STOCK PURCHASE AGREEMENT, dated as of January 18, 2000
("Agreement"), among each of the sellers listed on Schedule A hereto
(individually a "Seller" and collectively the "Sellers"), each of the buyers
listed on Schedule B hereto (individually a "Buyer" and collectively the
"Buyers") and Graubard Mollen & Miller, a law firm having an office at 600 Third
Avenue, New York, New York 10016 ("Escrow Agent").
WHEREAS, the Sellers desire to sell to the Buyers, and the
Buyers desire to purchase from the Sellers, an aggregate of 500,000 shares of
common stock, $.01 par value per share ("Common Stock"), of GolfRounds.com,
Inc., a Delaware corporation ("GolfRounds"), on the terms and conditions set
forth in this Agreement.
NOW THEREFORE, the parties hereto agree as follows:
1. Purchase and Sale of Shares. Subject to the terms and
conditions herein set forth, each Seller hereby agrees to sell shares of Common
Stock ("Purchased Shares") in the amount set forth opposite such Seller's name
on Schedule A, and each Buyer hereby agrees to purchase Purchased Shares in the
amount set forth opposite such Buyer's name on Schedule B, in each case for a
price of $1.375 per Purchased Share ("Purchase Price").
2. Deposit of Purchased Shares and Purchase Price in Escrow.
On or before January 19, 2000, the Sellers shall deposit with Escrow Agent stock
certificates representing all of the Purchased Shares, registered in the Buyers'
names and for the numbers of shares set forth on Schedule B ("Stock
Certificates"), and each Buyer shall deposit with Escrow Agent a wire transfer
for the full amount of the Purchase Price for the Purchased Shares set forth
opposite such Buyer's name on Schedule B (in the aggregate, the "Purchase
Funds").
3. Closing. The closing of the purchase and sale of the
Purchased Shares ("Closing") shall take place at the offices of the Escrow Agent
commencing at 10:00 a.m. on the first day on which all of the conditions to the
obligations of the parties to consummate the transactions contemplated hereby,
as set forth in Section 8, hereof are satisfied ("Closing Date"); provided,
however, that the Closing Date shall be no later than January 21, 2000. At the
Closing, Escrow Agent shall (i) deliver the Stock Certificates to the Buyers,
(ii) transfer to each Seller the aggregate Purchase Price for the shares sold by
such Seller in accordance with wire transfer instructions provided by the
Seller, and (iii) release the Proxies (as hereinafter defined) to the Buyers. If
the Closing does not take place on or before January 21, 2000, to the extent any
of the Stock Certificates, any portion of the Purchase Funds and/or the Proxies
have been or are thereafter delivered to Escrow Agent, Escrow Agent shall return
such Stock Certificates to the Sellers, and such Purchase Funds to the Buyers
and the Proxies to Koether (as hereinafter defined).
4. Representations of Sellers. Each Seller hereby
represents and warrants, severally and not jointly, to the Buyers as follows.
Each of such representations and warranties shall be deemed to have been given
as of the date hereof and as of the date of the Closing:
(a) Seller is the holder of record and beneficial
owner of the Purchased Shares set forth opposite such Seller's name on Schedule
A, free and clear of any security interests, liens or encumbrances, and Seller
has not granted to any person or persons any options or other rights to buy, or
proxies or other rights to vote, such Purchased Shares.
(b) Seller has full legal power to execute and
deliver this Agreement and to perform his or its obligations hereunder. All acts
required to be taken by Seller to enter into this Agreement and to carry out the
transactions contemplated hereby have been, or prior to the Closing Date shall
have been, properly taken; and this Agreement constitutes a legal, valid and
binding obligation of Seller, enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by Seller in accordance
with its terms will not, with or without the giving of notice or the passage of
time, or both, conflict with, result in a default, right to accelerate or loss
of rights under, or result in the creation of any encumbrance pursuant to, or
require the consent of any third party or governmental authority pursuant to,
(i) any provision of the certificate of incorporation or by-laws, if any, of
Seller, or (ii) any franchise, mortgage, indenture or deed of trust or any
material lease, license or other agreement or any law, regulation, order,
judgment or decree to which Seller is a party or by which Seller (or any of his
or its assets, properties, operations or businesses) may be bound, subject to or
affected.
