ASSET PURCHASE AGREEMENT
This
Asset Purchase Agreement (the “Agreement”) is entered into
as of August 19, 2009 (the “Effective Date”), between Las
Vegas Gaming Inc., a Nevada corporation (“Seller”) and Gaming Arts,
LLC, a Nevada limited liability company (“Buyer”). Seller
and Buyer are individually referred to as a “Party” and collectively as
the “Parties.”
Preliminary
Statements
A. Seller
operates various businesses relating to hardware or software applications for
gaming machines, linked-progressive, mega jackpot games, keno and bingo
(collectively, the “Business”).
B. Subject
to the terms and conditions set forth herein, Seller desires to sell to Buyer:
(i) its bingo operations (the “Bingo Business”), without
limitation, the sale of bingo equipment, service contracts related thereto and
various intellectual property identified herein; (ii) intellectual property
identified herein related to Seller’s keno operations, including various
licenses (“Keno IP
Business”); and (iii) intellectual property and assets identified herein
related to the system commonly known as PRACs (“PRACS Business,” together
with the Bingo Business and Keno IP Business, the “Specified
Businesses”).
C. Subject
to the terms and conditions set forth herein, Buyer desires to purchase the
Purchased Assets (as defined in Section
1.1).
D. Seller
plans to enter into an Asset Purchase Agreement with Session Gaming, LLC (“Session Gaming”) relating to
the sale of various assets of Seller’s keno operations, including, without
limitation, any Gaming Devices (as defined in Section 1.6) and
operations related thereto that would require the approval of various
Governmental Authorities (as defined in Section 4.3(c)),
including, without limitation, the Nevada Gaming Commission and/or the State
Gaming Control Board and any other regulatory jurisdiction over Seller (such
agreement executed by Seller and Session Gaming, the “Keno Purchase Agreement”) and
that would be subject to Buyer granting a license to Session Gaming for the use
Keno Intellectual Property (as defined in Section 1.1(i)) and a
sublicense for the use of the Nevada Numbers Intellectual Property (as defined
in Section
1.1(i)).
Agreement
NOW
THEREFORE, the Parties hereto agree as follows:
1. Purchase.
1.1 Purchase and Sale of
Assets. As of the Closing (as defined in Section 3), subject
to the terms and conditions set forth herein, Seller will grant, sell, assign
and transfer to Buyer, and Buyer will purchase and accept all of Seller’s right,
title and interest in and to the following (collectively, the “Purchased
Assets”):
(a) all
tangible assets, including without limitation, fixed assets, furniture,
fixtures, machines, equipment, inventories (including raw materials, work in
process and finished goods) and computer hardware, in each case only to the
extent such assets are currently solely and exclusively used in and required for
the Bingo Business (and, if applicable, Seller’s Keno operations (the “Keno Business”)), all of such
assets located on the real property of the offices of Seller located at 0000
Xxxx Xxx Xxxx Xxxx, Xxx Xxxxx, Xxxxxx, 000 X Xxxx Xxxx., Xxxx, Xxxxxx, and
LVGI’s Keno service locations, including, without limitation, those assets set
forth on Schedule
1.1(a) (the “Bingo
Personal Property”);
(b) (i) all
content of the customer lists of Seller, including, without limitation, e-mail
addresses and contact information of such customers and prospects of Seller
(including, as appropriate, names, addresses, dates and other information
customarily maintained by Seller), including, without limitation, all copies and
tangible embodiments thereof (in whatever form or medium), in each case only to
the extent relating to the Bingo Business (and, if applicable, the Keno
Business) and (ii) all marketing information and any copies thereof including,
without limitation, all market research, product and service feedback, product
and service reviews and focus group materials, in each case in any and all
media, and in each case, only to the extent solely and exclusively related to
the Bingo Business (and, if applicable, the Keno Business);
(c) a
leasehold interest in the forklift pursuant to the Lease Agreement, dated April
25, 2007, between Xxxx’ Material Handling-Sacramento and Seller;
(d) all
right, title and interest in, and claims under, the contracts, agreements,
licenses and commitments of Seller set forth in Schedule 1.1(d) (the
“Bingo Assumed
Contracts”), including customer proposals and orders, to the extent that
such contracts, agreements and commitments are assignable and transferrable, and
in each case, only to the extent solely and exclusively related to the Bingo
Business (and, if applicable, the Keno Business);
(e) (i) the
patents and any pending continuations, pending continuations-in-part, divisions,
or reissues thereof in each case listed on Schedule 1.1(e), and
the patent applications listed on Schedule 1.1(e) and
any continuations, continuations-in-part, divisions thereof, together
with any reissues of any of the foregoing; (ii) the copyrights (registered and
unregistered) listed on Schedule 1.1(e);
(iii) the trade names (registered and unregistered), trademarks (registered and
unregistered), and service marks (registered and unregistered), in each case
listed on Schedule
1.1(e), whether domestic or foreign; and (iv) to the extent the following
items are currently solely and exclusively used in and required for the Bingo
Business (and, if applicable, the Keno Business), all trade secrets, know-how,
proprietary information, software and computer programs and routines and source
code, object code, html code, all tools developed in support of production of
software development, databases, content assets, technology platform, customer
support logs, scripts, systems documentation and user manuals, including,
without limitation, the material items of which have been listed above,
including, without limitation, all work-in-progress, text, artwork, materials
and digital files or other works of authorship, in any format (collectively,
“Bingo Intellectual
Property”);
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(f) books
and records of Seller solely and exclusively relating to the Bingo Business,
including, but not limited to, such items stored in computer or by any other
means or media;
(g) accounts
receivables of Seller solely and exclusively arising from the Bingo Business
(together with the assets set forth in subsections (a)-(f), the “Bingo Assets”);
(h) all
right, title and interest in, and claims under any of the intellectual property
licensing contracts, agreements and commitments of Seller set forth in Schedule 1.1(h), in
each case, to the extent such intellectual property licensing contracts,
agreements and commitments are currently solely and exclusively used in and
required for the Seller’s Keno Business (the “Keno Assigned
Licenses”);
(i) (i) the
patents and any pending continuations, pending continuations-in-part, divisions,
or reissues thereof in each case listed on Schedule 1.1(i), and
the patent applications listed on Schedule 1.1(i) and
any continuations, continuations-in-part, divisions thereof, together with any
reissues of any of the foregoing; (ii) the copyrights (registered and
unregistered) listed on Schedule 1.1(i),
(iii) the trade names (registered and unregistered), trademarks (registered and
unregistered), and service marks, (registered and unregistered), in each case
listed on Schedule
1.1(i), and (iv) to the extent the following items are currently solely
and exclusively used in and required for the Keno Business (and, if applicable,
the Bingo Business), all Keno Business trade secrets, know-how, proprietary
information, software and computer programs and routines and source code, object
code, html code, all tools developed in support of production of software
development, databases, content assets, technology platform, customer support
logs, scripts, systems documentation and user manuals, including, without
limitation, all work-in-progress, materials and digital files or other works of
authorship, in any format (collectively, “Keno Intellectual Property”);
provided, however, that
the Keno Intellectual Property shall not include any patents or patent
applications related to Nevada Numbers, including, but not limited to, for
example, U.S. Patent No. 6,722,978 issued April 20, 2004,
Title: METHOD OF PLAYING A LINKED NUMERICAL GAME OF CHANCE WITH A
BONUS AND PARLAY WAGERING OPTION, the trademark, NEVADA NUMBERS, U.S.
