EXHIBIT 2.2
AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT
This amendment no. 1 (the "Amendment") to a Stock Purchase Agreement
by and among Family Golf Centers, Inc. ("Family Golf"), Eagle Quest Golf
Centers (U.S.), Inc. ("Buyer") and Trizechahn (USA) Corporation ("Seller")
dated as of November 27, 1998 (the "Stock Purchase Agreement") is dated as of
December 2, 1998.
WHEREAS, the parties entered into the Stock Purchase Agreement as of
November 27, 1998; and
WHEREAS, the Stock Purchase Agreement provides that there is to be an
adjustment to the Purchase Price based on Estimated Net Working Capital as of
the Effective Date; and
WHEREAS, based on the Effective Date Financial Statements prepared in
connection with the Closing, it has been determined that the Estimated Net
Working Capital set forth in the Stock Purchase Agreement should be modified;
NOW THEREFORE, in consideration of the premises and the mutual
promises herein made and in consideration of the representations, warranties
and covenants herein contained, the parties hereto, intending to become legally
bound, hereby agree as follows:
1. The Stock Purchase Agreement is hereby amended as follows:
(a) by deleting the definition of Estimated Net Working
Capital set forth in Section 1.01 of the Stock Purchase Agreement and
replacing it with the following:
"Estimated Net Working Capital" means ($561,683).
(b) by deleting Section 2.02 in its entirety and replacing it
with the following:
2.02 Initial Purchase Price. The Buyer shall pay to the
Seller at the Closing an amount (the "Initial Purchase Price") equal
to (a) Twenty Nine Million Dollars ($29,000,000); less the sum of (b)
the Estimated Net Working Capital plus (c) the sum of (i) the
outstanding principal balance plus accrued and unpaid interest through
the Effective Date under any of the Loans that remains outstanding
immediately following the consummation of the Closing; (ii) the
outstanding principal balance plus accrued and unpaid interest through
the Effective Date under any of the Loans that Buyer repays (or causes
SkateNation to repay) simultaneously with the Closing; and (iii) any
prepayment or yield maintenance interest or payments (including
breakage costs), paid by Buyer or SkateNation to the holder of any
Loan in connection with the repayment thereof simultaneously with the
Closing, together with interest on the Initial Purchase Price so
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determined at a rate of 7% per annum from the Effective Date through
the Closing. The Initial Purchase Price shall be paid at Closing in
cash by wire transfer of immediately available funds to one or more
accounts specified by the Seller to the Buyer prior to the Closing
Date.
(c) by deleting Section 2.06(a) in its entirety and replacing
it with the following:
(a) Preparation and Delivery of Effective Date Balance Sheet
and Net Working Capital Schedule. Within 60 days after the Closing Date, the
Seller shall prepare and deliver to the Buyer and to the Buyer's Auditors (i)
an audited consolidated balance sheet of SkateNation and its Subsidiaries as of
the Effective Date, prepared in accordance with GAAP applied in a manner
consistent with the Unaudited Year End Balance Sheet (without giving effect to
any election under Section 338(h)(10) of the Code (and any corresponding
elections under state, local or foreign tax law) (the "Effective Date Balance
Sheet"), and (ii) a schedule (the "Net Working Capital Schedule") setting forth
the Seller's calculation of the current assets (including cash and cash
equivalents, net accounts receivable, inventory and prepaid expenses, if any
and including the cash reserve associated with the Fleet Bank Loan Agreement)
minus the sum of (x) current liabilities (including accounts payable and
accrued liabilities, construction accounts payable and deferred revenue but
excluding (A) the current portion of the Loans (and any reserves that cover any
contingent portion of any such Loans) and (B) the current liabilities due to
parent) plus (y) deferred revenues that are reflected as long term liabilities
of SkateNation and its Subsidiaries on the Effective Date Balance Sheet (the
"Net Working Capital"). Net Working Capital shall also exclude the following
items: (x) all current liabilities with respect to SkateNation's obligations to
(A) repurchase 550 shares of Class B Common Stock of SkateNation held by
Hillgrove under certain circumstances, (B) repay principal plus accrued
interest on the two promissory notes due to Hillgrove each in the principal
amount of $150,000 dated July 31, 1998 and due July 31, 1999 and July 31, 2000
and (C) make a payment to Hillgrove in respect of the working capital
adjustment to purchase price set forth in Section 2.5 of the Agreement dated as
of July 23, 1998 between SkateNation and Hillgrove, all of which obligations
have been assumed by Seller pursuant to the RMSC Agreement Amendment described
in item 4.09 of the Disclosure Schedule; and (y) any reserves for (A) tax
audits or withholding tax matters set forth in items 4.12(b) and (c) of the
Disclosure Schedule, (B) the Perry/Xxxxxxxx Claim and (C) the Employee Claims.
The Net Working Capital Schedule and the items that comprise it shall be
audited by the Seller's regular outside auditors (the "Seller's Auditors"). The
Seller shall deliver (x) with the Effective Date Balance Sheet, an audit
opinion of Seller's Auditors and (y) with the Net Working Capital Schedule, a
report of the Seller's Auditors that opines on the compliance of the Net
Working Capital Schedule with the requirements of this Agreement. The Seller
and the Seller's Auditors shall be given access to all books, records and
documents and financial staff of SkateNation and its Subsidiaries as they may
reasonably request for the purposes of preparing and opining on the Effective
Date Balance Sheet and the Net Working Capital Schedule.
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(d) by deleting Section 8.02(d) in its entirety and replacing
it with the following:
(d) In the event the Buyer or Family Golf suffers any Adverse
Consequences from or by reason of any of the Xxxx Xxxxx Lease Claim,
the Perry/Xxxxxxxx Claim, the Employee Claims or the Xxxx Matter (each
as defined in the Disclosure Schedule or the supplement thereto),
provided that the Buyer makes a written claim for indemnification
against the Seller pursuant to Section 8.04 below before the one year
anniversary of the Closing Date, then the Seller agrees to protect,
defend, hold harmless and indemnify the Buyer from and against any
Adverse Consequences the Buyer shall suffer resulting from any of such
claims, including all Adverse Consequences arising out of the
enforcement of this Section 8.02.
2. In all other respects the Stock Purchase Agreement shall remain in
full force and effect.
3. This Amendment shall be governed by and construed in accordance
with the domestic laws of the State of New York without giving effect to any
choice or conflict of law provision or rule (whether of the State of New York
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
4. All capitalized terms not defined herein shall have the meaning
given to them in the Stock Purchase Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as
an instrument under seal on the date first above written.
FAMILY GOLF CENTERS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Title: Xxxxxx X. Xxxxxx, Senior Vice President
EAGLE QUEST GOLF CENTERS (U.S.), INC.
By: /s/ Xxxxxx X. Xxxxxx
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Title: Xxxxxx X. Xxxxxx, Senior Vice President
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TRIZECHAHN (USA) CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Vice President
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