(c) Seller does not know of any facts that would
cause him or it to believe that any of the documents filed by GolfRounds since
January 1, 1999 pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act"), or the rules and regulations thereunder, contained an untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances in which they were made, not misleading. Seller is
not aware of any material change in the business, properties or condition,
financial or otherwise, of GolfRounds since the date on which the most recent
report filed by GolfRounds pursuant to the Exchange Act was filed.
5. Representation and Warranty of Koether. In addition to his
representations and warranties as a Seller, Paul O. Koether ("Koether") hereby
represents and warrants as of the date hereof and as of the date of the Closing
that he is, and/or entities controlled by him are, the holder(s) of record and
beneficial owner(s) of the Proxy Shares (as hereafter defined) free and clear of
any security interests, liens or encumbrances, and neither he nor any of such
entities has granted to any person or persons any options or other rights to
buy, or proxies or other rights to vote, the Proxy Shares.
6. Representations and Warranties of Buyer. Each Buyer hereby
represents and warrants, severally and not jointly, to the Sellers as follows.
Each of such representations and warranties shall be deemed to have been given
as of the date hereof and as of the date of the Closing:
(a) Buyer has full legal power to execute and
deliver this Agreement and to perform his or its obligations hereunder. All acts
required to be taken by Buyer to enter into this Agreement and to carry out the
transactions contemplated hereby have been, or prior to the Closing Date shall
have been, properly taken; and this Agreement constitutes a legal, valid and
binding obligation of Buyer, enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by Buyer in accordance
with its terms will not, with or without the giving of notice or the passage of
time, or both, conflict with, result in a default, right to accelerate or loss
of rights under, or result in the creation of any encumbrance pursuant to, or
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require the consent of any third party or governmental authority pursuant to (i)
any provision of the certificate of incorporation or by-laws, if any, of Buyer,
or (ii) any franchise, mortgage, indenture or deed of trust or any material
lease, license or other agreement or any law, regulation, order, judgment or
decree to which Buyer is a party or by which Buyer (or any of his or its assets,
properties, operations or businesses) may be bound, subject to or affected.
(b) The Purchased Shares to be received by Buyer
pursuant to the terms hereof are being acquired for investment for Buyer's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof. Buyer understands that the Purchased Shares
have not been registered under the Securities Act of 1933, as amended
("Securities Act"), and may not be resold or otherwise transferred unless they
have been registered under the Securities Act or an exemption from registration
under the Securities Act is applicable. Buyer acknowledges that GolfRounds or
its transfer agent may place a legend denoting such restrictions on the
certificate for the Purchased Shares Buyer is purchasing hereunder.
(c) Buyer has been given an opportunity to ask
questions and receive answers from Sellers regarding the Purchased Shares and
GolfRounds and to obtain any additional information Sellers possessed or could
have acquired without unreasonable effort or expense.
(d) Buyer has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Purchased Shares and has obtained, in Buyer's
judgment, sufficient information from the Company to evaluate the merits and
risks of an investment in the Company.
(e) Buyer represents and warrants that he or it is
an "accredited investor" within the meaning of Rule 501(a) under the Securities
Act.
7. Covenants of Koether. In addition to his agreements
hereunder as a Seller, Koether hereby covenants that, on or prior to the Closing
Date, he shall have deposited in escrow with the Escrow Agent irrevocable
proxies ("Proxies"), which proxies shall state that they are coupled with an
interest, in favor of a designee selected by the Buyers giving such designee the
right to vote an aggregate of 449,690 shares of Common Stock that Koether or
entities controlled by Koether shall continue to own after the Closing Date
("Proxy Shares") for three years after the Closing Date.
8. Conditions.
(a) The obligations of the Buyers to consummate the
purchase of the Purchased Shares are subject to satisfaction of the following
conditions:
(i) All of the representations and
warranties of the Sellers herein are true and complete on the date hereof and on
the Closing Date.
(ii) Simultaneously with the execution of
this Agreement, GolfRounds, Koether, Thomas K. Van Herwarde ("Van Herwarde"),
John W. Galuchie, Jr. ("Galuchie") and each of the Buyers shall have executed an
agreement in the form of Exhibit A hereto ("Side Agreement").
