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EXHIBIT 10.26
MEMBERSHIP INTERESTS PURCHASE AGREEMENT
by and among
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇,
as the "Sellers,"
and
SENIOR TOUR PLAYERS DEVELOPMENT, INC.
and
ITS NOMINEE
as the "Buyers,"
and
THE RANCHITO COMPANY LLC,
Dated as of December 11, 1996
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MEMBERSHIP INTERESTS PURCHASE AGREEMENT
MEMBERSHIP INTERESTS PURCHASE AGREEMENT (this "Agreement"), made as of the
11th day of December, 1996, by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual
("DFS"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual ("RDS"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇, an
individual ("RDSII"), (collectively and together the "Sellers"), Senior Tour
Players Development, Inc., a Nevada corporation ("STPD") (collectively and
together with a nominee to be designated by STPD, the "Buyers"), and The
Ranchito Company LLC, a Nevada limited liability company ("Ranchito").
RECITALS:
---------
A. WHEREAS, the Sellers own and hold in the aggregate, beneficially and of
record, 48.5% of the membership interests (the "Interests") in Las Vegas Golf
Center, L.L.C., a Delaware limited liability company ("LVGC");
B. WHEREAS, Ranchito owns and holds, beneficially and of record, 30% of the
interests in LVGC;
C. WHEREAS, Buyers have entered into an agreement to purchase beneficial
and record interests in LVGC of 21.5% from ▇▇▇▇▇ ▇. ▇▇▇▇▇ ("White") and ▇▇▇▇▇▇
▇▇▇▇▇ ("▇▇▇▇▇"), which will be consummated prior to the consummation of the
transaction contemplated by this Agreement;
D. WHEREAS, the Buyers desire to purchase from each of the Sellers, and
each of the Sellers desires to sell to the Buyers, all of such Seller's
Interest;
E. WHEREAS, each of the Buyers desires to be admitted to LVGC as a member
thereof (a "Member");
F. WHEREAS, Ranchito desires to consent to the purchase by the STPD and its
nominee of the Sellers' Interests and to the admission of each of the Buyers to
LVGC as a Member of LVGC, and upon such admission, the Buyers and Ranchito
desire to amend and the Limited Liability Company Agreement, dated as of October
14, 1996, of LVGC (as amended to date, the "LVGC Agreement"); provided that
Ranchito has approved the nominee designated by STPD pursuant to sec. 6.1 of the
LVGC Agreement; and
G. WHEREAS, Sellers and STPD, among others, were parties to an Agreement
dated November 8, 1996, ("Initial Agreement") related to the transfer of the
interests by Sellers to STPD and STPD and Sellers' wish to terminate the Initial
Agreement so that each party's rights and obligations shall be governed by this
agreement.
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NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF MEMBERSHIP INTERESTS
-----------------------------------------
1.01 PURCHASE OF THE MEMBERSHIP INTERESTS FROM THE SELLERS. Subject to and
upon the terms and conditions of this Agreement, at the closing of the
transaction contemplated by this Agreement (the " Closing"), each of the Sellers
shall sell, transfer, convey, assign and deliver to the Buyers, and the Buyers
shall purchase, acquire and accept from each of the Sellers, all of such
Seller's right, title and interest (whether held beneficially or of record) in
and to such Seller's Interest.
1.02 CONSENT TO PURCHASE AND SALE AND ADMISSION TO LVGC["divided by"
sign]. Each of the Sellers and Ranchito hereby irrevocably and unconditionally
(i) consents, in accordance with the requirements of Section 6.1 of the LVGC
Agreement, to (a) the sale by each of the Sellers to the Buyers (STPD and its
nominee), and the purchase by the Buyers (STPD and its nominee) from each of
the Sellers, of all of each such Seller's Interest, and (b) the sale by White
and ▇▇▇▇▇ to the Buyers, and the Buyers purchase from White and ▇▇▇▇▇, of their
interests, (ii) consents, in accordance with the requirements of Article VI of
the LVGC Agreement, to the admission of the Buyers to LVGC as Members and the
substitution of the Buyers for (a) the Sellers and/or (b) White and ▇▇▇▇▇ as
Members, and (iii) waives any and all requirements and conditions, whether
imposed by Section 6.2 of the LVGC Agreement or otherwise, of execution and
delivery by the Buyers of any assumption of any or all liabilities or
obligations of any of the Sellers (except as set forth in the Seller Disclosure
Agreement) under the LVGC Agreement, and acknowledges and agrees that the
Buyers shall be admitted to LVGC as Members and substituted for the Sellers as
Members upon the closing notwithstanding non-compliance with any such
requirement or failure to satisfy any such condition.
1.03 AMENDMENT AND RESTATEMENT OF LVGC AGREEMENT; MANAGEMENT AGREEMENT.
Immediately upon effectiveness of the transactions referred to in Sections 1.01
and 1.02, (i) the LVGC Agreement shall be amended as the First Amended and
Restated Limited Liability Company Agreement of LVGC (the " Amended LVGC
Agreement") in the form of EXHIBIT A hereto, and (ii) LVGC and STPD shall enter
into the Management Agreement, dated as of the Closing Date, in the form of
EXHIBIT B attached hereto (the "New LVGC Management Agreement"). Each of the
Buyers and Ranchito (each, a "Post-Closing Member") shall (a) execute and
deliver the Amended LVGC Agreement to each other Post-Closing Member, and (b)
cause LVGC to execute and deliver the New LVGC Management Agreement; and STPD
shall execute and deliver the New LVGC Management Agreement; in each case at the
Closing.
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1.04 FURTHER ASSURANCES. At any time and from time to time after the
Closing, at the Buyers' request and without further consideration, each of the
parties hereto shall promptly execute and deliver such documents and
instruments, and take all such other action, as the Buyers may reasonably
request, more effectively to transfer, convey and assign to the Buyers, and to
confirm each Buyer's admission to LVGC as a Member and the Buyers' title to, all
of the Sellers' respective Interests, to assist the Buyers in exercising all
rights with respect thereto and to carry out the purpose and intent of this
Agreement, provided that no such documents shall subject Seller to any
additional costs or liabilities.
1.05 Sale of the Interests and Purchase Price Therefor.
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(a) The aggregate purchase price to be paid by the Buyers for the
Interests shall be (i) One Million Five Hundred Thirty-Two Thousand Fifty
Dollars ($1,532,050) payable by STPD or its nominee (the "Cash Consideration"),
and (ii) Three Hundred Sixty-Nine Thousand Five Hundred Forty-Seven (369,547)
shares of common stock, $0.001 par value per share, of STPD, payable by STPD
(the "STPD Shares" and, together with the Cash Consideration, the "Purchase
Price"), payable in the manner described in Sections 1.05(b) and 1.05 (c). Each
of the STPD Shares shall be duly authorized, validly issued, fully paid and
non-assessable, and shall be a restricted security, as defined in Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
by the Securities and Exchange Commission (the "Commission").
(b) At the Closing:
(i) Each of the Sellers shall deliver to each of the Buyers an
Instrument of Assignment in the form of Exhibit C (an "Instrument of
Assignment") with respect to such Seller's Interest, transferring such interest
to STPD and its nominee (to be held severally and not as tenants in common or
otherwise jointly).
(ii) STPD or its nominee shall deliver to the Sellers'
Representative (as defined below) the Cash Consideration of $1,532,050 (the
"Closing Payment") in cash, by certified or cashier's check, or by wire transfer
of immediately available funds to an account specified by the Sellers
Representative in writing to not later than three days prior to the Closing Date
to be distributed by the Sellers' Representative to the Sellers in amounts set
forth opposite each Seller's respective name in the column entitled " Closing
Payment" on SCHEDULE I.
(c)
(i) STPD shall deliver to the Sellers' Representative
certificates representing the STPD Shares, in the names of the respective
Sellers and in amounts set forth opposite each Seller's respective name in the
column entitled "STPD Shares" on SCHEDULE I.
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1.06 SHAREHOLDERS AGREEMENT. At Closing, the Sellers shall execute a
Shareholders Agreement with STPD in the form attached hereto as Exhibit D.
1.07. CONSULTING AND NON-COMPETITION AGREEMENT OF ▇▇▇▇▇▇▇. At Closing,
LVGC, and ▇▇▇▇▇▇▇ Properties, Inc. ("▇▇▇▇▇▇▇") shall execute a consulting and
non-competition agreement ("Consulting Agreement") in conformity with Section
5.4 of the LVGC Agreement and in the form attached hereto as Exhibit E.
1.08. TERMINATION OF GCA GUARANTY. At Closing, STPD shall release and
terminate that certain Guaranty Agreement made by Golf Centers of America, Inc.
in favor of STPD, dated November 8, 1996, as amended.
1.09. REGISTRATION RIGHTS AGREEMENT: At Closing, Sellers and STPD shall
enter into a Registration Rights Agreement in the form attached hereto as
Exhibit F.
1.10. TERMINATION OF AGREEMENT: STPD, Sellers, LVGC, and Ranchito agree
that the Agreement dated November 8, 1996 with various other parties is hereby
terminated without liability to any party and STPD, Sellers, and Ranchito will
use their best efforts to obtain the consent of GCA, ▇▇▇▇▇▇▇ Properties, Inc.,
▇▇▇▇▇ and White to such termination.
1.11. Sellers' Representative.
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(a) In order to efficiently administer (i) the waiver of any condition
to the obligations of the Sellers to consummate the transactions contemplated
hereby, (ii) the defense and/or settlement of any claims for which the Sellers
may be required to indemnify the Buyers pursuant to Section 11.03 hereof, and
(iii) the giving to the Sellers of any notice required or permitted to be given
to the Sellers hereunder, the Sellers hereby designate DFS as their
representative (the "Sellers' Representative").
(b) The Sellers hereby authorize the Sellers' Representative (i) to
take all action necessary in connection with the waiver of any condition to the
obligations of the Sellers to consummate the transactions contemplated hereby,
or the defense and/or settlement of any claims for which the Sellers may be
required to indemnify the Buyers pursuant to Section 11.03 hereof, (ii) to give
and receive all notices required to be given under the Agreement, and (iii) to
take any and all additional action as is contemplated to be taken by or on
behalf of the Sellers by the terms of this Agreement.
