AGREEMENT AND PLAN OF MERGER
DATED: JANUARY 20, 1998
BY AND BETWEEN
SAINT XXXXXXX GOLF CORPORATION
AND
LAS VEGAS DISCOUNT GOLF & TENNIS, INC.
TABLE OF CONTENTS
Page
AGREEMENT AND PLAN OF MERGER . . . . . . . . . . . . . . . . . .1
ARTICLE 1 - THE MERGER . . . . . . . . . . . . . . . . . . . .1
1.1 Surviving Corporation. . . . . . . . . . . . . . . .1
1.2 Articles of Incorporation. . . . . . . . . . . . . .1
1.3 By-Laws. . . . . . . . . . . . . . . . . . . . . . .1
1.4 Directors. . . . . . . . . . . . . . . . . . . . . .1
1.5 Officers . . . . . . . . . . . . . . . . . . . . . .2
1.6 Effective Time . . . . . . . . . . . . . . . . . . .2
1.7 Additional Actions . . . . . . . . . . . . . . . . .2
ARTICLE 2 - CONSIDERATION; CONVERSION OF SHARES. . . . . . . .2
2.1 Merger Consideration . . . . . . . . . . . . . . . .2
2.2 Conversion of Shares; Treatment of Warrants, Options
and Convertible Securities . . . . . . . . . . . .3
2.3 Cancellation of Certificates . . . . . . . . . . . .4
2.4 No Fractional Securities . . . . . . . . . . . . . .5
2.5 Closing. . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES WITH
RESPECT TO LVDG. . . . . . . . . . . . . . . . . . . . . . .5
3.1 Corporate Existence and Power; Qualification; Subsidiaries5
3.2 Corporate and Governmental Authorization; Contravention6
3.3 Capitalization . . . . . . . . . . . . . . . . . . .7
3.4 Financial Statements of LVDG; Changes. . . . . . . .7
3.5 No Undisclosed Liabilities . . . . . . . . . . . . .9
3.6 Compliance with Laws . . . . . . . . . . . . . . . .9
3.7 Tax Matters. . . . . . . . . . . . . . . . . . . . .9
3.8 Title to Properties; Absence of Liens and Encumbrances,
Etc. . . . . . . . . . . . . . . . . . . . . 10
3.9 Facilities . . . . . . . . . . . . . . . . . . . . 10
3.10 Condition of Facilities, Equipment, Etc. . . . . . 10
3.11 Insurance. . . . . . . . . . . . . . . . . . . . . 11
3.12 Agreements, Plans, Arrangements, Etc.. . . . . . . 11
3.13 Intellectual Properties. . . . . . . . . . . . . . 12
3.14 Permits, License, Etc. . . . . . . . . . . . . . . 13
3.15 Litigation . . . . . . . . . . . . . . . . . . . . 13
3.16 Accounts and Notes Receivable. . . . . . . . . . . 13
3.17 No Interest in Competitors, Etc. . . . . . . . . . 13
3.18 Books and Records. . . . . . . . . . . . . . . . . 14
3.19 Employees, Labor Relations, Etc. . . . . . . . . . 14
3.20 Employee Benefit Plans, Etc. . . . . . . . . . . . 15
3.21 SEC Filings. . . . . . . . . . . . . . . . . . . . 15
3.22 Information. . . . . . . . . . . . . . . . . . . . 15
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES WITH
RESPECT TO SAGC. . . . . . . . . . . . . . . . . . . . . . 16
4.1 Corporate Existence and Power; Qualification; Subsidiaries16
4.2 Corporate and Governmental Authorization; Contravention17
4.3 Capitalization . . . . . . . . . . . . . . . . . . 17
4.4 Financial Statements of SAGC; Changes. . . . . . . 18
4.5 No Undisclosed Liabilities . . . . . . . . . . . . 20
4.6 Compliance with Laws . . . . . . . . . . . . . . . 20
4.7 Tax Matters. . . . . . . . . . . . . . . . . . . . 20
4.8 Title to Properties; Absence of Liens and
Encumbrances, Etc. . . . . . . . . . . . . . . . . 20
4.9 Facilities . . . . . . . . . . . . . . . . . . . . 21
4.10 Condition of Facilities, Equipment, Etc. . . . . . 21
4.11 Insurance. . . . . . . . . . . . . . . . . . . . . 21
4.12 Agreements, Plans, Arrangements, Etc.. . . . . . . 21
4.13 Intellectual Properties. . . . . . . . . . . . . . 22
4.14 Permits, License, Etc. . . . . . . . . . . . . . . 23
4.15 Litigation . . . . . . . . . . . . . . . . . . . . 23
4.16 Accounts and Notes Receivable. . . . . . . . . . . 23
4.17 No Interest in Competitors, Etc. . . . . . . . . . 23
4.18 Books and Records. . . . . . . . . . . . . . . . . 24
4.19 Employees, Labor Relations, Etc. . . . . . . . . . 24
4.20 Employee Benefit Plans, Etc. . . . . . . . . . . . 25
4.21 SEC Filings. . . . . . . . . . . . . . . . . . . . 25
4.22 Information. . . . . . . . . . . . . . . . . . . . 26
ARTICLE 5 - CONDUCT OF BUSINESS OF LVDG AND SAGC PRIOR
TO THE EFFECTIVE TIME . . . . . . . . . . . . . . . . . . . 26
5.1 Conduct of Business of LVDG. . . . . . . . . . . . 26
5.2 Conduct of Business of SAGC. . . . . . . . . . . . 27
ARTICLE 6 - ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . 29
6.1 Access to Properties and Records . . . . . . . . . 29
6.2 Registration Statement . . . . . . . . . . . . . . 29
6.3 Stockholders' Approvals. . . . . . . . . . . . . . 29
6.4 Affiliates' Letters. . . . . . . . . . . . . . . . 30
6.5 Reasonable Efforts; Etc. . . . . . . . . . . . . . 30
6.6 Material Events. . . . . . . . . . . . . . . . . . 30
6.7 Tax Consequences . . . . . . . . . . . . . . . . . 30
6.8 Fair Price Statute . . . . . . . . . . . . . . . . 31
6.9 Indemnification. . . . . . . . . . . . . . . . . . 31
6.10 Quarterly Financial Statements . . . . . . . . . . 31
ARTICLE 7 - CONDITIONS TO THE OBLIGATIONS OF LVDG. . . . . . 32
7.1 Representations and Warranties True. . . . . . . . 32
7.2 Performance. . . . . . . . . . . . . . . . . . . . 32
7.3 Authorization of Merger. . . . . . . . . . . . . . 32
7.4 Registration Statement; Blue Sky Laws. . . . . . . 32
7.5 Affiliates Letters . . . . . . . . . . . . . . . . 32
7.6 Restrictive Legends. . . . . . . . . . . . . . . . 32
7.7 Absence of Litigation. . . . . . . . . . . . . . . 33
7.8 Opinion of Counsel . . . . . . . . . . . . . . . . 33
7.9 Appraisal Rights . . . . . . . . . . . . . . . . . 33
7.10 Articles of Merger . . . . . . . . . . . . . . . . 33
7.11 Consents . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 8 - CONDITIONS TO THE OBLIGATIONS OF SAGC. . . . . . 33
8.1 Representations and Warranties True. . . . . . . . 34
8.2 Performance. . . . . . . . . . . . . . . . . . . . 34
8.3 Authorization of Merger. . . . . . . . . . . . . . 34
8.4 Registration Statement; Blue Sky Laws. . . . . . . 34
8.5 Absence of Litigation. . . . . . . . . . . . . . . 34
8.6 Opinion of Counsel . . . . . . . . . . . . . . . . 34
8.7 Tax Opinion. . . . . . . . . . . . . . . . . . . . 35
8.8 Articles of Merger . . . . . . . . . . . . . . . . 35
8.9 Consents . . . . . . . . . . . . . . . . . . . . . 35
8.10 Inclusion on NASDAQ System . . . . . . . . . . . . 35
ARTICLE 9 - TERMINATION. . . . . . . . . . . . . . . . . . . 35
9.1 Termination. . . . . . . . . . . . . . . . . . . . 35
9.2 Notice of Termination. . . . . . . . . . . . . . . 35
9.3 Effect of Termination. . . . . . . . . . . . . . . 36
ARTICLE 10 - MISCELLANEOUS PROVISION . . . . . . . . . . . . 36
10.1 Amendment. . . . . . . . . . . . . . . . . . . . . 36
10.2 Waiver of Compliance . . . . . . . . . . . . . . . 36
10.3 Notices. . . . . . . . . . . . . . . . . . . . . . 36
10.4 Assignment . . . . . . . . . . . . . . . . . . . . 37
10.5 No Third Party Beneficiaries . . . . . . . . . . . 37
10.6 Expenses . . . . . . . . . . . . . . . . . . . . . 37
10.7 Public Announcements . . . . . . . . . . . . . . . 37
10.8 Brokers and Finders. . . . . . . . . . . . . . . . 38
10.9 Further Agreements . . . . . . . . . . . . . . . . 38
10.10 Counterparts. . . . . . . . . . . . . . . . . 38
10.11 Entire Agreement. . . . . . . . . . . . . . . 38
10.12 Governing Law . . . . . . . . . . . . . . . . 38
10.13 Descriptive Headings. . . . . . . . . . . . . 39
10.14 Specific Performance. . . . . . . . . . . . . 39
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 39
SCHEDULES
1.4 List of Directors of Surviving Corporation
1.5 List of Officers of Surviving Corporation
3.1 List of LVDG Subsidiaries
3.2 LVDG - Authorizations Required
3.3 LVDG - Schedule of Outstanding Options, Warrants and Other Rights
3.4 LVDG - Changes in Financial Condition
3.5 LVDG - Undisclosed Liabilities
3.7 LVDG - Tax Matters
3.8 LVDG - Real Property
3.9 LVDG - Facilities
3.11 LVDG - Insurance Policies
3.12 LVDG - Agreements
3.13 LVDG - Intellectual Properties
3.14 LVDG - Permits
3.15 LVDG - Litigation
3.17 LVDG - Transactions with Affiliates
3.20 LVDG - Employee Benefit Plans
4.1 List of SAGC Subsidiaries
4.2 SAGC - Authorizations Required
4.3 SAGC - Schedule of Outstanding Options, Warrants and Other Rights
4.4 SAGC - Changes in Financial Condition
4.5 SAGC - Undisclosed Liabilities
4.7 SAGC - Tax Matters
4.9 SAGC - Facilities
4.11 SAGC - Insurance Policies
4.12 SAGC - Agreements
4.13 SAGC - Intellectual Properties
4.14 SAGC - Permits
4.15 SAGC - Litigation
4.17 SAGC - Transactions with Affiliates
4.20 SAGC - Employee Benefit Plans
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of January 20, 1998, by and among
Saint Xxxxxxx Golf Corporation, a corporation organized under the laws of the
State of Nevada ("SAGC"), and Las Vegas Discount Golf & Tennis, Inc., a
corporation organized under the laws of the State of Colorado ("LVDG").
WHEREAS, the respective Boards of Directors of SAGC and LVDG have
approved the merger of SAGC with and into LVDG (the "Merger"), pursuant to
which LVDG will be the surviving corporation and the holders of SAGC Common
Stock and Preferred Stock (as herein defined) will be entitled to receive the
consideration provided for in this Agreement, all upon the terms and subject
to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements set forth herein, and intending to
be legally bound hereby, the parties hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 Surviving Corporation. In accordance with the provisions of this
Agreement, the Nevada General Corporation Law (the "Nevada Act") and the
Colorado Business Corporation Act (the "Colorado Act"), at the Effective Time
(as that term is hereinafter defined in Section 1.6 hereof) SAGC shall be
merged with and into LVDG, with LVDG being the surviving corporation in the
Merger (hereinafter sometimes called the "Surviving Corporation"). At the
Effective Time, the separate existence of SAGC shall cease and the Surviving
Corporation shall continue its corporate existence under the laws of the State
of Colorado. Without limiting the generality of the foregoing, from and after
the Effective Time the Surviving Corporation shall possess all of the rights,
privileges, immunities, powers and purposes, and shall assume and be liable
for all of the liabilities, obligations and penalties, of each of LVDG and
SAGC, and the Merger shall have all of the effects provided for in the Nevada
Act and the Colorado Act.
1.2 Articles of Incorporation. At the Effective Time, the Articles of
Incorporation of LVDG as in effect at the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation until thereafter amended as
provided by law.
1.3 By-Laws. At the Effective Time, the By-Laws of LVDG as in effect
at the Effective Time shall be the By-Laws of the Surviving Corporation until
thereafter amended as provided by law.
1.4 Directors. On and after the Effective Time, the directors of the
Surviving Corporation shall be those persons who are listed on Schedule 1.4,
all such directors to hold office until their respective successors are duly
elected and qualified in the manner provided in the Articles of Incorporation
and Bylaws of the Surviving Corporation, or as otherwise provided by law.
1.5 Officers. On and after the Effective Time, the officers of the
Surviving Corporation shall be those persons who are listed on Schedule 1.5,
each to hold the office(s) set forth opposite their respective names on such
Schedule, all such officers to hold office until their respective successors
are duly elected and qualified in the manner provided in the Articles of
Incorporation and By-Laws of the Surviving Corporation, respectively, or as
otherwise provided by law.
1.6 Effective Time. As soon as practicable following the Closing (as
that term is hereinafter defined in Section 2.5 hereof), Articles of Merger or
any similar document required by state law to effect the Merger (the
"Certificates of Merger") shall be filed with the Secretaries of State of the
States of Colorado and Nevada. The Merger shall become effective upon the
filing of the last of such certificates. The time when the Merger shall
become effective is herein referred to as the "Effective Time."
1.7 Additional Actions. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other acts or things are necessary or
desirable to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation, its right, title or interest in or to any of the
rights, properties or assets of SAGC acquired or to be acquired by reason of,
or as a result of, the Merger, or otherwise to carry out the purposes of this
Agreement (including, but not limited to, any applications which may be
required in order to allow the Surviving Corporation to transact business in
any jurisdiction), the Surviving Corporation and its proper officers and
directors shall be authorized to execute and deliver, in the name and on
behalf of SAGC, all such deeds, bills of sale, assignment and assurances and
to do, in the name and on behalf of SAGC, all such other acts and things
necessary or desirable to vest, perfect or confirm any and all right, title or
interest in, to or under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out the purposes of this Agreement.
ARTICLE 2
CONSIDERATION; CONVERSION OF SHARES
2.1 Merger Consideration. Except as set forth in Sections 2.2(b) and
2.2(f) hereof, the consideration payable in the Merger to holders of shares of
SAGC Common Stock, $.001 par value per share ("SAGC Common Stock"), and to the
holders of warrants, options, convertible securities and other rights to
purchase SAGC Common Stock upon exercise or conversion of the same, shall
consist solely of shares of Common Stock, no par value, of LVDG ("LVDG Common
Stock"), such shares of LVDG Common Stock to have such rights as are set forth
in the Articles of Incorporation of LVDG and to be issuable in accordance with
the terms of this Agreement. Except as set forth in Section 2.2(g) hereof,
the holders of shares of LVDG Common Stock shall continue to hold such shares,
and the holders of warrants, options, convertible securities and other rights
to purchase LVDG Common Stock will not be affected by the Merger.
2.2 Conversion of Shares; Treatment of Warrants, Options, and
Convertible Securities.
(a) Subject to Section 2.4 hereof, each share of SAGC Common
Stock issued and outstanding as of the Effective Time (other than SAGC
Dissenting Shares, as that term is hereinafter defined in Section 2.2(e)
below) shall, by virtue of the Merger and without any action on the part of
the holders thereof, automatically be converted into 2.4 shares of LVDG Common
Stock.