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(iii) All of the actions to be taken by
GolfRounds, Koether, Van Herwarde and Galuchie pursuant to the Side Agreement
shall have been taken at the times and in the manner specified in the Side
Agreement;
(iv) Prior to or simultaneously with the
Closing, the Asset Purchase Agreement between PKG Design, Inc., Van Herwarde and
American Metals Service, Inc. dated May 17, 1999, and the Escrow Agreement dated
as of May 17, 1999 by and among American Metals Service, Inc., PKG Design, Inc.
and Rosenman & Colin LLP, shall each have been amended to release GolfRounds
from any obligation to deliver to PKG Design, Inc. or Van Herwarde any of the
280,000 shares of Common Stock placed in escrow pursuant to the Escrow Agreement
and to permit and cause such shares to be returned to GolfRounds, and such
shares shall have been released from escrow, returned to GolfRounds and
canceled. At the Closing the Sellers shall provide the Buyers with evidence,
satisfactory to counsel to the Buyers, that this condition has been met.
(v) On or prior to the Closing Date,
Koether shall have deposited the Proxies in escrow with the Escrow Agent.
(vi) On the Closing Date, the Sellers
shall have provided evidence, satisfactory to counsel for the Buyers, that
GolfRounds continues to have at least $1,900,000 of cash and cash equivalents in
its bank and brokerage accounts.
(b) The obligations of the Sellers to consummate
the sale of the Purchased Shares are subject to satisfaction of the following
conditions:
(i) All of the representations and
warranties of the Buyers herein are true and complete on the date hereof and on
the Closing Date;
(ii) Simultaneously with the execution
of this Agreement, each of the Buyers shall have executed the Side Agreement;
(iii) The 14(f) Statement shall be in a
form reasonably satisfactory to Rosenman & Colin LLP, counsel for the Sellers;
(iv) At the Closing, the Buyers shall
deliver to the Sellers a copy of the written consent of the New Directors (as
defined in the Side Agreement) described in Section 8 of the Side Agreement; and
(v) At the Closing, the Buyers shall
deliver to the Sellers an indemnification letter in the form of Exhibit D to the
Side Agreement from each of the New Directors.
9. Escrow Agent. Escrow Agent is serving hereunder solely as a
convenience to the parties to facilitate a Closing and Escrow Agent's sole
obligation under this Agreement is to act with respect to the Stock
Certificates, Purchase Funds and Proxies as described in Section 2 of this
Agreement. Escrow Agent shall not be liable to any Seller or any Buyer or any
other person or entity in respect of any act or failure to act by Escrow Agent
hereunder or otherwise in connection with serving as Escrow Agent unless Escrow
Agent has acted in a manner constituting gross negligence or willful misconduct.
Escrow Agent shall be indemnified by the Sellers and the Buyers, jointly and
severally, against any claim made against it (including reasonable attorney's
4
fees) by reason of its acting or failing to act in connection with this
transaction except as a result of its gross negligence or willful misconduct.
Each Seller acknowledges that Escrow Agent is serving as counsel to the Buyers
in this transaction and its services as the escrow agent to facilitate the
Closing shall not prevent or disqualify Escrow Agent from serving as counsel to
any of the Buyers now or in the future.
10. Indemnification. Each Seller, severally and not jointly,
shall indemnify and hold harmless the Buyers and their respective heirs,
executors, legal representatives, successors and assigns from and against any
losses, damages, expenses or liabilities, including, without limitation,
reasonable attorneys' fees, that may be sustained, suffered or incurred by
Buyers, their respective heirs, executors, legal representatives, successors and
assigns, arising from or in connection with the breach of any of such Sellers'
covenants, representations, warranties, agreements, obligations or undertakings
hereunder. Each Buyer, severally and not jointly, shall indemnify and hold
harmless the Sellers and their respective heirs, executors, legal
representatives, successors, and assigns, from and against any losses, damages,
expenses or liabilities, including, without limitation, reasonable attorneys'
fees, that may be sustained, suffered or incurred by the Sellers arising from or
in connection with the breach of any of such Buyer's representations or
warranties hereunder.