(c) In the event that the Sellers' Representative dies, becomes unable
to perform his responsibilities hereunder or resigns from such position, Sellers
entitled to receive a majority of the Purchase Price hereunder as set forth on
SCHEDULE I hereto shall select another
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representative to fill such vacancy and such substituted representative shall be
deemed to be the Sellers' Representative for all purposes of this Agreement.
(d) All decisions and actions by the Sellers' Representative,
including, without limitation, any agreement between the Sellers' Representative
and the Buyers relating to the defense or settlement of any claims for which the
Sellers may be required to indemnify the Buyers pursuant to Section 11.03
hereof, shall be binding upon all of the Sellers, and no Seller shall have the
right to object, dissent, protest or otherwise contest the same.
(e) By their execution of this Agreement, the Sellers agree that:
(ii) the Buyers shall be able to rely conclusively on the
instructions and decisions of the Sellers' Representative as to the settlement
of any claims for indemnification by either or both of the Buyers pursuant to
Section 11.03 hereof or any other actions required to be taken by the Sellers'
Representative pursuant hereto, and no party hereunder shall have any cause of
action against the Buyers for any action taken by the Buyers in reliance upon
the instructions or decisions of the Sellers' Representative;
(iii) all actions, decisions and instructions of the Sellers'
Representative shall be conclusive and binding upon all of the Sellers and no
Seller shall have any cause of action against the Sellers' Representative for
any action taken, decision made or instruction given by the Sellers'
Representative under this Agreement, except for fraud or willful breach of this
Agreement by the Sellers' Representative;
(iv) the provisions of this Section 1.06 are independent and
severable, are irrevocable and coupled with an interest and shall be enforceable
notwithstanding any rights or remedies that any Seller may have in connection
with the transactions contemplated by this Agreement;
(v) remedies available at law for any breach of the provisions of
this Section 1.06 are inadequate; therefore, the Buyers shall be entitled to
temporary and permanent injunctive relief without the necessity of proving
damages if the Buyers bring an action to enforce the provisions of this Section
1.06; and
(vi) the provisions of this Section 1.06 shall be binding upon
the executors, heirs, legal representatives and successors of each Seller, and
any references in this Agreement to a Seller or the Sellers shall mean and
include the successors to the Sellers' rights hereunder, whether pursuant to
testamentary disposition, the laws of descent and distribution or otherwise.
(d) All fees and expenses (if any) incurred by the Sellers'
Representative shall be paid by the Sellers in proportion to their respective
entitlements to receive payment of Purchase Price amounts as set forth on
SCHEDULE I attached hereto.
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1.10. CLOSINGS. Unless this Agreement has been terminated and the
transactions contemplated herein have been abandoned pursuant to Section 10.01
hereof, (a) the Closing shall be held in Los Angeles, California, with the
location in Los Angeles to be agreed upon by the parties, at 10:00 a.m. local
time on April 10, 1997, or such earlier date as shall be designated by Buyers
with five (5) business days prior written notice to Seller, unless another date
or place is agreed to in writing by the Buyers and the Sellers' Representative
(with the date on which such Closing actually takes place being herein referred
to as the " Closing Date"),
1.11. CERTAIN DEFINITIONS. For purposes of this Agreement:
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(a) "Property" shall mean the real property described in EXHIBIT G.
(b) "Project" shall mean the golf driving range and related facilities
and improvements which are currently under construction on the Property and are
more particularly described on the Plans and Specifications.
(c) "Plans" shall mean the following drawings and plans:
(i) Park West Landscape, Inc. July 30,1996, Las Vegas Sports
Park Planting;
(ii) ▇▇▇▇▇ ▇▇▇▇▇▇ Architects, February 17, 1996, Las Vegas Sports
Center, as amended on August 22, 1996 and September 15,
1996;
(iii) Engineering Ventures, Inc. Las Vegas Sports Center Phase I,
Waterline Improvement Plans, May 23, 1996, as amended August
22, 1996, and Precise Grading Plans for Pro-Golf Expansion,
undated;
(iv) ▇▇▇▇▇▇▇▇▇ Associates, Inc. Landscaping, Las Vegas Sport
Center, April 18, 1996.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE
-------------------------------------
SELLERS AND RANCHITO REGARDING THE INTERESTS
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2.01 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each Seller severally
represents and warrants to each of the Buyers, as of the date hereof and as of
the Closing Date subject to the provisions of Paragraph 6.09, as follows:
(a) This Agreement has been duly and validly executed and delivered by
such Seller and constitutes a valid and binding legal obligation of such Seller
enforceable against such Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, or similar laws affecting the rights of creditors generally or
the availability of specific performance, injunctive relief and other equitable
remedies and to general principles of equity (regardless of whether such
principles are considered in a proceeding in equity or at law).
(b) Such Seller is a Member of LVGC possessing the rights, privileges,
liabilities and obligations specified in the LVGC Agreement and has good, valid
and marketable title to the Interest which is to be transferred to the Buyers by
such Seller pursuant hereto, free and clear of any and all covenants,
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conditions, restrictions, voting trust arrangements, liens, charges,
encumbrances, options and adverse claims or rights whatsoever.
(c) Such Seller has the legal capacity to enter into this Agreement
and to transfer, convey and sell to the Buyers at the Closing the Interest to be
sold by such Seller hereunder and, upon consummation of the purchase and sale
contemplated hereby at the Closing, each of the Buyers will acquire from such
Seller good, valid and marketable title to the portion of such Interest being
sold by such Seller to such Buyer hereunder, free and clear of all covenants,
conditions, restrictions, voting trust arrangements, liens, charges,
encumbrances, options and adverse claims or rights whatsoever, with the
exception of the consent of the other members of LVGC and the consent required
from ▇▇▇▇▇ County.
(d) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby on the part of such Seller do not and
will not violate any applicable law, ordinance, statute, rule, regulation,
order, decree or judgment, conflict with or result in the breach of any material
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge, or encumbrance upon the Property by reason
of, the terms of any contract, mortgage, lien, lease, agreement, indenture,
instrument, order, decree or judgment to which such Seller is a party or which
is or purports to be binding upon such Seller or LVGC or which otherwise affects
the Property, which will not be discharged, assumed or released at the Closing
subject to the conveyance of the White and ▇▇▇▇▇ interests to Buyers and the
terms of the LVGC Agreement and the consent of ▇▇▇▇▇ County. To the best of such
Seller's knowledge, no other action by any federal, state or municipal or other
governmental department, commission, board, bureau or instrumentality is
necessary to make this Agreement a valid instrument binding upon such Seller in
accordance with its terms. No other consent of any individual, governmental or
regulatory authority or other person or entity is required in connection with
the execution, delivery or performance of this Agreement by such Seller or the
consummation by such Seller of the transactions contemplated hereby subject to
the conveyance of the White and ▇▇▇▇▇ interests to the Buyers.
(e) No broker of finder has acted for such Seller in connection with
this Agreement or the transactions contemplated hereby, and no broker or finder
is entitled to any brokerage or finder's fee or other commissions in respect of
such transactions based upon agreements, arrangements or understandings made by
or on behalf of such Seller.
(f) Such Seller has actually made all such contributions to the
capital of LVGC as are reflected in the LVGC Agreement (including, without
limitation, Section 3.1A thereof) or elsewhere on the books and records of LVGC
as having been made or deemed to have been made by such Seller. The $684,000
representing Sellers' aggregate and combined capital account balances as
represented in the Balance Sheet of LVGC as of November 30, 1996 and attached
herein as Exhibit H is comprised of $484,000 actual cash consideration
contributed to the LVGC by Sellers, and $200,000 which was credited towards
Sellers' LVGC capital accounts for expenses incurred by GCA and ▇▇▇▇▇▇▇
Properties, Inc. prior to the formation of LVGC.
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2.02 REPRESENTATIONS AND WARRANTIES OF RANCHITO. Ranchito represents and
warrants to each of the Buyers, as of the date hereof and as of the Closing
Date, as follows:
(a) Ranchito is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Nevada, and has all
requisite power and authority to own its properties and to carry on its business
as now being conducted. Ranchito has full power and authority to execute and
deliver this Agreement and the documents and instruments contemplated herein and
to perform its obligations hereunder and thereunder.
(b) The execution and delivery of this Agreement and the documents and
instruments contemplated herein by Ranchito and the performance by Ranchito of
its obligations hereunder and thereunder have been duly authorized by all
requisite actions on the part of Ranchito. This Agreement and all such other
documents and instruments constitute the valid and legally binding obligations
of Ranchito, enforceable against Ranchito in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, or similar laws affecting the rights of creditors
generally or the availability of specific performance, injunctive relief and
other equitable remedies and to general principles of equity (regardless of
whether such principles are considered in a proceeding in equity or at law). The
execution, delivery and performance of this Agreement and all such other
documents and instruments by Ranchito will not, with or without the giving of
notice or the passage of time or both, (i) violate the provisions of any law,
rule or regulation applicable to Ranchito; (b) violate the provisions of
Ranchito's organizational documents; (c) violate any judgment, decree, order or
award of any court, governmental body or arbitrator applicable to Ranchito; or
(d) conflict with or result in the breach or termination of any term or
provision of, or constitute a default under, or cause any acceleration under, or
cause the creation of any lien, charge or encumbrance upon the properties or
assets of Ranchito pursuant to, any indenture, mortgage, deed of trust or other
agreement or instrument to which Ranchito is a party or by which Ranchito is or
may be bound.
(c) Ranchito is a Member of LVGC possessing the rights, privileges,
liabilities and obligations specified in the LVGC Agreement, and no other person
or entity claiming by, through or under Ranchito has any rights or interests
(beneficial or of record, and whether those of an assignee or otherwise) in the
Interest owned and held by Ranchito. Ranchito has actually made all such
contributions to the capital of LVGC as are reflected in the LVGC Agreement
(including, without limitation, Section 3.1A thereof) or elsewhere on the books
and records of LVGC as having been made or deemed to have been made by Ranchito.
