATION RIGHTS
8.1 Liability of Buyer. Xxxxx agrees to assume the Accounts Payable relating
to the operations of BGMS, as listed according to Exhibit X. Xxxxx does not
assume any obligation
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of Seller or any liability for claims arising out of any occurrence prior to
Closing with respect to Seller or operations of BGMS.
8.2 Liability of Seller. Seller does not assume any obligation of Buyer, or
any liability for claims arising out of any occurrence prior to Closing with
respect to the operations of Buyer.
8.3 Indemnification by Seller. Seller hereby indemnifies and holds Buyer
harmless from and against any and all claims, costs, penalties, damages,
losses, liabilities and expenses (including reasonable attorneys, fees) that
may at any time be incurred by Xxxxx, whether before or after Closing, as a
result of any breach by Seller of any of its representations, warranties,
covenants or obligations set forth herein or in any other document delivered by
Seller pursuant hereto, for a period of two (2) years following the Closing.
The provisions of this section shall survive termination of this Agreement by
Buyer or Seller. After twelve months from the Closing Date, the maximum amount
payable by Seller within this section shall be amount of the Purchase Price.
8.4 Indemnification by Xxxxx. Buyer hereby indemnifies and holds Seller
harmless from and against any and all claims, costs, penalties, damages,
losses, liabilities and expenses (including reasonable attorneys fees) that may
at any time be incurred by Seller, whether before or after Closing, as a result
of (i) any breach by Buyer of any of its representations, warranties, covenants
or obligations set forth herein or in any other document delivered by Buyer
pursuant hereto, and (ii) BGMS's post-closing operations related to any
Management Contract to which Seller or any affiliate possessed at the time of
Closing.
8.5 Termination by Xxxxx. If any condition set forth herein for the
benefit of Buyer cannot or will not be satisfied prior to Closing, or upon the
occurrence of any other event that would entitle Buyer to terminate this
Agreement and its obligations under this Agreement, and Seller fails to cure
any such matter within thirty (30) business days after notice thereof from
Buyer, Buyer, at its option, and as its sole remedies hereunder may elect
either (a) to terminate this Agreement and all other rights and obligations of
Seller and Buyer under this Agreement shall terminate immediately and all funds
paid or deposited by Buyer (including but not limited to xxxxxxx money) shall
be immediately refunded to Buyer; or (b) to waive its right to terminate,and
waive any such breach on the part of Seller and, instead, to proceed to Closing
without a reduction in the Purchase Price. If Buyer terminates this Agreement
as a consequence of a misrepresentation or breach of a warranty or covenant by
Seller, or a failure by Seller to perform its obligations under this Agreement,
Seller shall return all monies paid as deposits to the Buyer.
8.6 Termination by Seller. If any condition set forth herein for the
benefit of Seller cannot or will not be satisfied prior to Closing, and Buyer
fails to cure any such matter within thirty (30) business days after notice
thereof from Seller, Seller may, at its option and as its sole
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remedies hereunder, elect either (a) to terminate this Agreement, in which
event the rights and obligations of Seller and Xxxxx hereunder shall terminate
immediately, or (b) to waive its right to terminate, and waive any such breach
on the part of Buyer, and instead, to proceed to Closing. If Seller elects to
terminate this Agreement, Xxxxxx agrees to accept the sum of twenty-five
thousand ($25,000) dollars as agreed and liquidated damages, and Seller waives
any and all other claims for damages, actual, consequential or otherwise, that
it may possess against Buyer.
8.5 Costs and Attorneys' Fees. In the event of any litigation or dispute
between the parties arising out of or in any way connected with this Agreement,
resulting in any litigation, arbitration or other form of dispute resolution,
then the prevailing party in such litigation shall be entitled to recover its
costs of prosecuting and/or defending same, including, without limitation,
reasonable attorneys' fees at trial and all appellate levels.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Completeness; Modification. This Agreement constitutes the entire
agreement between the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior discussions, understandings,
agreements and negotiations between the parties hereto. Only a written
instrument duly executed by the parties hereto may modify this Agreement.
9.2 Assignments. Buyer may assign its rights under this Agreement to a
majority owned affiliate of Buyer without the consent of Seller, provided any
such assignment shall not relieve Granite Golf Group, Inc. of any of its
obligations or liabilities hereunder, including its obligations to pay the
Purchase Price, including the deferred portions of the Purchase Price. Buyer
may not otherwise assign its interest herein without the prior written consent
of Seller. Seller may assign its rights to receive any portion of the Purchase
Price, however Seller may not otherwise assign its interest herein without the
prior written consent of Buyer, which consent will not be unreasonably
withheld.