11. Miscellaneous.
(a) The warranties, representations, covenants
and indemnities of the Sellers and the Buyers contained in or made pursuant to
this Agreement shall survive the closing of the transaction contemplated by this
Agreement and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of any of the Buyers or Sellers.
(b) This Agreement shall be binding upon and
inure to the benefit of each party hereto, and its respective heirs, executors,
legal representatives, successors and assigns. This Agreement constitutes the
entire understanding and agreement between the parties with regard to the
subject matter hereof and may not be amended or modified except by a written
agreement specifically referring to this Agreement signed by all the parties. No
waiver of any breach or default hereunder shall be considered valid unless in
writing and signed by the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default of the same or similar
nature.
(c) This Agreement shall be governed by and
construed under the internal laws of the State of New York, disregarding any
principles of conflicts of laws.
(d) This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(e) The Sellers represent that, except for a
finder's fee of $0.025 per share that they have agreed to pay T.R. Winston &
Co., Inc. and Tyler Runnels, they neither are nor will be obligated for any
finder's fee or commission in connection with this transaction. The Buyers
represents that they neither are nor will be obligated for any finder's fee or
commission in connection with this transaction. Each Seller agrees, severally
and not jointly, to indemnify and hold harmless the Buyers from any liability
for any commission or compensation in the nature of a finder's fee (and the
costs and expenses of defending against such liability or asserted liability)
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for which such Seller or any of his or its representatives is responsible. Each
Buyer agrees, severally and not jointly, to indemnify and hold harmless the
Sellers from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Buyer or any of his or its representatives is
responsible.
(f) In the event that any provision of this
Agreement would be held to be invalid, prohibited or unenforceable in any
jurisdiction for any reason, unless such provision is narrowed by judicial
construction, this Agreement shall, as to such jurisdiction, be construed as if
such invalid, prohibited or unenforceable provision had been more narrowly drawn
so as not to be invalid, prohibited or unenforceable. If, notwithstanding the
foregoing, any provision of this Agreement would be held to be invalid,
prohibited or unenforceable in any jurisdiction for any reason, such provision,
as to such jurisdiction, shall be ineffective to the extent of such invalidity,
prohibition or unenforceability, without invalidating the remaining portion of
such provision or the other provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
(g) Any notice required or permitted under this
Agreement shall be given in writing and shall either be delivered personally or
sent by certified mail, return receipt requested, postage prepaid, or by Federal
Express next business day service with signed receipt required, if to a Seller,
at his or its address set forth on Schedule A, if to a Buyer, at his or its
address as set forth on Schedule B, and if to the Escrow Agent, to its address
set forth above, attention David Alan Miller, Esq., or to such other address as
either shall have specified by notice in writing to the other, and shall be
deemed duly given hereunder when so delivered. A copy of any notice to a Buyer
shall be sent to David Alan Miller, Esq., Graubard Mollen & Miller, 600 Third
Avenue, New York, New York 10016-2097, and a copy of any notice to a Seller
shall be sent to Guy Lander, Esq., Rosenman & Colin LLP, 575 Madison Avenue, New
York, New York 10022-2585.
(h) The section headings are inserted only as a
matter of convenience and for reference and in no way define, limit or describe
the scope or intent of any provision of this Agreement.
(i) This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the parties.
(j) The failure of the Closing to occur and the
return by the Escrow Agent of all documents, monies and other things deposited
with it pursuant to this Agreement and the Side Agreement shall not act as a
waiver by any party of any claims such party may have against any other party
for any breach of this Agreement or the Side Agreement.
[The remainder of this page has been left blank intentionally.]
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IN WITNESS WHEREOF, the parties have duly executed and
delivered this Agreement as of the date first above written.
