Exhibit 10.1
THE GREENS OF LAS VEGAS, INC.
MEMORANDUM OF UNDERSTANDING
JULY 1, 2002
This Memorandum of Understanding (the "MOU") sets forth the terms of an
agreement by and among The Greens of Las Vegas, Inc., a Nevada corporation
("GOLV"), Sedona Worldwide Incorporated, an Arizona corporation ("SDWW"), ILX
Resorts Incorporated, an Arizona corporation ("ILX") and Xxxxx Xxxxxx
("Xxxxxx"), to finance the construction of GOLV's putting facility in Las Vegas
and for general working capital.
1. TRANSACTION OUTLINE.
1.1 AMOUNT TO BE RAISED. The parties agree to use their mutual and
respective best efforts, as described below, to raise financing for GOLV, as
outlined in this MOU, to finance the construction of the putting facility in Las
Vegas and for general working capital (the "GOLV Capital").
1.2 REORGANIZATION. In order to raise the GOLV Capital, the parties
have agreed in principal to a plan of reorganization pursuant to which SDWW will
issue 8.0 million shares of its common stock at the closing of the
Reorganization (the "Closing") to GOLV (the "GOLV Shares") in a
stock-for-assets, reorganization (the "Reorganization"). At the Closing, SDWW
shall be a public "shell company" with no material assets or liabilities, other
than those liabilities disclosed on Exhibit "A", attached hereto and
incorporated herein by reference. The Closing will be contingent upon the
consummation of certain of the items set forth in Section 1 of this MOU. Upon
the Closing, SDWW will change its name to "Greens Worldwide Incorporated" or
such other name as the parties agree to use. Hereinafter, SDWW after the Closing
of the Reorganization shall be referred to as "GWWI."
1.3 $1.0 MILLION SALE OF COMMON STOCK TO ILX. Upon the Closing, GWWI
agrees to sell 8.0 million shares of its common stock (the "ILX Shares") to ILX
or its affiliates ("ILX") for $1.0 million cash. ILX will deposit good funds
with SDWW on or before the Closing Date with irrevocable instructions to pay for
the ILX Shares contingent only upon the Closing, and the completion of the other
transactions described herein.
1.4 XXXXXX OPTION. In connection with the Reorganization, ILX will
xxxxx Xxxxxx an option to purchase 1,000,000 shares of GWWI at an initial
exercise price of $.125 per share (the "Xxxxxx Option"), which price shall
increase at the rate of ten percent (10%) per annum, compounded annually, from
the date of the Clsoing until the date Xxxxxx pays cash upon his exercise of the
Xxxxxx Option. Other terms of the Xxxxxx Option, including but not limited to
provisions for voting, exercise and expiration, shall be approved by the parties
hereto prior to Closing.
1.5 GWWI BOARD COMPOSITION. At the Closing, the Board of Directors of
GWWI shall take such action as may be necessary to duly elect and appoint the
following persons as members of the Board of GWWI:
Xxxxxx X. Xxxxxxx, Xx.
Other ILX Nominee
Xxx XxXxxxxx or Other ILX Nominee
Xxxxx Xxxxxx
Other ILX Nominee
1.6 GWWI OFFICERS. At the Closing, the Board of Directors of GWWI
shall take such action as may be necessary to duly elect and appoint the
following persons as the officers of GWWI:
Xxxxxx X. Xxxxxxx, Chairman of the Board, Chief Executive
Officer, President and Chief Operating Officer
Xxxxx Xxxxxx, Executive Vice President
Xxxx X. Xxxxxxxx, Executive Vice President
Xxxxx Xxxxxxxx, Executive Vice President
Xxxxxxxx Xxxxxxx, Chief Financial Officer and Secretary
Xxxxxxx Xxxxxx, Assistant Secretary
Any amendments to the Bylaws of GWWI necessary to effect the foregoing elections
shall be accomplished as of the Closing.
2. DUE DILIGENCE. The parties and their respective agents, attorneys, and
representatives have had full and free access to the properties, books, and
records of SDWW and GOLV for due diligence purposes.
3. GOOD FAITH NEGOTIATIONS. The parties agree to negotiate in good faith
with respect to such additional terms and conditions as are usual and customary
in transactions such as the Reorganization and the raising of capital for GWWI.
4. EXPENSES. Each party shall pay for its own legal and accounting fees
related to this MOU and the Reorganization.
5. CONDUCT OF BUSINESS PENDING THE CLOSING. Prior to the consummation or
termination of the Reorganization and the sale of shares of GWWI, GOLV and SDWW
will conduct their respective businesses only in the ordinary course and none of
their respective assets relating to their respective businesses shall be sold or
disposed of except in the ordinary course of business or as contemplated by this
MOU and/or the Reorganization. The parties agree that prior to the Closing or
the termination of this MOU, neither GOLV nor SDWW shall, other than as set
forth above in this MOU, issue additional securities or rights to acquire any
securities without the consent of the other parties to this MOU. The parties
also agree that neither SDWW nor GOLV shall incur any additional indebtedness,
except in the ordinary course of business.
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6. REPRESENTATIONS OF SDWW. SDWW shall make the following representations
and warranties to GOLV and the other parties hereto, in connection with the
Reorganization, which shall survive the Closing of the Reorganization:
6.1 SDWW is a corporation duly organized, validly existing and in
good standing under the laws of Arizona, has the corporate power and authority
to own, lease and operate its properties and assets and to carry on its business
as it is now contemplated to be conducted in connection with the Reorganization.