9.3 Successors and Assigns. This Agreement shall bind and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
9.4 Days. If any action is required to be performed, or if any notice, consent
or other communication is given, on a day that is a Saturday or Sunday or a
legal holiday in the jurisdiction in which the action is required to be
performed or in which is located the intended recipient of such notice, consent
or other communication, such performance shall be deemed to be required, and
such notice, consent or other communication shall be deemed to be given, on the
first business day following such Saturday, Sunday or legal holiday. Unless
otherwise specified herein, all references herein to a "day" or "days" shall
refer to calendar days and not
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business days.
9.5 Governing Law. This Agreement and all documents referred to herein shall
be governed by and construed and interpreted in accordance with the laws of the
State of Florida.
9.6 Counterparts. To facilitate execution, this Agreement may be executed in as
many counterparts as may be required. It shall not be necessary that the
signature on behalf of both parties hereto appear on each counterpart hereof.
All counterparts hereof shall collectively constitute a single agreement.
9.7 Severability. If any term, covenant or condition of this Agreement, or the
application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Agreement, or the application
of such term covenant or condition to other persons or circumstances, shall not
be affected thereby, and each term, covenant or condition of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
9.8 Costs. Regardless of whether Closing occurs under this Agreement, and
except as otherwise expressly provided in this Agreement, or any document
delivered pursuant to this Agreement, each party to this Agreement shall be
responsible for its own costs in connection with this Agreement and the
transactions contemplated hereby, including without limitation, fees of
attorneys, engineers and accountants.
9.9 Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be delivered by hand, transmitted
by facsimile transmission, sent prepaid by Federal Express (or a comparable
overnight delivery service) or sent by the United States mail, certified,
postage prepaid, return receipt requested, at the addresses and with such
copies as on the Summary Sheet or to such other address as the intended
recipient may have specified in a notice to the other party. Any party hereto
may change its address or designate different or other persons or entities to
receive copies by notifying the other party and Escrow Agent in a manner
described in this Section. Any notice, request, demand or other communication
delivered or sent in the manner aforesaid shall be deemed given or made (as the
case may be) when actually delivered to the intended recipient.
9.10 Incorporation by Reference. All of the exhibits attached hereto are by
this reference incorporated herein and made a part hereof.
9.11 Survival. Except as expressly provided in Section 3, all of the
representations, warranties, covenants and agreements of Seller and Buyer made
in, or pursuant to, this Agreement shall survive Closing as provided herein and
shall not merge any other document or instrument executed and delivered in
connection herewith.
9.12 Further Assurances. Seller and Buyer each covenant and agree to sign,
execute and deliver, or cause to be signed, executed and delivered, and to do
or make, or cause to be done or made, upon the written request of the other
party, any and all agreements, instruments, papers, deeds, acts or things,
supplemental, confirmatory or otherwise, as may be reasonably
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required by either party hereto for the purpose of or in connection with
consummating the transactions described herein.
9.13 No Partnership. This Agreement does not and shall not be construed to
create a partnership, joint venture or any other relationship between the
parties hereto except the relationship of Seller and Xxxxx specifically
established hereby.
9.14 Confidentiality. Any confidential information delivered by Seller to Buyer
under this Agreement shall be used solely for the purpose of acquiring BGMS and
Buyer will keep such information confidential; provided Buyer shall have the
right to provide such information to its consultants and advisors and to
disclose such information as Buyer determines is necessary or appropriate in
connection with filing with the Securities and Exchange Commission. If Buyer
does not acquire BGMS, it shall deliver to Seller copies of all proprietary
information delivered to Buyer by Seller. Buyer and Seller agree to keep
confidential the terms and conditions of this Agreement, provided, however,
that Buyer and Seller shall have the right to provide such information to its
consultants and advisors.
IN WITNESS WHEREOF, Xxxxxx and Xxxxx have hereunder affixed their
signatures to this Purchase and Sale Agreement, all as of the 24th day of June,
1997.