(b) Subject to Section 2.4 hereof, each share of SAGC Series A
Convertible Preferred Stock (other than SAGC Dissenting Shares as that term is
defined in Section 2.2(e) below) shall by virtue of the Merger and without any
action on the part of the holders thereof, automatically be converted into 2.4
shares of LVDG Series B Convertible Preferred Stock.
(c)(i) Each warrant to acquire shares of SAGC Common Stock (a
"Warrant") that is outstanding and unexercised at the Effective Time shall, by
virtue of the Merger and without any action on the part of the holder thereof,
and subject to the other terms and conditions thereof, automatically be deemed
to be exercisable for that number of shares of LVDG Common Stock the holder of
such Warrant would have received in the Merger pursuant to Section 2.2(a) had
such holder exercised such Warrant in full immediately prior to the Effective
Time, and the price per share of LVDG Common Stock issuable after the
Effective Time upon exercise of such Warrant shall equal the product of the
price per share of SAGC Common Stock under such Warrant as in effect prior to
the Effective Time multiplied by .416667.
(ii) Each option to acquire shares of SAGC Common Stock
issued, or agreed or committed to be issued, under any stock option plan of
SAGC or otherwise (an "Option") that is outstanding and unexercised at the
Effective Time shall, by virtue of the Merger and without any action on the
part of the holders thereof, and subject to the other terms and conditions
thereof, automatically be assumed by LVDG and shall be exercisable for that
number of shares of LVDG Common Stock the holder of such Option would have
received in the Merger pursuant to Section 2.2(a) had such holder exercised
such Option in full (assuming, for the purpose of this calculation only, that
there is no limitation on the vesting of the right to exercise such Option)
immediately prior to the Effective Time, and the price per share of LVDG
Common Stock issuable after the Effective Time upon exercise of such Option
shall equal the product of the price per share of SAGC Common Stock under such
Option as in effect prior to the Effective Time multiplied by .416667. Any
term or condition respecting the vesting of the right to exercise such Option
shall remain unaffected by the Merger; provided, however, that any period
during which the holder of such Option shall have served as an employee or
consultant, as the case may be, of SAGC prior to the Merger shall be counted
toward determining the vesting of the right to exercise such Option after the
Effective Time.
(iii) The SAGC Warrants and Options are hereinafter referred
to collectively as the "SAGC Derivative Securities." Except as provided in
clauses (i) and (ii) above, the terms and conditions of the SAGC Derivative
Securities in effect prior to the Effective Time shall continue in effect
after the Effective Time.
(d) Each share of SAGC Common Stock held in the SAGC treasury as
of the Effective Time, if any, shall, by virtue of the Merger, be canceled
without payment of any consideration thereof.
(e) Each share of SAGC Common Stock held by LVDG at the
Effective Time shall, by virtue of the Merger and without any action on the
part of the holder thereof, be canceled without payment of any consideration
therefor.
(f) Notwithstanding the foregoing, any shares of SAGC Common or
Preferred Stock issued and outstanding immediately prior to the Effective Time
which are held by shareholders of SAGC who have not voted such shares in favor
of the Merger and who have complied with all other relevant provisions of
Section 92A.300 through 92A.500 of the Nevada Act (the "SAGC Dissenting
Shares") shall not be converted into shares of LVDG Common or Preferred Stock
in the manner contemplated by Sections 2.2(a) and (b) above, and the rights of
holders of SAGC Dissenting Shares shall be governed by the provisions of the
Nevada Act.
(g) Notwithstanding the foregoing, any shares of LVDG Common
Stock issued and outstanding immediately prior to the Effective Time which are
held by shareholders of LVDG who have not voted such shares in favor of the
Merger and who have complied with all other relevant provisions of Article 113
of the Colorado Act (the "LVDG Dissenting Shares") shall be governed by the
provisions of the Colorado Act.
2.3 Cancellation of Certificates. As promptly as is practicable after
the Effective Time, LVDG shall designate a bank or trust company (the
"Exchange Agent") to act as exchange agent in effecting the exchange of
certificates representing SAGC Common and Preferred Stock (other than SAGC
Dissenting Shares) for certificates representing the shares of LVDG Common or
Preferred Stock into which such shares of SAGC Common and Preferred Stock have
been converted. The Exchange Agent shall send a letter of transmittal to the
holders of SAGC Common and Preferred Stock offering to exchange the
certificates representing such SAGC Common and Preferred Stock for
certificates representing shares of LVDG Common or Preferred Stock,
respectively. Notwithstanding the foregoing, from and after the Effective
Time, all such outstanding shares of SAGC Common and Preferred Stock when so
converted shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist. From and after the Effective Time, each
certificate or instrument which prior to the Effective Time represented shares
of SAGC Common Stock, SAGC Preferred Stock or SAGC Derivative Securities, as
applicable, shall be deemed to represent only the right to receive the
certificates of LVDG Common Stock or the right to acquire shares of LVDG
Common Stock contemplated by Section 2.2 hereof, and the holder of each such
certificate or instrument shall cease to have any rights with respect to the
shares of SAGC Common and Preferred Stock formerly represented thereby, except
as otherwise provided by law.
2.4 No Fractional Securities. No fractional shares of LVDG Common
Stock shall be issuable by LVDG upon the conversion of shares of SAGC Common
or Preferred Stock in the Merger pursuant to Section 2.2(a) hereof or upon
exercise or conversion of any SAGC Derivative Security. In lieu of any
fractional share of LVDG Common Stock which would otherwise be issuable upon
conversion of any shares of SAGC Common Stock or exercise or conversion of any
SAGC Derivative Security, LVDG shall issue one full share of LVDG Common
Stock.
2.5 Closing. Subject to Section 9.1(b)(ii) hereof, the closing of the
transactions contemplated by this Agreement (the "Closing") shall take place
at the offices of LVDG, 0000 Xxxxx Xxxxxx Xxxx Xxxxxxxxx, Xxxxx 0, Xxx Xxxxx,
Xxxxxx 00000, at 2:00 p.m. local time, (i) as soon as practicable after the
later to occur of (x) the date of the stockholders' meetings referred to in
Section 6.3 hereof or (y) the day on which the last condition set forth in
Articles 7 and 8 hereof shall have been fulfilled or waived, or (ii) at such
other time as SAGC and LVDG may mutually agree (the "Closing Date").
ARTICLE 3
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO LVDG
LVDG represents and warrants to SAGC as follows (as used in this Article
3, the term "LVDG" shall include LVDG and each subsidiary (as such term is
defined in Rule 405 promulgated under the Securities Act of 1933, as amended
(the "Securities Act") of LVDG (a "LVDG Subsidiary") exclusive of SAGC, unless
the context suggests otherwise):
3.1 Corporate Existence and Power; Qualification; Subsidiaries. LVDG
is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation, has all corporate powers
to execute and deliver this Agreement and to perform its obligations hereunder
and consummate the transactions contemplated hereby, and has all corporate
powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and to own its properties,
and is duly qualified to do business and is in good standing in each
jurisdiction in which the conduct of its business or the ownership or leasing
of its properties requires such qualification. The copies of LVDG's Articles
of Incorporation and Bylaws that have been delivered to SAGC are complete and
correct and are in full force and effect. Schedule 3.1 sets forth a complete
list of each LVDG Subsidiary. Each LVDG Subsidiary is a corporation or
partnership duly incorporated (if a corporation), validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
as the case may be, has all requisite powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted and to own its properties, and is duly qualified to do business
and is in good standing in each jurisdiction in which the conduct of its
business or the ownership or leasing of its properties requires such
qualification. LVDG has not made any advances to or investments in, nor
directly or indirectly owns any securities of, any domestic or foreign
business entity, enterprise or organization other than as set forth on
Schedule 3.1. Neither LVDG nor any LVDG Subsidiary is in violation of any
provision of its Articles of Incorporation or Bylaws or certificate of limited
partnership, or equivalent organizational document, as the case may be. Each
of the outstanding shares of capital stock of, or other equity interests in,
any LVDG Subsidiary owned by LVDG is owned by LVDG free and clear of any
security interest, pledge, lien, charge, claim or other encumbrance of any
kind or nature (collectively, "Encumbrance").
3.2 Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by LVDG of this Agreement and the Merger
have been duly authorized by all necessary corporate action (other than the
approval of this Agreement and the Merger by the shareholders of LVDG). This
Agreement has been duly executed and delivered by LVDG. The execution and
delivery of this Agreement do not and the consummation of the transactions
contemplated hereby is not prohibited by, and will not violate or conflict
with, any provision of the Articles of Incorporation or Bylaws of LVDG, or of
any Law (as such term is defined in Section 3.6), or, except as set forth on
Schedule 3.2, any provision of, or result in the acceleration of, result in
any severance or termination pay liability, constitute a default under,
entitle any party to accelerate (whether after the giving of notice or lapse
of time or both) any obligation under, result in the creation or imposition of
any Encumbrance upon any property of LVDG pursuant to any provisions of, or
create any right on the part of any party to modify, amend or terminate, any
Contract (as such term is defined below), lien, instrument, order, Permit (as
such term is defined in Section 3.14 hereof), arbitration award, judgment or
decree to which LVDG is a party or by which it is bound. Other than the
requirement to file the Certificates of Merger with the Secretaries of State
of the States of Colorado and Nevada, as applicable, or as may be required by
the Securities Act, the Exchange Act of 1934, as amended (the "Exchange Act"),
state securities laws and the Nasdaq Stock Market, and except as set forth in
Schedule 3.2, no authorization, consent or approval of, or filing with, any
domestic or foreign public body or authority is necessary on the part of LVDG
for the consummation by LVDG of the transactions contemplated by this
Agreement or the other agreements referred to herein and the ownership and
operation by the Surviving Corporation of the business and properties of LVDG
after the Effective Time in substantially the same manner as presently owned
and operated, except where the failure to give such notices, obtain such
authorizations, consents or approvals or make such filings would not, in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), business or operations of the Surviving Corporation, or delay or
prevent the consummation of the transactions contemplated by this Agreement or
prevent LVDG from performing its obligations hereunder. This Agreement is a
valid, legal and binding agreement of LVDG, subject to applicable bankruptcy,
insolvency, moratorium or other laws affecting the enforcement of creditors'
rights in general from time to time in effect and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). As used herein, "Contracts" shall mean any lease, license,
mortgage, contract, sales order, purchase order or other agreement,
arrangement, understanding or commitment, whether written or oral which is
material to the business or properties of LVDG or SAGC as the context shall
require.
3.3 Capitalization.
(a) The shares of LVDG Common Stock which are currently
outstanding have been duly authorized and are validly issued, fully paid,
nonassessable and free of preemptive rights created by statute, LVDG's
Articles of Incorporation or otherwise. The authorized capital stock of LVDG
consists of 15,000,000 shares of LVDG Common Stock, of which 5,831,807 shares
are issued and outstanding, and 5,000,000 shares of Preferred Stock, no par
value, of which no shares are outstanding.
(b) There are no subscriptions, options, warrants or other
rights, calls, agreements or commitments obligating LVDG or any LVDG
Subsidiary to issue, or repurchase, redeem or otherwise acquire, capital stock
or other securities of LVDG or any LVDG Subsidiary, except as set forth in
Schedule 3.3.
(c) The shares of LVDG Common Stock to be issued to the
stockholders of SAGC pursuant to the Merger or upon exercise or conversion of
any SAGC Derivative Security to the holder thereof will be, upon such
issuance, duly authorized and validly issued, fully paid (assuming the
exercise or conversion of such SAGC Derivative Security in accordance with its
terms), nonassessable and free of preemptive rights created by statute, LVDG's
Articles of Incorporation or otherwise.
3.4 Financial Statements of LVDG; Changes.
(a) LVDG has heretofore delivered to SAGC true and complete
copies of (i) its consolidated audited balance sheet as of December 31, 1996,
and audited consolidated statements of operations and audited consolidated
statements of cash flows for the two year period then ended, and (ii) its
unaudited consolidated balance sheet as of September 30, 1997 (the "LVDG
Balance Sheet Date") and unaudited consolidated statements of operations and
statement of cash flows for the nine months then ended (collectively, the
"LVDG Financial Statements"). The LVDG Financial Statements present fairly
the consolidated financial position of LVDG as of the date of the balance
sheets and the consolidated results of operations and cash flows for the
periods then ended, all in conformity with generally accepted accounting
principles applied on a consistent basis, except as stated thereon.
(b) Except as set forth in Schedule 3.4 hereto, except for the
sale of certain assets made by LVDG pursuant to an Agreement for the Purchase
and Sale of Assets, as amended, which occurred on February 26, 1997 (the
"Asset Sale"), and except as contemplated by this Agreement, since the LVDG
Balance Sheet Date:
(i) there has been no material adverse change in the
business, assets, financial condition or results of operations of LVDG;
(ii) there has not been any direct or indirect redemption,
purchase or other acquisition by LVDG of any of its capital stock, or any
declaration, setting aside or payment of any dividend or other distribution by
LVDG in respect of its capital stock, and LVDG has not authorized or proposed
any of the foregoing, or entered into any contract, agreement, commitment or
arrangement to do any of the foregoing, except as may be contemplated by this
Agreement and the agreements contemplated hereby or referred to herein;
(iii) except for the transactions contemplated hereby, LVDG
has conducted its business in the ordinary course and consistent with past
practices;
(iv) there has been no damage, destruction or casualty loss
(whether or not covered by insurance) suffered by LVDG materially adversely
affecting the business, assets, financial condition or results of operations
of LVDG, nor has LVDG been notified of any pending condemnation proceeding
concerning any of its properties;
(v) there have not been any defaults or breaches by LVDG
under agreements to which it is a party or by which it is bound which, taken
in the aggregate, would have a material adverse effect upon the business,
assets, financial condition or results of operation of LVDG;
(vi) LVDG has not directly or indirectly, (A) issued, sold,
pledged, disposed of, or encumbered, or authorized, proposed or agreed to the
issuance, sale, pledge, disposition or encumbrance of, any shares of, or any
options, warrants or rights of any kind to acquire any shares of or any
securities convertible into or exchangeable for any of, the capital stock of
any class of LVDG, or any other securities in respect of, in lieu of, or in
substitution for any such capital stock; (B) acquired (by merger,
consolidation, or acquisition of shares or assets) any corporation,
partnership or other business organization or division thereof or made any
investment either by purchase of shares or securities, contributions to
capital (other than to subsidiaries or affiliates) or property transfer; (C)
authorized any change in its capitalization or authorized, recommended or
proposed any release or relinquishment of any Contract right; or (D)
authorized any of the foregoing, or entered into or modified any contract,
agreement, commitment or arrangement to do any of the foregoing;
(vii) LVDG has not incurred any obligation or liability
(fixed or contingent) with respect to its business or any of its assets,
except (1) obligations incurred in the ordinary course of business consistent
with past practice and (2) obligations and liabilities under this Agreement or
contemplated hereby;
(viii) LVDG has not discharged or satisfied any Encumbrance
or paid any obligation or liability (fixed or contingent) except (1) current
obligations and liabilities included in the LVDG Financial Statements and (2)
current obligations and liabilities incurred since the LVDG Balance Sheet Date
in the ordinary course of business;
(ix) LVDG has not mortgaged, pledged or subjected to any
Encumbrance any of its assets or properties;
(x) LVDG has not sold, transferred or leased any of its
assets or properties except in the ordinary course of business;
(xi) LVDG has not taken any action other than in the
ordinary course of business and consistent with past practice (none of which
actions is unreasonable or unusual) with respect to the grant of any severance
or termination pay (otherwise than pursuant to policies of LVDG in effect on
the date hereof) or with respect to any increase of benefits payable under its
severance or termination pay policies in effect on the date hereof; and
(xii) LVDG has not adopted or amended any bonus, profit
sharing, thrift, savings, compensation, stock option, pension, retirement,
deferred compensation, employment or other employee benefit plan, agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
employee or increased in any manner the compensation or fringe benefits of any
employee or paid any benefit not required by any existing plan and
arrangement, except for salary increases for employees in the ordinary course
of business consistent with past practices.