Registration No. 2,568,678 (together, the “Nevada Numbers Intellectual
Property”), U.S. Patent Serial Number 11/305,796, Title: VIDEO GAMING
DEVICE HAVING A SYSTEM AND METHOD FOR COMPLETING XXXXXX AND PURCHASES DURING THE
CASH OUT PROCESS, U.S. Patent Serial Number 11/686,755, Title: AUTOMATIC FUNDING
OF PARAGAMES ON ELECTRONIC GAMING PLATFORM, and U.S. Patent Serial Number
11/897,533, Title: METHOD AND SYSTEM FOR PARAGAME ACTIVITY AT ELECTRONIC GAMING
MACHINE;
(j) all
tangible assets, including, without limitation, fixed assets, furniture,
fixtures, machines, equipment, inventories (including raw materials, work in
process and finished goods) and computer hardware, wherever located and not
listed as personal property inventories that are owned by Seller and, in each
case currently solely and exclusively used in and required for Seller’s
operation of PRACS as set forth on Schedule
1.1(j);
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(k) all
accounts receivable solely and exclusively arising from Seller’s operation of
PRACS;
(l) all
content of the customer lists of Seller, including without limitation, e-mail
addresses and contact information of such customers and prospects of Seller
(including, as appropriate, names, addresses, dates and other information
customarily maintained by Seller), including, without limitation, all copies and
tangible embodiments thereof (in whatever form or medium), in each case only to
the extent relating to Seller’s operation of PRACS;
(m) all
right, title and interest in, and claims under, the contracts, agreements,
licenses and commitments of Seller set forth in Schedule 1.1(m) (the
“PRACS Contracts”),
including customer proposals, and orders, to the extent that such contracts,
agreements and commitments are assignable and transferrable, and in each case to
the extent solely and exclusively related to Seller’s operation of PRACS (the
“PRACS Assumed
Contracts,” together with the Bingo Assumed Contracts and the Keno
Assumed Contracts, the “Assumed
Contracts”);
(n) the
patents and any pending continuations, pending continuations-in-part, divisions
or reissues thereof and trademarks listed on Schedule 1.1(n) and
any continuations, continuations-in-part, divisions, or reissues thereof,
whether domestic or foreign, relating to thereto, and, in each case, all
variations thereof and all registrations and applications therefor
(collectively, “Other
Intellectual Property,” together with the Bingo Intellectual Property and
the Keno Intellectual Property, the “Intellectual Property”);
and
(o) all
Claims (as defined in Section 12.1) solely
and exclusively related to and arising from the foregoing and/or the Specified
Businesses.
1.2 Grant of
License. As of the Effective Date, Seller hereby grants Buyer
a license to all patents, issued or applied for any continuations,
continuations-in-part, divisions, or reissues thereof, the copyrights
(registered and unregistered), the trade names (registered and unregistered),
trademarks (registered and unregistered), and service marks (registered and
unregistered), and in each case, all variations thereof which are primarily
related to the operation of PRACS or which are primarily related to carrying out
the obligations under the Assumed Contracts related thereto that are being
acquired as part of the Purchased Assets.
1.3 Assumption of
Liabilities. Subject to the terms and conditions set forth
herein, Buyer agrees to: (i) pay Seller’s trade payables as set forth on Schedule 4.12 which
arose after July 1, 2009 (in no event shall Buyer be liable for any trade
payables as set forth on Schedule 4.12 which
arose prior to July 1, 2009); and (ii) perform all obligations of Seller arising
from and after the Closing pursuant to the terms of the Assumed Contracts but
excluding any Liabilities (as defined below in this Section) arising from or
relating to any breach, default or violation of the Assumed Contracts by Seller
prior to the Closing. The term “Liabilities” shall mean any
debt, Claim or obligation of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, disputed or
undisputed, liquidated or unliquidated, secured or unsecured, joint or several,
due or to become due, vested or unvested, executory, determined, determinable or
otherwise.
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1.4 No Other Assumption of
Liabilities. This Agreement is for the purchase of the
Purchased Assets, and Buyer shall not assume or pay, discharge or perform any
Liabilities of Seller (including any obligations under any written or oral
agreement relating to the Business or obligations relating to unpaid wages
claims) relating to the operations of the Business or any other business or
operations of Seller prior to or after the Closing, except those Liabilities
that are specifically set forth in Section
1.3.
1.5 Excluded
Liabilities. The following shall not constitute any contracts,
agreements or commitments of Seller that are not assignable or transferable,
unless Seller and Buyer obtain the express written consent of the other party to
any Assumed Contracts and any Liabilities relating to the Assumed Contracts that
relate or arise prior to the Closing.
1.6 Excluded
Assets. Seller represents and warrants to Buyer that none of
the Purchased Assets are gaming devices, as defined in Nevada Revised Statutes
section 463.0155 (“Gaming
Devices”), and the Purchased Assets do not entitle Seller or any
successor to participate or receive, directly or indirectly, in any gaming
revenue.
2. Purchase
Price.
2.1 Purchase Price and License
Fee. Subject to the terms and conditions, the purchase price
for the Purchased Assets (the “Purchase Price”) shall be
equal to $1,050,000, subject to adjustment, and as of the Closing Date, Buyer
shall pay Seller the License Fee (as defined in Section 7.1(j))
solely for the Nevada Numbers Intellectual Property. Additionally,
the Purchase Price shall be paid by Buyer, as follows:
(a) $500,000
of the Purchase Price (the “Deposit”) was delivered to
Seller prior to the execution of this Agreement;
(b) $450,000
of the Purchase Price (the “Payment”) shall be delivered
by Buyer on or prior to the Closing Date; and
(c) on the
last day of the fifth month after the Closing, Buyer shall deliver to Seller a
check in the amount equal to $100,000 less the amount equal to the adjustment
(as determined in accordance with Section 2.2) or as
otherwise provided herein (the “Final Payment”).
2.2 Purchase Price
Adjustment.
(a) In the
event a difference between accounts receivable attributable to the Bingo
Business (“Bingo Accounts
Receivable”), as of the Closing, and accounts payable attributable to the
Bingo Business (“Bingo
Accounts Payable”), as of the Closing, is less than $100,000, as
determined in accordance with Sections 2.2(b), (c), (d)
and (e), the Purchase Price shall be reduced dollar for dollar by the
amount equal to the shortfall, but not below zero. For example, as of
the Closing, if the Bingo Accounts Receivable is $130,000 and the Bingo Accounts
Payable is $56,000, the Purchase Price shall be adjusted by the amount equal to
$26,000.