2.03 ADDITIONAL REPRESENTATIONS OF THE SELLERS. The Sellers jointly and
severally represent and warrant to each of the Buyers, as of the date hereof and
as of the Closing Date, that (i) no person or entity other than the Sellers,
Ranchito, White and ▇▇▇▇▇, or any Permitted Transferee (as such term is defined
and used in the LVGC Agreement) of White and ▇▇▇▇▇ has any rights or interests
(beneficial or of record, and whether those of a member, of an assignee or
otherwise) in any Interest, and (ii) the copy of LVGC Agreement previously
delivered by the
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Sellers to the Buyers is true, correct, and complete, and the LVGC Agreement has
not been amended, modified, restated, terminated or superceded since the date
thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
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REGARDING LVGC
--------------
Except as set forth on the Seller Disclosure Schedule (as defined in
Section 3.01), the Sellers, jointly and severally, represent and warrant to each
of the Buyers, as of the date hereof and as of the First Closing Date subject to
the provisions of Paragraph 6.09, as follows:
3.01 SELLER DISCLOSURE SCHEDULE. The Seller Disclosure Schedule, marked as
Schedule 3.01 hereto (the "Seller Disclosure Schedule"), is divided into
sections which correspond to the Sections of this Article III; however, specific
cross-references to the Seller Disclosure Schedule are not necessarily included
in the Sections of this Article III. The Seller Disclosure Schedule is accurate
and complete. Disclosure in one section of the Seller Disclosure Schedule will
constitute disclosure for purposes of all Sections of this Agreement.
3.02 ORGANIZATION. LVGC is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite power and authority and all material licenses, permits and
authorizations to own, lease and operate its properties and assets and to carry
on its business as it is now being conducted. LVGC is duly qualified or licensed
to do business as a foreign limited liability company and is in good standing in
each jurisdiction in which the character or location of the properties and
assets owned, leased or operated by it or the nature of the business conducted
by it requires such qualification or licensing, except where the failure to be
so qualified, licensed or in good standing would not, individually or in the
aggregate, have a material adverse effect on the business, results of operations
or financial condition of LVGC or on the value of the Interests to be purchased
by the Buyers hereunder (the "LVGC Material Adverse Effect"). LVGC does not own
or hold any rights to acquire any shares of stock or any other equity security
or interest in any corporation, partnership or other entity.
3.03 NO RIGHTS TO ACQUIRE INTERESTS. Except as may be expressly provided in
the LVGC Agreement, there are no outstanding options, warrants, conversion
privileges or other rights to purchase or acquire any of Seller's Interests
(including, without limitation, assignee interests therein) or to Seller's
knowledge, other equity securities of LVGC or any outstanding securities that
are convertible into or exchangeable for such Interests, securities or rights
except Buyer's right to purchase the interests of White and ▇▇▇▇▇; and there are
no contracts, commitments, understandings, arrangements or restrictions by which
LVGC is bound to issue or acquire any additional Interests or other equity
securities or any options, warrants, conversion
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privileges or other rights to purchase or acquire any Interests or other equity
securities of LVGC or any securities convertible into or exchangeable for such
Interests, securities or rights.
3.04 NO DEFAULT. LVGC is not in default under, and no condition exists that
with notice or lapse of time, or both, would constitute a default of LVGC under
(i) any mortgage, loan agreement, evidence of indebtedness, or other instrument
evidencing borrowed money to which LVGC is a party or by which LVGC or the
properties or assets of LVGC are bound or (ii) any judgment, order or injunction
of any court, arbitrator, or governmental agency.
3.05 INVESTIGATIONS; LITIGATION. There are no claims, actions, suits or
proceedings by any private party or by any governmental body or authority
(including any nongovernmental self-regulatory agency), nor any investigations
or reviews by any federal, state, local or foreign body or authority (including
any nongovernmental self-regulatory agency), against or affecting LVGC, that are
pending or, to the knowledge of any of the Sellers, threatened, at law or in
equity. To the knowledge of any of the Sellers, there is no basis for any such
investigation, review, claim, action, suit or proceeding.
3.06 ASSETS. LVGC's unaudited financial statement as of November 30, 1996
("LVGC Balance Sheet") and The Seller Disclosure Schedule sets forth a true,
correct and complete list of (i) all assets of LVGC as of the date hereof (the
"Assets"), and (ii) all claims, liabilities, mortgages, liens (including,
without limitation, any mechanics', materialmen's and other vendor's liens),
pledges, security interests, charges, encumbrances and equities of any kind
affecting the Assets except matters disclosed in the title report (collectively,
the "Encumbrances"). All of the Assets are used by LVGC in the ordinary course
of business and, since the date of its formation, LVGC has not owned any
properties or assets other than (i) the Assets and (ii) personal property
disposed of by LVGC in the ordinary course of its business prior to the date
hereof which was not and is not material to LVGC or the Project. LVGC has good,
valid and marketable title and interest in and to all Assets reflected on the
LVGC Balance Sheet and Seller Disclosure Schedule. Other than as disclosed on
the Seller Disclosure Schedule, such Assets are not subject to any Encumbrance
except as described in the title report (whether or not of record).
3.07 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth on the Seller
Disclosure Schedule and the LVGC Balance Sheet or the title report, LVGC does
not have any liability or obligation, secured or unsecured, whether accrued,
absolute, contingent, unasserted, or otherwise.
3.08 LEASES. Except for (i) that certain Lease and Concession Agreement
dated January 3, 1995 (the "Ground Lease") by and between ▇▇▇▇▇ County, Nevada
(the "County") and Golf Centers of America, Inc., a California corporation
("GCA"), assigned (or to be assigned) to LVGC by GCA at or prior to the Closing,
and (ii) that certain Sublease dated November 4, 1996 (the "Sublease") by and
between GCA, as Lessor, and Pro-Golf of Nevada, Limited Liability Company, a
Nevada limited liability company, as Lessee, assigned (or to be assigned) to
LVGC by GCA at or prior to the Closing, there are no other leases, subleases,
tenancy or occupancy
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agreements with respect to the Property. The Ground Lease and the Sublease are
referred to together herein as the "Leases." The copies of the Leases delivered
to Buyer prior to the date hereof are true, complete and accurate copies of such
Leases and have not been amended, modified, terminated or superseded.
3.09 LEASES -- TITLE. At the time of the Closing, LVGC shall be the sole
Concessionaire (as such term is defined and used in the Ground Lease) under the
Ground Lease and shall own all of the legal and beneficial right and title to
the interest of said Concessionaire in and to such Ground Lease subject to (a)
Buyer's acquisition of the Interests of White and ▇▇▇▇▇ and (b) the County's
approval of the transfer of the Leases to LVGC. At the time of the Closing, LVGC
shall be the sole lessor under the Sublease and shall own all of the legal and
beneficial right and title to the lessor's interest in and to such Sublease
subject to (a) Buyer's acquisition of the Interests of White and ▇▇▇▇▇ and (b)
the County's approval of the transfer of the Leases to LVGC.
3.10 LEASES -- DEFAULTS AND DISPUTES. Neither LVGC, as Concessionaire under
the Ground Lease, nor any tenant or subtenant of the Property, is in default
under any of the Leases. LVGC has not received any notice of any claim, dispute,
termination, or default from the County under the Ground Lease, or any tenant
under any of the Leases, and there is no dispute or any existing and uncured
material default, or any claim of default, by the County, by LVGC or by any
tenant under any of the Leases. No tenant has asserted any defense, set-off, or
counterclaim with respect to its tenancy or its obligation to pay rent and other
charges pursuant to any of the Leases.
3.11 LEASING COMMISSIONS. There are no rental, lease or other commissions,
now or hereafter payable to any person or entity with respect to any of the
Leases, except as set forth on the Seller Disclosure Schedule.
3.12 LEASES -- PREPAID RENTS AND SPECIAL CONSIDERATION. No rent or other
charge under any of the Leases has been paid for more than thirty (30) days in
advance of its due date, and (ii) no tenant or subtenant is entitled to receive
any rent concession (not yet given) in connection with its tenancy, except as
disclosed in any such lease.
3.13 CONTRACTS AND AGREEMENTS. The Sellers have delivered to the Buyers on
or prior to the date hereof true, complete and accurate copies of all
architectural, management, leasing, brokerage, service, equipment, supply,
maintenance or concession agreements with respect to the Property and/or the
Project (the "Contracts"), a list of which is attached hereto as Exhibit I.
Except as provided below with respect to the Construction Contract (as defined
below), all contractors, subcontractors, suppliers, architects, engineers and
others who have performed services or labor or supplied material in connection
with LVGC's or GCA's acquisition, development, ownership or management of the
Property and/or the Project, have been paid in full. Other than this Agreement,
the New LVGC Management Agreement, the Leases, the Contracts and the
Construction Contract, the matters disclosed in the Seller Disclosure Schedule
or the title report, there are no leases, architectural, construction,
development or service contracts,
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management agreements or other agreements, instruments or arrangements in force
or effect to which LVGC is a party or which otherwise grant to any person or
entity whatsoever any right, title, interest or benefit in or to all or any part
of the Property and/or the Project or any rights relating to the use,
development, construction, operation, management, maintenance or repair of all
or any part of the Assets, the Property and/or the Project from and after the
First Closing Date. Except as otherwise set forth in the Seller Disclosure
Schedule, LVGC is not in default under any of the Leases, the Contracts and the
Construction Contract, nor, to the best knowledge of any of the Sellers or LVGC,
does there exist any event that, with notice or the passage of time or both,
would constitute a default or event of default by LVGC under any of the Leases,
the Contracts and the Construction Contract.
3.14 CONSTRUCTION CONTRACT. The Sellers have delivered to the Buyers on or
prior to the date hereof a true, complete and accurate copy of that certain
construction contract entitled "AIA Document A101, 1987 Edition - Standard Form
of Agreement between Owner and Contractor, dated April 1, 1996 between GCA and
D& D Commercial Construction, Inc. (the "Contractor") (the "Construction
Contract"). The Contractor has been paid $1,724,562.00 through December 31,
1996, which amount is the total amount due Contractor to said date under the
Construction Contract as of such date.
3.15 PROPERTY TAXES. The Sellers have delivered to the Buyers prior to or
concurrent with the Sellers' execution of this Agreement copies of the most
recent bills for real estate taxes, personal property taxes and assessments or
charges by any governmental authority pertaining to the Property, if any. All
real estate taxes, personal property taxes and assessments or charges by any
governmental authority pertaining to the Property, if any, have been paid in
full.