3.5 No Undisclosed Liabilities. Except as set forth in Schedules 3.4,
3.5, 3.12, 3.14, 3.15, and 3.20, there are no liabilities of LVDG of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, other than:
(a) liabilities disclosed or provided for in the consolidated
balance sheet of LVDG (or the notes thereto) as of the LVDG Balance Sheet Date
included in the LVDG Financial Statements; and
(b) liabilities incurred in the ordinary course of business
consistent with past practice since the LVDG Balance Sheet Date.
3.6 Compliance with Laws. LVDG has complied, and is in compliance, in
all material respects with all applicable federal, state, local or foreign
laws, regulations or orders or any other requirements of any governmental,
regulatory or administrative agency or authority or court or other tribunal
(including, but not limited to, any laws, regulations, order or requirement
relating to securities, the environment, properties, business, products,
manufacturing processes, advertising, sales or employment practices, terms and
conditions of employment, occupational safety, health and welfare conditions
of occupied premises, environmental protection, air or water pollution,
product safety, and liability or civil rights) (each and all of the foregoing
being herein referred to as "Laws"). LVDG is not now charged with or to its
knowledge under investigation with respect to any violation of any applicable
Law where such violation could have a material adverse effect on its business,
assets, financial condition or results of operation. LVDG has filed all
reports required to be filed with any governmental, regulatory or
administrative agency or authority where failure to file such report would
have a material adverse effect on its business, assets, financial condition or
results of operation.
3.7 Tax Matters. Except as set forth in Schedule 3.7, (a) LVDG has
duly filed or will file with the appropriate government agencies all Tax (as
hereinafter defined below) returns required to be filed by it on or before the
Effective Time, (b) LVDG has timely paid, or made provision on its books and
records by establishing a reserve for the payment of, all Taxes due with
respect to its operations or any other operation of the LVDG Group (as
hereinafter defined below) prior to the Effective Time, including all Taxes
shown as due on all Tax returns described in clause (a) above and all
estimated Tax payments due on or before the Effective Time, (c) LVDG has not
executed or filed any agreement extending the period for assessment or
collection of any Taxes, nor is LVDG a party to any pending Litigation (as
hereafter defined in Section 3.15 hereof) by any governmental authority for
assessment or collection of any Taxes, and no claims for assessment or
collection of any Taxes have been asserted against LVDG, and (d) to the
knowledge of LVDG, no Tax returns of LVDG or the LVDG Group are under
examination. LVDG is not a "United States real property holding company"
within the meaning of Section 1445 of the Code. As used herein (i) "LVDG
Group" shall mean LVDG and all members of its affiliated group as defined in
section 1504(a) of the Internal Revenue Code of 1986, as amended (the "Code")
and as defined in any applicable Law providing for consolidated or combined
returns and (ii) "Tax" or "Taxes" shall mean taxes of any kind payable to any
federal, state, local, or foreign taxing authority, including, without
limitation, (A) income, gross receipts, ad valorem, value added, sales, use,
service, franchise, profits, real or personal property, capital stock,
license, payroll, withholding, employment, social security, workers
compensation, unemployment compensation, utility, severance, production,
excise, stamp, sales, liquor, occupation, premium, windfall profits, transfer
and gains taxes, (B) customs duties, (C) interest, penalties, and additions to
tax imposed with respect to the above taxes, and (D) any damages, costs,
expenses, fees or other liability arising from such Tax or Taxes.
3.8 Title to Properties; Absence of Liens and Encumbrances, Etc.
Except as set forth in Schedule 3.8, LVDG owns no real property and has good
title to or a legal, valid and enforceable right to use the properties and
assets used in the conduct of its business (including without limitation the
assets reflected in its balance sheet as at the LVDG Balance Sheet Date,
except as since sold or otherwise disposed of in the ordinary course of
business), free and clear of all Encumbrances, imperfections of or other
matters affecting title, and any rights of third parties whatsoever, except
(i) the lien of taxes not yet due and payable or being contested in good faith
by appropriate proceedings, and (ii) such imperfections of title and other
Encumbrances, if any, which, individually or in the aggregate, do not
materially detract from the marketability, value, or interfere with the
present use, of the property or asset subject thereto or otherwise impair the
operations of its business (collectively, "Permitted Encumbrances").
3.9 Facilities. Schedule 3.9 sets forth a correct and complete list
of all of the real properties, together with the buildings, improvements, and
structures located thereon, owned or used by LVDG in the conduct of its
business, indicating whether such property is owned or leased and setting
forth where such property is located.
3.10 Condition of Facilities, Equipment, Etc. The buildings,
structures, equipment and other physical properties and assets owned,
operated, or leased by LVDG in connection with its business are in good
condition and repair (ordinary wear and tear which are not such as to affect
adversely the operation of LVDG's business excepted), free of any structural
or engineering defect, are suitable for the conduct of its business as
presently conducted and as presently proposed to be conducted, and do not
require any maintenance or repairs except for routine maintenance and repairs.
All such physical properties and assets are in conformity in all respects with
all applicable Laws and other requirements relating thereto currently in
effect or scheduled to come into effect, including, without limitation, Laws
relating to environmental regulation and the maintenance of occupational
safety and health among the workforce.
3.11 Insurance. The business and the assets of LVDG are covered by
insurance with licensed insurance companies against casualty and other losses
customarily obtained to cover comparable businesses and assets in the region
in which such businesses and assets are located, in amounts, scope and
coverage which are reasonable in light of existing conditions. Schedule 3.11
sets forth a correct and complete list of all of the policies of insurance and
fidelity or surety bonds carried by LVDG with respect to its business or any
of its assets (including prior policies to the extent that they continue to
provide coverage). LVDG has not failed to give any notice or present any
claim under such insurance policies in due and timely fashion, and there are
no claims by LVDG against any of such policies as to which any insurance
company is denying liability or defending under a reservation of rights
clause.
3.12 Agreements, Plans, Arrangements, Etc. Except as set forth in
Schedule 3.12 (which may refer to other specific Schedules hereto), LVDG is
not a party to, nor is LVDG or any of its properties and assets bound or
affected by, any of the following:
(a) a lease (whether as lessor or lessee) relating to real or
personal property;
(b) a license, sublicense, assignment or other Contract (whether
as licensor or licensee, assignor or assignee) relating to Intellectual
Property (as such term is defined in Section 3.13 hereof);
(c) an employment Contract or consulting Contract;
(d) a joint venture or partnership Contract;
(e) a Contract for the borrowing or lending of money or
guaranteeing, indemnifying or otherwise becoming liable for the obligations or
liabilities of another;
(f) a Contract granting any person a security interest or other
Encumbrance on any of the assets of LVDG;
(g) a Contract for the construction or modification of any
building or structure or for the incurrence of any other capital expenditure;
(h) a Contract which restricts LVDG from doing business anywhere
in the world;
(i) a Contract not entered into in the ordinary course of
business;
(j) a Contract requiring the payment of royalties; or
(k) any other Contract which could have a material adverse
effect on the Surviving Corporation.
Correct and complete copies of all Contracts set forth in Schedule 3.12 or any
other Schedule hereto, including all amendments to date (or, where they are
oral, true and complete written summaries thereof), and true and complete
copies of all standard form Contracts used by LVDG in the conduct of its
business have been delivered to SAGC or its Representatives (as such term is
defined in Section 3.23 hereof) prior to the date hereof. Each such Contract
is valid, in full force and effect and enforceable in accordance with its
terms and LVDG has fulfilled, or taken all action reasonably necessary to
enable it to fulfill when due, its obligations under such Contracts. There
has not occurred any default, or any event which, with the lapse of time or
the election of any person other than LVDG, or any combination thereof, will
become a default, by LVDG, nor to the knowledge of LVDG has there occurred any
default by others or any event which, with the lapse of time or the election
of LVDG, will become a default by others under any material Contracts. LVDG
is not, and to the knowledge of LVDG, no other party, is in arrears in respect
of the performance or satisfaction of the terms or conditions on its part to
be performed or satisfied under any of such Contracts and no waiver or
indulgence has been granted by any of the parties thereto.
3.13 Intellectual Properties. Schedule 3.13 sets forth a correct and
complete list of all patents, trademarks, trade names, service marks,
copyrights, and applications therefor (collectively, "Intellectual
Properties") used in the conduct of the business of LVDG. Except as disclosed
in Schedule 3.13, (a) LVDG owns or possesses adequate licenses or other valid
rights to use (without the making of any payment to others or the obligation
to grant rights to others in exchange) all Intellectual Properties necessary
to the conduct of its business as presently being conducted and the
consummation of the transactions contemplated hereby will not alter or impair
any of such rights; (b) the validity of such rights and the title thereto of
LVDG has not been questioned in any Litigation (as defined in Section 3.15
hereof) to which it is a party, nor to the knowledge of LVDG is any such
Litigation threatened; (c) the conduct of LVDG's business as now conducted
does not infringe or conflict with any Intellectual Properties of others; (d)
there is no use of any trademark, service xxxx or trade name owned by or
licensed to LVDG that has heretofore been or is now being made, except by LVDG
or by an entity duly licensed by it to use the same under a Contract disclosed
in Schedule 3.12; and (e) to the knowledge of LVDG there is no infringement by
others of any Intellectual Properties owned by or licensed by or to LVDG. All
patents, patent applications and rights to inventions heretofore owned or held
by any employee or officer of LVDG and relating to its business in any manner
have been duly effectively transferred to LVDG. All licenses and Contracts
requiring the payment of royalties by LVDG are referenced and correctly
described in LVDG's Annual Report on Form 10-K for the year ended December 31,
1996.
3.14 Permits, License, Etc. LVDG has, and has complied in all material
respects with, all Permits (as hereafter defined below) that are required in
order to carry on its business as presently conducted and is not in default of
any thereof. Schedule 3.14 sets forth a correct and complete list of all such
Permits, all of which are in full force and effect, and to LVDG's knowledge,
no suspension, cancellation or non- renewal of any of them is threatened, nor
does any basis for such suspension, cancellation or non-renewal exist. As to
any such Permit that has expired or is about to expire, LVDG has promptly
applied for the renewal of same. A true and complete copy of each Permit set
forth in Schedule 3.14 has been previously delivered to SAGC. As used herein,
"Permits" shall mean all licenses, permits, consent orders, administrative
orders, registrations, authorizations, franchises and other approvals from any
domestic (federal, state or local) or foreign governmental, public or
self-regulatory body or authority the failure of which to obtain would have a
material adverse effect on the business or properties of LVDG or SAGC, taken
as a whole, as the context shall require.
3.15 Litigation. Except as set forth on Schedule 3.15, there is no
claim, action, suit, proceeding, arbitration, investigation or inquiry (each
and all of the foregoing items being herein referred to as "Litigation")
pending before any federal, state, municipal, foreign or other court or
governmental, administrative or self-regulatory body or agency, or any private
arbitration tribunal, or to the knowledge of LVDG threatened, against,
relating to or affecting LVDG with respect to its business or the transactions
contemplated by this Agreement; nor to the knowledge of LVDG is there any
basis for any such Litigation. Neither LVDG nor any officer, director or
employee of LVDG has been permanently or temporarily enjoined or barred by
order, judgment or decree of any court or other tribunal or any agency or
self-regulatory body from engaging in or continuing any conduct or practice in
connection with its business. There is not in existence any order, judgment
or decree of any court or other tribunal or any agency or self-regulatory body
enjoining LVDG from taking or requiring LVDG to take action of any kind with
respect to its business or to which LVDG is subject or by which LVDG is bound.
3.16 Accounts and Notes Receivable. LVDG has heretofore delivered to
SAGC a true, complete and correct listing of all of the receivables (including
accounts receivable, notes receivable, loans receivable and any advances) of
LVDG as of September 30, 1997. All such receivables, net of any allowance for
doubtful accounts, have been reported in accordance with generally accepted
accounting principles applied on a consistent basis except as stated thereon.
All accounts and notes receivable shown in the listing provided as of
September 30, 1997, or arising thereafter and on or prior to the Effective
Time arose from bona fide transactions in the ordinary course of business.
3.17 No Interest in Competitors, Etc. Except as set forth in Schedule
3.17 (which may refer to other specific Schedules hereto), and except for the
ownership of not more than five percent (5%) of the outstanding securities of
any class of an issuer registered under Section 12 of the Exchange Act neither
LVDG nor any affiliate thereof, nor any officer or director of LVDG or any
affiliate or associate thereof, directly or indirectly is, or owns any
interest in or controls or is an employee, officer, director, or partner of or
participant in or consultant to any corporation, partnership, limited
partnership, joint venture, association, or other entity which is a
competitor, supplier, customer, landlord, or tenant of LVDG. Schedule 3.17
hereto sets forth all Contracts or other arrangements between LVDG and any
affiliate thereof for space, facilities, personnel, management, computer,
telephone or other services. Except as set forth in Schedule 3.17, LVDG does
not owe any amount to, or have any Contract with or commitment to, any of its
shareholders, directors, officers, employees or consultants (other than
compensation for current services not yet due and payable and reimbursement of
expenses arising in the ordinary course of business), none of such persons
owes any amount to LVDG, and no property or assets of any shareholders of LVDG
or any affiliate of any shareholders of LVDG is used by LVDG.
3.18 Books and Records. The books of account and other financial and
corporate records of LVDG are in all material respects complete and correct,
are maintained in accordance with good business practices and all Laws
applicable to LVDG, and are accurately reflected in the LVDG Financial
Statements. The minute books of LVDG as previously made available to SAGC and
its counsel contain accurate records of all meetings, and accurately reflect
all other corporate action of the shareholders and directors of LVDG.
3.19 Employees, Labor Relations, Etc. (a) LVDG is not a party to any
contract or agreement with any labor organization or other representative of
LVDG employees; (b) there is no unfair labor practice charge or complaint
pending or, to the best knowledge of LVDG, threatened, against LVDG; (c) there
is no labor strike, slowdown, work stoppage or other material labor
controversy in effect, or to the knowledge of LVDG threatened against or
otherwise affecting LVDG; (d) LVDG has not experienced any labor strike,
slowdown, work stoppage or other material labor controversy within the past
three years; (e) no representation question has been raised respecting any of
LVDG's employees within the past three years, nor, to the best knowledge of
LVDG are there any campaigns being conducted to solicit cards from LVDG's
employees to authorize representation by any labor organization; (f) no
collective bargaining agreement relating to any of LVDG's employees is being
negotiated; (g) no action, suit, complaint, charge, arbitration, inquiry,
proceeding, or investigation by or before any court, governmental agency,
administrative agency or commission brought by or on behalf of any employee,
prospective employee, former employee, retiree, labor organization or other
representative of LVDG's employees, is pending or, to the best knowledge of
LVDG, threatened, against LVDG; (h) LVDG is not a party to, or otherwise bound
by, any consent decree with, or citation by, any government agency relating to
LVDG's employees or employment practices relating to LVDG's employees; (i)
LVDG is in compliance in all material respects with all applicable Laws and
Contracts relating to employment, employment practices, wages, hours, and
terms and conditions of employment, and have not engaged in any unfair labor
practice or discriminated on the basis of race, age, sex or otherwise in its
employment conditions or practices with respect to its employees; and (j) LVDG
has paid in full to all of its employees all wages, salaries, commissions,
bonuses, benefits and other compensation due and payable to such employees on
or prior to the date hereof.