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(b) As
promptly as practicable following the Closing, but in no event later than 30
days thereafter, Seller shall cause to be prepared and delivered to Buyer a
statement setting forth the Bingo Accounts Receivable and the Bingo Accounts
Payable as of the date of the Closing, as determined by Seller’s Chief Financial
Officer or Certified Public Accountant and as determined in accordance with the
practices used by Seller in the statement setting forth the Bingo Accounts
Receivable and Bingo Accounts Payable as of March 31, 2009 (the “March Statement”) delivered
to Buyer prior to the Effective Date.
(c) During
the 30-day period following receipt of the statement required to be delivered by
Seller to Buyer in accordance with Section 2.2(b) (the
“Statement”), Buyer and
its independent accountants shall, at Buyer’s expense, be permitted to review
the working papers of Seller and Seller’s accountants relating to each Statement
and to ask questions, receive answers and request such other data and
information from each of them as shall be reasonable under the
circumstances. The Statement shall become final and binding upon the
Parties hereto on the 45th day following delivery thereof, unless Buyer gives
written notice of its disagreement with such Statement (the “Notice of Disagreement”) to
Seller prior to such date. The Notice of Disagreement shall specify,
in reasonable detail, the nature of any disagreement so asserted.
(d) During
the 15-day period following the delivery of the Notice of Disagreement that
complies with the preceding paragraph, or such longer period as the Parties
hereto shall mutually agree, the Parties hereto shall seek, in good faith, to
resolve in writing any differences which they may have with respect to the
matters specified in the Notice of Disagreement. If, at the end of
such 15-day period (or such longer mutually agreed upon period), the Parties
hereto have not so resolved such differences, the Parties hereto shall submit
the dispute for resolution to an independent accounting firm (the “Arbiter”) for review and
resolution of any and all matters which remain in dispute and which were
properly included in such Notice of Disagreement. The Arbiter shall
be a mutually acceptable internationally recognized independent public
accounting firm agreed upon by the Parties hereto in writing. The
Parties hereto shall use reasonable efforts to cause the Arbiter to render a
decision resolving the matters in dispute within 30 days following the
submission of such matters to the Arbiter. The scope of the disputes
to be resolved by the Arbiter is limited to such items that Seller has disputed
in the Notice of Disagreement. In resolving any disputed item, the
Arbiter shall limit its review to matters set forth in the applicable Notice of
Disagreement. The Arbiter shall notify Buyer and Seller whether or
not the Arbiter believes that the computation contained in any Statement is
understated or overstated, which determination (the “Determination”) shall be
final and binding and shall be the sole and exclusive remedy between Buyer and
Seller regarding such computation and judgment may be entered upon the
determination of the Arbiter in any court having jurisdiction over the party
against which such determination is to be enforced. Any amounts
determined to be understated or overstated, as provided above, will be adjusted
accordingly (the “Adjustment”) solely for
purposes of Section
2.2. Any Statement reviewed by the Arbiter shall, after giving
effect to any applicable Adjustment, become final and binding on the Parties
hereto.
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(e) The fees,
costs and expenses of the Arbiter shall be paid one-half by Seller, on the one
hand, and one-half by Buyer, on the other.
2.3 Allocation.
(a) Buyer
shall allocate the Purchase Price and the Assumed Contracts among the Purchased
Assets, subject to Section
2.3(a). Such allocation shall be made in accordance with
Section 1060 of the Internal Revenue Code (“Code”) and the applicable
Treasury Regulations, and shall be binding upon Buyer and Seller for all
purposes (including regulatory reporting and tax purposes). Seller
shall timely and properly prepare, file and deliver all such documents, forms
and other information, as Buyer may reasonably request, to prepare such
allocation. Each of the Parties hereto agree to file Tax Returns (as
defined in Section
4.8(i)) consistently with the foregoing and in accordance with Section
1060 of the Code and the applicable treasury regulations, and to act in
accordance with such allocation in the course of any tax audit, tax review or
tax litigation relating to this matter.
2.4 Deposit. The
Deposit is refundable and shall be treated as a loan in the amount of the
Deposit (the “Loan”) to
Seller, in the event that the Closing of the transactions contemplated
hereunder, the Deposit shall be credited towards the Purchase
Price. Notwithstanding the above, Seller agrees that the Deposit has
been used, or shall be used, to pay all outstanding Liabilities related to
vendor accounts, Seller’s personnel payroll of employees used in connection with
the Bingo Business, and all of the operations of Seller’s keno business,
including employee benefits, in order that all amounts are paid in full as of
the Closing. In the event that Seller does not use the proceeds of
the Deposit as provided above, Buyer may immediately terminate this Agreement by
providing written notice to Seller; such termination shall be effective as of
the date of the notice.
3. Closing. The
purchase of the Purchased Assets as contemplated herein (the “Closing”) shall take place at
the offices of Xxxxxx Silver located at 0000 Xxxxxx Xxxxxx Xxxxxxx, 0xx Xxxxx,
Xxx Xxxxx, Xxxxxx 00000 on August 19, 2009 (the “Closing Date”). If
the conditions precedent set forth in Section 8 are not
satisfied as of the Closing Date, this Agreement shall terminate and the Parties
shall have no further obligations hereunder, except those obligations that
expressly survive, including, without limitation, that Buyer has all Claims
against Seller to immediately repay the Deposit as provided in Sections 2.4 and
11.2.
4. Seller’s Representations and
Warranties. Seller represents and warrants to Buyer
that:
4.1 Organization. Seller
is a duly organized corporation, existing and in good standing under the laws of
the State of Nevada.
4.2 Authority. Seller
has the requisite power and authority to execute and deliver this Agreement and
the other agreements provided for herein, and consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement
have been duly authorized by all necessary action on the part of
Seller. Seller has duly executed and delivered this Agreement and,
assuming due authorization, execution and delivery of this Agreement by Buyer,
this Agreement constitutes Seller’s legal, valid and binding obligation,
enforceable against Seller in accordance with its terms.
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4.3 Violation. Neither
the execution and delivery of this Agreement by Seller, the consummation of the
transactions contemplated hereby, nor the performance by Seller of its
obligations hereunder will:
(a) Violate
or result in any breach of any provision of the articles of incorporation,
bylaws or any other organization documents of Seller, each as
amended;
(b) Violate,
conflict with or result in a material violation or breach of, or constitute a
material default (with or without due notice or lapse of time or both) under, or
permit the termination of, any of the Assumed Contracts or any other Contract
that Seller is bound or party to, including, without limitation, any
nondisclosure agreement, confidentiality agreement or agreement prohibiting
competition;
(c) Violate
any order, writ, judgment, injunction, decree, statute, law, rule, regulation or
ordinance of any federal, state or municipal court or governmental,
quasi-governmental or regulatory department or authority (“Governmental Authority”)
applicable to Seller in any material respect; or
(d) Result in
the imposition of any mortgages, pledges, liens, encumbrances, equities, claims,
title retention or other security arrangement or obligations on the Purchased
Assets.
4.4 Approvals. Except
as required under the Assumed Contracts, no approvals from any Governmental
Authority or consents of third parties are required for the execution and
delivery of this Agreement by Seller or the consummation and performance by
Seller of the transactions contemplated by this Agreement.
