AGREEMENT AND PLAN OF MERGER
by and between
AVIATION INDUSTRIES CORP.
a Nevada Corporation
and
CAL ACQUISITION CORP.,
a Nevada Corporation to be formed
and
INTEGRATED MARKETING PROFESSIONALS, INC.
F/K/A CASINO AIRLINK, INC.
a Nevada Corporation
AGREEMENT AND PLAN OF MERGER, dated as of ____________ 1998,
between AVIATION INDUSTRIES CORP., a Nevada corporation ("AIC"),
and CAL ACQUISITION CORP., a Nevada corporation to be formed
("CAL"), and INTEGRATED MARKETING PROFESSIONALS, INC. f/k/a
CASINO AIRLINK, INC., a Nevada corporation ("CASINO")
WHEREAS, AIC and CASINO are publicly traded companies, the shares
of which are quoted on the over-the-counter bulletin board; and
WHEREAS, AIC and CASINO have executed a letter of intent for a
merger of CASINO with and into AIC, subject to entering into a
formal merger agreement, and
WHEREAS, CAL is a wholly owned subsidiary of AIC; and
WHEREAS, the respective boards of directors of AIC and CASINO
deem it advisable to merge CASINO with CAL pursuant to this
Agreement and Articles of Merger to be executed by each company
("Articles of Merger"), whereby the holders of shares of common
and preferred stock of CASINO (such shares of common stock being
sometimes hereinafter called, collectively, the "Common Stock"
and such shares of preferred stock being sometimes hereinafter
called, collectively, the "Preferred Stock") outstanding at the
effective time (as hereinafter defined) of the merger shall
receive shares of AIC common stock $.001 par value per share (the
"AIC Shares"), in the manner and in such amount as is set forth
in Article I hereof and upon the terms and conditions otherwise
set forth in this Agreement; and
WHEREAS, to effectuate the foregoing, the parties desire to adopt
a plan of reorganization in accordance with the provisions of
Section 368 (a)(1)(A) of the Internal Revenue Code of 1986, as
amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for the purpose of
stating the terms and conditions of the merger, the mode of
carrying the same into effect, the manner of converting the
shares of CASINO issued and outstanding immediately prior to the
effective date of the merger into AIC shares, and such other
details and provisions as are deemed desirable, the parties
hereto, severally and jointly, have agreed, and do hereby agree,
subject to the terms and conditions hereinafter set forth as
follows:
ARTICLE I
THE MERGER
1.01 Execution of Certificates, and Articles of Merger. Subject
to the provisions of this Agreement, the Articles of Merger with
respect to the merger shall be executed and acknowledged by CAL
and CASINO and thereafter delivered to the Secretary of State of
the State of Nevada for filing, as provided by the Nevada
Business Corporation Law, as soon as practicable on or after the
closing date (as hereinafter defined) of such merger. The merger
shall become effective upon the filing of the Articles of Merger
with the Secretary of State of the State of Nevada. The date when
the merger becomes effective shall be called the "effective date"
of such merger. At the effective date of the merger, the separate
existence of CAL shall cease and such company shall be merged
with and into CASINO. CASINO shall be the surviving corporation
of the merger, and shall be a wholly owned subsidiary of AIC.
1.02 Consummation of the Merger. As soon as practicable after the
approval of the merger by the stockholders, AIC, CAL and CASINO
will cause such merger to be consummated in accordance with
applicable law, subject to the conditions hereinafter set forth.
1.03 Conversion of Shares of CASINO / AIC.
(a) On the effective date of the merger, each of 15,645,189
outstanding shares of CASINO common stock, each of the 1,000,000
outstanding shares of CASINO Series A preferred stock, and each
of the 1,700,000 outstanding shares-of CASINO preferred stock,
shall be exchanged for shares of AIC common stock having a value
equal to $11,994,018. The number of AIC shares for which the
outstanding common and preferred stock of CASINO is to be
exchanged shall be determined by dividing 11,994,018 by the
average closing price of AIC common stock over the ten trading
days commencing five trading days prior to the effective date of
the merger.
(b) On the effective date of the merger, each share of CAL
common stock shall be exchanged for and converted into one share
of CASINO common stock.
(c) On the effective date of the merger, (i) the 2,000,000
options granted to Xxxxxxx Xxxxxx to purchase 2,000,000 shares of
CASINO common stock at an exercise price of $.30 per share shall
be exchanged for options to purchase 2,000,000 shares of AIC
common stock at an exercise price of $1.80 per share, (ii) the
400,00 options granted to Xxxxx Xxxxxxxxx to purchase 400,000
shares of CASINO common stock at an exercise price of $.20 per
share shall be exchanged for options to purchase 400,000 shares
of AIC common stock at an exercise price of $1.20 per share, and
(iii) the 150,000 options granted to each member of CASINO's
Board of Directors to purchase an aggregate of 750,000 shares of
CASINO common stock at an exercise price of $.28 per share shall
be exchanged for options to purchase an aggregate of 750, 000
shares of AIC common stock at an exercise price of $1.68 per
share.
(d) On the effective date of the merger, the 643,333 five year
warrants granted to Xxxxxx Xxxxxxx & Associates, Inc. ("JCA") to
purchase 643,333 shares of CASINO common stock at an exercise
price of $.35 per share, shall be exchanged for five year
warrants to purchase the quantity of shares of AIC common stock
JCA would have received in the merger had the warrants been
exercised prior to the merger, at an exercise price of $2.10 per
share.
1.04 Exchange of Certificates. On or after the effective date of
the merger, each holder of a certificate theretofore evidencing
outstanding shares of common stock of CASINO (other than shares
held by dissenting stockholders and shares that are automatically
cancelled as hereinafter provided), upon surrender of the same to
the transfer agent of such other agent or agents as shall be
appointed by AIC, shall be entitled to receive in exchange
therefor a certificate or certificates evidencing the pro-rata
number of full AIC shares for which the shares of common stock of
CASINO theretofore represented by the certificate or certificates
so surrendered and exchanged. As soon as practicable after the
effective date of the merger, the Transfer Agent will send a
notice and transmittal form to each holder of an outstanding
certificate which immediately prior to the effective time of such
merger evidenced shares of common stock of CASINO and which is to
be exchanged for AIC as provided for herein, advising such
stockholder of the terms of the exchange effected by such merger
and the procedure for surrendering to the Transfer Agent (which
may appoint forwarding agents) such certificate for exchange into
one or more certificates evidencing AIC shares. Until so
surrendered, each outstanding certificate which, prior to the
effective date of such merger, represented common stock of CASINO
(other than shares previously held by dissenting stockholders)
will be deemed for all corporate purposes of AIC to evidence
ownership of the pro-rata number of full AIC shares for which the
shares of common stock of CASINO represented thereby were
exchanged; provided, however, that until such outstanding
certificates formerly evidencing common stock of CASINO are
surrendered, no dividend payable to holders of record of AIC
shares as of any date subsequent to the effective date of such
merger or any cash in lieu of any fraction of a AIC share payable
pursuant to Section 1,05 hereof shall be paid to the holder of
such outstanding certificates in respect thereof. After the
effective date of such merger there shall be no further registry
of transfers on the records of CASINO of shares of common stock
of CASINO and, if a certificate evidencing such shares is
presented to AIC, it shall be canceled and exchanged for a
certificate evidencing shares of AIC common stock as herein
provided.
1.05 No fractional shares. Neither certificates nor scrip for
fractional AIC shares will be issued, but in lieu thereof each
holder of shares of CASINO who would otherwise have been entitled
to a fraction of a AIC share, upon surrender of all the
certificates evidencing shares of common stock of such company
registered in the name of such holder, will be paid the cash
value of such fraction, which shall be equal to such fraction
multiplied by the market value of a AIC share at the close of
trading of the AIC shares on the trading day immediately
preceding the effective date of such merger.