BUYER SELLER
GRANITE GOLF GROUP, INC BRASSIE GOLF CORPORATION
A Nevada Corporation a Delaware Corporation
By /s/ X. Xxxxxx Xxxxxxx By /s/ Xxxxxxx X. Xxxxx
--------------------- --------------------
Print Name X. Xxxxxx Xxxxxxx Print Name Xxxxxxx X. Xxxxx
----------------- ----------------
Its Chief Financial Officer Its President
----------------------- ---------
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EXHIBIT A
MANAGEMENT CONTRACTS
EagleBrook Country Club Riviera Country
Xxxxxxxx Country Club Sea Pines Country Club
Heritage Links Smokey Mountain Golf Club
Kettnering Country Club St Xxxxx - Members Club
Lone Palm Country Club Southern Dunes
Miramar Beach & Tennis Club Starmount Forest Country Club
Panama Country Club Village of Sands Point
Pasadena Country Club
Xxxxxxxx Country Club The Links
BRASSIE GOLF CORPORATION - OWNERSHIP / MANAGEMENT
The Gauntlet at Xxxxxx Xxxx The Gauntlet at St. Xxxxx
The Gauntlet at Laurel Valley The Gauntlet at Xxxxxx Xxxx
PROSPECTIVE CLIENTS
The Players Club Autumn Oaks
West Chase Dataw Island
Xxxxx Xxxxx Broken Sound
Tunica / Biloxi Grand Casino
Cherokee The Xxxxx
Xxx Meadow Olde Hickory
Palm Aire Longview
Hunterdon County Manassas Park
Kishwaulkee Manhattan Xxxxx
Jacksonville Golf & XX Xxxxxx Plantation
Village Club
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LIST OF EXHIBITS
Exhibit A Tangible Personal Property
Exhibit B Accounts Payable
Exhibit C Accounts Receivable
Exhibit D Current Balance Sheet
Exhibit E FIRPTA Certificate
Exhibit F Purchase Price
Exhibit G Registration Rights Agreement
Exhibit H Security Agreement
Exhibit I Seller's Certificate
Exhibit J Guaranty Agreement
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EXHIBIT F
The Purchase Price shall be One Million One Hundred Thousand and no/100 dollars
($1,100,000.00)
A. AT CLOSING:
1. Granite Golf Group, Inc. ("Granite") shall pay Six Hundred Thousand
and no/100 dollars ($600,000.00) in cash.
2. Granite and the Companies shall deliver a Security Agreement, included
herein as Exhibit H.
B. ON JULY 31, 1997, OR WITHIN 5 DAYS THEREAFTER:
1. The parties shall examine the monthly invoices for management or
accounting fees sent to all current, active, and collectible management
contract clients. The sum of those invoices shall be divided into
850,000 to determine the multiple for any repurchase, as described
below.
C. ON OR BEFORE JANUARY 9, 1998
Notwithstanding the terms described herein, the parties agree that any payment
after the Closing Date within Exhibit F shall be subject to Buyer's
confirmation of Management Contract gross revenues. That portion of the
Purchase Price shall be reduced in the following event:
The parties agree that the Seller has estimated that the 1997 gross
revenues of COPM and its course management affiliates will be
$1,033,706. Excluding Xxxxxx Xxxx, Xxxxxx Valley, Xxxxxx Xxxx, the
Gauntlet at St. Xxxxx, and the St. Xxxxx Plantation Members Club, the
adjusted amount is $847,706. On or before January 9, 1998, the parties
shall determine the expected annual gross revenues, and if below
$847,706, the purchase price shall be reduced on a dollar for dollar
basis. In no event shall the Purchase Price be reduced by more than
$150,000.00.
Seller shall have the right to review the books and records of Xxxxx
and COPM to confirm any adjustment of the Purchase Price as provided above.
Seller may commence such review within thirty (30) days after receiving written
notice from Buyer of Xxxxx's proposed
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adjustment. In the event that Xxxxxx's review results in a Purchase Price
adjustment different than that proposed by Xxxxx, the parties will select an
uninterested third party Certified Public Accountant who shall determine that
adjustment and the parties agree to be bound by such determination.
D. ON OR BEFORE JANUARY 30, 1998:
1. Granite shall provide verification to Seller that it has received at
least Five Million and no/100 ($5,000,000.00) dollars in equity
capital, said amounts committed after June 15, 1997 as well as written
commitments from bona fide third party institutional lenders to fund
Fifty Million and no/100 ($50,000,000.00) dollars in debt capital.
2. If both the equity and debt capital have been successfully raised,
according to item 1, above, Granite shall have the option to make a
written offer to pay Two Hundred Fifty Thousand and no/100
($250,000)dollars to Seller as a full and final payment of the
Purchase Price. The Seller shall have 10 days to either accept or
reject the offer.
a. If the Seller accepts the offer, Granite shall have 30 days
from the receipt of a written acceptance to make the payment.