4.5 Contracts.
(a) Each of
such Assumed Contracts is valid, binding, subsisting and enforceable in
accordance with its terms (subject to the effect of applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws
affecting creditor’s rights generally), and Seller has performed in all material
respects all obligations required to be performed under any such Assumed
Contracts and is not in breach or default or in arrears in any material respect
or in any other respect which would permit the other party to cancel such
contract or arrangement under the terms thereof. Without limiting the
generality of the foregoing, Seller has not, within the last twelve months,
received any correspondence from any creditor referencing the possibility of
either placing Seller on any more restrictive or less favorable credit terms or
referring Seller’s account for collection action.
(b) Except as
set forth in Schedule
4.4, no consent by, notice to or approval from any third party is
required under any of the Assumed Contracts as a result of or in connection with
the execution, delivery or performance of this Agreement and the consummation of
the transactions contemplated herein.
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(c) Seller
has delivered true and correct copies of all Assumed Contracts to
Buyer.
4.6 Liens. Except as set forth in
Schedule
4.6, Seller
is in possession of and has good and marketable title in the Purchased Assets,
free and clear of all Liens (as defined below in this Section), and the
Purchased Assets are in good working order and condition, ordinary wear and tear
excepted. Additionally, as of the Closing, Seller shall be in
possession of and shall have good and marketable title in the Purchased Assets,
free and clear of all Liens, and the Purchased Assets shall be in good working
order and condition, ordinary wear and tear excepted. “Lien” shall mean any
mortgage, deed of trust, pledge, security interest, attachment, right of first
refusal or first offer, encumbrance, lien or charge of any kind (including any
agreement to give any of the foregoing) or right of others of any similar
nature.
4.7 Claims. There is
no suit, action, arbitration, unfair labor practice charge, or legal,
administrative or other proceeding, or governmental investigation, pending or
threatened, against or affecting Seller or Seller’s
Business. Additionally, there is no pending action or audit by a
Governmental Authority that may result or could result in the payment of any
fines, fees or assessment to any Governmental Authority. Seller is
not in default with respect to any order, writ, injunction or decree of any
federal, state, local or foreign court, department, agency or instrumentality in
connection with the Purchased Assets or any other assets of Seller.
4.8 Tax Returns. All
Tax Returns required to be filed with respect to the Business for all periods
through and including the Closing Date have been duly and timely filed with the
appropriate governmental authorities in all jurisdictions in which such Tax
Returns are required to be filed, and such Tax Returns are true, correct and
complete in all material respects. All Taxes (as defined in Section 4.8(ii))
shown as due on such Tax Returns have been timely paid. All Taxes
required to be withheld and paid with respect to (i) Seller’s Business; or (ii)
any amounts owed by Seller to any employee, creditor, independent contractor or
other third party have been duly and timely withheld and paid. To the
Knowledge of Seller (as defined below in this Section), there are no pending or
threatened audits or investigations with respect to Taxes relating to the
Business. “Knowledge of Seller” means
the actual knowledge of the officers of Seller.
(i) “Tax Return” means any return,
declaration, report, claim for refund, information return or information
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
(ii) “Taxes” means any and all
taxes, charges, fees, levies, tariffs, duties, liabilities, impositions or other
assessments of any kind imposed by any tax authority or other governmental
authorities.
4.9 Financial
Statements. The Financial Statements, including the notes
thereto, were prepared on an accrual basis, are true and correct and fairly
present in all material respects the financial condition, results of operations
and cash flows of the Business for the periods covered thereby. The
March Statement is true and correct and fairly present in all material respects
the financial condition, results of operations and cash flows of the Specified
Businesses for the periods covered thereby.
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4.10 No Other Rights. Seller has
not: (i) obligated itself in any manner to sell the Purchased Assets to any
party other than Buyer; (ii) granted any option to purchase the Purchased Assets
to any party other than Buyer; or (iii) granted any right of first offer or
first refusal in connection with the Purchased Assets.
4.11 Receivables. Schedule 4.11
attached sets forth a true, correct and complete list of the accounts and notes
receivable of Seller relating, in part, to the Assumed Contracts, including the
aging thereof as of the date hereof. All accounts receivable of the
Company: (i) are legal, valid and binding obligations of the obligor with
respect thereto, and are in full force and effect; (ii) arose out of bona fide
transactions in the ordinary course of business; (iii) are not subject to
discount, rebate, off-set, return privilege (other than return privileges
granted in the ordinary course of business consistent with past practice) or
pending claim or, to the Knowledge of Seller, any threatened claim; and (iv) are
valid and collectible (in the ordinary course of business).
4.12 Liabilities. Except
as set forth in Schedule 4.12 listing
trade payables of Seller which arose after July 1, 2009 (“Trade Payables”), Seller does
not have any material liabilities (absolute, accrued, contingent or otherwise)
relating to the Specified Businesses, except liabilities or obligations (i)
adequately provided for in the Financial Statements, or (ii) incurred since
December 31, 2008 in the ordinary course of business. None of the
Seller or any of its officers, directors, or to the Knowledge of the Seller, any
of their respective affiliates: (a) is contemplating the filing of a petition
under the Bankruptcy Laws (as defined below in this Section) with respect to
Seller, or the liquidation of all or any major portion of its or their assets or
properties, or (b) aware of any person (as defined below in this Section)
contemplating the filing of any petition against the Seller under the Bankruptcy
Laws. Schedule 4.12
contains a complete list of all trade payables arising after July 1,
2009. The term “Bankruptcy Laws” means the
United States Bankruptcy Code (Title 11, United States Code) and any state or
federal laws pertaining to insolvency. The term “person” means any natural
person, partnership, limited liability company, limited liability partnership,
corporation, association, joint stock company, trust, joint venture,
unincorporated organization or other entity or any Governmental
Authority.
4.13 Intellectual
Property.
(a) The
Intellectual Property constitutes all of the intellectual property rights and
other proprietary rights used by Seller in the operation of the Specified
Businesses or all of the intellectual property rights directly related to the
Specified Businesses and that is owned by Seller or for which Seller has
obtained any rights directly related to the Specified Businesses. The use of the
Intellectual Property does not infringe upon the rights of any other person,
whether or not registered. Seller has not received any notice of a
Claim of such infringement, nor were any such Claims the subject of any action,
suit or proceeding naming Seller as a party thereto.
(b) Seller
has no knowledge of any infringement or improper use by any third party of the
Intellectual Property, nor has Seller instituted any action, suit or proceeding
in which an act constituting an infringement of any of the Intellectual Property
was alleged to have been committed by a third party.
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(c) Except
set forth on Schedule
4.13(c) (“Intellectual
Property Agreements”), there are no licenses, sublicenses or agreements
to which Seller is a party or is bound with respect to (i) the use by third
parties of the Intellectual Property, or (ii) the use by Seller of the
Intellectual Property and, to the knowledge of Seller, there is no prior right
of any other party or other impediment which would invalidate or affect any of
the Intellectual Property. Seller has delivered to Buyer true and
correct copies of all Intellectual Property Agreements.
(d) The use
of the Intellectual Property does not infringe upon the rights of any other
person, whether or not registered.