3.16 COMPLIANCE WITH LAWS. Neither any Seller nor LVGC nor GCA has received
any notice or claim of any violations of law, municipal or county ordinances, or
other legal requirements (i) with respect to the Property or with respect to the
use, occupancy, development or construction of the Project thereon, or (ii)
otherwise relating to LVGC or its assets, properties, business or operations,
and, to the best knowledge of any of the Sellers or LVGC, no such violations
exist. All such permits, approvals, variances, licenses and orders as may be
required from any governmental authority with jurisdiction over the Property or
the Project for the construction, development, use and operation of the Property
and, when completed, the Project have been obtained and are in full force and
effect, and no violations exist thereunder. Upon completion of construction of
the Project in accordance with the Plans to Seller's knowledge, the Property
shall comply with all zoning, building, health, traffic, environmental, flood
control, fire safety, handicap and other applicable laws, regulations,
ordinances and rulings of all local, state and federal authorities and any other
governmental entity having jurisdiction over the Property or the Project.
3.17 HAZARDOUS SUBSTANCES. Neither any Seller nor LVGC nor GCA has ever
generated, stored or disposed of any hazardous substances on the Property,
except in compliance with all applicable laws, and except as disclosed in the
report entitled "Phase I Environmental Site
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Assessment, 42-Acre Parcel, NWC of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇," dated December 30, 1994 (the "Environmental Report"), prepared
by Converse Environmental Consultants Southwest, Inc. ("Converse"), no Seller is
aware of the generation, storage or disposal of such substances on the Property
by anyone else. Neither any Seller nor LVGC nor GCA has ever received any notice
from any governmental authority regarding the presence or alleged presence of
any hazardous substances on the Property. For the purposes of this Section 3.21,
"hazardous substances" shall mean (i) any "hazardous substance", "hazardous
material", "toxic substance" or "solid waste" as such terms are presently
defined in CERCLA, RCRA and the Hazardous Materials Transportation Act (49
U.S.C. Section 1801 et seq.); (ii) any additional substances or materials which
are hereafter incorporated in or added to the definition or "hazardous
substance" for the purposes of such laws; (iii) any material, waste or substance
which is (A) petroleum, (B) asbestos or asbestos containing material, (C)
polychlorinated biphenyls, (D) flammable explosives, or (E) radioactive
materials; (iv) any additional substances or materials which are now or
hereafter considered to be "hazardous substances" (including, without
limitation, any asbestos containing materials) under any applicable law, rule or
regulation (whether local, state or Federal) relating to the Property; and (v)
any substance or material defined as a "Hazardous Material" under the Ground
Lease.
3.18 INDEPENDENT FACILITY. TO SELLER'S KNOWLEDGE, the Property is, and when
completed in accordance with the Plans the Project will be, an independent unit
which does not rely on any drainage, sewer, access, utility or other facilities
(other than the facilities of public utility or other facilities located in
public streets which are adjacent to the Property) located on any property not
included in the Property (i) to fulfill any zoning, building code or other
municipal or governmental requirements, (ii) for structural support or the
furnishing to the improvements thereon of any essential building systems or
utilities, including, but not limited to, electrical, plumbing, mechanical and
heating, ventilating and air conditioning, water and sanitary sewage systems,
(iii) to fulfill the requirements of any of the Leases or other agreement
affecting the Property or the Project. No land, building or other improvement
not included in any part of the Property relies on any part of the Property to
fulfill any zoning, building code or other governmental or municipal requirement
or for structural support or the furnishing to such building or improvement of
any essential building systems or utilities, except as disclosed in the title
report.
3.19 UTILITIES. All utilities and all public and quasipublic improvements
upon the Property (including, without limitation, all applicable electric lines,
gas, sewer and water lines, and telephone lines) are adequate to service the
requirements of the Project, when completed in accordance with the Plans, and
all payments currently due for the same have been made; and all necessary
easements, permits, licenses and agreements in respect of any of the foregoing
are installed and operating and all installation and connection charges have
been paid for in full.
3.20 LEGAL ACCESS. LVGC has legal access from a public way to the Property.
All necessary curb cuts, access permits and other governmental approvals
required to provide such access have been issued and are in full force and
effect.
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3.21 LITIGATION. Sellers have no knowledge of any actual or pending
litigation, proceeding or investigation by any organization, person, individual,
or governmental board, commission, department, agency, or instrumentality
against LVGC or the Property. LVGC is not operating the Property or the Project
under or subject to, or in default with respect to, any order, writ, injunction,
or decree of any court or federal, state, municipal or other governmental agency
or department, commission, board, or instrumentality.
3.22 CONDEMNATION. No condemnation or eminent domain proceedings relating
to the Property are pending. To the best knowledge of any of the Sellers or
LVGC, there are no written or proposed plans to widen, modify, or realign any
street or highway or any existing or proposed condemnation or eminent domain
proceedings which would affect the Property, except the widening of ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
3.23 No Other Activities or Employees.
--------------------------------
(a) LVGC is not engaged, and since the date of its formation has not
engaged, in any business activities other than such activities relating to the
Property and/or the Project.
(b) LVGC does not have, and since the date of its formation has not
had, any officers or employees, except as set forth in the LVGC Agreement.
3.24 Taxes.
-----
LVGC has filed on a timely basis all federal, state, local and foreign
Tax (as defined below) returns that were required to be filed, all of which
returns were accurate and complete in all material respects. LVGC has paid all
Taxes which have become due as they became due and withheld and remitted when
due any Taxes required to be withheld by it. No unsatisfied deficiencies have
been asserted or assessed against LVGC as a result of any audit by the Internal
Revenue Service or any state or local taxing authority, and no examination or
audit by any such authority is currently in progress or, threatened. "Taxes"
means all taxes and all charges, fees and similar assessments in the nature of a
tax (including, without limitation, those relating to income, receipts, excise,
real property, personal property, sales, use, transfer, withholding, employment,
payroll and franchises) imposed by the United States of America or any state,
local or foreign government, or any agency thereof.
3.25 BROKERS. None of the Sellers have employed any broker, agent or
finder, or incurred any liability for any brokerage fees, agents' commissions or
finder's fee in connection with the transactions contemplated hereby on behalf
of itself and/or LVGC.
3.26 ACCURACY OF INFORMATION. To the knowledge of the Sellers, no
representation or warranty by the Sellers in this Agreement contains or will
contain any untrue statement of material fact or omits or will omit to state any
material fact necessary in order to make the statements
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herein, in light of the circumstances under which they were made, not misleading
as of the date of the representation or warranty.
3.27 ABSENCE OF MANAGEMENT CONTRACT. None of the Sellers have entered into
a management agreement on behalf of themselves and/or LVGC for the management of
the Project.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF STPD
--------------------------------------
Except as set forth on the STPD Disclosure Schedule (as defined in
Section 2.1), STPD represents and warrants to the Sellers, as of the date hereof
and as of the Closing Date, as follows:
4.01 STPD DISCLOSURE SCHEDULE. The STPD Disclosure Schedule, marked as
Schedule 4.01 hereto (the "STPD DISCLOSURE SCHEDULE"), is divided into sections
which correspond to the Sections of this Article IV; however, specific cross
references to the STPD Disclosure Schedule are not necessarily included in the
Sections of this Article IV. The STPD Disclosure Schedule is accurate and
complete. Disclosure in one section of the STPD Disclosure Schedule will
constitute disclosure for purposes of any other Section of this Agreement.
4.02 ORGANIZATION. Each of STPD and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, and each has all requisite corporate power and authority and
possesses all material licenses, permits and authorizations to own, lease and
operate its properties and assets and to carry on its business as now being
conducted. Each of STPD and its subsidiaries are duly qualified or licensed to
do business as a foreign corporation and is in good standing in each
jurisdiction in which the character or location of the properties and assets
owned, leased or operated by it or the nature of the business conducted by it
requires such qualification or licensing except where the failure to be so
qualified, licensed or in good standing would not, individually or in the
aggregate, have a material adverse effect on the business, results of operations
or financial condition of STPD and its subsidiaries taken as a whole (the "STPD
MATERIAL ADVERSE EFFECT").
4.03 AUTHORITY AND VALIDITY OF AGREEMENT. STPD has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized and approved by the Board of Directors of STPD, and no other
corporate proceedings on the part of STPD are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by STPD and constitutes a valid
and binding legal obligation of STPD, enforceable against STPD in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or
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similar laws affecting the rights of creditors generally or the availability of
specific performance, injunctive relief and other equitable remedies and to
general principles of equity (regardless of whether such principles are
considered in a proceeding in equity or at law).
4.04 CONSENTS AND APPROVALS. Except for any applicable requirements of the
Securities Act and state securities laws, and the approval of the Financing (as
defined in Section 803) by the STPD Board of Directors no consent, approval,
order or authorization of or from, or registration, notification, declaration or
filing with (hereinafter sometimes separately referred to as "CONSENT" and
sometimes collectively as "CONSENTS") any individual, governmental or regulatory
authority or other person or entity is required in connection with the
execution, delivery or performance of this Agreement by STPD or the consummation
by STPD of the transactions contemplated hereby, except any Consent which, if
not received or made, is not reasonably likely to have a STPD Material Adverse
Effect.
4.05 CAPITALIZATION. The authorized capital stock of STPD consists of
15,000,000 shares of STPD Common Stock and 5,000,000 shares of Preferred Stock,
of which there are 2,933,333 shares of STPD Common Stock and 0 shares of
Preferred Stock issued and outstanding. All issued and outstanding shares of
STPD Common Stock and Preferred Stock are validly issued, fully paid,
nonassessable and free of preemptive rights. All STPD Shares to be issued and
delivered to the Sellers pursuant to Article I hereof will be, at the time of
issuance and delivery, validly issued, fully paid, nonassessable and free of
preemptive rights. There are not any outstanding or authorized subscriptions,
options, warrants, calls, rights, commitments, restrictions, arrangements or any
other agreements of any character that, directly indirectly, (a) obligate STPD
to issue any shares of capital stock or any securities convertible into, or
exercisable or exchangeable for, or evidencing the right to subscribe for, any
shares of capital stock, (b) call for or relate to the sale, pledge, transfer or
other disposition or encumbrance by STPD of any shares of its capital stock, or
(c) relate to the voting or control of such capital stock except as otherwise
set forth in Section 4.05 of the STPD Disclosure Schedule.