3.20 Employee Benefit Plans, Etc.
(a) Schedule 3.20 hereto contains a true and complete list of
each plan, Contract, program, policy or arrangement, including, but not
limited to, pension, bonus, section 401(k) plan, deferred compensation,
incentive compensation, stock purchase, supplemental retirement, severance or
termination pay, stock option, hospitalization, medical, life insurance,
dental, disability, salary continuation, vacation, supplemental unemployment
benefits, profit-sharing, or retirement plan, Contract, program, policy or
arrangement, maintained, contributed to, or required to be contributed to, by
LVDG or by any of its subsidiaries or affiliates for the benefit of any
employee, whether or not any of the foregoing is funded, whether formal or
informal, whether or not subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and whether legally binding or not
(collectively, the "Benefit Plans"). LVDG has delivered to SAGC true and
complete copies of all documents embodying or relating to the Benefit Plans,
including, without limitation, with respect to each Benefit Plan, all
amendments to the Benefit Plans, and any trust or other funding arrangement.
(b) Except as specifically set forth in Schedule 3.20, full
payment has been made of all amounts which LVDG is required, under applicable
law or under any Benefit Plan or any agreement relating to any Benefit Plan to
which LVDG is a party, to have paid as contributions thereto as of the last
day of the most recent fiscal year of such Benefit Plan ended prior to the
date hereof. LVDG has made adequate provision for reserves to meet
contributions that have not been made because they are not yet due under the
terms of any Benefit Plan or related agreements. Benefits under all Benefit
Plans are as represented and have not been increased subsequent to the date as
of which documents have been provided.
3.21 SEC Filings. LVDG has filed with the Securities and Exchange
Commission ("SEC") and has previously delivered to SAGC true and complete
copies of, all forms, reports, schedules, statements, and other documents
required to be filed by LVDG since January 1, 1995, under the Securities Act
or the Exchange Act, and has previously delivered to SAGC true and complete
copies of all forms, reports, schedules, statements, and other documents
otherwise filed by LVDG since January 1, 1995, under the Securities Act or the
Exchange Act. No form, report, schedule, statement or other document filed by
LVDG with the SEC since January 1, 1995, contained any untrue statement of a
material fact or omitted to state any material fact, at the time such document
was filed, necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, other than such
facts as were corrected in any subsequent form, report, schedule, statement or
other document filed by LVDG with the SEC.
3.22 Information. None of the information concerning LVDG supplied or
to be supplied by LVDG or any of its agents, accountants, lawyers or other
consultants or advisors (each of the foregoing referred to herein as
"Representative") for inclusion in the proxy and registration statement on
Form S-4 prepared in connection with the transactions contemplated hereby or
any amendment or supplement thereto has or will, at the time that the proxy
and registration statement was or any amendment is mailed, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading or, in the case of any such proxy and
registration statement, necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for the meeting or
consent in connection with which such proxy and registration statement shall
be mailed. None of the information and documents which have been or may be
furnished by LVDG or any of its Representatives to SAGC or their
Representatives in connection with the transactions contemplated hereby is or
will be materially false or misleading or contains or will contain any
material misstatement of fact or omits or will omit any material fact
necessary to be stated in order to make the statements therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO SAGC
SAGC represents and warrants to LVDG as follows (as used in this Article
4, the term "SAGC" shall include SAGC and each subsidiary (as such term is
defined in Rule 405 promulgated under the Securities Act) of SAGC (an "SAGC
Subsidiary"), unless the context suggests otherwise):
4.1 Corporate Existence and Power; Qualification; Subsidiaries. SAGC
is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation. SAGC has all corporate
powers to execute and deliver this Agreement and to perform its obligations
hereunder and consummate the transactions contemplated hereby, and has all
corporate powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted and to own its
properties, and is duly qualified to do business and is in good standing in
each jurisdiction in which the conduct of its business or the ownership or
leasing of its properties requires such qualification. The copies of SAGC's
Articles of Incorporation and By-laws that have been delivered to LVDG are
complete and correct and are in full force and effect. Schedule 4.1 sets forth
a complete list of each SAGC Subsidiary. Each SAGC Subsidiary is a
corporation or partnership duly incorporated (if a corporation), validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, as the case may be, has all requisite powers
and all governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted and to own its properties, and is
duly qualified to do business and is in good standing in each jurisdiction in
which the conduct of its business or the ownership or leasing of its
properties requires such qualification. SAGC has not made any advances to or
investments in, nor directly or indirectly owns any securities of, any
domestic or foreign business entity, enterprise or organization other than as
set forth on Schedule 4.1. Neither SAGC nor any SAGC Subsidiary is in
violation of any provision of its Articles of Incorporation or Bylaws or
certificate of limited partnership, or equivalent organizational document, as
the case may be. Each of the outstanding shares of capital stock of, or other
equity interests in, any SAGC Subsidiary owned by SAGC is owned by SAGC free
and clear of any Encumbrance.
4.2 Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by SAGC of this Agreement and the Merger
have been duly authorized by all necessary corporate action (other than the
approval of this Agreement and the Merger by the holders of a majority of the
outstanding shares of SAGC Common and Preferred Stock voted at the stockholder
meeting referred to in Section 6.3 hereof). This Agreement has been duly
executed and delivered by SAGC. The execution and delivery of this Agreement
do not and the consummation of the transactions contemplated hereby will not
be prohibited by, or violate or conflict with, any provision of the Articles
of Incorporation or Bylaws of SAGC, or of any Law, or, except as set forth on
Schedule 4.2, any provision of, or result in the acceleration of, result in
any severance or termination pay liability, constitute a default under,
entitle any party to accelerate (whether after the giving of notice or lapse
of time or both) any obligation under, result in the creation or imposition of
any Encumbrance upon any property of SAGC pursuant to any provisions of, or
create any right on the part of any party to modify, amend or terminate, any
Contract, lien, instrument, order, Permit (as such term is defined in Section
3.14 hereof), arbitration award, judgment or decree to which SAGC is a party
or by which any of them is bound. Other than the requirement to file the
Certificates of Merger with the Secretaries of State of the States of Colorado
and Nevada, as appropriate, and as required by the Securities Act, the
Exchange Act, state securities laws, and the Nasdaq Stock Market, and except
for the other regulatory filings and approvals set forth in Schedule 4.2
hereof, no authorization, consent or approval of, or filing with, any domestic
or foreign public body or authority is necessary on the part of SAGC for the
consummation by SAGC of the transactions contemplated by this Agreement or the
other agreements referred to herein and the ownership and operation by the
Surviving Corporation of the business and properties of SAGC after the
Effective Time in substantially the same manner as presently owned and
operated, except where the failure to give such notices, obtain such
authorizations, consents or approvals or make such filings would not, in the
aggregate have a materially adverse effect on the condition (financial or
otherwise), business or operations of SAGC, or delay or prevent the
consummation of the transactions contemplated by this Agreement or prevent
SAGC from performing its obligations hereunder. This Agreement is a valid,
legal and binding agreement of SAGC, subject to applicable bankruptcy,
insolvency, moratorium or other laws affecting the enforcement of creditors'
rights in general from time to time in effect and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
4.3 Capitalization.
(a) The shares of SAGC Common Stock which are currently
outstanding have been duly authorized and are validly issued, fully paid,
nonassessable and free of preemptive rights created by statute, SAGC's
Articles of Incorporation or otherwise. The authorized capital stock of SAGC
consists of 10,000,000 shares of SAGC Common Stock, of which 3,000,000 shares
are issued and outstanding, and 5,000,000 shares of Preferred Stock, par value
$.01 per share, of which 500,000 shares are outstanding.
(b) There are no subscriptions, options, warrants or other
rights, calls, agreements or commitments obligating SAGC or any SAGC
Subsidiary to issue, or repurchase, redeem or otherwise acquire, capital stock
or other securities of SAGC or any SAGC Subsidiary, except as set forth in
Schedule 4.3.
4.4 Financial Statements of SAGC; Changes.
(a) SAGC has heretofore delivered to LVDG true and complete
copies of (i) its consolidated audited balance sheet as at December 31, 1996,
and audited consolidated statements of operations and audited consolidated
statements of cash flows for the two-year period then ended, (ii) its
unaudited consolidated balance sheet as of September 30, 1997 (the "SAGC
Balance Sheet Date"), and unaudited consolidated statements of operations and
statement of cash flows for the nine months then ended (collectively, the
"SAGC Financial Statements"). The SAGC Financial Statements present fairly
the consolidated financial position of SAGC as of the dates of the balance
sheets, and the consolidated results of operations and cash flows for the
periods then ended, all in conformity with generally accepted accounting
principles applied on a consistent basis, except as stated thereon.
(b) Except as set forth in Schedule 4.4 hereto, except for the
sale of certain assets made by SAGC pursuant to an Agreement for the Purchase
and Sale of Assets, as amended, which occurred on February 26, 1997 (the
"Asset Sale"), and except as contemplated by this Agreement, since the SAGC
Balance Sheet Date:
(i) there has been no material adverse change in the
business, assets, financial condition or results of operations of SAGC;
(ii) there has not been any direct or indirect redemption,
purchase or other acquisition by SAGC of any of SAGC's capital stock, or any
declaration, setting aside or payment of any dividend or other distribution by
SAGC in respect of its capital stock, and SAGC has not authorized or proposed
any of the foregoing, or entered into any contract, agreement, commitment or
arrangement to do any of the foregoing, except as may be contemplated by this
Agreement and the agreements contemplated hereby or referred to herein;
(iii) except for the transactions contemplated hereby, SAGC
has conducted its business in the ordinary course and consistent with past
practices;
(iv) there has been no damage, destruction or casualty loss
(whether or not covered by insurance) suffered by SAGC materially adversely
affecting the business, assets, financial condition or results of operations
of SAGC, nor has SAGC been notified of any pending condemnation proceeding
concerning any of its properties;
(v) there have not been any defaults or breaches by SAGC
under agreements to which it is a party or by which it is bound which, taken
in the aggregate, would have a material adverse effect upon the business,
assets, financial condition or results of operation of SAGC;
(vi) SAGC has not directly or indirectly, (A) issued, sold,
pledged, disposed of, or encumbered, or authorized, proposed or agreed to the
issuance, sale, pledge, disposition or encumbrance of, any shares of, or any
options, warrants or rights of any kind to acquire any shares of or any
securities convertible into or exchangeable for any of, the capital stock of
any class of SAGC, or any other securities in respect of, in lieu of, or in
substitution for any such capital stock; (B) acquired (by merger,
consolidation, or acquisition of shares or assets) any corporation,
partnership or other business organization or division thereof or made any
investment either by purchase of shares or securities, contributions to
capital (other than to subsidiaries or affiliates) or property transfer; (C)
authorized any change in its capitalization or authorized, recommended or
proposed any release or relinquishment of any Contract right; or (D)
authorized any of the foregoing, or entered into or modified any contract,
agreement, commitment or arrangement to do any of the foregoing;
(vii) SAGC has not incurred any obligation or liability
(fixed or contingent) with respect to the business of SAGC or any of its
assets, except (1) obligations incurred in the ordinary course of business
consistent with past practice and (2) obligations and liabilities under this
Agreement or contemplated hereby;
(viii) SAGC has not discharged or satisfied any
Encumbrance or paid any obligation or liability (fixed or contingent) except
(1) current obligations and liabilities included in the SAGC Financial
Statements and (2) current obligations and liabilities incurred since the SAGC
Balance Sheet Date in the ordinary course of business;
(ix) SAGC has not mortgaged, pledged or subjected to any
Encumbrance any of the assets or properties of SAGC;
(x) SAGC has not sold, transferred or leased any of the
assets or properties of SAGC, except in the ordinary course of business;
(xi) SAGC has not taken any action other than in the
ordinary course of business and consistent with past practice (none of which
actions is unreasonable or unusual) with respect to the grant of any severance
or termination pay (otherwise than pursuant to policies of SAGC in effect on
the date hereof) or with respect to any increase of benefits payable under its
severance or termination pay policies in effect on the date hereof; and
(xii) SAGC has not adopted or amended any bonus, profit
sharing, thrift, savings, compensation, stock option, pension, retirement,
deferred compensation, employment or other employee benefit plan, agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
employee or increased in any manner the compensation or fringe benefits of any
employee or paid any benefit not required by any existing plan and
arrangement, except for salary increases for employees in the ordinary course
of business consistent with past practices.
4.5 No Undisclosed Liabilities. Except as set forth in Schedules 4.4,
4.5, 4.12, 4.14, 4.15 and 4.20, there are no liabilities of SAGC of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, other than:
(a) liabilities disclosed or provided for in the balance sheet
of SAGC (or the notes thereto) as of the SAGC Balance Sheet Date included in
the SAGC Financial Statements; and
(b) liabilities incurred in the ordinary course of business
consistent with past practice since the SAGC Balance Sheet Date.
4.6 Compliance with Laws. SAGC has complied, and is in compliance, in
all material respects with all applicable Laws. SAGC is not now charged with
or to its knowledge under investigation with respect to any violation of any
applicable Law where such violation could have a material adverse effect on
the business, assets, financial condition or results of operation of SAGC.
SAGC has filed all reports required to be filed with any governmental,
regulatory or administrative agency or authority where failure to file such
report would have a material adverse effect on the business, assets, financial
condition or results of operation of SAGC.
4.7 Tax Matters. Except as set forth in Schedule 4.7, (a) SAGC has
duly filed or will file with the appropriate government agencies all Tax
returns required to be filed by it on or before the Effective Time, (b) SAGC
has timely paid, or made provision on its books and records by establishing a
reserve for the payment of, all Taxes due with respect to its operations or
any other operation of the SAGC Group (as hereinafter defined below) prior to
the Effective Time, including all Taxes shown as due on all Tax returns
described in clause (a) above and all estimated Tax payments due on or before
the Effective Time, (c) SAGC has not executed or filed any agreement extending
the period for assessment or collection of any Taxes, nor is SAGC a party to
any pending Litigation by any governmental authority for assessment or
collection of any Taxes, and no claims for assessment or collection of any
Taxes have been asserted against SAGC, and (d) to the knowledge of SAGC, no
Tax returns of SAGC or the SAGC Group are under examination. As used herein,
"SAGC Group" shall mean SAGC and all members of its affiliated group as
defined in section 1504(a) of the Code and as defined in any applicable Law
providing for consolidated or combined returns. SAGC is not a "United States
real property holding company" within the meaning of Section 1445 of the Code.
4.8 Title to Properties; Absence of Liens and Encumbrances, Etc.
SAGC owns no real property and has good title to or a legal, valid and
enforceable right to use the properties and assets used in the conduct of the
business of SAGC (including without limitation the assets reflected in its
balance sheet as at the SAGC Balance Sheet Date, except as since sold or
otherwise disposed of in the ordinary course of business), free and clear of
all Encumbrances, imperfections of or other matters affecting title, and any
rights of third parties whatsoever, except Permitted Encumbrances.
4.9 Facilities. Schedule 4.9 sets forth a correct and complete list
of all of the real properties, together with the buildings, improvements, and
structures located thereon, owned or used by SAGC in the conduct of its
business, indicating whether such property is owned or leased and setting
forth where such property is located.