(e) Seller is
not aware of any facts that would be adverse to the validity and enforceability
of the Intellectual Property (e.g., an on-sale bar that would invalidate a
patent).
(f) The
Intellectual Property constitutes all of the intellectual property rights and
other proprietary rights used by Seller in the operation of the Specified
Businesses and are freely transferable without the consent of any person or
entity. The use of the Intellectual Property does not infringe upon
the rights of any other person or entity, whether or not
registered.
4.14 Omissions. No statement or
certificate furnished or to be furnished pursuant hereto or in connection with
the transaction contemplated herein, contains any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements contained therein not misleading.
4.15 Entire Line. The sale of the
Purchased Assets pursuant to this Agreement will convey to Buyer: (i) the entire
Specified Businesses; (ii) all of the tangible and intangible property used by
Seller in connection with the conduct of the Bingo Business and PRACS Business;
and (iii) all of the intangible property of the Keno Business including various
licenses related to the Keno Business.
4.16 Broker. No broker,
investment bank, financial advisor or other person is entitled to any brokerage,
finder’s, financial advisor’s or similar fee or commission in connection with
this Agreement based upon arrangements made by or on behalf of
Seller.
4.17 Survival. The
representations and warranties set forth in this Section 4 shall
survive the Closing.
5. Representations and Warranties of
Buyer. Buyer represents and warrants to Seller
that:
5.1 Authorization. Buyer
has the requisite power and authority to execute and deliver this Agreement and
the other agreements provided for herein and consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement
have been duly authorized by all necessary action on the part of
Buyer. Buyer has duly executed and delivered this Agreement, and,
assuming due authorization, execution and delivery of this Agreement by Seller,
this Agreement constitutes Buyer’s legal, valid and binding obligation,
enforceable against Buyer in accordance with its terms.
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5.2 Broker. No broker,
investment bank, financial advisor or other person is entitled to any brokerage,
finder’s, financial advisor’s or similar fee or commission in connection with
this Agreement based upon arrangements made by or on behalf of
Buyer.
5.3 Survival. The
representations and warranties set forth in this Section 5 shall
survive the Closing.
6. Covenants
and Additional Agreements.
6.1 Assumed
Contracts. In the event that any Assumed Contract requires the
consent of a third party to assign or transfer such Assumed Contract, Seller
shall use its best efforts to obtain such consents.
6.2 Playground
Agreement. Prior to the Closing, Seller will obtain an
acknowledgment executed by Playground Gaming, LLC in favor of Seller, in the
form approved by Buyer (the “Acknowledgment”), providing,
in part, that: (i) Playground has not violated the non-disclosure agreement
around the Optima source code or any other confidential or proprietary
information in Playground possession relating to the Specified Businesses; (ii)
the Independent Sales Representative Agreement and Distributor Agreement, dated
as of June 15, 2009, shall not be binding upon any successor owner of Seller’s
Keno operations, including, without limitation, Buyer, Session Gaming and each
of their successors and assigns (the “Successors”); and (iii)
Playground waives any Claims that it may have against the Successor or
Successor’s successors, assigns, affiliates and representatives.
6.3 IGT Consent. On or
prior to the Closing Date, Seller will obtain IGT’s written consent and waiver,
in the form approved by Buyer, providing, in part, that IGT waives any Claims
against Seller and its successors (including, without limitation Buyer and
Merati), assigns, officers, directors employees and representative that it may
have against the Nevada Numbers and that IGT consents to the sale of the
Purchased Assets to Buyer (the “IGT Waiver”).
6.4 Freely
Assignable. All rights relating to the Intellectual Property
granted by Seller shall be freely licensable by Buyer as necessary to operate
the Specified Businesses and shall be freely assignable by Buyer in connection
with the sale of the Specified Businesses, or to any affiliate, subsidiary or
operating unit of Buyer.
6.5 Further
Assistance. After the Closing, upon request of Buyer, Seller
shall cooperate and Seller shall cause its officers or applicable
representatives or employees to cooperate with Buyer in any prosecution,
defense, enforcement, maintenance or any other matters pertaining to patents,
issued or applied for and any continuations, continuations-in-part, divisions,
or reissues thereof or pertaining to the Intellectual Property, including,
without limitation, any action necessary to exploit such patents and any other
rights of the Intellectual Property and any action necessary to obtain releases
on any Purchased Assets, in a form approved by Buyer.
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7. Closing
Deliveries.
7.1 Seller’s
Delivery. On the Closing Date, Seller shall deliver to
Buyer:
(a) an
original executed xxxx of sale setting forth the Purchased Assets the items
listed on Sections
1.1(a) and 1.1(j), in the form attached as Exhibit
A;
(b) an
assignment of Assumed Contracts in the form attached as Exhibit B (the “Assignment of
Contracts”);
(c) an
original executed Trademark Assignment in the form attached as Exhibit C (the “Trademark
Assignment”);
(d) an
original executed Patent Assignment in the form attached as Exhibit D (the “Patent
Assignments”);
(e) an
original executed license documents relating to the Intellectual Property as
requested by Buyer in a form approved by Buyer in its sole and absolute
discretion;
(f) an
original executed counterpart of the Services Agreement between the Parties
hereto in the form attached hereto as Exhibit E (“Services Agreement”),
providing, in part, that (i) commencing as of the Closing and terminating as of
the closing of the sale of the keno operations and assets under the Keno
Purchase Agreement, Seller shall provide certain management services to Buyer;
(ii) Buyer shall be responsible for the certain costs and expenses (the “Fee”); and (iii) in the event
of a default by Seller (such as failing to promptly provide such Services,
filing any bankruptcy proceedings or receivership), Buyer may elect to
immediately terminate the Consulting Agreement and Buyer shall have no further
obligations except to pay the Fee prorated for the amount of actual days during
such period and as otherwise provded therein.
(g) an
original executed Acknowledgment;
(h) an
original executed IGT Waiver;
(i) an
original executed counterpart of the License Agreement in the form attached
hereto as Exhibit
F (“Keno License
Agreement”), providing, in part, that Buyer shall grant a license to
Seller for the Keno Intellectual Property, at the time of the Closing in order
that Seller may operate the Keno Business, such license shall not be
transferable; and
(j) an
original executed counterpart of the License Agreement in the form attached
hereto as Exhibit
G (“Nevada Numbers
License Agreement”), providing, in part, that Buyer pay a fee equal to
$50,000.00 (the “License
Fee”) for an exclusive license to non-slot machine applications, and
royalties, as defined in the original executed counterpart of the License
Agreement, for a non-exclusive license in slot machine
applications;
(k) deliver
to Buyer possession of the Purchased Assets;
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(l) certificate
of titles relating to any vehicles which comprise of the Purchased Assets;
and
(m) delivery
and execution of all other documents that Buyer, in its sole and absolute
discretion requests, in order to transfer all of the Purchased Assets to
Buyer.