4.06 COMMISSION REPORTS. STPD has duly and timely made all required filings
with the Commission under the Securities Act and the Securities Exchange Act of
1934, as amended, and all of the reports, forms and documents so filed complied
in all material respects with all applicable requirements. As of their
respective filing dates or the date of any amendment thereto, none of such
reports, proxy statements or registration statements contained any untrue
statements of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, except to the
extent corrected by a subsequently filed report, form or document. The audited
consolidated financial statements and unaudited interim financial statements and
schedules of STPD contained in such public reports (or incorporated therein by
reference) were prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as noted therein, and fairly
present the consolidated financial condition and results of operations of STPD
and its subsidiaries as at the respective dates thereof and for the periods
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indicated therein, subject (in the case of interim unaudited financial
statements) to normal year-end audit adjustments, none of which will be
material.
4.07 NON-CONTRAVENTION. Neither STPD nor any of its subsidiaries are in
default under, and no condition exists that with notice or lapse of time would
constitute a default of STPD or any of its subsidiaries under, (i) any mortgage,
loan agreement, evidence of indebtedness, or other instrument evidencing
borrowed money to which STPD or any of its subsidiaries are bound, or (ii) any
judgment, order, or injunction of any court, arbitrator, or governmental agency.
4.08 NO UNDISCLOSED LIABILITIES. Except for liabilities and obligations
incurred in the ordinary course of business since September 30, 1996, neither
STPD nor any of its subsidiaries nor any of the property or assets of STPD or
any of its subsidiaries is subject to any material liability or obligation that
was required to be included or adequately reserved against in STPD's
consolidated unaudited interim financial statements for the period ended
September 30, 1996 as filed with the Commission or described in the notes
thereto and was not so included, reserved against, or described.
4.09 INVESTIGATIONS; LITIGATION. There are no claims, actions, suits or
proceedings by any private party or by any governmental body or authority
(including any nongovernmental self regulatory agency), nor any investigations
or reviews by any federal, state, local or foreign body or authority (including
any nongovernmental self regulatory agency), against or affecting STPD or any of
its subsidiaries, that are pending or, to STPD's knowledge threatened, at law or
in equity To the best of STPD's knowledge, there is no basis for any such
investigation, review, claim, action, suit or proceeding.
4.10 ABSENCE OF CERTAIN CHANGES. Except as authorized by this Agreement,
and except as in the ordinary course of business and consistent with past
practice, since September 30, 1996, there has not been:
(a) Any material adverse change in the business, financial condition,
operations or assets of STPD or any of its subsidiaries;
(b) Any damage, destruction, or loss, whether covered by insurance or
not, materially adversely affecting the properties or business of STPD or any of
its subsidiaries;
(c) Any sale or transfer by or STPD or any tangible or intangible
asset other than in the ordinary course of business, any mortgage or pledge or
the creation of any security interest, lien, or encumbrance on any such asset,
or any lease of property, including equipment, other than tax liens with respect
to taxes not yet due and contract rights of customers in inventory, with the
exception of the loans incurred by STPD in connection with its mortgage loan to
the Project;
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(d) Any declarations, setting aside, or payment of a distribution in
respect of or the redemption or other repurchase by STPD of any stock of STPD;
(e) Any material transaction not in the ordinary course of business of
STPD or any of its subsidiaries;
(f) The lapse of any material trademark, assumed name, trade name,
service ▇▇▇▇, copyright, or license of any application with respect to the
foregoing;
(g) The grant of any increase in the compensation of officers or
employees (including any such increase pursuant to any bonus, pension,
profit-sharing, or other plan) other than customary increases on a periodic
basis or required by agreement or understanding in the ordinary course of
business and in accordance with past practice;
(h) The discharge or satisfaction of any material lien or encumbrance
or the payment of any material liability other than current liabilities in the
ordinary course of business;
(i) The making of any material loan, advance, or guaranty to or for
the benefit of any person except the loan granted by NationsCredit in connection
with the construction of The Badlands Golf Course ("Badlands Loan"), the
creation of accounts receivable in the ordinary course of business; or
(j) An agreement to do any of the foregoing.
4.11 TITLE TO PROPERTY; CONDITION. STPD and/or one of its subsidiaries has
good and merchantable right, title and interest in and to all of the real and
personal property and all other assets reflected in STPD's consolidated balance
sheet as of September 30, 1996, included in STPD's unaudited consolidated
financial statements which are set forth in STPD's most recent Form 10-QSB for
the quarter ended September 30, 1996 ("STPD'S LATEST BALANCE SHEET") and all of
the assets purchased or otherwise acquired since the date of STPD's Latest
Balance Sheet (except for such assets as may have been sold or otherwise
disposed of in the ordinary course of business since the date of STPD's Latest
Balance Sheet), and such assets are not subject to any mortgage, pledge, lien or
security interest of any kind or nature (whether or not of record) not reflected
in STPD's Latest Balance Sheet, except (i) The Badlands Loan, (ii) statutory
liens for property taxes not yet delinquent or payable subsequent to the date of
this Agreement and statutory or common law liens securing the payment or
performance of any obligation of STPD or its subsidiaries, the payment or
performance of which is not delinquent, or that is payable without interest or
penalty subsequent to the date on which this representation is given, (iii)
claims, easements, liens, and other encumbrances of record pursuant to filings
under real property recording statutes which do not interfere with the
marketability of title of such property, and (iv) as described in STPD's Latest
Balance Sheet or the notes thereto. The items of equipment and other personal
property of each of STPD and its subsidiaries that are necessary to the conduct
of their respective businesses of are in good operating condition and repair and
fit for the intended
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purpose thereof, ordinary wear and tear excepted, and no material maintenance,
replacement or repair has been deferred or neglected.
4.12 TAX RETURNS. Each of STPD and its subsidiaries has prepared in a
substantially correct manner and has filed all federal, state, local, and
foreign tax returns and reports heretofore required to be filed on or prior to
the date hereof and has paid all taxes shown as due thereon. No taxing authority
has asserted any deficiency in the payment of any tax or informed STPD or any of
its subsidiaries that it intends to assert any such deficiency or to make any
audit or other investigation of STPD or any of its subsidiaries for the purpose
of determining whether such deficiency should be asserted against STPD or any of
its subsidiaries.
4.13 INSURANCE. Each of STPD and its subsidiaries maintains adequate
insurance policies covering fire and other casualty, general liability, theft,
life, workers' compensation, health, directors and officers liability, business
interruption and other forms of insurance as are customarily carried by similar
businesses. Neither STPD nor any of its subsidiaries are in default with respect
to its respective obligations under such policy maintained by it. Neither STPD
nor any of its subsidiaries have been notified of the cancellation of any of its
respective insurance policies or of any material increase in the premiums to be
charged for such insurance policies.
4.14 COMPLIANCE WITH LAW. To the knowledge of STPD, the assets, properties,
business and operations of STPD and all of its subsidiaries are and have been in
compliance in all material respects when taken a whole with all laws applicable
to the ownership and conduct of their assets, properties, business and
operations.
4.15 NO BROKERS OR FINDERS. Neither STPD nor any of its officers, directors
or employees has employed any broker, agent or finder or incurred any liability
for any brokerage fees, agents' commissions or finders' fees in connection with
the transactions contemplated hereby.
4.16 ACCURACY OF INFORMATION. To the knowledge of STPD, no representation
or warranty by STPD in this Agreement contains or will contain any untrue
statement of material fact or omits or will omit to state any material fact
necessary in order to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading as of the date of the
representation or warranty.
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ARTICLE V
ARTICLE V (Intentionally Omitted)
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ARTICLE VI
COVENANTS OF THE SELLERS
------------------------
Except in the ordinary course of business and consistent with past
practice, and except as may be expressly authorized by this Agreement or
otherwise agreed in writing by the Buyers, and to the extent of their authority
under the LVGC Agreement and to the extent of their authority as officers and
directors of GCA, from the date hereof until the Closing:
6.01 AGREEMENTS AS TO SPECIFIED MATTERS. The Sellers shall not permit LVGC
or GCA to:
(a) Declare, pay or set aside for payment any distribution in respect
of any Interest; or
(b) Issue any Interests or issue or sell any securities convertible
into, or exchangeable for, or options, warrants, or rights to subscribe to, any
Interests or repurchase, reacquire, cancel or redeem any such Interests (in each
case, whether in whole or in part), or admit any new member to LVGC.
6.02 CONDUCT OF LVGC'S BUSINESS. Sellers shall cause each of LVGC and GCA
to operate its respective business in accordance with the reasonable judgment of
its Managing Member (as such term is defined and used in the LVGC Agreement)
(with respect to LVGC) or its Board of Directors (with respect to GCA), as the
case may be, diligently and in good faith, consistent with past management
practices. Each of LVGC and GCA will continue to use its reasonable efforts to
preserve its present relationships with persons having business dealings with
it. LVGC shall not incur any liabilities or obligations other than in the
ordinary course of business.
6.03 ASSETS. Sellers shall cause each of LVGC and GCA to use, preserve and
maintain its respective assets, property, and rights now owned by it, as far as
practicable, in the ordinary course of business, to the same extent and in the
same condition as said assets, property, and rights are on the date of this
Agreement. Without the prior consent of the Buyers, the Sellers shall not permit
LVGC or GCA to encumber or dispose of any of its respective assets or make any
commitments relating to such assets, property, or business, except in the
ordinary course of LVGC's or GCA's (as the case may be) business.
6.04 INSURANCE. Sellers shall cause each of LVGC and GCA to keep or cause
to be kept in effect and undiminished the insurance now in effect on its
respective various properties and assets, and will purchase such additional
insurance, at the Buyers' cost, as the Buyers may request.
6.05 EMPLOYEES. Sellers shall not permit LVGC to hire or employ, or offer
to hire or employ, any person.
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6.06 NO VIOLATIONS. Sellers shall cause each of LVGC and GCA to comply in
all material respects with all statutes, laws, ordinances, rules, and
regulations applicable to it in the ordinary course of business.