Upon payment, there shall be no further obligations of payment
by Granite under this Agreement.
b. If the Seller rejects the offer, Seller shall be entitled to
receive only Granite Golf Group, Inc. stock as the balance
due, except as provided in section 6.9 of this Agreement. The
terms of the stock payment are described in E (2) and G of this
Exhibit F.
1. If the capital has not been successfully raised, Seller shall have an
option to either proceed with the purchase as described in section E,
herein, or exercise a right to repurchase all previously sold
Shares, rights, property and interests of BGMS, including Management
Contracts acquired after Closing.
a. If Seller elects to repurchase, The parties shall examine the
invoices for management or accounting fees sent to all current
and active management contract clients. The sum of those
invoices shall be multiplied by the multiple determined in
section B(1). Further, Granite
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shall have the option of including the following management
contracts, if current and active, in the sum of invoices and
purchase by Seller:
Cypress Head, Port Orange Florida
Eagle Trace, Clearwater, Minnesota
Schalamar Creek, Lakeland, Florida
Spruce Creek, Daytona Beach, Florida
Preswick Golf Club, Ormond Beach, Florida
Municipal golf course (unnamed), Universal
City,Texas
(i) Seller shall provide written notice of its
election to repurchase before February 16, 1998.
Seller shall at the same time make a
non-refundable deposit of $25,000.00. From
January 30, 1998 to February 10, 1998, Granite
shall provide all reasonably requested materials
in order for Seller to make said election.
(ii) In no case shall the repurchase price be less
than Six Hundred Thousand and no/100 ($600,000)
dollars.
(iii) Seller shall have 30 days from the date of notice
to repurchase to pay the balance due, in cash.
(iv) The option to repurchase is not transferable by
Seller.
(v) If Seller elects to repurchase, upon the closing
of such repurchase, it shall relinquish all
rights to acquire Granite stock under this
Agreement.
b. If Seller elects not to repurchase, the balance of
payments shall be made according to sections E(1)&(2) of
Exhibit F,
A. TWELVE MONTHS FROM THE CLOSING DATE:
The Seller shall make an election as a full payment of the balance due. The
election shall be as follows:
1. Two Hundred and Fifty Thousand and No/100 ($250,000.00) in
cash, to be paid within 30 days. In the event Seller chooses
this cash payment, and it is paid as described in the
foregoing sentence, Granite shall have no further obligation
under the Agreement; or
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2. Five Hundred Thousand and No/100 ($500,000.00) in fully paid,
nonassessable, and freely tradable shares of Granite Golf
Group, Inc. Common stock, containing full voting rights,
issued according to the following schedule:
a. Two Hundred and Fifty Thousand and no/100
($250,000.00) issued on the first anniversary date of
the Closing. The price per share shall be seventy
five percent (75%) of the previous average 30-day
closing.
b. Two Hundred and Fifty Thousand and no/100 ($250,000)
issued on the second anniversary date of the Closing.
The price per share shall be seventy five percent
(75%) of the previous average 30-day closing price.
F. From and at all times after the Closing Date, Seller, its officers or
directors, or their assigns, if any, shall not short sales of Shares without
the written consent of Granite Golf Group, Inc., nor take any action which
might reasonably be expected to cause or result in any manipulation of the
price of any security of Granite to facilitate the sale of any Shares pursuant
to this Agreement.
G. If at any time after closing, Granite Golf Group, Inc. shall default
in its obligation under this Exhibit F, as well as its obligations to register
stock under the Registration Rights Agreement, then upon such default, Brassie
Golf Corporation, at its option, may declare all amounts owed to Brassie Golf
Corporation described in this Exhibit F to then e immediately due and payable in
cash, or at Brassie Golf Corporation's election, in stock of Granite Golf Group,
Inc., and Xxxxxxx Golf Corporation may exercise all rights or remedies to
recover such amounts as are available at law or in equity, including, but not
limited to, enforcing its rights under the Security Agreement. In the event of
such default, Brassie Golf Corporation shall be entitled, in addition to other
remedies, to recover all costs and expenses of any action or litigation
undertaken to enforce its rights under this Exhibit F, including, but not
limited to, all attorney's fees, whether such attorney's fees are incurred in
any pretrial, trial, appellate or bankruptcy proceedings.
H. The Companies shall unconditionally and absolutely guaranty the
obligations of Granite Golf Group, Inc. under this Exhibit F by executing the
Guaranty Agreement attached hereto as Exhibit I. Further, in order to secure
their obligations under the Guaranty
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Agreement, the Companies shall join into the Security Agreement.