7.2 Buyer’s
Delivery. On the Closing Date, only if Seller has delivered to
Buyer the items set forth in Section 7.1, Buyer
shall deliver to Seller:
(a) the
proceeds equal to the Payment;
(b) an
original executed counterpart of the Assignment of Contracts;
(c) an
original executed counterpart of Trademark Assignment;
(d) an
original executed counterpart of Patent Assignment;
(e) an
original executed counterpart of the Keno License Agreement;
(f) an
original executed counterpart of the Nevada Numbers License Agreement;
and
(g) an
original executed counterpart of the Management Agreement.
8. Conditions
to Closing.
8.1 Buyer’s Conditions to
Closing. The obligations of Buyer to proceed with the Closing
are subject to the fulfillment at or prior to the Closing Date, of each of the
conditions set forth in this Section
8.1:
(a) the
representations and warranties of Seller in Section 4 shall be
true and correct at and as of the Closing Date with the same effect as though
made on and as of the Closing Date (except that representations and warranties
which speak as of a specified date or period of time shall be true and correct
only as of such date or period of time);
(b) Seller
shall have delivered the documents set forth in Section
7.1;
(c) Buyer
shall have received evidence satisfactory to it that Buyer will receive at
Closing good and marketable title to each of the Purchased Assets, free and
clear of all Liens;
(d) all
covenants, agreements and obligations contained in this Agreement to be
performed or complied with by Seller on or prior to the Closing Date shall have
been performed or complied with in all material respects; and
(e) all such
other instruments or documents as may be reasonably required by Buyer in order
to consummate the transactions contemplated herein.
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Buyer
shall have the right to waive in writing any or all of the conditions precedent
to its obligations hereunder; provided, however, that no
waiver by Buyer of any condition to its obligations hereunder shall constitute a
waiver by Purchaser of any other condition precedent to its obligations
hereunder.
8.2 Seller’s Closing
Conditions. The obligations of Seller to proceed with the
Closing are subject to the fulfillment at or prior to the Closing Date, of each
of the conditions set forth in this Section
8.2:
(a) the
representations and warranties of Buyer in Section 5 shall be
true and correct in all material respects as of the Effective Date with the same
effect as though made on and as of the Closing Date;
(b) Buyer
shall have delivered the documents set forth in Section
7.2;
(c) all
covenants, agreements and obligations contained in this Agreement to be
performed or complied with by Buyer on or prior to the Closing Date shall have
been performed or complied with in all material respects; and
(d) all such
other instruments or documents as may be reasonably required by Seller in order
to consummate the transactions contemplated herein.
Seller
shall have the right to waive in writing any or all of the conditions precedent
to its obligations hereunder; provided, however, that no
waiver by Seller of any condition to its obligations hereunder shall constitute
a waiver by Purchaser of any other condition precedent to its obligations
hereunder.
8.3 Fulfillment of Conditions
Precedent. Buyer and Seller each agree to use reasonable best
efforts to fulfill the conditions precedent to their obligation to close this
transaction, as set forth herein.
9. Costs
and Expenses.
9.1 Prorations.
(a) The
following shall be prorated and adjusted between the Parties hereto as of the
Closing Date: (a) revenues, charges and payments under the Assumed
Contracts, to the extent that such Assumed Contracts are assigned to Buyer as
provided herein, except Trade Payables shall be prorated as of July 1, 2009; and (b)
revenues from the operation of the Purchased Assets.
(b) For
purposes of calculating prorations, Seller shall be deemed to be in title to the
Purchased Assets, and, therefore, entitled to the income therefrom and
responsible for the expenses thereof for the entire day upon which the Closing
occurs. All such prorations shall be made on the basis of the actual
number of days of the month which shall have elapsed as of the Closing Date and
based upon the actual number of days in such month and a 365 day
year.
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The
amount of such prorations shall be initially calculated by Seller and Buyer at
the Closing but shall be subject to adjustment in cash after the Closing when
complete and accurate information becomes available, if such information is not
available at the Closing. Seller and Buyer agree to cooperate and use their best
efforts to make such adjustments no later than 30 days after the
Closing. The provisions of Section 9.1 shall
survive the Closing.
9.2 Closing
Statement. Seller and Buyer shall prepare a closing statement
reflecting the prorations set forth above (the “Closing Statement”) within 30
days after the Closing, as mutually agreed upon by the Parties hereto; such
agreement shall be evidenced by the Parties hereto executing to the consent of
the Closing Statement. If the Closing Statement reflects a net amount
due and owing to Seller, Buyer shall pay such net amount to Seller within five
days after the Closing Statement both Parties hereto have executed a consent to
the Closing Statement. If, in contrast, the Closing Statement
reflects a net amount due and owing to Buyer, Seller shall pay such amount to
Buyer within five days after the Closing Statement both Parties hereto have
executed a consent to the Closing Statement. In the event Seller and
Buyer agree that additional items shall be pro-rated, allocated or adjusted, any
such items shall be prorated, adjusted or allocated consistent with this Section
9. In the event that the Parties do not agree on all of the
items with respect to the Closing Statement, the Parties shall include
nondisputed items on the Closing Statement. The items reflected on
the Closing Statement shall be subject to adjustment subsequent to the Closing
Date; provided,
however, that no Claim for an adjustment may be made more than one year
following the Closing Date.
9.3 Taxes Withheld. All transfer,
sales, use, registration and all other such Taxes and fees incurred in
connection with, or arising out of, the transactions completed by this Agreement
shall be paid by Seller when due, and Seller shall, at its expense, file all
necessary federal, state and local tax returns and other documentation with
respect to the foregoing. Seller shall remain responsible for payment of any
fees or taxes due pursuant to any subsequent deficiency determination made
pursuant to applicable law which encompass any period of time before the
Closing, and shall hold Buyer harmless therefrom.
10. Post-Closing
Covenants.
10.1 Receivables.
(a) On the
Closing Date, or as soon thereafter as practicable, Seller shall provide Buyer
with a schedule, setting forth by customer, and its outstanding accounts
receivable relating to the Bingo Business and the PRACS Business on the Closing
Date; provided that the receivables shall not relate to any directly or
indirectly to any gaming revenues. In the event that Seller receives
any Receivables, within five days of the receipt, Seller shall deliver such
amounts to Buyer. Upon written request of Buyer, Seller shall use its
best efforts assist to Buyer in the collection of the outstanding accounts
receivables that are part of the Purchased Assets, which shall be at no cost of
Buyer.
(b) The
obligations of the Parties to forward the Accounts Receivable payments pursuant
to this Section
10.1 are absolute and unconditional and irrespective of any circumstances
whatsoever that might constitute a legal or equitable discharge, recoupment,
offset, counterclaim or defense of the Parties, the right to assert any of which
with respect to proceeds of any accounts receivable is hereby
waived. The obligations under this Section 10.1 shall
survive the Closing.
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10.2 Consents. Seller
shall use its commercially reasonable efforts to assist Buyer obtaining all
consents from third parties in connection with the assignment of the Assumed
Contracts.
10.3 Commercially Reasonable
Efforts. On and after the Closing Date, without limiting the
provisions of Section
6.6, Seller and Buyer shall use all commercially reasonable efforts to
take or cause to be taken all necessary or appropriate actions and do, or cause
to be done, all things necessary or appropriate to consummate and make effective
the transactions contemplated herein, including the execution of any additional
documents or instruments of any kind (not containing additional representations
and warranties) which may be reasonably necessary or appropriate to carry out
any of the provisions hereof.