SELLERS: BUYERS:
ASSET VALUE HOLDINGS, INC. THE RACHEL BETH HELLER 1997 TRUST
DATED 7/9/97
/s/ John W. Galuchie, Jr. /s/ Lawrence Kupferberg
By: _____________________________ By:_______________________________
John W. Galuchie, Jr. Name: Lawrence Kupferberg
Treasurer Title: Trustee
BRADFORD TRADING COMPANY THE EVAN TODD HELLER TRUST DATED
6/17/97
/s/ Howard F. Bovers /s/ Lawrence Kupferberg
By:_______________________________ By:_______________________________
Howard F. Bovers Name: Lawrence Kupferberg
President Title: Trustee
/s/ Paul O. Koether
_________________________________ MARTAN & CO.
Paul O. Koether
/s/ Michael Silvestri
By:_______________________________
SHAMROCK ASSOCIATES Name: Michael Silvestri
Title: President
/s/ Paul O. Koether
By:_____________________________
Paul O. Koether DONEHEW FUND LIMITED PARTNERSHIP
General Partner Donehew Capital LLC, General
Partner
/s/ Robert H. Donehew
By:_______________________________
SUN EQUITIES CORPORATION Name: Robert H. Donehew
Title: Manager, Donehew Capital
/s/ John W. Galuchie, Jr. LLC, General Partner
By:_____________________________
Name: John W. Galuchie, Jr. JONATHAN & NANCY GLASER FAMILY
Title: Vice President TRUST DATED 12/16/98
/s/ Jonathan Glaser
/s/ Thomas K. Van Herwarde By:_______________________________
________________________________ Name: Jonathan Glaser
Thomas K. Van Herwarde Title: Trustee
/s/ W. Robert Ramsdell
__________________________________
W. Robert Ramsdell
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NAGELBERG FAMILY TRUST DATED
9/24/97
/s/ David S. Nagelberg
By:_______________________________
David S. Nagelberg
Trustee
ESCROW AGENT:
GRAUBARD MOLLEN & MILLER
/s/ David Alan Miller
By: ______________________________
David Alan Miller, Partner
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Schedule A
Sellers Shares Being Sold
- ------- ------------------
Asset Value Holdings, Inc. 200,000
376 Main Street
P.O. Box 74
Bedminster, New Jersey 07921
John W. Galuchie, Jr.-- Treasurer
(Delaware corporation)
Bradford Trading Company 25,000
2855 Ocean Drive, Suite D-3
Vero Beach, Florida 32963
Howard F. Bovers-- President
(Delaware corporation)
Paul O. Koether 10,000
211 Pennbrook Road
Far Hills, New Jersey 07931
Shamrock Associates 208,000
376 Main Street
P.O. Box 74
Bedminster, New Jersey 07921
Paul O. Koether-- General Partner
(New Jersey limited partnership)
Sun Equities Corporation 7,000
376 Main Street
P.O. Box 74
Bedminster, New Jersey 07921
John W. Galuchie, Jr.-- Vice President
(Delaware corporation)
Thomas K. Van Herwarde 50,000
P.O. Box 441
Keyston Court #4
Vernon, New Jersey 07462
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Schedule B
Buyers Shares Being Purchased
- ------ ---------------------
The Rachel Beth Heller 1997 Trust dated 70,000
7/9/97
Lawrence Kupferberg, Trustee
74 Farview Road
Tenafly, New Jersey 07670
SS #: ###-##-####
The Evan Todd Heller 1997 Trust dated 70,000
6/17/97
Lawrence Kupferberg, Trustee
74 Farview Road
Tenafly, New Jersey 07670
SS #: ###-##-####
Martan & Co. 70,000
525 Washington Blvd., 34th Floor
Jersey City, New Jersey 07310
Eugene Whitehouse, Vice President
Tax ID#: 13-1924455
Donehew Fund Limited Partnership 70,000
Donehew Capital LLC General Partner
111 Village Parkway, Building #2
Marietta, Georgia 30067
Attn: Robert H. Donehew
Tax ID #: 83-0316971
Jonathan & Nancy Glaser Family Trust dated 40,000
12/16/98
Jonathan & Nancy Ellen Glaser, Trustee
1999 Avenue of the Stars, Suite 2530
Los Angeles, California 90067
Tax ID #: ###-##-####
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W. Robert Ramsdell 40,000
474 Paseo Miramar
Pacific Palisades, California 90272
SS #: ###-##-####
Nagelberg Family Trust dated 9/24/97 140,000
David S. Nagelberg &
Bette Nagelberg, Trustees
P.O. Box 2142
Rancho Santa Fe, California 92067
Tax ID #: 12-2442177
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