1.06 Certificate of incorporation;-By-laws; Directors. The
Certificate of incorporation and By-laws of AIC and CASINO, as in
effect immediately prior to the effective date of the merger,
shall continue to be the Certificate of Incorporation and By-laws
of AIC and CASINO, until they shall thereafter be duly altered,
amended or repealed, except that (i) on the effective date of the
merger, the name of AIC! shall be changed to "Integrated
Marketing Professionals, Inc.", (ii) the name of CASINO shall be
changed to a name other than Integrated Marketing Professionals,
Inc., and (iii) the By-Laws of AIC shall be amended in the manner
provided on Schedule 1.06.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF AIC
AIC represents and warrants to CASINO, knowing and intending that
CASINO will rely on these representations and warranties in
entering into this Agreement, as follows:
2.01 Corporate Authority.
(a) AIC has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by
the Board of Directors of AIC, and, except for the approval of
AIC's stockholders, no other corporate proceedings on the part of
AIC are necessary to authorize this Agreement and the
transactions contemplated hereby.
(b) CAL is, or will be by the effective date of the merger, a
wholly owned subsidiary of AIC. The capitalization of CAL shall
be set forth in Schedule 2.01.
2.02 Due Organization; Power, Qualification, Subsidiaries, Etc.
(a) AIC is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Nevada and has
the corporate power to own its property and to carry on its
business as now and where now conducted. AIC is duly qualified or
licensed as a foreign corporation and is in good standing in all
jurisdictions in which the nature of its business or the property
owned, leased or operated by it makes such qualification or
licensing necessary.
(b) Other than CAL, AIC has no subsidiaries or affiliates (as
that term is used in the regulations promulgated under the
Securities Act of 1933), except as disclosed in Schedule 2.02,
(c) AIC has previously furnished to CASINO true and complete
copies of the Articles (or Certificates) of Incorporation of AIC
certified by the Secretary of State of the domicile of AIC and of
the By-Laws (or Codes of Regulations) of AIC, certified by its
corporate Secretary.
(d) AIC has heretofore furnished to CASINO or its counsel for
examination-the minute and stock record book or books of AIC and
the same are true and complete and reflect all resolutions
adopted and all actions authorized or ratified by the
shareholders and the directors of AIC. All such actions and any
other actions required by or reflected in any "contracts" (as
identified in Section 2.06 and Schedule 2.06), and all other
material actions taken by AIC, have been duly so authorized or
ratified.
2.03 Capitalization. The authorized capital stock of AIC consists
of 50,000,000 shares of common stock, $.001 par value per share,
of which 9,375,000 shares are issued and outstanding as of the
date hereof. There are no options, warrants, convertible
securities or rights which may require any Company to issue
additional shares of its capital stock. All the outstanding
shares of common stock and preferred stock of AIC have been duly
authorized, and are validly issued, fully paid and nonassessable.
AIC has no obligation of any kind to issue any additional
securities, except as disclosed in Schedule 2.03, or as provided
for herein,
2.04 Financial Information; No Material Adverse Change.
(a) AIC has heretofore delivered to CASINO its audited financial
statements ("Financial Statements") for the year ending December
31, 1997 and the quarter ending March 31, 1998. All of the
Financial Statements (i) have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis during the periods, (ii) fairly present the financial
condition, results of its operations and changes in its financial
position at and for the periods therein specified for the
entities covered thereby, (iii) are true and complete, (iv) are
consistent with the books and records of the entities covered
thereby, and (v) with respect to any unaudited Financial
Statements, include all adjustments, consisting only of normal
recurring adjustments, required for a fair presentation. As of
the respective dates, such Financial Statements did not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(b) Since March 31, 1998 there has not been any material adverse
change in the business, or financial condition or the operations
of AIC or to the best knowledge of AIC any occurrence,
circumstance, or combination thereof which reasonably could be
expected to result in such a material adverse change in the
future.
(c) At March 31, 1998, there were no liabilities, absolute or
contingent of AIC that were not shown or reserved against on the
balance sheets included in the Financial-3 Statements, except
obligations under the contracts shown on or as otherwise
disclosed in Schedule 2.04.
(d) Since March 31, 1998, AIC has not sold or otherwise disposed
of or encumbered any of the properties or assets reflected on the
Financial Statements, or otherwise owned or leased by it except
in the ordinary course of business, except as described in
Schedule 2.04.
(e) AIC has no liabilities or obligations, whether accrued or
unaccrued, fixed or contingent, which have not been reflected in
the Financial Statements or described on Schedules to this
Agreement, except liabilities incurred and obligations entered
into in the ordinary course of business since March 31, 1998. AIC
is not in default with respect to any such liability or
obligation.
2.05 Tax Matters.
(a) AIC has filed or caused to be filed with the appropriate
federal, state, county, local and foreign governmental agencies
of instrumentalities all tax returns and tax reports required to
be filed, and all taxes, assessments, fees and other governmental
charges have been fully paid when due.
(b) There is no pending or, to the best knowledge of AIC, any
threatened federal, state or local tax audit of AIC; there is no
agreement with any federal, state or local taxing authority by
AIC that may affect the subsequent tax liabilities of AIC.
(c) Without limiting the foregoing: (a) the financial statements
include adequate provision for all taxes, assessments fees,
penalties and governmental charges which have been or in the
future may be assessed against AIC with respect to the period
then ended and all periods prior thereto; and (b) AIC is not, on
the date hereof, liable for taxes, assessments, fees or
governmental charges.
(d) AIC has heretofore furnished to CASINO or its counsel true
and complete copies of all federal, state and local income,
franchise or other tax returns filed by AIC.
2.06 No Conflict or Default Neither the execution and delivery of
this Agreement, nor compliance with the terms and provisions
hereof, including without limitation the consummation of the
transactions contemplated hereby, will violate any statute,
regulation or ordinance of any governmental authority, or
conflict with or result in the breach of any term condition or
provisions of the Articles of Incorporation or By-laws of AIC, or
of any agreement, deed, contract, mortgage, indenture, writ,
order decree, legal obligation or instrument to which AIC is a
party or by which it or any of its respective assets or
properties are or may be bound: or constitute a default (or an
event which, with the lapse of time or the giving of notice, or
both, would constitute a default) thereunder, or result in the
creation or imposition of any lien, charge or encumbrance, or
restriction of any nature whatsoever with respect to any
properties or assets of AIC, or give to others any interest or
rights, including rights of termination, acceleration or
cancellation in or with respect to any of the properties, assets,
contracts, or business of AIC.
2.07 Party to Agreements.
(a) AIC is not a party to any contract or other arrangements
except those made in the ordinary course of business or which are
terminable on the giving of sixty (60) days (or less) notice of
AIC's intent to terminate such contract. AIC is not in default in
any material respect under any contract or agreements to which it
is a party or by which it or any of its assets is or may be
bound.
(b) Schedule 2.07 is a true and complete list of all contracts,
understandings, commitments, arrangements and agreements (all of
which, and any other agreements set forth on any other Schedule
or list, or furnished in writing to CASINO pursuant to this
Agreement, are collectively referred to in this Agreement as
"contracts") , which are in full force and effect unperformed in
whole or in part, to which AIC is a party, including, but not
limited to, the following;
(i) bonus, incentive, pension, profit-sharing, hospitalization,
insurance, deferred compensation, retirement, stock option or
stock purchase plans or similar plans providing employee
benefits;
(ii) factoring, loan, note, financing or similar contracts with
any lenders, or guarantees of undertakings to answer for the
debts or defaults of another, or any contracts encumbering title
to any of AIC's assets;
(iii) contracts for the acquisition or disposition of the
property, assets or capital stock or other securities of a
business or company;
(iv) management or consulting contracts;
(v) partnership or joint venture contracts involving a sharing
of profits;
(vi) contracts for the employment or compensation of any
employee, officer, director or agent; and
(vii) contracts not made in the ordinary course.
2.08 Litigation. Except as disclosed in Schedule 2.08, there are
no actions, suits, investigations, or proceedings pending, or, to
the knowledge of AIC, threatened, against or affecting or which
may affect AIC, the performance of the terms and conditions
hereof, or the consummation of the transactions contemplated
hereby, in any court or by or before any governmental body or
agency, including without limitation any claim, proceeding or
litigation for the purpose of challenging, enjoining or
preventing the execution, delivery or consummation of this
Agreement; and AIC does not know of any state of facts which
would give rise to any such action, suit, investigation or
proceeding. AIC is not subject to any order, judgment, decree,
stipulation or consent or any agreement with any governmental
body or agency which affects its business or operation.