10.4 Non-Competition Agreement.
(a) Seller
agrees that, during the five-year period following the Closing Date, Seller or
its successors and assigns shall not, directly or indirectly, or for any other
Person (other than the Seller) participate in the Specified
Businesses. For purposes of this Section 10.4(a), the
term “participate”
includes any direct or indirect interest in any enterprise, whether as a
partner, member, agent, representative, independent contractor, consultant,
franchisor, franchisee, creditor, lender, owner, seller or licensor (which shall
include the sale or licensing of any Intellectual Property to any third party
that could be used by such third party to compete with the Specified Businesses
or Buyer) or otherwise; provided that the term “participate” shall not
include ownership of less than 2% of the stock of a publicly-held corporation
whose stock is traded on a national securities exchange or in the
over-the-counter market. Seller agrees that this covenant is
reasonable with respect to its duration, geographical area and
scope. For and in consideration of the restrictions and limitations
of this Section
10.4(a), Seller agrees that it has received a fair and adequate portion
in connection with this provision. Notwithstanding the above, Seller
shall not be deemed to violate this provision if Seller is conducting or engaged
in a business involving bingo or keno implemented in Seller’s “Player Vision” application as
such application exists as of the Effective Date or if Seller has been granted a
license in writing to utilize certain Intellectual Property of Buyer, subject to
the terms and conditions set forth therein.
(b) If the
final judgment of a court of competent jurisdiction declares that any term or
provision of this Section 10.4 is
invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
(c) Notwithstanding
any provision to the contrary, in the event of a breach or threatened breach of
any of the duties and obligations of Seller or any related party thereto under
this Section
10.4, Buyer shall be entitled, in addition to any other legal or
equitable remedies it may have in connection therewith (including any right to
monetary damages), to a
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temporary,
preliminary and/or permanent injunction restraining such breach or threatened
breach without the need to post a bond or demonstrate irreparable harm or
inadequacy of monetary damages. Seller agrees that, in the event
there is a question as to the enforceability of this Section 10.4, Seller
will not engage in any conduct inconsistent with or contrary to this Section
until after the question has been resolved by a final judgment of a court of
competent jurisdiction.
11. Events
of Termination.
11.1 Termination. This
Agreement may be terminated at any time prior to the Closing Date:
(a) By the
written agreement of the Parties hereto;
(b) By Buyer,
upon a breach of any representation, warranty, covenant or agreement on the part
of Seller set forth in this Agreement;
(c) By Buyer
or Seller if any permanent injunction or proceeding by any Governmental
Authority of competent jurisdiction enjoining, denying approval of or otherwise
prohibiting consummation of any of the transactions contemplated by the
Agreement becomes final and nonappealable; or
(d) By Buyer
if the Closing shall not have occurred, for any reason, on or prior to August
19, 2009.
11.2 Effect of
Termination. In the event of termination of this Agreement as
provided in Section
11.1, this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Seller or Buyer, except the
obligation that Seller immediately deliver an amount equal to the Deposit on or
prior to the first business day after the termination, which shall
survive termination, and except that such termination shall not relieve a party
from liability as a result of the willful breach by such party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
12. Indemnification.
12.1 Buyer’s Indemnification
Obligations. Buyer shall indemnify, defend and hold harmless
Seller and its respective affiliates, officers, members, managers, employees,
agents and representatives and persons claiming by and through any of them and
their respective heirs, personal representatives, legatees, successors and
assigns (collectively, the “Seller’s Group”), for, from
and against all demands, claims, actions, causes of action, losses, damages,
liabilities, costs and expenses, including, but not limited to, interest,
penalties and reasonable attorneys’ fees and expenses (collectively, “Claims”), directly or
indirectly asserted against, imposed upon or incurred by Seller’s Group or any
member thereof: (i) by reason of or resulting from any material
breach of a representation or warranty made by Buyer in this Agreement or in any
exhibit, certificate or any other agreement or document executed or delivered in
connection herewith being untrue, incorrect or incomplete; or (ii) the operation
of the Specified Businesses on or after the Closing Date.
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12.2 Seller’s Indemnification
Obligations. Seller and Owners, jointly and severally, shall
indemnify, defend and hold harmless Buyer and its respective affiliates,
officers, members, managers, employees, agents and representatives and persons
claiming by and through any of them, and their respective heirs, personal
representatives, legatees, successors and assigns (collectively, the “Buyer’s Group”), for, from
and against all Claims, directly or indirectly asserted against, imposed upon or
incurred by Buyer’s Group or any member thereof, resulting from, directly or
indirectly, or incident to: (i) any material breach of a representation or
warranty made by Seller in this Agreement or in any exhibit, certificate or any
other agreement or document executed or delivered in connection herewith being
untrue, incorrect or incomplete; (ii) the operation of the Specified Businesses
that occurred prior to the Closing Date; or (iii) the Claims of the Specified
Businesses.
12.3 Third Party
Claims. If any legal proceedings are instituted or any claim
or demand is asserted by any person in respect of which either party (the “Indemnitee”) may seek
indemnification from the other pursuant to the provisions of this Section 12, the
Indemnitee shall promptly cause written notice of the assertion of such claim or
demand to be made to the other party (the “Indemnitor”). The
Indemnitor shall be subrogated to all rights and remedies of the
Indemnitee.
12.4 Reduction in Final
Payment. In the event that a Buyer’s Group member incurs any
costs or expenses in connection with the Claims (the “Expenses”) pursuant to which
Seller has any obligations to indemnify under Section 12.2, the
amount of the Final Payment shall be reduced by an amount equal to such costs
incurred by any member of Buyer’s Group and the Final Payment shall be reduced
in the amount equal to the Expenses. Notwithstanding the above,
Seller shall continue to be obligated to indemnify Buyer’s Group in the event
that such obligations exceed the amount equal to the Final Payment.
12.5 Survival. The
Obligations of this Section 12 shall
survive the Closing.
13. Miscellaneous.
13.1 Notices. All
notices, demands and other communications to be given or delivered under or by
reason of the provisions of this Agreement will be in writing and will be deemed
to have been given: (i) when delivered if personally delivered by hand (with
written confirmation of receipt); (ii) when received if sent by a nationally
recognized overnight courier service (receipt requested); or (iii) when receipt
is acknowledged by an affirmative act of the Party receiving notice, if sent by
facsimile, (provided that such an acknowledgement does not include an
acknowledgment generated automatically by a facsimile). Notices,
demands and communications to the Party address is specified in writing, be sent
to the address indicated below:
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|
If
to Seller:
|
|
|
0000
Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
|
|
|
Xxx
Xxxxx, Xxxxxx 00000
|
|
|
Fax:
(000) 000-0000
|
|
|
Attn: Xxxxx
X. Xxxxxxx, CFO
|
|
|
If
to Buyer:
|
Gaming
Arts, LLC
|
|
0000
Xxx Xxxx Xxxx
|
|
|
Xxx
Xxxxx, Xxxxxx 00000
|
|
|
Attn: Xxxxx
Xxxxxx
|
|
|
Fax:
|
|
|
With
a copy to:
|
Xxxxxx
Silver
|
|
0000
Xxxxxx Xxxxxx Xxxxxxx, 0xx Xxxxx
|
|
|
Xxx
Xxxxx, Xxxxxx 00000
|
13.2 Attorneys’
Fees. In the event of any action or legal proceeding between
or among the Parties to enforce, protect, interpret or establish any of their
rights or obligations under this Agreement or any action or legal proceeding for
damages for an alleged breach of any provision of this Agreement, the prevailing
party shall be entitled to recover from the other Party reasonable expenses,
attorneys’ fees and costs.