6.07 NO SOLICITATION. The Sellers shall not permit LVGC or GCA or its
respective agents to, directly or indirectly, solicit, or initiate discussions
or negotiations with, provide any nonpublic information to, or enter into any
agreement with, any third party concerning any disposition of any of the
Interests, any of the assets of LVGC, the Property or the Project (other than
pursuant to this Agreement) (such proposals, announcements or transactions being
called herein "Acquisition Proposals"). Notwithstanding the foregoing, Sellers
shall be able to conduct negotiations for and enter into a standby agreement or
agreements ("Standby Agreement") which is initiated by a third party or parties,
provided that Sellers shall not disclose the terms of this Agreement to any
third party or parties and any such Standby Agreement shall take effect only in
the event the transactions contemplated herein are not consummated through no
fault or responsibility of Sellers.
6.08 CONSUMMATION; CONSENTS; REMOVAL OF OBJECTIONS. The Sellers shall, and
to the extent of their authority, shall cause LVGC and GCA to, subject to the
terms and conditions herein provided, use their respective best efforts (which
shall not include incurring any additional costs or liabilities in the case of
GCA and costs and liabilities not in excess of $25,000 in the case of LVGC) to
take or cause to be taken all actions and do or cause to be done all things
necessary, proper or advisable under applicable laws to consummate and make
effective, as soon as reasonably practicable, the transactions contemplated
hereby, including without limitation; (i) obtaining all Consents of any person
or entity, whether private or governmental, required in connection with the
consummation of the transactions contemplated herein; (ii) the removal or
satisfaction, if possible, of any objections to the validity or legality of the
transactions contemplated herein; and (iii) the satisfaction of the conditions
to consummation of the transactions contemplated hereby.
6.09 SUPPLEMENTS TO SELLER DISCLOSURE SCHEDULE. Prior to the Closing, the
Sellers shall supplement or amend the Seller Disclosure Schedule with respect to
any event or development which is necessary to correct any information set forth
on the Seller Disclosure Schedule or in any representation or warranty of any of
the Sellers which has been rendered inaccurate by reason of such event or
development.
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ARTICLE VII
COVENANTS OF STPD
-----------------
Except in the ordinary course of business and consistent with past
practice, and except as may be expressly authorized by this Agreement or
otherwise agreed in writing by the Sellers, from the date hereof until the
Closing:
7.01 AGREEMENTS AS TO SPECIFIED MATTERS. STPD shall not:
----------------------------------
(a) Declare, pay or set aside for payment any dividend or other
distribution in respect of its capital stock;
(b) Except as set forth in Schedule 4.01, issue any shares of its
capital stock or issue or sell any securities convertible into, or exchangeable
for, or options, warrants, or rights to subscribe to, any shares of its stock or
subdivide, or in any way reclassify any shares of its capital stock or
repurchase, reacquire, cancel or redeem any such shares.
7.02 CONDUCT OF STPD'S BUSINESS. STPD shall operate its business in
accordance with the reasonable judgment of its management diligently and in good
faith, consistent with past management practices.
7.03 ASSETS. STPD shall use, preserve and maintain the assets, property,
and rights now owned by it, as far as practicable, in the ordinary course of
business, to the same extent and in the same condition as said assets, property,
and rights are on the date of this Agreement, and no unusual or novel methods of
manufacture, purchase, sale, management, or operation of said properties or
business or accumulation or valuation of inventory will be made or instituted.
7.04 NO VIOLATIONS. STPD shall comply in all material respects with all
statutes, laws, ordinances, rules, and regulations applicable to it.
7.05 CONSUMMATION; CONSENTS; REMOVAL OF OBJECTIONS. STPD shall, subject to
the terms and conditions herein provided, use its best efforts to take or cause
to be taken all actions and do or cause to be done all things necessary, proper
or advisable under applicable laws to consummate and make effective, as soon as
reasonably practicable, the transactions contemplated hereby, including without
limitation: (i) obtaining all Consents of any person or entity, whether private
or governmental, required in connection with the consummation of the
transactions contemplated herein; (ii) the removal or satisfaction, if possible,
of any objections to the validity or legality of the transactions contemplated
herein; and (iii) the satisfaction of the conditions to consummation of the
transactions contemplated hereby.
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7.06 SUPPLEMENTS TO DISCLOSURE SCHEDULE. Prior to the Closing, STPD shall
supplement or amend the STPD Disclosure Schedule with respect to any event or
development which is necessary to correct any information set forth on the STPD
Disclosure Schedule or in any representation and warranty of STPD which has been
rendered inaccurate by reason of such event or development.
ARTICLE VIII
CONDITIONS TO OBLIGATION OF THE BUYERS
--------------------------------------
Notwithstanding any other provision of this Agreement to the contrary, the
obligations of the Buyers to effect the transactions contemplated herein will be
subject to the satisfaction at or prior to the Closing (unless another date is
specified) of each of the following conditions:
8.01 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Sellers and Ranchito contained in this Agreement, including,
without limitation, in the Seller Disclosure Schedule, will be in all material
respects true, complete and accurate as of the date when made and at and as of
the Closing as though such representations and warranties were made at and as of
such time, except for changes specifically permitted or contemplated by this
Agreement, and except insofar as such representations and warranties relate
expressly and solely to a particular date or period, in which case they will be
true and correct in all material respects at the Closing with respect to such
date or period.
8.02 DUE DILIGENCE. Buyers shall complete a due diligence review of LVGC,
the Property and the Project to the satisfaction of Buyers in their sole and
absolute discretion on or before 5:00 p.m. Pacific Standard Time December 18,
1996 ("Due Diligence Date").
8.03 FINANCING. Buyers shall on or before February 15, 1997 obtain suitable
debt and/or equity financing for the purchase of Sellers' interests and the
completion of the Project on terms satisfactory to Buyers, STPD's Board of
Directors, and Ranchito.
8.04 PERFORMANCE. The Sellers and Ranchito will have performed and complied
in all material respects with all agreements, covenants, obligations and
conditions required by this Agreement to be performed or complied with by them
at or prior to the Closing.
8.05 ASSIGNMENT OF CERTAIN CONTRACTS. The Lease, the Sublease, the
Construction Contract and each of the Contracts shall have been assigned and
transferred to LVGC, pursuant to documentation reasonably satisfactory in form
and substance to the Buyers and their respective counsel.
8.06 REQUIRED APPROVALS, WAIVERS AND CONSENTS.
----------------------------------------
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(a) All action required by law and otherwise to be taken by the
Sellers and Ranchito to authorize the execution, delivery and performance of
this Agreement by the Sellers and Ranchito and the consummation of the
transactions contemplated hereby will have been duly and validly taken.
(b) All Approvals, Waivers and Consents of or from all third parties
required hereunder in order for the Sellers and Ranchito to consummate the
transactions contemplated herein will have been delivered, made or obtained, and
the Buyers will have received copies thereof.
8.07 TITLE INSURANCE. A leasehold owners binder of title insurance on ALTA
Form (4-6-90), in a form satisfactory to the Buyers and their counsel in their
sole discretion, will have been obtained and made available to the Buyers at
Buyer's expense by the Due Diligence Date, which binder shall contain such
affirmative assurances and coverages as are satisfactory to the Buyers in their
sole discretion, including, without limitation, assurance that the Project can
be completed in accordance with the Plans without violation of any of the
matters listed on Schedule B of said policy. Upon receipt of the title insurance
binder, Buyer shall give Seller written notice of any defects or exceptions in
title. Any exception or defect not reported to Sellers by the Due Diligence Date
shall be waived. It shall, however, be a condition of closing that no new
exceptions or defects arise from the date from the Due Diligence date.
8.08 ENVIRONMENTAL UPDATE. An update dated within 30 days prior to the
Closing Date (the "Update Report") of the Environmental Report will have been
obtained by Buyer, at Buyer's expense by the Due Diligence Date, which Update
Report shall not disclose any new material facts concerning the condition of the
Property, and shall include the agreement by Converse that Buyers may rely on
the contents of the Environmental Report as if it were originally prepared for
the Buyers.
8.09 ALTA SURVEY. An ALTA as-built survey of the Property, satisfactory in
all respects to the Buyers and their respective counsel in their sole
discretion, shall have been obtained by Buyer at Buyer's expense by the Due
Diligence Date.
8.10 ADVERSE CHANGES. From the date of this Agreement to the Closing, no
material adverse change (whether or not such change is referred to or described
in any supplement to the Seller Disclosure Schedule) will have occurred in the
business, financial condition, working capital, assets, liabilities (absolute,
accrued, contingent or otherwise) or operations of LVGC, GCA (to the extent
relating to the Property or the Project).
8.11 NO PROCEEDING OR LITIGATION. No suit, action, investigation, inquiry
or other proceeding by any governmental or regulatory authority or other person
or entity will have been instituted or threatened which questions the validity
or legality of the transactions contemplated hereby or which, if successfully
asserted, would individually or in the aggregate otherwise have an LVGC Material
Adverse Effect.
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8.12 LEGISLATION. No law will have been enacted which prohibits, restricts
or delays the consummation of the transactions contemplated hereby or any of the
conditions to the consummation of such transaction.
8.13 ACCEPTANCE BY COUNSEL. The form and substance of all legal matters
hereby and of all papers delivered hereunder will be reasonably acceptable to
each of Buyers' attorneys.
8.14 CERTIFICATES. The Buyers will have received such certificates of LVGC,
GCA, each of the Sellers and Ranchito, in a form and substance reasonably
satisfactory to the Buyers, dated the Closing Date, to evidence compliance with
the conditions set forth in this Article VIII and such other matters as may be
reasonably requested by the Buyers.
8.15 CLOSING DELIVERIES. At the Closing, the following shall be delivered:
(c) Instruments of Assignment relating to the Sellers' respective
Interests, duly executed and acknowledged by each of the Sellers.
(d) A Consent to Assignment and Modification of Lease and Concession
Agreement in the form attached hereto as EXHIBIT J, duly executed, attested and
acknowledged by all parties thereto.