2.09 Securities Filings. AIC has previously filed all reports
required to be filled by it with the Securities and Exchange
Commission ("SEC") and will have on the closing date and
thereafter, made all filings required to be made by AIC with the
SEC and any state securities authorities, and will have done so
in a timely manner.
2.10 Governmental Approval. AIC has all permits, licenses, orders
and approvals of all federal, state, local or foreign
governmental or regulatory bodies required for AIC to conduct its
business as presently conducted. All such permits, licenses,
orders and approvals are in full force and effect and no
suspension or cancellation of any of them is threatened, and none
of such permits licenses, orders of approvals will be affected by
the consummation of the transactions contemplated by this
Agreement.
2.11 Salaries. Schedule 2.11 annexed hereto and made a part
hereof is a true and complete list, as of the date of this
agreement, of all of the persons who are employed by AIC,
together with their compensation (including bonuses) for the
calendar year ended December 31, 1997, and the three (3) month
period ended March 31, 1998, and the rate of compensation
(including bonus arrangements) currently being paid to each such
employee.
2.12 Accrued Compensation. AIC does not have outstanding
liability for payment of wages , vacation pay (whether accrued or
otherwise) , salaries, bonuses, pensions or contributions under
any labor or employment contract, whether oral or written, or by
reason of any past practices with respect to such employees based
upon or accruing with respect to services of present or former
employees of AIC, except as disclosed in Schedule 2.12.
2.13 Employee Benefit Plans. AIC does not have any pension plan,
profit-sharing plan or employees' savings plan, and AIC is not
otherwise subject to any applicable provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
2.14 Conflicts of Interest. Transactions between management of
AIC and such Corporation, Management's interest in affiliated
Corporations, agreements as to Management's remuneration, as well
as any other actual or potential conflicts of interest are
disclosed in Schedule 2.14.
2.15 Title to Assets. AIC has good, valid and, except as to
leased assets, marketable title to all of its assets (real and
personal, tangible and intangible), including, but not limited
to, all assets reflected or required to be reflected in the
Financial Statements and all assets purchased or leased by them
since March 31, 1998 (except for properties and assets so
reflected or required to be reflected, which have been sold or
otherwise disposed of in the ordinary course of business),
subject to no liens, pledges, encumbrances, mortgages, security
interests, charges or other similar restrictions of any nature
whatsoever, except as disclosed in the Financial Statements or in
Schedules to this Agreement. The personal property owned or
leased by AIC for the operation of, or used in, its business is
in its possession and is in good operating or working condition
and repair, after taking into account routine maintenance and
repair, age of equipment and ordinary wear and tear, and is
adequate for the operation of its business as presently
conducted.
2.16 Patents and Trademarks
(a) Except as disclosed in Schedule 2.16, AIC does not own or
use in its operations, any patent or any applications therefor.
All trademarks, trade names, service marks or applications owned
by AIC or used in its operations are listed on Schedule 2.16 and,
to the extent indicated thereon, have been duly registered and
filed.
(b) All copyright registrations (both U.S. and foreign), pending
copyright registration applications, all common law copyrights
and other intellectual property rights owned by AIC or used in
its operations are listed on Schedule 2.16 and, to the extent
indicated thereon, have been duly registered and, tiled.
(c) AIC has not been charged with infringement or violation of,
or otherwise been put on notice of the existence of, any
adversely held patent, trademark, trade name, service xxxx,
copyright or other intellectual property right.
2.17 Environmental Concerns. AIC has not engaged in any
operations which have resulted or will result in any chemicals,
hazardous, noxious or toxic wastes being deposited, spilled,
leaked, disposed of, dumped or buried at any facility, contiguous
property, or any other real property, which have, will, or may
result in property damages, personal injury or clean-up costs.
2.18 Material Misstatements or Omissions. No representations or
warranties made by AIC in this Agreement or in any certificate,
schedule or other document furnished or to be furnished to CASINO
or its counsel pursuant hereto, or in connection with the
transactions contemplated by this Agreement, contains or will
contain any untrue statement of a material fact, or omits or will
omit to state a material fact necessary to make the statements of
fact contained therein not misleading. All statements made and
data presented by AIC in this Agreement and in any certificate,
schedule, chart, list, letter, compilation or other document
provided to CASINO by AIC pursuant to this Agreement are deemed
to be representations and warranties made under this Agreement to
CASINO by AIC. References in any such document to any other
document as to which AIC on or prior to the closing has not
provided to CASINO a copy or, if oral, a written summary thereof,
shall not be deemed for any purposes of this Agreement to be a
disclosure of any term, provision or statement of fact of, or
relating to, such document. To the extent that any such
representations and warranties are stated as being to the best
knowledge of AIC, the same are being made after diligent and
reasonable investigation under the circumstances by them as to
the subject matter thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CASINO
CASINO represents and warrants to AIC, knowing and intending that
AIC will rely on these representations and warranties in entering
into this Agreement, as follows:
3.01 Corporate Authority. CASINO has the corporate power and
authority to enter into this Agreement and to carry out its
obligation hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by its Board of Directors and,
except for the approval of its stockholders, no other corporate
proceedings on the part of such Company are necessary to
authorize this Agreement and the transactions contemplated
hereby.
3.02 Due organization; Power; Qualification; Subsidiaries and
Affiliates, Etc.
(a) CASINO is a corporation duly organized, validly existing, in
good standing under the laws of the State of Nevada and is
authorized to do business in the State of Florida and has the
corporate power to own its property and to carry on its business
as now conducted. The nature of the business now conducted by
CASINO, the character of the property owned by it, or any other
state of facts does not require CASINO to be qualified to do
business as a foreign corporation in any jurisdiction.
(b) Except as disclosed in Schedule 3.02 there are no
subsidiaries or affiliates (as that term is used in the
regulations promulgated under the Securities Act of 1933) of
CASINO.
3.03 Capitalization. The authorized capital stock of CASINO
consists of 25,000,000 shares of common stock, $.10 par value per
share, of which 15,645,189 shares are issued and outstanding as
of the date hereof; 5,000,000 shares of Preferred "All (each
convertible to two shares of Common Stock), 1,000,000 shares of
which are issued and outstanding as of the date hereof; 1,700,000
shares of Preferred "B" (each convertible to one share of Common
Stock), all of which are issued and outstanding as of the date
hereof. There are no options, warrants, convertible securities or
rights which may require any Company to issue additional shares
of its capital stock, except as disclosed in Section 1.03. All
the outstanding shares of common stock and preferred stock of
CASINO have been duly authorized, and are validly issued, fully
paid and nonassesable. CASINO has no obligation of any kind to
issue any additional securities, except as disclosed in Schedule
3.03, or as provided for herein.
3.04 Financial Information, No Material Adverse Change.
(a) CASINO has heretofore delivered to AIC (i) audited financial
statements for the year ended December 31, 1996, and December 31,
1997; and (ii) unaudited financial statements for the quarter
ending March 31, 1998 (collectively "Financial Statements") and
month ending April 30, 1998. All of the Financial Statements (i)
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the
periods, (ii) fairly present the financial condition, results of
its operations and changes in its financial position at and for
the periods therein specified for the entities covered thereby,
(iii) are true and complete, (iv) are consistent with the books
and records of the entities covered thereby, and (v) with respect
to any unaudited Financial Statements, include all adjustments,
consisting only of normal recurring adjustments, required for a
fair presentation. As of the respective dates, such documents did
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein in order to
make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) At April 30, 1998, there were no liabilities, absolute or
contingent of CASINO that were not shown or reserved against on
the balance sheets included in the Financial Statements, except
obligations under the contracts shown in Schedule 3.07, or as
otherwise disclosed on Schedule 3.04.