13.3 Time of
Essence. Time is of the essence in this Agreement and each and
every provision hereof.
13.4 Governing Law;
Jurisdiction. The Parties hereby irrevocably and
unconditionally consent and agree that all actions, suits or other proceedings
arising under or in connection with this Agreement shall be tried and litigated
in state or federal courts located in Xxxxx County, in the State of Nevada,
which courts shall have exclusive jurisdiction. Each of the Parties:
(i) irrevocably submits to the jurisdiction of any such court and consents in
advance to such jurisdiction in any action, suit or other proceeding commenced
in any such court; (ii) waives any right it may have to assert the doctrine of
forum non conveniens or any objection that such person may have based upon lack
of personal jurisdiction or improper venue; and (iii) consents to the granting
of such legal or equitable relief as is deemed appropriate by such
court. To the extent permitted under the laws of any such
jurisdiction, each of the Parties hereby waives, in respect of any such action,
suit or other proceeding, the jurisdiction of any other court or courts that now
or hereafter, by reason of such Party’s present or future domicile, or
otherwise, may be available to it.
13.5 Entire
Agreement. This Agreement, including any Exhibits and
Schedules attached hereto, constitutes the entire agreement of the Parties
concerning the purchase and sale of the Purchased Assets. This
Agreement may not be amended or modified, except by written amendment hereto
executed by an authorized signatory for each party hereto. In the
event of any inconsistencies between this Agreement and any Exhibit attached
hereto, this Agreement shall
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control;
provided, however, if
there is an inconsistency with the Keno License Agreement, and this Agreement,
the Keno License Agreement shall control, or if there is an inconsistency with
the Nevada Numbers License Agreement and this Agreement, the Nevada Numbers
License Agreement shall control.
13.6 Waivers. No delay
or failure by any party to exercise or enforce at any time any right or
provision of this Agreement shall be considered a waiver thereof or of such
party’s right thereafter to exercise or enforce each and every right and
provision of this Agreement. To be valid, a waiver shall be in
writing, but need not be supported by consideration. No single waiver
shall constitute a continuing or subsequent waiver.
13.7 Assignment. This
Agreement may not be assigned by either party without the prior written consent
of the other party; provided,
however, this Agreement may be assigned to or by an entity in which Xxxxx
Xxxxxx owns the equity interests. Except as otherwise provided
herein, this Agreement shall fully bind and inure to the benefit of each party’s
respective personal representatives, heirs, successors and assigns.
13.8 No Benefit to
Others. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the Parties
hereto and their permitted successors and assigns, and they shall not be
construed as conferring any rights on any other persons except to any assignee
permitted hereunder.
13.9 Severability. If
any provision of this Agreement or the application thereof to any person or
circumstance is held invalid or unenforceable, the remainder of this Agreement,
and the application of such provision to such person or circumstance or to other
persons or circumstances, shall not be affected thereby, and to this end the
provisions of this Agreement shall be severable.
13.10 Facsimile Signature and
Counterparts. For purposes of execution of this Agreement, fax
signatures shall be deemed to be original signatures creating a valid and
binding obligation of the party so signing. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, and all of which taken together shall constitute one and the same
instrument.
13.11 Interpretation. The
captions of the sections of this Agreement are for convenience and reference
only, and the words contained therein shall in no way be held to explain,
modify, amplify or aid in the interpretation, construction or meaning of this
Agreement. Any pronouns or references used herein shall be deemed to
include the masculine, feminine or neuter genders as appropriate. Any
expression in the singular or the plural shall, if appropriate in the context,
include both the singular and the plural. This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.
13.12 Days. If any of
the dates specified in this Agreement shall fall on a Saturday, Sunday or
nationally recognized holiday, then the date of such action shall be deemed to
be extended to the next business day.
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13.13 Expenses. Each
party will bear its own costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby, except as expressly provided
herein.
13.14 No Trial by
Jury. To the extent permitted by law, each party hereto
acknowledges and agrees that any controversy which may arise under this
Agreement is likely to involve complicated and difficult issues, and therefore
each party hereby irrevocably and unconditionally waives any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of or relating to this Agreement and any of the agreements delivered in
connection herewith or the transactions contemplated hereby or
thereby.
13.15 Acknowledgment. The
Parties respectively represent that each has had an opportunity to be
represented by counsel of its own choosing in the negotiation and execution of
this Agreement. Each Party affirms and acknowledges that each Party
has read, fully appreciates, and understands the words, terms, and provisions of
this Agreement, is entirely satisfied with the terms hereof, and has duly
executed this Agreement voluntarily and of its full free will and
accord. The Parties, and each of them, further acknowledge that this
Agreement has been prepared by Xxxxxx Silver, counsel to Buyer.
[Signatures
on following page.]
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WHEREFORE,
this Agreement is executed by the Parties to be effective as of the Effective
Date.
BUYER:
Gaming
Arts, LLC
/s/ Xxxxx
Xxxxxx
Xxxxx
Xxxxxx, Manager
SELLER:
Las Vegas
Gaming Inc., a Nevada corporation
Las Vegas Gaming,
Inc.
By:/s/ Xxxxx X.
Xxxxxxx
Its:Chief Financial
Officer
|
Schedules
|
|
|
Schedule
1.1(a)
|
Bingo
Assets
|
|
Schedule
1.1(d)
|
Bingo
Assumed Contracts
|
|
Schedule
1.1(e)
|
Bingo
Intellectual Property
|
|
Schedule
1.1(i)
|
Keno
Intellectual Property
|
|
Schedule
1.1(j)
|
PRACS
Assets
|
|
Schedule
1.1(m)
|
PRACS
Assumed Contracts
|
|
Schedule
1.1(n)
|
Other
Intellectual Property
|
|
Schedule
4.6
|
Liens
|
|
Schedule
4.11
|
Accounts
Receivable
|
|
Schedule
4.12
|
Liabilities
|
|
Schedule
4.13(c)
|
Licenses
|
|
Exhibits
|
|
|
Exhibit
A
|
Xxxx
of Sale
|
|
Exhibit
B
|
Assignment
of Contracts
|
|
Exhibit
C
|
Trademark
Assignment
|
|
Exhibit
D
|
Patent
Assignment
|
|
Exhibit
E
|
Services
Agreement
|
|
Exhibit
F
|
Keno
License Agreement
|
|
Exhibit
G
|
Nevada
Numbers License
Agreement
|
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