4.10 Condition of Facilities, Equipment, Etc. The buildings,
structures, equipment and other physical properties and assets owned,
operated, or leased by SAGC in connection with its business are in good
condition and repair (ordinary wear and tear which are not such as to affect
adversely the operation of SAGC's business excepted), free of any structural
or engineering defect, are suitable for the conduct of SAGC's business as
presently conducted and as presently proposed to be conducted, and do not
require any maintenance or repairs except for routine maintenance and repairs.
All such physical properties and assets are in conformity in all respects with
all applicable Laws and other requirements relating thereto currently in
effect or scheduled to come into effect, including, without limitation, Laws
relating to environmental regulation and the maintenance of occupational
safety and health among the workforce.
4.11 Insurance. The business and the assets of SAGC are covered by
insurance with licensed insurance companies against casualty and other losses
customarily obtained to cover comparable businesses and assets in the region
in which such businesses and assets are located, in amounts, scope and
coverage which are reasonable in light of existing conditions. Schedule 4.11
sets forth a correct and complete list of all of the policies of insurance and
fidelity or surety bonds carried by SAGC with respect to SAGC's business or
any of its assets (including prior policies to the extent that they continue
to provide coverage). SAGC has not failed to give any notice or present any
claim under such insurance policies in due and timely fashion, and there are
no claims by SAGC against any of such policies as to which any insurance
company is denying liability or defending under a reservation of rights
clause.
4.12 Agreements, Plans, Arrangements, Etc. Except as set forth in
Schedule 4.12 (which may refer to other specific Schedules hereto), SAGC is
not a party to, nor is SAGC or any of its properties and assets bound or
affected by, any of the following:
(a) a lease (whether as lessor or lessee) relating to real or
personal property;
(b) a license, sublicense, assignment or other Contract (whether
as licensor or licensee, assignor or assignee) relating to Intellectual
Property;
(c) an employment Contract or consulting Contract;
(d) a joint venture or partnership Contract;
(e) a Contract for the borrowing or lending of money or
guaranteeing, indemnifying or otherwise becoming liable for the obligations or
liabilities of another;
(f) a Contract granting any person a security interest or other
Encumbrance on any of the assets of SAGC;
(g) a Contract for the construction or modification of any
building or structure or for the incurrence of any other capital expenditure;
(h) a Contract which restricts SAGC from doing business anywhere
in the world;
(i) a Contract not entered into in the ordinary course of
business;
(j) a Contract requiring the payment of royalties; or
(k) any other Contract which could have a material adverse
effect on the Surviving Corporation.
Correct and complete copies of all Contracts set forth in Schedule 4.12 or any
other Schedule hereto, including all amendments to date (or, where they are
oral, true and complete written summaries thereof), and true and complete
copies of all standard form Contracts used by SAGC in the conduct of its
business have been delivered to LVDG or its Representatives prior to the date
hereof. Each such Contract is valid, in full force and effect and enforceable
in accordance with its terms and SAGC has fulfilled, or taken all action
reasonably necessary to enable it to fulfill when due, all of its obligations
under such Contracts. Except as set forth in Schedule 4.12, there has not
occurred any default, or any event which, with the lapse of time or the
election of any person other than SAGC, or any combination thereof, will
become a default, by SAGC, nor to the knowledge of SAGC has there occurred any
default by others or any event which, with the lapse of time or the election
of SAGC, will become a default by others under any of such Contracts. Neither
SAGC nor to SAGC's knowledge any other party is in arrears in respect of the
performance or satisfaction of the terms or conditions on its part to be
performed or satisfied under any of such Contracts and no waiver or indulgence
has been granted by any of the parties thereto.
4.13 Intellectual Properties. Schedule 4.13 sets forth a correct and
complete list of all Intellectual Properties used or presently proposed to be
used in the conduct of the business of SAGC. Except as disclosed in Schedule
4.13, (a) SAGC owns or possesses adequate licenses or other valid rights to
use (without the making of any payment to others or the obligation to grant
rights to others in exchange) all Intellectual Properties necessary to the
conduct of its business as presently being conducted and the business of SAGC
as presently being conducted and the consummation of the transactions
contemplated hereby will not alter or impair any of such rights; (b) the
validity of such rights and the title thereto of SAGC have not been questioned
in any Litigation (as defined in Section 3.15 hereof) to which SAGC is a
party, nor to the knowledge of SAGC is any such Litigation threatened; (c) to
SAGC's knowledge, the conduct of SAGC's business as now conducted does not
infringe or conflict with any Intellectual Properties of others; (d) there is
no use of any trademark, service xxxx or trade name owned by or licensed to
SAGC that has heretofore been or is now being made, except by SAGC or by an
entity duly licensed by it to use the same under a Contract disclosed in
Schedule 4.12; and (e) to the knowledge of SAGC there is no infringement by
others of any Intellectual Properties owned by or licensed by or to SAGC. All
patents, patent applications and rights to inventions heretofore owned or held
by any employee or officer of SAGC or affiliate of SAGC and relating to its
business in any manner have been duly effectively transferred to SAGC. All
licenses and Contracts requiring the payment of royalties by SAGC are
referenced and correctly described in the SAGC 1996 Annual Report.
4.14 Permits, License, Etc. SAGC has, and has complied in all material
respects with, all Permits that are required in order to carry on its business
as presently conducted and is not in default of any thereof. Schedule 4.14
sets forth a correct and complete list of all such Permits, all of which are
in full force and effect, and, to SAGC's knowledge, no suspension,
cancellation or non-renewal of any of them is threatened, nor does any basis
for such suspension, cancellation or non-renewal exist. As to any such Permit
that has expired or is about to expire, SAGC has promptly applied for the
renewal of same. A true and complete copy of each Permit set forth in
Schedule 4.14 has been previously delivered to LVDG.
4.15 Litigation. Except as set forth on Schedule 4.15, there is no
Litigation pending before any federal, state, municipal, foreign or other
court or governmental, administrative or self-regulatory body or agency, or
any private arbitration tribunal, or to the knowledge of SAGC threatened,
against, relating to or affecting SAGC with respect to its business or the
transactions contemplated by this Agreement; nor to the knowledge of SAGC is
there any basis for any such Litigation. Neither SAGC nor any officer,
director or employee of SAGC has been permanently or temporarily enjoined or
barred by order, judgment or decree of any court or other tribunal or any
agency or self-regulatory body from engaging in or continuing any conduct or
practice in connection with its business. There is not in existence any
order, judgment or decree of any court or other tribunal or any agency or
self-regulatory body enjoining SAGC from taking or requiring SAGC to take
action of any kind with respect to its business or to which SAGC is subject or
by which it is bound.
4.16 Accounts and Notes Receivable. SAGC has heretofore delivered to
LVDG a true, complete and correct listing of all of the receivables (including
accounts receivable, notes receivable, loans receivable and any advances) of
SAGC as of September 30, 1997. All such receivables, net of any allowance for
doubtful accounts, have been reported in accordance with generally accepted
accounting principles applied on a consistent basis, except as stated thereon.
All accounts and notes receivable shown in the listing provided as of
September 30, 1997, or arising thereafter and on or prior to the Effective
Time arose from bona fide transactions in the ordinary course of business.
4.17 No Interest in Competitors, Etc. Except as set forth in Schedule
4.17 (which may refer to other specific Schedules hereto), and except for the
ownership of not more than five percent (5%) of the outstanding securities of
any class of an issuer registered under Section 12 of the Exchange Act neither
SAGC nor any affiliate thereof, nor any officer or director of SAGC or any
affiliate or associate thereof, directly or indirectly is, or owns any
interest in or controls or is an employee, officer, director, or partner of or
participant in or consultant to any corporation, partnership, limited
partnership, joint venture, association, or other entity which is a
competitor, supplier, customer, landlord, or tenant of SAGC. Schedule 4.17
hereto sets forth all Contracts or other arrangements between any affiliate of
SAGC and SAGC for space, facilities, personnel, management, computer,
telephone or other services. Except as set forth in Schedule 4.17, SAGC does
not owe any amount to, or have any Contract with or commitment to, any of its
shareholders, directors, officers, employees or consultants (other than
compensation for current services not yet due and payable and reimbursement of
expenses arising in the ordinary course of business), none of such persons
owes any amount to SAGC, and no part of the property or assets of any
shareholder of SAGC or any affiliate of any shareholder of SAGC is used by
SAGC.
4.18 Books and Records. The books of account and other financial and
corporate records of SAGC are in all material respects complete and correct,
are maintained in accordance with good business practices and all Laws
applicable to SAGC, and are accurately reflected in the SAGC Financial
Statements. The minute books of SAGC as previously made available to LVDG and
its counsel contain accurate records of all meetings, and accurately reflect
all other corporate action of the shareholders and directors of SAGC.
4.19 Employees, Labor Relations, Etc. (a) SAGC is not a party to any
contract or agreement with any labor organization or other representative of
SAGC's employees; (b) there is no unfair labor practice charge or complaint
pending or, to the best knowledge of SAGC, threatened, against SAGC; (c) there
is no labor strike, slowdown, work stoppage or other material labor
controversy in effect, or to the knowledge of SAGC threatened against or
otherwise affecting SAGC; (d) SAGC has not experienced any labor strike,
slowdown, work stoppage or other material labor controversy within the past
three years; (e) no representation question has been raised respecting any of
SAGC's employees within the past three years, nor, to the best knowledge of
SAGC are there any campaigns being conducted to solicit cards from SAGC's
employees to authorize representation by any labor organization; (f) no
collective bargaining agreement relating to any of SAGC's employees is being
negotiated; (g) no action, suit, complaint, charge, arbitration, inquiry,
proceeding, or investigation by or before any court, governmental agency,
administrative agency or commission brought by or on behalf of any employee,
prospective employee, former employee, retiree, labor organization or other
representative of SAGC's employees, is pending or, to the best knowledge of
SAGC, threatened, against SAGC; (h) SAGC is not a party to, or otherwise bound
by, any consent decree with, or citation by, any government agency relating to
SAGC's employees or employment practices relating to SAGC's employees; (i)
SAGC is in compliance in all material respects with all applicable Laws and
Contracts relating to employment, employment practices, wages, hours, and
terms and conditions of employment, and has not engaged in any unfair labor
practice or discriminated on the basis of race, age, sex or otherwise in its
employment conditions or practices with respect to its employees; and (j) SAGC
has paid in full to all of SAGC's employees all wages, salaries, commissions,
bonuses, benefits and other compensation due and payable to such employees on
or prior to the date hereof.
4.20 Employee Benefit Plans, Etc.
(a) Schedule 4.20 hereto contains a true and complete list of
each plan, Contract, program, policy or arrangement, including, but not
limited to, pension, bonus, section 401(k) plan, deferred compensation,
incentive compensation, stock purchase, supplemental retirement, severance or
termination pay, stock option, hospitalization, medical, life insurance,
dental, disability, salary continuation, vacation, supplemental unemployment
benefits, profit-sharing, or retirement plan, Contract, program, policy or
arrangement, maintained, contributed to, or required to be contributed to, by
SAGC or by any of its subsidiaries or affiliates for the benefit of any
employee, whether or not any of the foregoing is funded, whether formal or
informal, whether or not subject to ERISA, and whether legally binding or not
(collectively, the "Benefit Plans"). SAGC has delivered to LVDG (i) true and
complete copies of all documents embodying or relating to the Benefit Plans,
including, without limitation, with respect to each Benefit Plan, all
amendments to the Benefit Plans, and any trust or other funding arrangement,
including certified financial statements which fairly present the assets and
liabilities of each of the Benefit Plans as of the date thereof (and there
have been no material changes in the assets and the liabilities since the date
of such financial statements), (ii) the most recent annual and periodic
actuarial valuations, if any, prepared for any Benefit Plan, (iii) the most
recent annual reports (series 5500 and all schedules thereto), if any,
required under ERISA, (iv) if the Benefit Plan is funded, the most recent
annual and periodic accounting of the Benefit Plan's assets, (v) the most
recent determination letter received from the Internal Revenue Service, if
any, and (vi) a copy of the most recent summary plan description together with
the most recent summary of modifications required under ERISA with respect to
each such Benefit Plan, and all employee communications relating to each such
Benefit Plan.
(b) Except as specifically set forth in Schedule 4.20, full
payment has been made of all amounts which SAGC is required, under applicable
law or under any Benefit Plan or any agreement relating to any Benefit Plan to
which SAGC is a party, to have paid as contributions thereto as of the last
day of the most recent fiscal year of such Benefit Plan ended prior to the
date hereof. SAGC has made adequate provision for reserves to meet
contributions that have not been made because they are not yet due under the
terms of any Benefit Plan or related agreements. Benefits under all Benefit
Plans are as represented and have not been increased subsequent to the date as
of which documents have been provided.
4.21 SEC Filings. SAGC has filed with the SEC, and has previously
delivered to LVDG true and complete copies of, all forms, reports, schedules,
statements, and other documents required to be filed by SAGC since January 1,
1995, under the Securities Act or the Exchange Act. No form, report,
schedule, statement or other document filed by SAGC with the SEC since January
1, 1995, contained any untrue statement of a material fact or omitted to state
any material fact, at the time such document was filed, necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading, other than such facts as were corrected in any
subsequent form, report, schedule, statement or other document filed by SAGC
with the SEC.
4.22 Information. None of the information concerning SAGC incorporated
by reference, or any other information supplied or to be supplied by SAGC or
its Representatives for inclusion, in the proxy and registration statement on
Form S-4 prepared in connection with the transactions contemplated hereby or
any amendment or supplement thereto has or will, at the time that the proxy
and registration statement was or any amendment is mailed, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading or, in the case of any such proxy and
registration statement, necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for the meeting or
consent in connection with which such proxy and registration statement shall
be mailed. None of the information and documents which have been or may be
furnished by SAGC or any of its Representatives to LVDG or its Representatives
in connection with the transactions contemplated hereby is or will be
materially false or misleading or contains or will contain any material
misstatement of fact or omits or will omit any material fact necessary to be
stated in order to make the statements therein not misleading.
ARTICLE 5
CONDUCT OF BUSINESS OF LVDG
AND SAGC PRIOR TO THE EFFECTIVE TIME
5.1 Conduct of Business of LVDG. During the period commencing on the
date hereof and continuing until the Effective Time, LVDG agrees that, except
as otherwise expressly contemplated by this Agreement or agreed to in writing
by SAGC, LVDG (which for purpose of this Article V shall include the LVDG
Subsidiaries, as appropriate):
(a) will carry on its business only in the ordinary course and
consistent with past practice;
(b) will not declare or pay any dividend on or make any other
distribution (however characterized) in respect of shares of its capital
stock;
(c) will not, directly or indirectly, redeem or repurchase, or
agree to redeem or repurchase, any shares of its capital stock;
(d) will not amend its Articles of Incorporation or By-Laws;
(e) will not issue, or agree to issue, any shares of its capital
stock (except pursuant to the exercise and/or conversion of currently
outstanding LVDG Derivative Securities), or any options, warrants or other
rights to acquire shares of its capital stock, or any securities convertible
into or exchangeable for shares of its capital stock;
(f) will not combine, split or otherwise reclassify any shares
of its capital stock;
(g) will not sell or pledge, or agree to sell or pledge, any
shares of the capital stock of or other equity interest in any LVDG
Subsidiary;
(h) will use all reasonable efforts to preserve intact its
present business organization, keep available the services of its officers and
key employees and preserve its relationships with clients and others having
business dealings with it to the end that its goodwill and ongoing business
shall not be materially impaired at the Effective Time;
(i) will not (A) make any capital expenditures individually in
excess of $25,000 or in the aggregate in excess of $50,000, (B) enter into or
terminate (except in the ordinary course of business and consistent with past
practice) any lease of, or purchase or sell, any real property, (C) enter into
any leases of personal property involving individually in excess of $10,000
annually or in the aggregate in excess of $25,000 annually, (D) incur or
guarantee any additional indebtedness for borrowed money, (E) create or permit
to become effective any Encumbrance on its properties or assets, or (F) enter
into any agreement to do any of the foregoing;
(j) will not, other than in the ordinary course of business,
adopt or amend any Benefit Plan for the benefit of employees, or enter into
any agreement to do the same;
(k) will promptly advise SAGC of the commencement of, or threat
of(to the extent that such threat comes to the knowledge of LVDG), any claim,
action, suit, proceeding or investigation against, relating to or involving
LVDG or any of its directors, officers, employees, agents or consultants in
connection with its business or the transactions contemplated hereby;
(l) will maintain in full force and effect all insurance
policies maintained by LVDG on the date hereof;
(m) will not enter into any agreement to dissolve, merge,
consolidate or, except in the ordinary course, sell any material assets of
LVDG;
(n) will promptly provide SAGC with copies of any and all
reports or documents filed with the SEC.