(c) Since Xxxxx 00, 0000, XXXXXX has not sold or otherwise
disposed of or encumbered any of the properties or assets
reflected on the Financial Statements, or otherwise owned or
leased by it, except in the ordinary course of business.
(d) Since April 30, 1998, there has been no material adverse
change in the business or financial condition or the operations
of CASINO or to the best knowledge of CASINO any occurrence,
circumstance, or combination thereof which reasonably could be
expected to result in such a material adverse change in the
future.
(e) CASINO has no liabilities or obligations, whether accrued or
unaccrued, fixed or contingent, which have not been reflected in
the Financial Statements or described on Schedules to this
Agreement, except liabilities incurred and obligations entered
into in the ordinary course of business since April 30, 1998.
CASINO is not in default with respect to any such liability or
obligation.
3.05 Tax Matters.
(a) CASINO has filed or caused to be filed with the appropriate
federal, state, county, local and foreign governmental agencies
or instrumentalities all tax returns and tax reports required to
be filed, and all taxes, assessments, fees and other governmental
charges have been fully paid when due.
(b) There is no pending or, to the best knowledge of CASINO,
threatened federal, state or local tax audit of CASINO; there is
no agreement with any federal, state or local taxing authority
that may affect the subsequent tax liabilities of CASINO.
(c) Without limiting the foregoing: (i) the Financial Statements
include adequate provision for all taxes, assessments, fees,
penalties and governmental charges which have been or in the
future may be assessed against CASINO with respect to the period
then ended and all periods prior thereto; and (b) CASINO is not,
on the date hereof, liable for taxes, assessments, fees or
governmental charges.
(d) CASINO has heretofore furnished to AIC or its counsel true
and complete copies of all federal, state and local income,
franchise or other tax returns filed by CASINO.
3.06 No Conflict or Default. Neither the execution and delivery
of this Agreement, nor compliance with the terms and provisions
hereof, including without limitation the consummation of the
transactions contemplated hereby, will violate any statute,
regulation or ordinance of any governmental authority, or
conflict with or result in the breach of any term, condition or
provisions of the Articles of Incorporation or By-laws of CASINO,
or of any agreement, deed, contract, mortgage, indenture, writ,
order decree, legal obligation or instrument to which CASINO is a
party or by which it or any of its respective assets or
properties are or may be bound, or constitute a default (or an
event which, with the lapse of time or the giving of notice, or
both, would constitute a default) thereunder or result in the
creation or imposition of any lien, charge or encumbrance, or
restriction of any nature whatsoever with respect to any
properties or assets of CASINO, or give to others any interest or
rights, including rights of termination, acceleration or
cancellation in or with respect to any of the properties, assets,
contracts or business of CASINO.
3.07 Party to Agreements.
(a) CASINO is not a party to any contract or other arrangement
except those made in the ordinary course of business or which are
terminable on the giving of sixty (60) day' s (or- less) notice
of CASINO, s intent to terminate such contract, except as set
forth on Schedule 3.08 annexed hereto. CASINO is not in default
in any material respect under any contract or agreement to which
it is a party or by which it or any of its assets is or may be
bound.
(b) CASINO has heretofore furnished to AIC or its counsel true
and complete copies of each document, and a written description
of each oral contract, set forth on Schedule 3.07. Schedule 3.07
is a true and complete list of all contracts, understandings,
commitments, arrangements and agreements (all of which, and any
other agreements Bet forth on any other Schedule or list, or
furnished to AIC pursuant to this Agreement, are collectively
referred to in this Agreement as "contracts"), which are in full
force and effect unperformed in whole or in part, to which CASINO
is a party, including, but not limited to, the following:
(i) bonus, incentive, pension, profit-sharing, hospitalization,
insurance, deferred compensation, retirement, stock option or
stock purchase plans or similar plans providing employee
benefits;
(ii) factoring, loan, note, financing or similar contracts with
any lenders, or guarantees of undertakings to answer for the
debts or defaults of another, or any contracts encumbering title
to any of CASINO's assets;
(iii) contracts for the acquisition or disposition of the
property, assets or capital stock or other securities of a
business or company;
(iv) management or consulting contracts;
(v) partnership or joint venture contracts involving a sharing
of profits,
(vi) contracts for the employment or compensation of any
employee, officer, director or agent, and
(vii) contracts not made in the ordinary course.
3.08 Litigation. Other than as disclosed in its Financial
Statements or in a Schedule 3,08, there are no actions suits,
investigations, or proceedings pending, or, to the knowledge of
CASINO, threatened, against or affecting or which may affect
CASINO, the performance of the terms and conditions hereof, or
the consummation of the transactions contemplated hereby, in any
court or by or before any governmental body or agency, including
without limitation any claim, proceeding or litigation for the
purpose of challenging, enjoining or preventing the execution,
delivery or consummation of this agreement; and except as
otherwise disclosed herein does not know of any state of f acts
which would give rise to any such action, suit investigation or
proceeding. CASINO is not subject to any order, judgment, decree,
stipulation or consent or any agreement with any governmental
body or agency which affects its business or operation.
3.09 Securities Filings. CASINO will have on the closing date and
thereafter, made all filings required to be made by it with the
Securities and Exchange Commission and any state securities
authorities, and will have done so in a timely manner.
3.10 Governmental Approval. CASINO has all permits, licenses,
orders and approvals of all federal state, local or foreign
governmental or regulatory bodies required for CASINO to conduct
its business as presently conducted. All such permits, licenses,
orders and approvals are in full force and effect and no
suspension or cancellation of any of them is threatened, and none
of such permits licenses, orders of approvals will be affected by
the consummation of the transactions contemplated by this
Agreement.
3.11 Salaries. Schedule 3.11 annexed hereto and made a part
hereof is a true and complete list, as of the date of this
Agreement, of all of the persons who are employed by CASINO,
together with their compensation (including bonuses) for the year
ended December 31, 1997 and the three month period ended March
31, 1998, and the rate of compensation (including bonus
arrangements) currently being paid to each such employee. Any
amounts due and owing immediately prior to the effective date of
the merger to the officers, directors, and employees of CASINO
shall not be paid to such persons out of funds of AIC, existing
as of the closing date.
3.12 Accrued Compensation. CASINO does not have any outstanding
liability for payment of wages, vacation pay (whether accrued or
otherwise) , salaries, bonuses, pensions or contributions under
any labor or employment contract, whether oral or written or by
reason of any past practices with respect to such employees based
upon or accruing with respect to services or present or former
employees of CASINO, except as disclosed in Schedule 3.12.
3.13 Employee Benefit Plans. CASINO does not have any pension
plan, profit-sharing plan or employees, savings plan, and CASINO
is not otherwise subject to any applicable provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
3.14 Conflicts of Interest. Transactions between Management of
CASINO and such Corporation, Management's interest in affiliated
Corporations, agreements as to Management's remuneration, as well
as any other actual or potential conflicts of interest are
disclosed in Schedule 3.14.
3.15 Title to Assets. CASINO has good, valid and, except as to
leased assets, marketable title to all of its assets (real and
personal, tangible and intangible), including, but not limited
to, all assets reflected or required to be reflected in the
Financial Statements and all assets purchased or leased by them
since March 31, 1998 (except for properties and assets so
reflected or required to be reflected, which have been sold or
otherwise disposed of in the ordinary course of business),
subject to no liens, pledges, encumbrances, mortgages, security
interests, charges or other similar restrictions of any nature
whatsoever, except as disclosed in the Financial Statements or in
Schedules to this Agreement. The personal property owned or
leased by CASINO for the operation of, or used in, its business
is in its possession and is in good operating or working
condition and repair, after taking into account routine
maintenance and repair, age of equipment and ordinary wear and
tear, and is adequate for the operation of its business as
presently conducted.
3.16 Patents and Trademarks.
(a) CASINO does not own or use in its operations, any patent or
any applications therefor. All trademarks, trade names, service
marks or applications owned by CASINO or used in its operations
are listed on Schedule 3.16 and, to the extent indicated thereon,
have been duly registered and filed.