(e) An Assignment of Sublease and Guaranty with Spousal Consents in
the form attached hereto as EXHIBIT K, duly executed by subtenant and the
Guarantors under the Guaranty of Sublease dated November 4, 1996 and their
respective spouses.
(f) An Estoppel Certificate in the form attached hereto as EXHIBIT L,
duly executed by Pro-Golf of Nevada, L.L.C.
(g) Such affidavits and indemnities as the Buyers' title insurance
company may reasonably require in order to omit from its title insurance policy
all exceptions for (i) judgments, bankruptcies or other returns against persons
or entities whose names are the same as or similar to Sellers' name; (ii)
parties in possession other than under the rights to possession granted under
the Leases; and (iii) mechanics' liens.
(h) A Contractor's Consent to Assignment and Estoppel Agreement in the
form attached hereto as EXHIBIT M, duly executed by the Contractor.
(i) Complete original prints of the Plans for the Project.
(j) Original prints (or photocopies if original prints are unavailable
to the Seller) of all current site plans, surveys, soil and substrata studies,
architectural drawings, engineering plans and studies, floor plans, landscape
plans and other plans or studies of any kind
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that relate to all or any part of the Property or the Project, as well as copies
of all certificates, licenses, permits, authorizations and approvals issued for
or with respect to the Property or the Project by governmental and
quasi-governmental authorities having jurisdiction.
(k) An Architect's Consent to Assignment and Estoppel Agreement in the
form attached hereto as EXHIBIT N, duly executed by the Architect, ▇▇▇▇▇ ▇▇▇▇▇▇
Architects, A.P.C..
(l) The consent of ▇▇▇▇▇ County, Nevada to the Sublease.
(m) A Cooperation Agreement between GCA and LVGC, in the form attached
hereto as EXHIBIT O, with respect to the permits and approvals relating to the
Property and the Project, duly executed by the Sellers in their capacities as
shareholders and officers of GCA.
(n) An opinion of Allen, Matkins, ▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ LLP, counsel
to the Sellers, in the form attached hereto as EXHIBIT P.
(o) A Release Agreement among the Sellers, the Buyers and LVGC, in the
form attached hereto as EXHIBIT Q, relating to the release of any claims of the
Sellers against LVGC, duly executed by each of the Sellers (the "Release
Agreement").
(p) The Amended LVGC Agreement in accordance with terms of Exhibit A,
executed and delivered by Buyers and Ranchito.
(q) The New Management Agreement in the form attached hereto as
Exhibit B executed and delivered by STPD and LVGC.
(r) The Registration Rights Agreement in the form attached hereto as
Exhibit F executed and delivered by Sellers and STPD.
(s) The Consulting and Noncompetition Agreement in the form attached
hereto as EXHIBIT E executed and delivered by LVGC and ▇▇▇▇▇▇▇.
ARTICLE IX
CONDITIONS TO THE OBLIGATION OF THE SELLERS
-------------------------------------------
Notwithstanding anything in this Agreement to the contrary, the obligations
of the Sellers to effect the transactions contemplated herein will be subject to
the satisfaction at or prior to the Closing of each of the following conditions:
9.01 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Buyers contained in this Agreement, including, without
limitation, the STPD Disclosure Schedule,
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will be in all materials respects true, complete and accurate as of the date
when made and at and as of the Closing as though such representations and
warranties were made at and as of such time, except for changes permitted or
contemplated by this Agreement, and except insofar as the representations and
warranties relate expressly and solely to a particular date or period, in which
case they will be true and correct in all material respects at the Closing with
respect to such date or period.
9.02 PERFORMANCE. The Buyers will have performed and complied in all
material respects with all agreements, covenants, obligations and conditions
required by this Agreement to be performed or complied with by the Buyers at or
prior to the First Closing.
9.03 Required Approvals and Consents.
-------------------------------
(a) All action required to be taken by the Buyers to authorize the
execution, delivery and performance of this Agreement by the Buyers and the
consummation of the transactions contemplated hereby will have been duly and
validly taken.
(b) All Consents of or from all third parties required hereunder in
order for the Buyers to consummate the transactions contemplated herein will
have been delivered, made or obtained, and the Sellers will have received copies
thereof.
9.04 ADVERSE CHANGES. From the date of this Agreement to the Closing, no
material adverse change (whether or not such change is referred to or described
in any supplement to the STPD Disclosure Schedule) will have occurred in the
business, financial condition, working capital, assets, liabilities (absolute,
accrued, contingent or otherwise) or operations of STPD.
9.05 NO PROCEEDING OR LITIGATION. No suit, action, investigation, inquiry
or other proceeding by any governmental or regulatory authority or other person
or entity will have been instituted or threatened which questions the validity
or legality of the transactions contemplated hereby or which, if successfully
asserted, would individually or in the aggregate otherwise have an STPD Material
Adverse Effect.
9.06 LEGISLATION. No law will have been enacted which prohibits, restricts
or delays the consummation of the transactions contemplated hereby or any of the
conditions to the consummation of such transactions.
9.07 ACCEPTANCE BY COUNSEL. The form and substance of all legal matters
contemplated hereby and of all papers delivered hereunder will be reasonably
acceptable to Allen, Matkins, ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP.
9.08 CERTIFICATES. The Sellers will have received such certificates of the
Buyers' respective officers, in form and substance reasonably acceptable to the
Sellers and Ranchito, dated
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the First Closing Date, to evidence compliance with the conditions set forth in
this Article IX and such other matters as may be reasonably requested by the
Sellers.
9.09 TERMINATION OF GUARANTEE. Prior to or at the Closing, any and all
guarantees made by GCA in favor of STPD with respect to that certain loan in the
aggregate amount of $1,100,000 made by STPD to LVGC shall be terminated, and any
other obligations of GCA with respect to the foregoing loan shall be assumed by
LVGC. The guaranty shall be marked "Cancelled" and returned to GCA.
ARTICLE X
TERMINATION AND ABANDONMENT
---------------------------
10.01 METHODS OF TERMINATION. This Agreement may be terminated and the
transactions contemplated herein may be abandoned at any time, but not later
than the Closing:
(a) By mutual written consent of the Buyers and the Sellers; or
(b) By the Buyers on or before December 18, 1996 if Buyers are not
satisfied with their due diligence of LVGC, the Property and the Project in
their sole and absolute discretion.
(c) By the Buyers on or before February 15, 1997 if Buyers have not
obtained suitable financing under Section 8.03.
(d) By the Buyers on or before April 10, 1997 if any of the conditions
provided for in Article VIII to be satisfied or waived by the Closing Date has
not been satisfied or waived in writing by the Buyers prior to such date; or
(e) By the Sellers on or before April 10, 1997 if any of the
conditions provided for in Article IX have not been satisfied or waived in
writing by the Sellers prior to such date.
10.02 PROCEDURE UPON TERMINATION. In the event of termination and
abandonment pursuant to Section 10.01, written notice thereof will forthwith be
given to the other party or parties, and the provisions of this Agreement
(except to the extent provided in Section 12.01) will terminate, and the
transactions contemplated herein will be abandoned, without further action by
any party hereto. If this Agreement is terminated as provided herein: (i) each
party will, upon request, redeliver all documents, work papers and other
material of any other party (and all copies thereof) relating to the
transactions contemplated herein, whether so obtained before or after the
execution hereof, to the party furnishing the same; (ii) the confidentiality
obligations of Section 13.02 will continue to be applicable; and (iii) except as
provided in this Section 10.02, no party will have any liability for a breach of
any representation, warranty, agreement, covenant or
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other provision of this Agreement, unless such breach was due to a willful or
bad faith action or omission of such party or any representative, agent,
employee or independent contractor thereof.
10.03 MEMBERSHIP INTEREST REPURCHASE RIGHT. In the event that this
Agremeent is terminated by Buyer pursuant to Section 8.03, STPD shall have the
right at its sole election to require Sellers to purchase the interests in LVGC
purchased by STPD from ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ equaling 21.5% of the
outstanding interests of LVGC ("Minority Interest") for a purchase price of
$1,167,000, ("Purchase Price") by notifying Sellers in writing of said election
and of Seller's obligation to purchase the Minority Interest from STPD. Sellers
shall, within one hundred twenty (120) days of the date of such notice from
STPD, consummate the purchase of the Minority Interest by paying the Purchase
Price to STPD in cash, certified funds, or by wire transfer of immediately
available funds to an account specified by STPD in writing and receive in
exchange therefor, an assignment of said Minority Interest and STPD's rights
under its agreement with White and ▇▇▇▇▇. If Sellers default in the purchase of
the Minority Interest as aforesaid, STPD shall become on the day of default the
exclusive manager of the Project in accordance with the Management Agreement set
forth as Exhibit B. This right of exclusive management shall constitute
liquidated damages for Sellers' default and shall be STPD's sole remedy in lieu
of any other remedy at law or in equity.
10.04 ADJUSTMENT TO MANAGEMENT FEE. In the event that STPD has not
terminated this Agreement pursuant to Section 8.03 and STPD does not exercise
its right under Section 10.03 above, then Sellers and STPD shall re-negotiate
the management fee to STPD for the Project, but in no event shall STPD receive a
management fee of less than 3% of gross revenues.
10.05 STPD DEFAULT. In the event that STPD has terminated this Agreement
pursuant to Section 8.03 and subsequently defaults and does not consummate the
closing of the transactions hereunder due to no fault or responsibility of
Sellers, then Seller shall be entitled to purchase the Minority Interest and an
assignment of STPD's rights under its agreement with White and ▇▇▇▇▇ from STPD
for the sum of $700,200 payable by cash, certified funds or by wire transfer of
immediately available funds to an account specified by STPD in writing. In order
to exercise this right, Seller must notify STPD in writing within thirty (30)
days of the date of default and purchase the Minority Interest within sixty (60)
days thereafter. This right to purchase and receive an assignment of the
Minority Interest from Buyer shall constitute liquidated damages for Buyer's
defaults and shall be Sellers' sole remedy in lieu of any other remedy at law or
in equity. If, however, STPD has not purchased the Minority Interest, then STPD
shall pay to Sellers liquidated damages of $100,000 as Sellers sole remedy in
lieu of any other remedy at law or in equity.
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ARTICLE XI
SURVIVAL AND INDEMNIFICATION
----------------------------
11.01 SURVIVAL. The representations and warranties of each of the parties
hereto will survive the Closing until the first anniversary of the Closing Date.