6.2 SDWW has the requisite power and authority to enter into this MOU
and the agreements contemplated by the Reorganization and to carry out its
obligations under the agreements as contemplated hereby. The execution and
delivery of this MOU and the consummation of the transactions contemplated
hereby have been duly and validly authorized and no other proceedings on the
part of SDWW are necessary to authorize the MOU and the transactions
contemplated by the MOU. Except for required present or future filings under
state and federal securities laws, no authorization, consent or approval of, or
filing that has not been duly made with, any governmental body or authority, and
no authorization, consent or approval of any third party, is necessary for the
consummation by SDWW of the transactions contemplated by this agreement.
6.3 The execution and delivery of the MOU and the consummation of the
transactions contemplated by the Reorganization and compliance with their terms
does not as of the date of this MOU, and will not as of the Closing of the
Reorganization, (i) conflict with, or result in any violation of any provision
of, the Articles of Incorporation or Bylaws of SDWW, (ii) violate or conflict
with, or result in a breach or termination of or default under, any agreement,
instrument, license, judgment, order, decree, statute, law or regulation
applicable to SDWW, or (iii) result in the creation or imposition of any lien on
any asset of SDWW.
6.4 No material action, suit or proceeding is pending, or, to the
best of SDWW's knowledge, is threatened against SDWW at law or in equity, or
before any national, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality.
6.5 SDWW agrees to make such additional representations, warranties,
and covenants in the connection with the Reorganization as are customary for a
transaction of the type contemplated.
7. REPRESENTATIONS OF GOLV. GOLV makes the following representations and
warranties to SDWW and the other parties hereto, which shall survive the Closing
of the Reorganization:
7.1 GOLV is a corporation duly organized, validly existing and in
good standing under the laws of Nevada, has the corporate power and authority to
own, lease and operate its properties and assets and to carry on its business as
it is now contemplated to be conducted in connection with the Reorganization,
and at the Closing will be duly qualified to do business and in good standing in
each jurisdiction in which its ownership or leasing of its properties or the
conduct of its business will require such qualification.
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7.2 GOLV has good and marketable title to its assets, free and clear
of any claim, mortgage, pledge, lien, encumbrance or liability of any kind
created by or deriving from its businesses or any third parties.
7.3 GOLV has the requisite power and authority to enter into this MOU
and the agreements contemplated by the Reorganization and to carry out its
obligations under the agreements as contemplated hereby. The execution and
delivery of this MOU and the consummation of the transactions contemplated
hereby have been duly and validly authorized and no other proceedings on the
part of GOLV are necessary to authorize the MOU and the transactions
contemplated by the MOU. Except for required present or future filings under
state and federal securities laws, no authorization, consent or approval of, or
filing that has not been duly made with, any governmental body or authority, and
no authorization, consent or approval of any third party, is necessary for the
consummation by GOLV of the transactions contemplated by this agreement.
7.4 The execution and delivery of this MOU and the consummation of
the transactions contemplated by the Reorganization and compliance with their
terms does not as of the date of this MOU, and will not as of the Closing of the
Reorganization, (i) conflict with, or result in any violation of any provision
of, the Articles of Incorporation or Bylaws of GOLV, (ii) violate or conflict
with, or result in a breach or termination of or default under, any agreement,
instrument, license, judgment, order, decree, statute, law or regulation
applicable to GOLV, or (iii) result in the creation or imposition of any lien on
any asset of GOLV.
7.5 No material action, suit or proceeding is pending, or, to the
best of GOLV's knowledge, is threatened against GOLV at law or in equity, or
before any national, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality.
7.6 GOLV agrees to make such additional representations, warranties,
and covenants in the connection with the Reorganization as are customary for a
transaction of the type contemplated.
8. 2002 ANNUAL MEETING OF SDWW STOCKHOLDERS. The parties agree that GWWI
(formerly "SDWW") will convene its annual meeting of its stockholders as soon as
practicable after the Closing, but not later than October 31, 2002, if so
determined by the Board of Directors of GWWI after the Closing, to vote on the
approval of such matters as such Board of Directors shall deem necessary and/or
advisable.
9. MISCELLANEOUS. This MOU constitutes the entire agreement and
understanding of the parties hereto with respect to the matters and transactions
contemplated hereby and supersedes all prior agreements and understandings
whatsoever relating to such matters and transactions between the parties.
Neither this MOU nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought.
10. GOVERNING LAW. This MOU shall be governed by and construed in
accordance with the laws of the State of Arizona without regard to the conflict
of laws provisions thereof.
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11. BINDING NATURE. The parties acknowledge and agree that this MOU shall
be binding on the parties. However, the parties acknowledge their intention to
enter into additional agreements in connection with the Reorganization that will
include the terms and conditions of this MOU and such other terms and conditions
as are customary in a transaction such as the Reorganization and as may be
agreed upon by the parties. The undersigned parties agree to use their best
efforts to draft definitive Reorganization and other agreements incorporating
the terms of this MOU into such other agreements as may be required to effect
the intents and purposes outlined herein.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK. THE SIGNATURE PAGE FOLLOWS.)
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THE GREENS OF LAS VEGAS, INC.
By: ______________________________
Xxxxx Xxxxxx, President
Date: ____________________________
SEDONA WORLDWIDE INCORPORATED
By: ______________________________
Xxx X. Xxxxxxx, President
Date: ____________________________
ILX RESORTS INCORPORATED
By: ______________________________
Xxxxxx X. Xxxxxxx, Chairman
Date: ____________________________
XXXXX XXXXXX
Date: ____________________________
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