(b) All copyright registrations (both U.S. and foreign), pending
copyright registration applications, all common law copyrights
and other intellectual property rights owned by CASINO or used in
its operations are listed on Schedule 3.16 and, to the extent
indicated thereon, have been duly registered and, filed.
(c) CASINO has not been charged with infringement or violation
of, or otherwise been put on notice of the existence of, any
adversely held patent, trademark, trade name, service xxxx,
copyright or other intellectual property right.
3.17 Environmental Concerns. CASINO has not engaged in any
operations which have resulted or will result in any chemicals,
hazardous, noxious or toxic wastes being deposited, spilled,
leaked, disposed of, dumped or buried at any facility, contiguous
property, or any other real property, which have, will, or may
result in property damages, personal injury or clean-up costs.
3.18 Material Misstatements or Omissions. No representations or
warranties made by CASINO in this Agreement or in any
certificate, schedule or other document furnished or to be
furnished to AIC or its counsel pursuant hereto, or in connection
with the transactions contemplated by this Agreement, contains or
will contain any untrue statement of a material fact, or omits or
will omit to state a material fact necessary to make the
statements of fact contained therein not misleading. All
statements made and data presented by CASINO in this Agreement
and in any certificate, schedule, chart, list, letter,
compilation or other document provided to AIC by CASINO pursuant
to this Agreement are deemed to be representations and warranties
made under this Agreement to AIC by CASINO. References in any
such document to any other document as to which CASINO on or
prior to the closing has not provided to AIC a copy or, if oral,
a written summary thereof, shall not be deemed for any purposes
of this Agreement to be a disclosure of any term, provision or
statement of fact of, or relating to, such document. To the
extent that any such representations and warranties are stated as
being to the best knowledge of CASINO, the same are being made
after diligent and reasonable investigation under the
circumstances by them as to the subject matter thereof.
3.19 Title and Authority. To the best of the knowledge of CASINO,
shareholders as listed in Schedule 3.19 constitute the holders of
record as of the date set forth therein (the "Record Date") of
all of the outstanding shares of CASINO common stock and
preferred stock. CASINO has no knowledge that any such
shareholder does not have:
(a) full legal title to all of such shares free and clear of any
liens, security interests, encumbrances, pledges, charges,
claims, voting trusts, restrictions on transfer, and of any
rights or interest therein, direct or contingent, in favor of any
other parties; and
(b) full and unrestricted right, power and authority to sell,
assign, transfer and deliver the same or to cause the same to be
surrendered in accordance with this Agreement.
ARTICLE IV
COVENANTS
4.01 Covenants Of CASINO. agrees that prior to the closing date:
(a) No dividend shall be declared or paid by other distribution
(whether in cash, stock, property or any combination thereof) or
payment declared or made in respect to CASINO common stock or
preferred stock, nor shall CASINO purchase, acquire or redeem or
split, combine or reclassify any shares of its capital stock.
(b) Except as herein provided or disclosed on Schedule 4.01, no
change shall be made in the number of shares of authorized or
issued CASINO common stock; nor shall any option, warrant, call,
right, commitment or agreement of any character be granted or
made by CASINO relating to its authorized or issued CASINO common
or preferred stock; nor shall CASINO issue, grant or sell any
securities or obligations convertible into or exchangeable for
shares of CASINO common stock.
(c) Except as disclosed on Schedule 4.01, CASINO will not (i)
incur any indebtedness for borrowed money; (ii) assume,
guarantee, endorse, or otherwise become liable or responsible
(whether directly contingently or otherwise) for the obligations
of any other individual, firm or corporation; or (iii) make any
loans, advances or capital contributions to or investments in,
any other individual, firm or corporation.
(d) CASINO will not take, agree to take or knowingly permit to
be taken any action or do or knowingly permit to be done
anything, in the conduct of the business of CASINO or otherwise,
which would be contrary to or in breach of any of the terms or
provisions of this Agreement, or which would cause any of
CASINO's representations contained herein to be or become untrue
in any material respect at the closing date.
(e) CASINO will not alter or change any employment or other
contract with any of its management personnel or make, adopt,
alter, revise, or amend any pension, bonus, profit-sharing or
other employee benefit plan, or grant any salary increase or
bonus to any person without the prior written consent of AIC.
4.02 Covenants of AIC. AIC agrees that prior to the closing date:
(a) No dividend shall be declared or paid or other distribution
(whether in cash, stock, property or any combination thereof) or
payment declared or made in respect of AIC Common Stock nor shall
AIC purchase, acquire or redeem or split, combine or reclassify
any shares of AIC Common Stock.
(b) Except as herein provided, no change shall be made in the
number of shares of authorized or issued AIC common stock; nor
shall any option, warrant, call, right, commitment or agreement
(other than this Agreement) of any character be granted or made
by AIC relating to its authorized or issued AIC Common stock; nor
shall AIC issue, grant or sell any securities or obligation
convertible into or exchangeable for shares of common stock,
(c) AIC will not (i) incur any indebtedness for borrowed money;
(ii) assume, guarantee, endorse, or otherwise become liable or
responsible (whether directly contingently or otherwise) for the
obligations of any other individual, firm or corporation; or
(iii) make any loans, advances of capital contributions to or
investments in, any other individual, firm or corporation.
(d) AIC will not alter or change any employment or other
contract with any of its management personnel or make, adopt,
alter, revise, or amend any pension, bonus, profit-sharing or
other employee benefit plan, or grant any salary increase or
bonus to any person or owe any accrued salary or other
compensation under any agreement or plan without the prior
written consent of CASINO.
(e) AIC will not take, agree to take, or knowingly permit to be
taken any action, or do, or knowingly permit to be done anything
in the conduct of the business of AIC, or otherwise, which would
be contrary to or in breach of any of the terms or provisions of
this Agreement, or which would cause any of the representations
of AIC contained herein to be or become untrue in any material
respect at the Closing Date.
4.03 Mutual Covenants. AIC and CASINO further agree and covenant
as follows:
(a) Stockholders' Meetings. CASINO and AIC will take all actions
necessary in accordance with applicable law, including proxy
solicitation requirements, and the Articles of Incorporation and
By-Laws to convene meetings of stockholders as promptly as
practicable, upon the effectiveness of the required Registration
Statement, to consider and vote upon the approval of this merger.
(b) Conduct of Business Pending the Merger. Prior to the
effective date of the merger, unless AIC and CASINO shall
otherwise agree in writing, each Company shall not (i) operate
its business otherwise than in the ordinary course, (ii) grant
any compensation increase to any director, officer or employee,
(iii) issue, authorize or propose the issuance of additional
shares of capital stock of any class or securities convertible
into any such shares or rights, warrants or options to acquire
any such shares or convertible securities, (iv) amend its
Articles of Incorporation or By-laws, (v) split, combine or
reclassify its outstanding shares of common or preferred stock,
or (vi) authorize, recommend or propose any merger,
consolidation, acquisition of assets, disposition of assets,
material change in its capitalization or any comparable event,
not in the ordinary course of business (other than the
transactions contemplated hereby and transactions as to which
written notice has been given to AIC prior to the date hereof).
(c) Takeover Proposals. CASINO and AIC will not, and will not
authorize or permit any officer, director or employee of, or any
investment banker, attorney, accountant or other representative
retained by, or agent of such company or any affiliate of such
company, to directly or indirectly solicit or encourage any
proposal for a merger or other business combination involving
such company for the acquisition of a substantial equity interest
in such company or a substantial portion of such company's
assets, other than as contemplated by this Agreement. Each
company will promptly advise the other company of the terms of
any such proposal that it may receive.