Notwithstanding the foregoing, LVDG shall have the right at any time to employ
or discharge employees and increase or decrease any employee salaries or
compensation in the ordinary course, but shall notify SAGC after the taking of
any such action.
5.2 Conduct of Business of SAGC. During the period commencing on the
date hereof and continuing until the Effective Time, SAGC agrees that, except
as otherwise expressly contemplated by this Agreement or agreed to in writing
by LVDG, SAGC (which for purposes of this Article V shall include the SAGC
Subsidiaries, as appropriate):
(a) will carry on its business only in the ordinary course and
consistent with past practice;
(b) will not declare or pay any dividend on or make any other
distribution (however characterized) in respect of shares of its capital
stock;
(c) will not, directly or indirectly, redeem or repurchase, or
agree to redeem or repurchase, any shares of its capital stock;
(d) will not amend its Articles of Incorporation or By-Laws;
(e) will not issue, or agree to issue, any shares of its capital
stock (except pursuant to the exercise and/or conversion of currently
outstanding options, warrants, convertible securities or other rights, or
pursuant to SAGC's existing section 401(k) plan or in connection with
financing of the Las Vegas All-American SportPark), or any options, warrants
or other rights to acquire shares of its capital stock, or any securities
convertible into or exchangeable for shares of its capital stock;
(f) will not combine, split or otherwise reclassify any shares
of its capital stock;
(g) will use all reasonable efforts to preserve intact its
present business organization, keep available the services of its officers and
key employees and preserve its relationships with clients and others having
business dealings with it to the end that its goodwill and ongoing business
shall not be materially impaired at the Effective Time;
(h) except in connection with financing and developing the Las
Vegas All-American SportPark, will not (A) make any capital expenditures
individually in excess of $25,000 or in the aggregate in excess of $50,000,
(B) enter into or terminate (except in the ordinary course of business and
consistent with past practice) any lease of, or purchase or sell, any real
property, (C) enter into any leases of personal property involving
individually in excess of $10,000 annually or in the aggregate in excess of
$25,000 annually, (D) incur or guarantee any additional indebtedness for
borrowed money, (E) create or permit to become effective any Encumbrance on
its properties or assets, (F) hire or fire employees receiving compensation in
excess of $50,000 annually or (G) enter into any agreement to do any of the
foregoing;
(i) will not, other than in the ordinary course of business,
adopt or amend any Benefit Plan for the benefit of employees or (except for
such increases in salary or other compensation payable to any employee as the
Board of Directors of SAGC may reasonably determine are necessary to retain
the services of such employee) increase the salary or other compensation
(including, without limitation, bonuses) payable or to become payable to its
employees (except pursuant to existing contractual obligations which have been
disclosed to LVDG or consistent with past practice), or enter into any
agreement to do any of the foregoing;
(j) will promptly advise LVDG of the commencement of, or threat
of (to the extent that such threat comes to the knowledge of SAGC), any claim,
action, suit, proceeding or investigation against, relating to or involving
SAGC or any of its directors, officers, employees, agents or consultants in
connection with its business or the transactions contemplated hereby;
(k) will maintain in full force and effect all insurance
policies maintained by SAGC on the date hereof; and
(l) will not enter into any agreement to dissolve, merge,
consolidate or, except in the ordinary course, sell any material assets of
SAGC.
(m) will promptly provide LVDG with copies of any and all reports
or documents filed with the SEC.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Access to Properties and Records. Between the date of this
Agreement and the Effective Time, LVDG will provide SAGC and its
Representatives and SAGC will provide LVDG and its Representatives, with full
access, during business hours, to their respective premises and properties and
their respective books and records (including, without limitation, contracts,
leases, insurance policies, litigation files, minute books, accounts, working
papers and tax returns filed and in preparation) and each will cause its
officers to furnish to the other and its authorized advisors such additional
financial, tax and operating data and other information pertaining to its
business as the other shall from time to time reasonably request.
6.2 Registration Statement. As soon as reasonably practicable after
the execution and delivery of this Agreement, SAGC and LVDG shall prepare and
file with the SEC a registration and joint proxy statement on Form S-4 (the
"Registration Statement"), which shall cover all of the shares of LVDG Common
Stock to be issued in connection with the Merger, and shall use all reasonable
efforts to have the Registration Statement declared effective by the SEC as
promptly as practicable. LVDG shall also take such actions as may be required
under state blue sky or securities laws in connection with such issuance of
shares of LVDG Common Stock in connection with the Merger. SAGC shall
cooperate fully with LVDG and shall furnish LVDG with all information
concerning SAGC and its shareholders and shall take all such other action as
LVDG may reasonably request in connection with any such actions.
6.3 Stockholders' Approvals. Promptly after the effectiveness of the
Registration Statement and compliance with all state securities and blue sky
laws, each of SAGC and LVDG shall take all action necessary to convene
meetings of their respective stockholders for the purpose of voting upon the
transactions contemplated hereby and such other matters as may be appropriate
at such meetings, and in connection therewith shall in a timely manner mail to
the respective stockholders the Proxy Statement contained in the Registration
Statement and, if necessary after the Proxy Statement shall have been mailed,
shall promptly and in a timely manner circulate amended or supplemental
materials and, if necessary, materials necessary for resoliciting proxies.
Each of SAGC and LVDG will, through its respective Board of Directors,
recommend to its respective stockholders approval of the transactions
contemplated by this Agreement; provided that neither SAGC nor LVDG shall be
obligated to make such recommendation, and either SAGC or LVDG may withdraw
such recommendation if its Board of Directors receives an unsolicited written
proposal to effect a merger, consolidation or other business combination, a
sale of substantial assets or similar transaction involving it or any
subsidiary or a sale of more than 25% of its outstanding capital stock (each
of the foregoing referred to herein as an "Acquisition Proposal") which its
Board of Directors or any committee thereof, in good faith and upon the advice
of its independent financial advisor, determines to be more favorable to its
stockholders than the transactions contemplated by this Agreement.
6.4 Affiliates' Letters. SAGC shall deliver to LVDG, prior to the
Closing, a letter identifying all persons who are, at the time the Merger is
submitted to the aforesaid meeting of the stockholders of SAGC, "affiliates"
of SAGC for purposes of Rule 145 under the Securities Act. SAGC shall use its
best efforts to cause each person who is identified as an "affiliate" in the
letter referred to above to deliver, at or prior to the Closing, a signed,
written agreement to the effect that such person will not sell or otherwise
transfer any shares of LVDG Common Stock issued to such person pursuant to the
Merger, except pursuant to an effective registration statement or in
compliance with Rule 145 or other exemption from the registration requirements
of the Securities Act.
6.5 Reasonable Efforts; Etc. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable
efforts to promptly take, or cause to be taken, all actions, and to promptly
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations, whether before or after the Effective Time,
to consummate and make effective the transactions contemplated by this
Agreement, including obtaining any consents, authorizations, exemptions and
approvals from, and making all filings with, any governmental or regulatory
authority, agency or body which are necessary in connection with the
transactions contemplated by this Agreement; provided that the obligation of
the parties to use reasonable efforts as required by this Section 6.5 shall
not obligate any party to incur unreasonable costs or expenses.
6.6 Material Events. At all times prior to the Effective Time, each
party shall promptly notify the others in writing of the occurrence of any
event which will or may result in the failure to satisfy any of the conditions
specified in Article 7 or Article 8 hereof.
6.7 Tax Consequences. From and after the Effective Time, none of the
parties will take any position in or with regard to their respective Federal,
state or local income tax returns (or any amendments thereto) that is
inconsistent with the treatment of the Merger as a tax-free reorganization for
Federal income tax purposes under Section 368(a)(2)(E) of the Code or with
respect to the tax consequences contemplated thereby (including those related
to the basis of stock and assets).
6.8 Fair Price Statute. If any "fair price" or "control share
acquisition" statute or other similar statute or regulation shall become
applicable to the transactions contemplated hereby, SAGC and LVDG and the
members of their respective Board of Directors shall use their best efforts to
grant such approvals and take such actions as are necessary so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms contemplated hereby and otherwise act to minimize the effects of
such statute or regulation on the transactions contemplated thereby.
6.9 Indemnification.
(a) In the event the Merger shall become effective, then from
and after the Effective Time, the Surviving Corporation (the "Indemnifying
Party") shall indemnify, defend and hold harmless each person who is now, or
who becomes prior to the Effective Time, an officer, director, employee or
agent of SAGC or LVDG (the "Indemnified Parties") against (i) all losses,
claims, damages, costs, expenses, liability or judgment or amounts paid with
the approval of the Indemnifying Party (which approval shall not be
unreasonably withheld) in settlement of or in connection with any claim,
action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of the fact that such person is or was an
officer, director, employee or agent of SAGC or LVDG, whether pertaining to
any matter existing or occurring at or prior to the Effective Time, and
whether asserted or claimed prior to, at, or after, the Effective Time (the
"Indemnified Liabilities") and (ii) all Indemnified Liabilities based in whole
or in part on or arising in whole or in part out of or pertaining to this
Agreement or the transactions contemplated hereby, including, without
limitation, any Indemnified Liabilities arising under or out of any state or
federal securities laws, in each case to the fullest extent permitted by law
(the Surviving Corporation shall pay expenses in advance of the final
disposition of any such action or proceeding to each Indemnified Party to the
fullest extent permitted by law upon receipt of any undertaking that may be
required by law).
(b) Any Indemnified Party wishing to claim indemnification under
this Section 6.10 shall notify the Surviving Corporation promptly upon
learning of any such claim, action, suit, proceeding or investigation (but the
failure to notify an Indemnifying Party should not relieve it from any
liability which it may have under this Section 6.9 except to the extent such
failure prejudices such party).
(c) The provisions of this Section 6.9 are intended to be for
the benefit of, and shall be enforceable by each Indemnified Party, and his or
her heirs and representatives.
6.10 Quarterly Financial Statements. Prior to the Effective Time, LVDG
and SAGC shall deliver to the other party as soon as available, but in any
event no later than 45 days after the end of each quarterly period of its
fiscal year (or such later period as may be permitted for the filing of
quarterly financial statements under the Exchange Act), unaudited balance
sheets and the related unaudited statements of income and retained earnings
and unaudited statements of cash flows for each such quarter.
ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF LVDG
The obligation of LVDG to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or prior to the
Closing Date, of each of the following conditions (any of which may be waived
in writing by LVDG in its sole discretion):
7.1 Representations and Warranties True. The representations and
warranties of SAGC which are contained in this Agreement, or contained in any
Schedule, certificate or other instrument or document delivered or to be
delivered pursuant to this Agreement shall be true and correct in all material
respects at and as of the Closing Date as though such representations and
warranties were made on and as of the Closing Date except for changes
expressly permitted or contemplated by the terms of this Agreement, and at the
Closing SAGC shall have delivered to LVDG a certificate (signed on its behalf
by its President and the Chief Financial Officer) to that effect with respect
to all such representations and warranties.
7.2 Performance. SAGC shall have performed and complied in all
material respects with all of its obligations under this Agreement which are
required to be performed or complied with on or prior to the Closing Date, and
at the Closing SAGC shall have delivered to LVDG a certificate (signed on its
behalf by its President and its Chief Financial Officer) to that effect with
respect to all such obligations required to have been performed or complied
with by SAGC on or before the Closing Date.
7.3 Authorization of Merger. This Agreement and the consummation of
the transactions contemplated hereby shall have been duly approved and adopted
(i) by the requisite affirmative vote of the stockholders of LVDG and (ii) by
the requisite affirmative vote of the stockholders of SAGC, in each case in
accordance with applicable law.
7.4 Registration Statement; Blue Sky Laws. The Registration Statement
shall have been declared effective under the Securities Act and shall not be
subject to a stop order or any threatened stop order. All necessary state
securities and blue sky permits, approvals and exemption orders required in
connection with the transactions contemplated by this Agreement shall have
been obtained.
7.5 Affiliates Letters. SAGC shall have obtained from each person who
is an "affiliate" (as such term is defined in Rule 144 of the Securities Act)
of SAGC an executed letter agreement in the form of Exhibit 6.4 hereto and
shall have delivered such letter agreements to LVDG.
7.6 Restrictive Legends. The transfer agent for LVDG shall have been
instructed to place the following legend on each certificate representing
shares of LVDG Common Stock issued to any "affiliate" of SAGC pursuant to the
Merger:
"The sale or other transfer of the shares represented by this
certificate is not permitted unless effected pursuant to an effective
registration statement or in compliance with Rule 145 or another exemption
from the registration requirements of the Securities Act of 1933, as amended."
7.7 Absence of Litigation. No statute, rule or regulation shall have
been enacted or promulgated, and no order, decree, writ or injunction shall
have been issued and shall remain in effect, by any court or governmental or
regulatory body, agency or authority which restrains, enjoins or otherwise
prohibits the consummation of the transactions contemplated hereby, and no
action, suit or proceeding before any court or governmental or regulatory
body, agency or authority shall have been instituted by any person (or
instituted or threatened by any governmental or regulatory body, agency or
authority), and no investigation by any governmental or regulatory body,
agency or authority shall have been commenced, with respect to the
transactions contemplated hereby or with respect to SAGC which, in the
reasonable judgment of LVDG's Board of Directors, would have a material
adverse effect on the transactions contemplated hereby or on the business of
SAGC.
7.8 Opinion of Counsel. SAGC shall have delivered to LVDG an opinion
of counsel to SAGC, in a form to be agreed upon by the parties hereto.
7.9 Appraisal Rights. The holders of more than ten percent (10%) of
the issued and outstanding shares of SAGC Common Stock or ten percent (10%) or
more of the issued and outstanding shares of LVDG Common Stock shall not have
demanded appraisal rights in respect of the Merger, and no holder of SAGC
Preferred Stock shall have demanded appraisal rights in respect of the Merger.
7.10 Articles of Merger. SAGC shall have executed and delivered to
LVDG counterparts of the Certificates of Merger to be filed with the
Secretaries of State of the States of Colorado and Nevada in connection with
the Merger.
7.11 Consents. SAGC and LVDG shall have obtained all necessary
waivers, consents, authorizations or approvals of, and made any necessary
filings with, any governmental, public or self-regulatory body or authority or
any other third party to the consummation of the transactions contemplated
hereby, or executions therefrom or waivers thereof, and any requisite waiting
period with respect thereto shall have expired.