(d) Registration / Proxy Statements. The parties hereto shall
forthwith agree upon a time table for the filing of a
registration statement and any required amendments thereto, Blue
Sky filings, proxies and all other steps necessary to register
the shares proposed to be distributed to the shareholders of
CASINO pursuant to this Agreement. The registration statement
shall be prepared by AIC, at AIC's expense, with the cooperation
of CASINO and filed with the United States Securities and
Exchange commission ("SEC"). The parties shall select counsel and
such other professionals as are required to prepare and file the
necessary registration statements. In connection with the
preparation of a Registration Statement, Proxy Statement and/or
any other filings, CASINO and AIC will cooperate with each other
and will furnish the information relating to CASINO and AIC, as
the case may be, required by the Securities Act of 1933 and/or
the Securities Exchange Act of 1934 to be set forth in such,
Registration Statement, Proxy Statement and/or any other filings,
The information to be provided shall continue to be true and
correct in all material respects and shall not contain any untrue
statement of a material fact, or omit to state a material fact
required to be stated therein to make the statements made, in the
light of the circumstances under which they were made, not
misleading.
(e) Press Releases. CASINO and AIC agree to cooperate with each
other in releasing information concerning this Agreement and the
transaction contemplated herein. where possible, each of the
parties shall furnish to the other drafts of all releases prior
to publication. Nothing contained herein shall prevent either
party at any time from furnishing any information to any
governmental agency, provided that each party shall give at least
48 hours prior written notice to the other of the intent to make
any such disclosure.
(f) Recommendation of Approval. The Board of Directors of AIC
and CASINO shall continue to recommend to their respective
stockholders approval of this Agreement and the merger to which
such company is a party, except as the fiduciary obligations of
each such Board of Directors may otherwise require.
(g) Access. Prior to the closing, CASINO shall afford to the
officers, attorneys, accountants, and other authorized
representatives of AIC free and full access to the premises,
books and records of CASINO in order that AIC may make such
investigation as it may desire of the affairs of CASINO. Prior to
the closing, AIC shall afford to the officers, attorneys,
accountants, and other authorized representatives of CASINO free
and full access to the premises, books and records of AIC so that
purchasers may make such investigations as it may desire of the
affairs of AIC.
ARTICLE V
CONDITIONS
5.01 Conditions to the Obligations of AIC. The obligations of AIC
to consummate the merger contemplated by this Agreement are
subject to the satisfaction, at or before the consummation of
such merger, of each of the following conditions:
(a) No action shall have been threatened, taken by or be pending
before, and no statute, rule, regulation or order shall have been
promulgated, enacted, entered, enforced or deemed applicable to
the merger by any federal, state or foreign government or
governmental authority or by any court, domestic or foreign,
including the entry, of a preliminary or permanent injunction,
which would (i) make the merger illegal, (ii) require the
divestiture by AIC of the shares of AIC or of a material portion
of the business of AIC, (iii) impose material limits on the
ability of AIC to effectively control the business of AIC, (iv)
otherwise materially adversely affect AIC or (v) if the merger is
consummated, subject any officer, director, or employee of AIC to
criminal penalties or to civil liabilities not adequately covered
by insurance or enforceable indemnification maintained by AIC.
(b) CASINO shall have complied in all material respects with its
agreements and covenants herein, and all representations and
warranties of CASINO herein shall be true and correct in all
material respects at the time of consummation of the merger and
it made at that time, except to the extent they expressly relate
to an earlier date, and AIC shall have received a certificate to
that effect to the best of the knowledge of CASINO, signed by the
President of CASINO.
(c) The holders of not more than ten percent (10%) of the issued
and outstanding shares of common and preferred stock of CASINO
with respect to which such merger is proposed shall have
exercised their right to dissent as dissenting stockholders.
(d) AIC shall have received from the accountants for CASINO, an
opinion, in form and substance satisfactory to AIC, that there
has been no material or adverse change 'in the financial
condition of CASINO as of the date of consummation of the merger,
or reflected in the Financial Statements.
5.02 Conditions to the Obligations of CASINO. The obligations of
CASINO to consummate the merger contemplated by this Agreement
are subject to the satisfaction, at or before the consummation of
such merger, of each of the following conditions:
(a) No action shall have been threatened, taken by or be pending
before, and no statute, rule, regulation or order shall have been
promulgated, enacted, entered, enforced or deemed applicable to
the merger by any federal, state of foreign government or
governmental authority or by any court, domestic or foreign,
including the entry of a preliminary or permanent injunction,
which would (i) make the merger illegal, (ii) require the
divestiture by CASINO of the shares of CASINO or of a material
portion of the business of CASINO, (iii) impose material limits
on the ability of CASINO to effectively control the business of
CASINO, (iv) otherwise materially adversely affect CASINO or (v)
if the merger is consummated, subject any officer, director, or
employee of CASINO to criminal penalties or to civil liabilities
not adequately covered by insurance of enforceable
indemnification maintained by CASINO.
(b) AIC shall have complied in all material respects with its
agreements and covenant , s herein, and all representations and
warranties of AIC herein shall be true and correct in all
material respect at the time of consummation of the merger and if
made at the time, except to the extent they expressly relate to
an earlier date, and CASINO shall have received a certificate to
that effect to the best of the knowledge of AIC, signed by the
President of AIC.
(c) The holders of no more than ten percent (10%) of the issued
and outstanding shares of common stock of AIC with respect to
which such merger is proposed shall have exercised their right to
dissent as dissenting stockholders.
(d) CASINO shall have received from the accountants for AIC, an
opinion, in form and substance satisfactory to AIC, that there
has been no material or adverse change in the financial condition
of AIC as of the date of consummation of the merger, or reflected
in the Financial Statements.
5.03 Conditions to Each Company's Obligations. The obligation of
each company to consummate the merger contemplated by this
Agreement is subject to the satisfaction, at or before the
consummation of such merger, of each of the following conditions:
(a) The stockholders of CASINO shall have duly approved the
merger in accordance with applicable law.
(b) The stockholders of AIC shall have duly approved the merger
in accordance with applicable law.
(c) No action shall have been taken, and no statute, rule,
regulation or order shall have been promulgated, enacted,
entered, enforced or deemed applicable to the merger by any
federal, state or foreign government or governmental authority or
by any court domestic or foreign, including the entry of a
preliminary or permanent injunction, which would (i) make the
merger illegal, or (ii) if the merger is consummated, subject any
officer, director or employee of CASINO or AIC to criminal
penalties or to civil liability not adequately covered by
insurance or enforceable indemnification arrangements maintained
by CASINO or AIC.
(d) No action or proceeding before any court or governmental
authority domestic or foreign, by any government or governmental
authority or by any other person, domestic or foreign, shall be
threatened, instituted or pending which would reasonably be
expected to result in any of the consequences referred to in
clauses (i) and (ii) of paragraph (c) above,
(e) The Registration Statement filed under the Securities Act of
1933 and any Proxy Statement filed under the Exchange Act of 1934
shall have become effective and not be subject to a stop order or
any threatened stop order.
(f) The officers and directors of AIC and CASINO shall each have
executed releases for any claims for compensation or other
payment for services rendered as of the closing date-
(g) Each party's satisfactory completion of due diligence
review.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Transfer of Restricted Shares. At closing under the terms of
this Merger Agreement, Xxx Xxxxx, Jr., Xxxxx Xxxxxxxxxx and
Consolidated Equities (collectively referred to as "Existing
Shareholders") shall convey to Xxxxxxx Xxxxxx one and one-half
million (1,500,000) shares of common stock of AIC; Existing
Shareholders shall also convey to Xxxxx Xxxxxxxxx five hundred
thousand (500,000) shares of common stock of AIC. It is agreed
and acknowledged that the shares to be conveyed pursuant to this
paragraph are issued and outstanding shares owned by Existing
Shareholders and are restricted against resale. Existing
Shareholders shall also grant voting proxies to Xxxxxxx Xxxxxx to
vote 2,500,000 of shares retained by them for a period of thirty
six (36) months after consummation of the merger, or sale of the
shares to bona-fide third party purchasers, whichever first
occurs, provided that in the event of a block trade (being
defined as a trade of over 150, 000 shares) , the sale will be
subject to the unexpired term of the proxies. In addition,
375,000 shares owned by Existing Shareholders shall be retired
and returned to treasury upon consummation of the merger.
6.02 Cita Americas, Inc. The merger contemplated herein is
conditioned upon and subject to Xxx Xxxxx, Jr. and Xxxxx
Xxxxxxxxxx, and/or their assigns, being able to acquire all of
AIC's interest in Cita Americas, Inc., without adverse tax or
accounting consequence. Provided that Xxx Xxxxx, Jr. and Xxxxx
Xxxxxxxxxx receive necessary opinions of accountants or other
professionals that there will be no such adverse consequences, on
the effective date of the merger (unless the conveyance is made
prior thereto) AIC shall convey all of its interest in Cita
Americas, Inc. to Xxx Xxxxx, Jr. and Xxxxx Xxxxxxxxxx in
satisfaction of loans made by them to AIC, or for such other
consideration as the parties may agree.
ARTICLE VII
INDEMNIFICATION AND WAIVER OF CLAIMS
7.01 Survival of Representations and Warranties. Notwithstanding
the closing of the transactions contemplated by this Agreement or
any investigation made by or on behalf of AIC or CASINO, the
representations and warranties of AIC and CASINO contained in
this Agreement or in any certificate, schedule, chart, list,
letter, compilation or other document delivered pursuant hereto,
shall survive the Closing for a period of one (1) year; provided,
however, that the representations and warranties contained in
Sections 2.05 and 3.05 with respect to tax matters shall be
deemed to survive for so long as any applicable statute of
limitations with respect to tax claims shall not have expired,
shall have been suspended or shall have been waived or extended,
and for thirty (30) days thereafter; provided further, however,
that as to any breach of or misstatement in any such
representation or warranty as to which the non-breaching party
has given notice to the breaching party an or prior to the
expiration of the applicable period as to tax or non-tax matters,
as above set forth, the same shall continue to survive beyond
said period, but only as to the matters contained in such notice.
7.02 Indemnification. AIC hereby agrees to indemnify and hold
CASINO, its officers, directors, employees and agents harmless
from and against the following:
(a) Any and all liabilities, losses, damages, claims, costs and
expenses of AIC of any nature, whether absolute, contingent or
otherwise, which are not expressly assumed by CASINO as herein
provided, including but not limited to any and all claims or
rights to dissent from the shareholders of AIC, purported
shareholders of AIC, claims of AIC creditors, Federal or State or
Local taxing authorities, and other claimants of AIC.
(b) Any and all damages or deficiencies resulting from any
misrepresentation, breach of any warranty, or non-fulfillment of
any covenant or agreement on the part of AIC contained in this
Agreement or in any statement or certificate furnished or to be
furnished to CASINO pursuant hereto or in connection with the
transactions contemplated hereby; and
(c) AIC, as of the date immediately preceding this Agreement,
will indemnify and hold harmless CASINO, from and against any and
all losses, claims, damages, expenses or liabilities, joint or
several, to which it may become subject within the meaning of the
Securities Exchange Act of 1934 and the Securities Act of 1933
(collectively the "Act") or under any other statutes or at common
law or otherwise, and will reimburse and indemnify CASINO and its
officers and directors for any legal or other expense including
the cost of any investigation and preparation reasonably incurred
by them or any of them in connection with investigating or
defending any litigation or claim, whether or not resulting in
any liability insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of are based upon any untrue
statement or alleged untrue statement or a material fact
contained in any annual reports, Forms 10K or other $EC filings,
Prospectus, Private Placement Memorandums, Offering Circulars,
Proxy Statements, and Verbal, Written and other representations
in connection with or related to Limited Partnership Offerings,
Joint Ventures, any stock or bond offering, stock conversion
rights granted, investment contracts, or other security as that
term is define under the Act or any State Security Act (as
amended or as supplemented) or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading or any negligent
misrepresentation of any officer, director, agent, or employee of
AIC; or any failure to perform any of the terms or conditions of
this Agreement. CASINO agrees upon its receipt of written notice
of the commencement of any action against them as aforesaid, in
respect of which indemnity may be sought from AIC, on account of
the indemnity agreement contained in this section 7.02, to notify
AIC promptly in writing of the commencement thereof. CASINO
agrees to notify AIC promptly of the commencement of any
litigation or proceeding against it or any of the officers or
directors of CASINO of which it may be advised in connection with
the issue and sale of any of its securities.
7.03 Indemnification by CASINO. CASINO hereby agrees to indemnify
and hold AIC, its officers, directors, employees and agents
harmless from and against the following:
(a) Any and all liabilities, losses, damages, claims, costs and
expenses of CASINO of any nature, whether absolute, contingent or
otherwise, which are not expressly assumed by AIC as herein
provided, including but not limited to any and all claims or
rights to dissent from the shareholders of CASINO, purported
shareholders of CASINO, claims of CASINO creditors, Federal or
State or Local taxing authorities and other claimants of CASINO;
(b) Any and all damages or deficiencies resulting from any
misrepresentation, breach of any warranty, or non-fulfillment of
any covenant or agreement on the part of CASINO contained in this
Agreement or in any statement or certificate furnished or to be
furnished to CASINO pursuant hereto or in connection with the
transactions contemplated hereby; and
(c) CASINO, as of the date immediately preceding this Agreement,
will indemnify and hold harmless AIC from and against any and all
losses, claims, damages, expenses or liabilities, joint or
several, to which they or any of them become subject within the
meaning of the Securities Exchange Act of 1934 and the Securities
Act of 1933 (collectively the "Act") or under any other statutes
or a common law or otherwise, and will reimburse and indemnify
AIC and its officers and directors for any legal or other
expenses including the cost of any investigation and preparation
reasonably incurred by them or any of them in connection with
investigating or defending any litigation or claim, whether or
not resulting in any liability insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of are based
upon any untrue statement or alleged untrue statement or a
material fact contained in any annual reports, Forms 10K or other
SEC filings, Prospectus, Private Placement Memorandum, Offering
Circulars, Proxy Statements, and Verbal, Written and other
representations in connection with or related to Limited
Partnership Offerings, Joint Ventures, any stock or bond
offering, stock conversion rights granted, investment contracts,
or other security as that term is defined under the Act or any
State Security Act (as amended or as supplemented) or arise out
of or are based upon the omission or alleged omission to state
therein in a material fact required to be saved therein or
necessary in order to make the statements therein not misleading;
or any negligent misrepresentation of any officer, director,
agent, or employee of CASINO; or any failure to perform any of
the terms or conditions of this Agreement. AIC agrees upon its
receipt of written notice of the commencement of any action
against them as aforesaid, in respect of which indemnity may be
sought from CASINO, its Directors and officers on account of the
indemnity agreement contained in this section 7.03, to notify
CASINO promptly in writing of the commencement thereof. AIC
agrees to notify CASINO promptly of the commencement of any
litigation or proceeding against it or against any of the
officers or directors of CASINO of which it may be advised, in
connection with the issue and sale of any of its securities.
ARTICLE VIII
CLOSING DATE
8.01 The closing for the consummation of the merger contemplated
by this Agreement shall, unless another date or place is agreed
to in writing by the parties hereto, take place at the Office of
Atlas Xxxxxxxx Trop & Borkson, P.A., on the date which is no
later than the fifth business day after the last to occur of the
following dates:
(a) The date the Registration Statement required for the
transactions contemplated herein becomes effective pursuant to
applicable rules and regulations of the SEC.
(b) The date the stockholders of AIC and CASINO shall have given
the approval referred to in Section 5.01 (a) and 5.01 (b); or
(c) The date on which all the conditions set forth in Article V
hereof shall have been satisfied, except to the extent any such
conditions are capable of being waived and shall have been waived
by AIC or CASINO.
(d) December 31, 1998.