ARTICLE 8
CONDITIONS TO THE OBLIGATIONS OF SAGC
The obligation of SAGC to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or prior to the
Closing Date, of each of the following conditions (any of which may be waived
in writing by SAGC in its sole discretion):
8.1 Representations and Warranties True. The representations and
warranties of LVDG contained in this Agreement, or contained in any Schedule,
certificate or other instrument or document delivered or to be delivered
pursuant to this Agreement, shall be true and correct in all material respects
at and as of the Closing Date as though such representations and warranties
were made on and as of the Closing Date except for changes expressly permitted
or contemplated by the terms of this Agreement, and at the Closing LVDG shall
have delivered to SAGC a certificate (signed on its behalf by its President
and its Chief Financial Officer) to that effect with respect to all such
representations and warranties made by such entity.
8.2 Performance. LVDG shall have performed and complied in all
material respects with all of its obligations under this Agreement which are
required to be performed or complied with on or prior to the Closing Date, and
at the Closing LVDG shall have delivered to SAGC a certificate, signed on its
behalf by its President and its Chief Financial Officer, to that effect with
respect to all such obligations required to have been performed or complied
with on or before the Closing Date.
8.3 Authorization of Merger. This Agreement and the consummation of
the transactions contemplated hereby shall have been duly approved and adopted
by (i) the requisite affirmative vote of the stockholders of SAGC, and (ii) by
the requisite affirmative vote of the stockholders of LVDG, in each case in
accordance with applicable law.
8.4 Registration Statement; Blue Sky Laws. The Registration Statement
shall have been declared effective under the Securities Act and shall not be
subject to a stop order or any threatened stop order. All necessary state
securities and blue sky permits, approvals and exemption orders required in
connection with the transactions contemplated by this Agreement shall have
been obtained.
8.5 Absence of Litigation. No statute, rule or regulation shall have
been enacted or promulgated, and no order, decree, writ or injunction shall
have been issued and shall remain in effect, by any court or governmental or
regulatory body, agency or authority which restrains, enjoins or otherwise
prohibits the consummation of the transactions contemplated hereby, and no
action, suit or proceeding before any court or governmental or regulatory
body, agency or authority shall have been instituted by any person (or
instituted or threatened by any governmental or regulatory body, agency or
authority) and no investigation by any governmental or regulatory body, agency
or authority shall have been commenced, with respect to the transactions
contemplated hereby or with respect to LVDG which, in the reasonable judgment
of SAGC's Board of Directors, would have a material adverse effect on the
transactions contemplated hereby or on the business of LVDG.
8.6 Opinion of Counsel. LVDG shall have delivered to SAGC an opinion
of counsel to LVDG, in a form to be agreed upon by the parties hereto.
8.7 Tax Opinion. Counsel to SAGC, or counsel to LVDG, shall have
rendered its opinion to SAGC concerning certain tax matters, in a form to be
agreed upon the the parties hereto.
8.8 Articles of Merger. LVDG shall have executed and delivered to
SAGC counterparts of the Certificates of Merger to be filed with the
Secretaries of State of the States of Colorado and Nevada in connection with
the Merger.
8.9 Consents. LVDG and SAGC shall have obtained all necessary
waivers, consents, authorizations or approvals of, and made any necessary
filings with, any governmental, public or self-regulatory body or authority or
any other third party to the consummation of the transactions contemplated
hereby, or executions therefrom or waivers thereof, and any requisite waiting
period with respect thereto shall have expired.
8.10 Inclusion on Nasdaq Stock Market. The LVDG Common Stock to be
issued to the stockholders of SAGC pursuant to the Merger shall be listed for
trading on the Nasdaq Small Cap Market, and there shall have been no
involuntary trading halt, as of the Effective Time, of LVDG Common Stock
imposed by the NASD.
ARTICLE 9
TERMINATION
9.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether prior to or after approval of this Agreement
and the transactions contemplated hereby by the stockholders of LVDG and/or
SAGC:
(a) by the mutual written consent of the Boards of Directors of
LVDG and SAGC;
(b) by either LVDG or SAGC
(i) if any court or governmental or regulatory agency,
authority or body shall have enacted, promulgated or issued any statute, rule,
regulation, ruling, writ or injunction, or taken any other action,
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and all appeals and means of appeal therefrom have been reasonably
exhausted; or
(ii) if the stockholders of SAGC and/or LVDG shall have
failed to approve the Merger at the meetings referred to in Section 6.3;
9.2 Notice of Termination. In the event LVDG or SAGC shall elect to
terminate this Agreement pursuant to Section 9.1, it shall give written notice
of such termination to the other party, which notice shall state the reasons
for such termination.
9.3 Effect of Termination. In the event of the termination of this
Agreement, this Agreement shall forthwith become void and there shall be no
liability on the part of any of the parties hereto or their respective
officers or directors, except for Sections 10.6, 10.7 and 10.9, which shall
remain in full force and effect, and except that nothing herein shall relieve
any party from liability for a breach of this Agreement prior to the
termination hereof.
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 Amendment. This Agreement may be amended by written agreement
between LVDG and SAGC prior to the Effective Time, whether prior to or after
approval hereof by the stockholders of SAGC and/or the stockholders of LVDG,
but after any such approval no amendment shall be made to the exchange ratio
pursuant to which outstanding shares of SAGC Common and Preferred Stock are
converted into shares of LVDG Common and Preferred Stock pursuant to the
Merger, without the further approval of such stockholders.
10.2 Waiver of Compliance. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant or agreement contained herein may be waived only by a written notice
from the party or parties entitled to the benefits thereof. No failure by any
party hereto to exercise, and no delay in exercising, any right hereunder,
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right hereunder preclude any other or future exercise of that right by
that party.
10.3 Notices. All notices and other communications hereunder shall be
deemed given if given in writing and delivered personally, by registered or
certified mail, return receipt requested, postage prepaid, or by overnight
courier to the party to receive the same at its respective address set forth
below (or at such other address as may from time to time be designated by such
party to the others in accordance with this Section 10.3):
(a) if to LVDG, to:
Xxxx Xxxxxx, President
Las Vegas Discount Golf & Tennis, Inc.
0000 Xxxxx Xxxxxx Xxxx Xxxxxxxxx, Xxxxx 00
Xxx Xxxxx, Xxxxxx 00000
with copies to:
Xxx X. Xxxxxx, Esq.
Xxxx Xxxxx Xxxxxxxx & Xxxxxx, P.C.
000 00xx Xxxxxx, Xxxxx 0000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000-0000
(b) if to SAGC, to:
Xxxxxx X. Xxxxxx, President
Saint Xxxxxxx Golf Corporation
0000 Xxxxx Xxxxxx Xxxx Xxxxxxxxx, Xxxxx 0
Xxx Xxxxx, Xxxxxx 00000
with copies to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxxxx & Xxxxx, P.C.
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
All such notices and communications hereunder shall be deemed given when
received, as evidenced by the signed acknowledgment of receipt of the person
to whom such notice or communication shall have been personally delivered, the
acknowledgment of receipt returned to the sender by the applicable postal
authorities or the confirmation of delivery rendered by the applicable
overnight courier service.
10.4 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any
rights, duties or obligations hereunder shall be assigned by any party hereto
without the prior written consent of the other parties hereto.
10.5 No Third Party Beneficiaries. Except as provided in Section 6.11
hereof to the contrary, neither this Agreement nor any provision hereof nor
any Schedule, certificate or other instrument delivered pursuant hereto, nor
any agreement to be entered into pursuant hereto or any provision hereof, is
intended to create any right, claim or remedy in favor of any person or
entity, other than the parties hereto and their respective successors and
permitted assigns.
10.6 Expenses. Each party shall pay its own expenses in connection
with this Agreement, the agreements to be entered into pursuant hereto and the
transactions contemplated hereby; provided, that if the Merger is consummated
pursuant to this Agreement, all such expenses of SAGC incurred on behalf of
SAGC in connection with the transactions contemplated hereby shall be the
responsibility of the Surviving Corporation.
10.7 Public Announcements. Promptly upon execution and delivery of
this Agreement, SAGC and LVDG shall issue a joint press release in such form
as they shall mutually agree. Thereafter, and prior to the consummation of
the Merger or the termination of this Agreement, none of the parties hereto
shall, except as mutually agreed by SAGC and LVDG, or except as may be
required by law or applicable regulatory authority (including, without
limitation, the rules applicable to NASDAQ listed companies), issue any
reports, releases, announcements or other statements to the public relating to
the transactions contemplated hereby.
10.8 Brokers and Finders. LVDG and SAGC each represent and warrant to
the other that no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission based on arrangements made by
or on behalf of either, other than fees payable to Xxxxx Financial, Inc. for
services rendered to LVDG and SAGC in connection with its valuation opinion.
10.9 Further Agreements. The parties acknowledge and agree that if,
following any breach of any of the representations and warranties of the
parties set forth in this Agreement, the existence of which is disclosed in
writing signed by the disclosing party and submitted to the non-breaching
party prior to the Effective Time, and the parties thereafter nevertheless
proceed to consummate the transactions contemplated hereby, it shall be
conclusively presumed, in the absence of written agreement of the parties to
the contrary, that the breach so disclosed has been waived by the non-
breaching party and no party shall be liable therefor in damages, whether
pursuant to this Agreement or otherwise.
10.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.11 Entire Agreement. This Agreement, and the Schedules, certificates
and other instruments and documents delivered pursuant hereto, together with
the other agreements referred to herein and to be entered into pursuant
hereto, embody the entire agreement of the parties hereto in respect of, and
there are no other agreements or understandings, written or oral, among the
parties relating to, the subject matter hereof. This Agreement supersedes all
prior agreements and understandings, written or oral, between the parties with
respect to such subject matter.
10.12 Governing Law. The parties hereby agree that this Agreement, and
the respective rights, duties and obligations of the parties hereunder, shall
be governed by and construed in accordance with the laws of the State of
Nevada, without giving effect to principles of conflicts of law thereunder,
except for the provisions of Article 1 hereto setting forth the provisions for
consummating, and the effects of, the Merger, which shall be governed by and
construed in accordance with the Colorado Act to the extent that the Colorado
Act is applicable by its terms. Each of the parties hereby (i) irrevocably
consents and agrees that any legal or equitable action or proceeding arising
under or in connection with this Agreement shall be brought exclusively in the
Court of the State of Nevada or any federal district court located in Nevada
and any court to which an appeal may be taken in any such litigation, and (ii)
by execution and delivery of this Agreement, irrevocably submits to and
accepts, with respect to any such action or proceeding, for itself and in
respect of its properties and assets, generally and unconditionally, the
jurisdiction of the aforesaid courts, and irrevocably waives any and all
rights such party may now hereafter have to object to such jurisdiction.
10.13 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.
10.14 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event this Agreement were not to be performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof in addition to any other remedies at
law or equity.
IN WITNESS WHEREOF, SAGC and LVDG have caused this Agreement to be duly
executed and delivered as of the date first above written.
SAINT XXXXXXX GOLF LAS VEGAS DISCOUNT GOLF & TENNIS,
CORPORATION INC.
By /s/ Xxxxxx X. Xxxxxx By /s/ Xxxx Xxxxxx
Xxxxxx X. Xxxxxx, President Xxxx Xxxxxx, President
SCHEDULE 1.4
LIST OF DIRECTORS OF SURVIVING CORPORATION
Xxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxx
Motoharu Iue
SCHEDULE 1.5
LIST OF OFFICERS OF SURVIVING CORPORATION
Xxxx Xxxxxx - Chairman of the Board
Xxxxxx X. Xxxxxx - President, Chief Executive Officer, Treasurer and Secretary
Xxxxx X. Xxxxxxx - Vice President of New Business Development
SCHEDULE 3.1
LIST OF LVDG SUBSIDIARIES
1. Saint Xxxxxxx Golf Corporation
2. Las Vegas Discount Golf & Tennis Rainbow, Inc.
3. Las Vegas Discount Golf & Tennis Development Corp.
4. All-American SportPark, Inc.
5. All-American Golf, LLC
SCHEDULE 3.2
LVDG - AUTHORIZATIONS REQUIRED
None
SCHEDULE 3.3
LVDG - SCHEDULE OF OUTSTANDING OPTIONS,
WARRANTS AND OTHER RIGHTS
Number of Number
Shares Exercise of Options
Under Option Price Status Outstanding
------------ -------- ------- -----------
Incentive Options Granted July 28, 1994:
Xxxxx X. Xxxxxx 10,000 $0.80 Expired
Xxxx X. Xxxxxxxxx, Xx. 10,000 $0.80 Expired
Xxxxxx X. Xxxxxxxxxx 10,000 $0.80 Expired
Xxxx Xxxxxxxxx III 5,000 $0.80 * 5,000
Xxxxxxx X. Xxxx 5,000 $0.80 * 5,000
Xxxxxxx X. Xxxxx, Xx. 5,000 $0.80 Expired
Xxxxx XxXxxxxxx 5,000 $0.80 Expired
Xxxxx Xxxxxxx 10,000 $0.80 * 10,000
Xxx Xxxxx 10,000 $0.80 Expired
Xxxxxx X. Xxxxxx 138,000 $0.80 * 138,000
TOTAL 208,000
Non-Qualified Options Granted July 28, 1994:
Xxxx Xxxxxx 130,000 $0.80 * 130,000
Xxxxxxxx X. Xxxxxxxxxx 10,000 $0.80 * 10,000
Xxxxxx X. Xxxxxx 143,000 $0.80 * 143,000
TOTAL 283,000
Incentive Options Granted January 27, 1995:
Xxxxx Xxxxxxx 10,000 $1.625 Expired
Incentive Options Granted July 5, 1995:
Xxxxxx Xxxxxx 1,000 $1.35 ** 1,000
_________________________
* Exercisable until 7/28/99
**Exercisable until 7/5/00
SCHEDULE 3.4
LVDG - CHANGES IN FINANCIAL CONDITION
Xxx Xxxxxx has converted the 512,799 shares of preferred stock he owned into
512,799 shares of LVDG common stock.
SCHEDULE 3.5
LVDG - UNDISCLOSED LIABILITIES
None
SCHEDULE 3.7
LVDG - TAX MATTERS
None
SCHEDULE 3.8
LVDG - REAL PROPERTY
None
SCHEDULE 3.9
LVDG - FACILITIES
LVDG leases approximately 15,500 square feet of warehouse space and
approximately 6,000 square feet of office space at 0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxx 00, Xxx Xxxxx, Xxxxxx, at an aggregate monthly rent of
approximately $13,700 from Xxxx Xxxxxx. The rent is adjustable annually based
on increases in the consumer price index and the lease expires January 31,
2005. Beginning July 1, 1996, SAGC was allocated 67% of the rent and LVDG was
allocated 33% of the rent. In February 1997, LVDG subleased a majority of the
warehouse space and approximately one-half of the office space to the
purchaser in the asset sale.
LVDG has a retail store at 0000 Xxxxxxx Xxxxxxxxx Xxxxx xx Xxx Xxxxx,
Xxxxxx. The store is located in leased space in a small shopping center in a
growing area of Las Vegas. The space covers 5,600 square feet of space, and
is leased from an unaffiliated party for $7,000 per month plus cost of living
adjustments, real estate taxes and other expenses. The lease expires in
August 2000.
SAGC and a subsidiary have entered into leases for 65 acres of land in
Las Vegas, Nevada. The leases are described in Schedule 4.9.
SCHEDULE 3.11
LVDG - INSURANCE POLICIES
1. LVDG is one of the insured parties under an umbrella insurance policy with
Travelers Insurance which covers the corporate offices in addition to LVDG's
Rainbow store and Xxxx Xxxxxx'x store on Paradise.