ARTICLE IX
RESIGNATION AND ELECTION
9.01 Once this Agreement is signed by all parties, AIC shall
cause to be held a meeting of its shareholders at which time
Xxxxxxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxx, Xxxxx Xxxxxx and
Xxxxx Xxxxx shall be elected to the Board of Directors of AIC and
Xxx Xxxxx, Jr., shall resign as a member of the Board of
Director, such that the Board shall be comprised of six (6)
members- Xxxxxxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxx, Xxxxx
Xxxxxx, Xxxxx Xxxxx, and Xxxxx Xxxxxxxxxx. Xxxxx Xxxxxxxxxx, or
his nominee, shall remain on the Board for so long as Xxxxxxx
Xxxxxx holds the voting proxies provided for in Section 6.01. It
is agreed and understood that in the event the merger
contemplated herein is not consummated for any reason, including
AIC a dissatisfaction with due diligence, Forhan, Muldowney,
York, Xxxxxx and Xxxxx shall promptly tender their resignations
as members of the Board of Directors and, if applicable, officers
of AIC.
9.02 At the closing, AIC will cause all of its officers to resign
from office and those persons designated by AIC's Board as
constituted pursuant to Section 9.01, shall be appointed.
ARTICLE X
INTENTIONALLY LEFT BLANK
ARTICLE XI
MISCELLANEOUS
11.01 Termination. With respect to each company, this
Agreement may be terminated and the merger to which such company
is proposed to be a party as contemplated herein may be abandoned
(i) by the mutual consent of AIC and CASINO at any time; (ii) by
either CASINO or AIC if the merger has not been consummated prior
to December 31, 1998; (iii) in the event of any material adverse
change in the business, property, or financial condition of AIC
or CASINO; (iv) in the event of any action, suit, or proceeding
at law or equity against either CASINO or AIC or by any Federal,
State, Local government agency or commissions, board or agency,
where any unfavorable decision would materially adversely affect
the business, property or financial condition or income of CASINO
or AIC; (v) by a party (the "terminating party") in the event of
the failure of the other party to comply with a condition
described in Article V and such condition is not waived by the
terminating party (provided that the terminating party is not
itself in default); or (vi) in the event the merger violates any
federal or state statue, rule or regulation. In the event of such
termination and abandonment, neither AIC nor CASINO (or any of
its directors or officers) shall have any liability or further
obligation to any other party to this Agreement, except that
nothing herein will relieve any party from liability for any
willful breach of this Agreement.
11.02 Expenses. Whether or not any merger is consummated, all
out-of-pocket costs and expenses incurred in connection with the
merger and this agreement will be paid by the party incurring
such expenses.
11.03 Indebtedness of CASINO. As disclosed elsewhere herein
or in a Schedule hereto, CASINO is currently indebted to certain
persons in the aggregate amount of approximately $350,000
including accrued interest. This indebtedness is not disclosed in
the Financial Statements of CASINO previously delivered to AIC
(but will be set forth on Schedule 3.04 to this Agreement).
CASINO is currently in default of its payment obligation to such
persons. It is intended by the parties that, on or after the
effective date of the merger contemplated hereby, this
indebtedness of CASINO will be converted into an aggregate of
approximately 200,000 shares of AIC common stock. The precise
structure of this debt conversion is to be reviewed by
professional advisors to CASINO and AIC and their recommendations
will be taken into account in determining the final structure of
the conversion.
11.04 Tax Structure of Merger. The merger contemplated by
this Agreement is intended to qualify as a tax-free
reorganization, as contemplated by Section 368(A) of the Internal
Revenue Code of 1986, as amended. To the extent that the parties'
legal, tax and accounting advisors indicate that all or a portion
of the transactions contemplated hereby adversely affect the tax-
free nature of such transactions, the parties agree to negotiate,
in good faith, modifications to this Agreement so as to enable
the parties to consummate the transactions contemplated hereby
without adverse tax consequences to the parties or their
shareholders.
11.05 Schedules. The parties agree that the Schedules
contemplated by this Agreement shall be delivered by each party
to the other not more than 10 days following the date hereof. The
information set forth on the Schedules shall be subject to the
parties due diligence review and to the provisions of Section
5.03.
11.06 CTC Acquisitions. The parties acknowledge that prior to
the date hereof, CASINO entered into a letter of intent to
acquire all of the outstanding securities of Corporate Travel
Consultants ("CTC"). Notwithstanding the foregoing, the parties
hereto contemplate that subsequent to the execution of this
Agreement and prior to the closing hereof, AIC will endeavor to
acquire all of the outstanding stock of CTC. In the event that
AIC completes the acquisition of CTC, and the transactions
contemplated by this Agreement are not consummated, AIC hereby
agrees to sell all of the outstanding securities to CASINO at a
price equal to the value of the consideration paid by AIC for the
securities of CTC.
11.07 Brokers. No broker or finder is entitled to any
brokerage or finder's fee or other commission or fee from any
Company or based upon arrangements made by or on behalf of any
Company with respect to the transactions contemplated by this
Agreement.
11.08 Arbitration. Any controversy arising out of, connected
to, or relating to any matters herein or the transactions
contemplated by this Agreement, or the breach thereof, including,
but not limited to any claims of violations of Federal and/or
State Securities Acts, Banking Statutes, Consumer Protection
Statutes, Federal and/or State anti-Racketeering (e.g. RICO)
claims as well as any common law claims and any State Law claims
of fraud, negligence, negligent misrepresentations, and/or
conversion shall be settled by arbitration in Washington, D.C.,
under the rules of the American Arbitration Association; and
judgment on the arbitrator's award may be entered in any court
having jurisdiction thereof in accordance with the provisions of
the law of the State of Nevada. In the event of such a dispute,
each party to the conflict shall select an arbitrator, both of
whom shall select a third arbitrator which shall constitute the
three person arbitration board. The decision of a majority of the
board of arbitrators shall be binding upon the parties.
11.09 Other Actions. Each of the parties hereto agrees to
execute and deliver such other documents, certificates,
agreements and other writings and -to take such other actions as
may be necessary or desirable to consummate the transactions
contemplated by this Agreement.
11.10 Waiver and Amendment. Any provision of this Agreement
may be waived at any time by the party which is or whose
stockholders are, entitled to the benefits thereof and this
Agreement may be amended or supplemented at any time. No such
waiver, amendment or supplement shall be effective unless in
writing and signed by the party or parties necessary thereto.
11.11 Entire Agreement. This Agreement contains the entire
agreement between AIC and CASINO with respect to the merger and
the other transactions contemplated hereby.
11.12 Applicable Law. This agreement shall be governed by and
construed in accordance with the laws of the State of Nevada.
11.13 Descriptive Headings. The descriptive headings are for
convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.14 Notices. All notes or other communications hereunder
shall be in writing and shall be deemed to have been duly given
if delivered personally or sent by registered or certified mail
postage prepaid, addressed as follows:
If to AIC, to: AVIATION INDUSTRIES CORP.
0000 Xxxxxxx Xxxxxx, Xxxxx 0
Xxxx Xxx, XX 00000
and to: SONNENBLICK PARKER & SELVERS,
P.C.
Attention; Xxxx X. Xxxxxxx,
Esq.
0000 Xxxxx 0 Xxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
If to CASINO, to: INTEGRATED MARKETING
PROFESSIONALS, INC.
000 X. Xxx Xxxx Xxxx., Xxx.
000
Xxxx Xxxxxxxxxx, XX 00000
and to: ATLAS, XXXXXXXX, TROP &
BORKSON, PA
Attention: Xxxxxx X.
Xxxxxxxxxx, Esq.
000 X. Xxx Xxxx Xxxx.
Xxxx Xxxxxxxxxx, XX 00000
11.15 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute but one
agreement.
11.16 Signatures. Each of the undersigned, have been duly
authorized to execute this Agreement on behalf of AIC and CASINO,
respectively, and, to the extent the undersigned ate directors
and shareholders of AIC and CASINO, respectively, each of the
undersigned hereby agree to vote all shares held of record by him
and to recommend to the shareholders a vote, in favor of the
transactions contemplated by the within Agreement at the meeting
of shareholders of said corporation contemplated by this
Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto
as of the date first hereinabove written.
AVIATION INDUSTRIES CORP.
By: /s/ Xxxxxx X'Xxxxxxxx
XXXXXX X'XXXXXXXX, PRESIDENT
INTEGRATED MARKETING PROFESSIONALS, INC.
By: /s/ Xxxxxxx Xxxxxx
XXXXXXX XXXXXX, PRESIDENT