SCHEDULE 3.12
LVDG - AGREEMENTS
1. Lease Agreement with Xxxx Xxxxxx, as amended
2. Employment Agreement with Xxxx Xxxxxx, as amended
3. License Agreement with Xxxx Xxxxxx
4. Agreement between the Company and Saint Xxxxxxx Golf Corporation
5. License Agreement between the Company and Saint Xxxxxxx Golf
Corporation
6. Lease Agreement with A&R Management and Development Co., et al., and
Sublease to Las Vegas Discount Golf & Tennis, Inc.
7. Lease Agreement with Xxxx Xxxxxx, as amended, and Assignment to Las
Vegas Discount Golf & Tennis, Inc.
See also Schedule 4.12 for Agreements of SAGC.
SCHEDULE 3.13
LVDG - INTELLECTUAL PROPERTIES
SAGC has filed an "intent to use" trademark application for "All-American
SportPark" and a related design and Slugger Stadium.
LVDG has filed "intent to use" trademark applications with regard to
the "St. Xxxxxxx" name and related designs with respect to mens' and womens'
clothing and certain golf equipment and accessories.
The trademarks "Las Vegas Discount Golf & Tennis, Inc." and "St.
Xxxxxxx" on golf club bags, are registered on the principal register of the
United States Patent and Trademark Office as well as in Canada and in the
State of Nevada. These were owned by LVDG.
LVDG also has common law trademark and tradename rights in "Saint
Xxxxxxx" to the extent that it has used the xxxx as applied to goods or as a
corporate source identifier.
On August 1, 1994, LVDG entered into a license agreement with SAGC
pursuant to which LVDG granted a license to SAGC to use all trademarks,
tradenames and other commercial symbols that were owned by LVDG and licensed
to franchisees of Saint Xxxxxxx. Included in this license were the following:
(a) Las Vegas Discount Golf & Tennis - name (Reg. No. 1,482,753)
(b) Las Vegas Discount Golf & Tennis - logo ( Reg. No. 1,350,039)
(c) St. Xxxxxxx - name and design (Reg. No. 1,303,946) and related
applications
(d) Saint Xxxxxxx
(e) Birdie Golf
(f) Royal Xxxx
In February 1997, the rights to the trademarks "Las Vegas Discount Golf
& Tennis" and "Birdie Golf" were assigned to the purchaser in connection with
the sale of the franchise business. The purchaser of the assets granted back
to Boreta Enterprises, Ltd. a perpetual license to use the name Las Vegas
Discount Golf & Tennis for retail equipment stores in the State of Nevada,
south of a line between Pahrump, Nevada and Mesquite, Nevada, except for
Xxxxxxxxx, Nevada. Boreta Enterprises, Ltd. has agreed to allow LVDG's retail
store on Rainbow Boulevard in Las Vegas to continue to use the name Las Vegas
Discount Golf & Tennis.
SCHEDULE 3.14
LVDG - PERMITS
None.
SCHEDULE 3.15
LVDG - LITIGATION
In 1995, Giant Ride, Inc. filed suit in the District Court of Xxxxx
County, Nevada, against SAGC claiming that SAGC has breached a contract to
purchase a giant slide for Saint Xxxxxxx' Las Vegas SportPark. Giant Ride,
Inc. is seeking an unspecified amount of damages. SAGC denies that it had a
contract to purchase such a slide.
SCHEDULE 3.17
LVDG - TRANSACTIONS WITH AFFILIATES
LVDG owns 66.7% of the outstanding Common Stock of SAGC. SAGC is
registered under Section 12(g) of the Exchange Act.
Effective August 1, 1994, LVDG granted SAGC a license to use all of its
trademarks, trade names and other commercial names and symbols for so long as
such trademarks, trade names and other commercial names and symbols are being
used by SAGC.
Certain facilities used by LVDG and SAGC are leased by the Company from
Xxxx Xxxxxx. LVDG leases approximately 15,500 square feet of warehouse space
and 6,000 square feet of office space from Xx. Xxxxxx at a base monthly rent
of approximately $13,700.
LVDG owns a retail store in Las Vegas and LVDG and a store owned by Xxxx
Xxxxxx share advertising costs in the Las Vegas market and on an equal basis.
See LVDG's Form 10-KSB for additional disclosures concerning
transactions with affiliated persons.
SCHEDULE 3.20
LVDG - EMPLOYEE BENEFIT PLANS
1989 Stock Option Plan (LVDG)
1991 Stock Option Plan (LVDG)
Employee Retirement and Savings Program (401(k))
Supplemental Retirement Plan
1994 Stock Option Plan (SAGC)
Medical Insurance with Sierra Health
SCHEDULE 4.1
LIST OF SAGC SUBSIDIARIES
1. All-American SportPark, Inc.
2. All-American Golf, LLC
SCHEDULE 4.2
SAGC - AUTHORIZATIONS REQUIRED
The Investment Agreement between SAGC and Three Oceans, Inc. dated July
29, 1996, prevents SAGC from effecting a merger without the prior written
consent of Three Oceans, Inc. SAGC has obtained such consent.
The Membership Interest Security Agreement between SAGC and Callaway
Golf Company could be interpreted to require the prior written consent of
Callaway Golf Company to the merger, but it is the opinion of SAGC that such
consent is not required.
SCHEDULE 4.3
SAGC - SCHEDULE OF OUTSTANDING OPTIONS,
WARRANTS AND OTHER RIGHTS
OPTIONS:
# of
Date Type Shares Expiration
of of Under Exercise Date or
Grant Name of Grantee Option Option Price Status
------- ------------------ ------ ------- -------- ----------
8/8/94 Xxxxxxx Xxxx NQSO 40,000 $5.00 8/7/99
7/29/96 Three Oceans, Inc. NQSO 250,000 $3.0625 7/29/01
6/9/97 Xxxx Xxxxxx NQSO 110,000 $3.0625 8/7/99
Xxxxxx X. Xxxxxx NQSO 110,000 $3.0625 8/7/99
Xxxxx Xxxxxx NQSO 10,000 $3.0625 8/7/99
Xxxxxx X. Xxxxxxx NQSO 5,000 $3.0625 8/7/99
Xxxxxxx Xxxxxx NQSO 5,000 $3.0625 8/7/99
Xxxxx Xxxxxxx ISO 10,000 $3.0625 4/16/01
Xxxxxx Xxxxxx ISO 1,000 $3.0625 4/16/01
Xxxx Xxxxxx ISO 10,000 $3.0625 4/16/01
Xxxxxx X. Xxxxxx NQSO 125,000 $3.0625 4/16/01
Xxxx Xxxxxxxxxx NQSO 10,000 $3.0625 4/16/01
Xxx Xxxxxxxxxx NQSO 10,000 $3.0625 4/16/01
Xxxxxx X. Xxxxxx NQSO 200,000 $3.0625 4/24/01
Xxxx Xxxxxx NQSO $3.0625 4/24/01
Xxx Xxxxx NQSO 10,000(1) $3.0625 4/24/01
1,000
WARRANTS:
Shares of
Common Stock Exercise
Underlying Price Expiration
Type Warrants Per Share Date
--------------------------------- ------------ --------- ----------
Class A Warrants 500,000 $6.50 3/16/98
Representatives' Class A Warrants 50,000 $7.80 3/16/98
Representatives' Warrants 100,000 $5.40 12/12/99
PREFERRED STOCK:
Series Shares of Common
Stock Underlying Conversion
Preferred Rate
------------------------------------ ---------------- ------------
Series A Convertible Preferred Stock 500,000 One for One
SCHEDULE 4.4
SAGC - CHANGES IN FINANCIAL CONDITION
None
SCHEDULE 4.5
SAGC - UNDISCLOSED LIABILITIES
None
SCHEDULE 4.7
SAGC - TAX MATTERS
None
SCHEDULE 4.9
SAGC - FACILITIES
SAGC currently occupies approximately 2,360 square feet of office space
and 2,857 square feet of warehouse space at 0000 Xxxxx Xxxxxx Xxxx Xxxxxxxxx,
Xxxxx 0, Xxx Xxxxx, Xxxxxx, and pays monthly rent of $2,944. The space is
leased from Xxxx Xxxxxx. The rent is adjustable annually based on increases
in the consumer price index and the lease expires January 31, 2005.
On June 20, 1997, SAGC entered into a lease for approximately 24 acres
of land in Las Vegas, Nevada, on which it intends to build the Sports
Entertainment Complex portion of its SportPark. In addition, All-American
Golf, LLC entered into a lease for approximately 41 acres of land where the
Callaway Golf Center is being built.
SCHEDULE 4.11
SAGC - INSURANCE POLICIES
1. SAGC is one of the insured parties under an umbrella policy with
Travelers Insurance which covers the corporate offices in addition to LVDG's
Rainbow store and Xxxx Xxxxxx'x golf store on Paradise. The policy covers
loss from fire and other causes and includes liability insurance.
2. SAGC pays an annual bond for the State Industrial Insurance system
for workmen's compensation.
3. SAGC has insurance on its vehicles.
SCHEDULE 4.12
SAGC - AGREEMENTS
1. Employment Agreement with Xxxxxx X. Xxxxxx.
2. Employment Agreement with Xxxxx Xxxxxxx.
3. Lease Agreement with A&R Management and Development Co., et al., and
Sublease to Las Vegas Discount Golf & Tennis, Inc.
4. Lease Agreement with Xxxx Xxxxxx, as amended, and Assignment to Las
Vegas Discount Golf & Tennis, Inc.
5. Letter Agreement with Oracle One Partners, Inc.
6. Agreement with Major League Baseball Properties, Inc.
7. License Agreement with National Association for Stock Car Auto
Racing, Inc., dated August 1, 1995
8. Concept Development and Trademark Agreement with Callaway Golf
Company dated May 23, 1995
9. Investment Agreement with Three Oceans, Inc.
10. Indenture of Lease Agreement between Urban Land of Nevada and
All-American SportPark, Inc.
11. Indenture of Lease between Urban Land of Nevada and All-American Golf
Center, LLC
12. Operating Agreement for All-American Golf, LLC, a limited liability
company
13. Agreement dated September 30, 1997 with Boreta Enterprises, Ltd.
14. Sponsorship Agreement with Pepsi-Cola Company dated December 4, 1997.
SCHEDULE 4.13
SAGC - INTELLECTUAL PROPERTIES
SAGC has filed an "intent to use" trademark application for "All-American
SportPark" and a related design and "Slugger Stadium". LVDG has
filed "intent to use" trademark applications with regard to the "St. Xxxxxxx"
name and related designs with respect to mens' and womens' clothing and
certain golf equipment and accessories.
On August 1, 1994, LVDG entered into a license agreement with SAGC
pursuant to which LVDG granted a license to SAGC to use all trademarks,
tradenames and other commercial symbols that were owned by LVDG and licensed
to franchisees of Saint Xxxxxxx. Included in this license were the following:
(a)Las Vegas Discount Golf & Tennis - name (Reg. No. 1,482,753)
(b)Las Vegas Discount Golf & Tennis - logo ( Reg. No. 1,350,039)
(c)St. Xxxxxxx - name and design (Reg. No. 1,303,946) and related applications
(d)Saint Xxxxxxx
(e)Birdie Golf
(f)Royal Xxxx
In February 1997, the rights to the trademarks "Las Vegas Discount Golf
& Tennis" and "Birdie Golf" were assigned to the purchaser in connection with
the sale of the franchise business.
During September 1997, SAGC agreed to sell its rights to the St. Xxxxxxx
name to Boreta Enterprises, Ltd. for a $20,000 two year promissory note since
the Company no longer intends to engage in the business of selling golf
equipment and apparel.
SCHEDULE 4.14
SAGC - PERMITS
Below are listed the steps completed by SAGC related to the All-American
SportPark in Las Vegas.
TECHNICAL STUDIES
Traffic Study Completed-September 3, 1996
Hydrology Study Completed-February 7, 1997
Geo-Technical Study Completed-October 18, 1996
Environmental Impact Study Not required
ZONING AND CONDITIONAL USE PERMIT
APPLICATION AND APPROVALS
Xxxxx County Department of Comprehensive Planning
Zone Charge Application Completed-August 14, 1996
Condition Use Permit Approved, Conditional Approval-
January 17, 1997
Code Variance Application Completed-February 7, 1997
Vacation of Public Right of Way Approved, Conditional Approval-
January 17, 1997
FAA-DOA PERMIT APPLICATIONS AND APPROVALS
FAA Notice of Proposed Construction Completed-December 9, 1997
or Alteration Approved, Conditional
Approval-February 7, 1997
Xxxxx County Department of Aviation Completed-February 8, 1997
XxXxxxxx Airport (Directors Permit) Approved, Conditional
Approval-February 18, 1997
NEVADA DEPARTMENT OF TRANSPORTATION
(Rights of Way, Dedications, Easements) Applications and Approvals
Abandonment of State Right of Way Submitted-January 23, 1997
Approved, Conditional Approval-
January 17, 1997
Recorded-May 21, 1996
SCHEDULE 4.14
SAGC - PERMITS
(Continued)
PUBLIC WORKS
Off-Site Improvements Agreement Agreement-Dated February 21, 1997
Improvement Plans Submitted-September 21, 1996 HTE
#00-000-00000
Approved-Pending Review by Xxxxx
County Building Department
LAS VEGAS VALLEY WATER DISTRICT
Application for Water Plan Review Accepted for review-February 10, 1997
SCHEDULE 4.15
SAGC - LITIGATION
In 1995, Giant Ride, Inc. filed suit in the District Court of Xxxxx
County, Nevada, against SAGC claiming that SAGC has breached a contract to
purchase a giant slide for Saint Xxxxxxx' Las Vegas SportPark. Giant Ride,
Inc. is seeking an unspecified amount of damages. SAGC denies that it had a
contract to purchase such a slide.
SCHEDULE 4.17
SAGC - TRANSACTIONS WITH AFFILIATES
LVDG owns 66.7% of SAGC's outstanding common stock. Xxxx Xxxxxx, SAGC's
Chairman of the Board, is an Officer, Director and principal shareholder of
LVDG. Xxxxxx X. Xxxxxx, President and a Director of SAGC, is a Director and
principal shareholder of LVDG. Xxxxxx X. Xxxxxxx and Xxxxxxx Xxxxxx,
Directors of SAGC, are also Directors of LVDG. In addition, Xxxx Xxxxxx, the
son of Xxxx Xxxxxx and the brother of Xxxxxx X. Xxxxxx, is a principal
shareholder of LVDG.
SAGC has extensive transactions with LVDG, LVDG's other subsidiaries,
and Xxxx Xxxxxx'x Las Vegas store.
SAGC occupies approximately 2,360 square feet of office space and 2,857
square feet of warehouse space at 0000 Xxxxx Xxxxxx Xxxx Xxxxxxxxx, Xxxxx 0,
Xxx Xxxxx, Xxxxxx. The space is leased from Xxxx Xxxxxx and the monthly rent
is $2,944.
During September 1997, SAGC agreed to sell its right to the St. Xxxxxxx
name to Boreta Enterprises, Ltd. for a $20,000 two-year promissory note since
SAGC no longer intends to engage in the business of selling golf equipment or
apparel.
See SAGC's Form 10-KSB for additional disclosures concerning
transactions with affiliated persons.
SCHEDULE 4.20
SAGC - EMPLOYEE BENEFIT PLANS
Employee Retirement and Savings Program (401(k))
Supplemental Retirement Plan
1994 Stock Option Plan