11.02 INDEMNIFICATION BY THE SELLERS. Each Seller, jointly and severally
(but severally and not jointly with respect to such Seller's representations and
warranties set forth in Article II), agrees to indemnify and hold harmless each
of the Buyers and its respective directors, officers, employees and agents, from
and against any and all loss, liability or damage suffered or incurred by any of
them (including, without limitation, legal fees and expenses incurred in
connection with enforcing the indemnification rights of the Buyers pursuant to
this Section 11.02), by reason of (i) any untrue representation of, or breach of
warranty by, the Sellers in any part of this Agreement, provided, however, that
no claim for indemnity may be made pursuant to this Section 11.02 after the
first anniversary of the Closing Date; and (ii) any nonfulfillment of any
covenant, agreement or undertaking of any of the Sellers in any part of this
Agreement which by its terms is to remain in effect after the Closing and has
not been specifically waived in writing at the Closing by the Buyer or Buyers
entitled to the benefits thereof.
11.03 INDEMNIFICATION BY THE BUYERS. Buyer agrees to indemnify and hold
harmless each of the Sellers and its respective agents, from and against any and
all loss, liability or damage suffered or incurred by any of them (including,
without limitation, legal fees and expenses incurred in connection with
enforcing the indemnification rights of the Sellers pursuant to this Section
11.04), by reason of (i) any untrue representation of, or breach of warranty by,
the Buyers in any part of this Agreement, provided, however, that no claim for
indemnity may be made pursuant to this Section 11.03 after the first anniversary
of the Closing ; and (ii) any nonfulfillment of any covenant, agreement or
undertaking of any of the Buyers in any part of this Agreement which by its
terms is to remain in effect after the First Closing and has not been waived in
writing at the First Closing by the Seller or Sellers entitled to the benefits
thereof.
11.04 CLAIMS FOR INDEMNIFICATION. The parties intend that all
indemnification claims hereunder be made as promptly as practicable by the party
seeking indemnification (the "Indemnified Party"). Whenever any claim arises for
indemnification hereunder, the Indemnified Party will promptly notify the party
from whom indemnification is sought (the "Indemnifying Party") of the claim and,
when known, the facts constituting the basis for such claim. In the case of any
such claim for indemnification hereunder resulting from or in connection with
any claim or legal proceedings of a third party, the notice to the Indemnifying
Party will specify, if known, the amount or an estimate of the amount of the
liability arising therefrom. The Indemnified Party will not settle or compromise
any claim by a third party for which it is entitled to indemnification hereunder
without the prior written consent of the Indemnifying Party, which will not be
unreasonably withheld. If the Indemnifying Party is of the opinion that the
Indemnified Party is not entitled to indemnification, or is not entitled to
indemnification in the amount claimed in such
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notice, it will deliver, within ten (10) business days after the receipt of such
notice, a written objection to such claim and written specification in
reasonable detail of the aspects or details objected to, and the grounds for
such objection. If the Indemnifying Party filed timely written notice of
objection to any claim for indemnification, the validity and amount of such
claim will be determined by arbitration pursuant to Section 13.17 hereof.
ARTICLE XII
DEVELOPER'S FEE
12.01 DEVELOPER'S FEE. Sellers shall be entitled to be paid out of the
costs of the Project a developer's fee. which will be paid in addition to the
Cash Consideration, of $137,500 ("Developer's Fee") to be paid on the earlier of
(a) the closing of a first Deed of Trust loan with an institutional lender which
approves the Developer's Fee, provided that STPD has been paid its development
fee of $112,500 as a priority and (b) the Closing Date.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.01 EXPENSES. Each of the parties hereto will bear its own costs, fees
and expenses in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, fees,
commission and expenses payable to brokers, finders, investment bankers,
consultants, exchange or transfer agents, attorneys, accountants and other
professionals, whether or not the transactions contemplated herein are
consummated.
13.02 CONFIDENTIALITY. The parties hereto shall not use, or permit the use
of, any of the information relating to any other party hereto furnished to it in
connection with the transactions contemplated herein ("Information") in a manner
or for a purpose detrimental to such other party or otherwise than in connection
with the transaction, and they shall not disclose, divulge, provide or make
accessible (collectively, "Disclose"), or permit the disclosure of, any of the
Information to any person or entity, other than their respective directors,
officers, employees, investment advisors, accountants, counsel and other
authorized representatives and agents, except as may be required by judicial or
administrative process or, in the opinion of such party's regular counsel, by
other requirements of law, unless the disclosing party first obtains the prior
written consent of the other parties hereto. The term "Information" as used
herein will not include any information relating to a party which the party
disclosing such information can show: (i) to have been in its possession prior
to its receipt from another party hereto; (ii) to be now or to later become
generally available to the public through no fault of the disclosing party;
(iii) to have been available to the public at the time of its receipt by the
disclosing party; (iv) to have been received separately by the disclosing party
in an unrestricted manner from a person entitled to disclose such
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information; or (v) to have been developed independently by the disclosing party
without regard to any information received in connection with this transaction.
The parties hereto also shall promptly return to the party from whom originally
received all original and duplicate copies of written materials containing
Information should the Closing not occur. A party hereto will be deemed to have
satisfied its obligations to hold the Information confidential if it exercises
the same care as it takes with respect to its own similar information. This
Section 13.02 shall survive the Closings and any termination of this Agreement.
13.03 PUBLIC ANNOUNCEMENTS. None of the parties hereto will make any public
announcement with respect to the transactions contemplated herein without the
prior written consent of the other parties, which consent will not be
unreasonably withheld or delayed; provided, however, that any of the parties
hereto may at any time make any announcements which are required by applicable
law so long as the party so required to make an announcement promptly upon
learning of such requirement notifies the other parties of such requirement and
discusses with the other parties in good faith the exact proposed wording of any
such announcement.
13.04 RESTRICTIVE LEGEND. Each of the Sellers consents to the placing of
the following legend on the certificate or certificates for STPD Shares to be
issued to each such Seller in connection with the purchase of their respective
Interests by the Buyers hereunder:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
APPLICABLE STATE SECURITIES LAWS AND MAY BE SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED ONLY IF A REGISTRATION
STATEMENT WITH RESPECT TO SUCH TRANSACTION IS IN EFFECT PURSUANT
TO THE PROVISIONS OF SUCH LAW OR IF, IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER, AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH LAWS IS AVAILABLE.
13.05 MAINTENANCE OF AND ACCESS TO BOOKS AND RECORDS. For three (3) years
after the date hereof, the Buyers and Ranchito shall cause LVGC to maintain all
of its financial, accounting, tax and other books and records with respect to
any period prior to the date hereof and to cooperate with and provide the
Sellers and their authorized representatives reasonable access to any and all of
such records during normal business hours.
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13.06 Further Assurances; Cooperation; Notification.
---------------------------------------------
(a) Each party hereto will, before, at and after the Closings, execute
and deliver such instruments and take such other actions as the other party or
parties, as the case may be, may reasonably require in order to carry out the
intent of this Agreement.
(b) At all times from the date hereof until the Closing, each party
will promptly notify all other parties in writing of the occurrence of any event
which it reasonably believes will or may result in a failure by such party to
satisfy the conditions specified in Article VI and Article VII hereof.
13.07 AMENDMENT AND MODIFICATION. Subject to applicable law, this Agreement
may be amended or modified by the parties hereto at any time prior to the
Closing with respect to any of the terms contained herein, provided, however,
that all such amendments and modifications must be in writing duly executed by
all of the parties hereto.
13.08 WAIVER OF COMPLIANCE: CONSENTS. Any failure of a party to comply with
any obligation, covenant, agreement or condition herein may be expressly waived
in writing by the party or parties entitled hereby to such compliance, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition will not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. No single or partial exercise
of a right or remedy will preclude any other or further exercise thereof or of
any other right or remedy hereunder. Whenever this Agreement requires or permits
the consent by or on behalf of a party, such consent will be given in writing in
the same manner as for waivers of compliance.
13.09 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement will entitle
any person or entity (other than a party hereto and his, her or its respective
successors and assigns permitted hereby) to any claim, cause of action, remedy
or right of any kind.
13.10 NOTICES. All notices, requests, demands and other communications
required or permitted hereunder will be made in writing and will be deemed to
have been duly given and effective: (i) on the date of delivery, if delivered
personally; (ii) on the earlier of the fourth (4th) day after mailing or the
date of the return receipt acknowledgment, if mailed, postage prepaid, by
certified or registered mail, return receipt requested, or delivered by a
nationally recognized overnight delivery firm; or (iii) on the date of
transmission, if sent by facsimile, telecopy, telegraph, telex or other similar
telegraphic communications requirement:
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If to the Sellers:
To: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Sellers' Representative
c/o Selleck Properties, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Ext. 2
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Allen, Matkins, ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person or address as the Sellers' Representative will furnish
to the other parties herein in writing in accordance with this Section 12.09.
If to the Buyers:
To:
Senior Tour Players Development, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇'▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Ranchito:
To: The Ranchito Company, LLC
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇
The Ranchito Company, LLC
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other person or address as the relevant Buyer will furnish to the
other parties hereto in writing in accordance with this Section 12.09 (provided,
however, that any such writing shall be deemed furnished to all of the Sellers
if furnished to the Sellers' Representative).
13.11 ASSIGNMENT. This Agreement and all of the provisions hereof will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned (whether voluntarily,
involuntarily, by operation of law or otherwise) by any of the parties hereto
without the prior written consent of the other parties. In no event shall STPD
be relieved of liability hereunder by its transfer of certain rights to its
nominee.
13.12 GOVERNING LAW. This Agreement and the legal relations among the
parties hereto will be governed by and construed in accordance with the internal
substantive laws of the State of Nevada (without regard to the laws of conflict
that might otherwise apply) as to all matters, including without limitation
matters of validity, construction, effect, performance and remedies.
13.13 COUNTERPARTS. This Agreement may be executed simultaneously in one or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
13.14 HEADINGS; REFERENCES. The table of contents and the headings of the
Articles and Sections of this Agreement are inserted for convenience only and
shall not constitute a part hereof. All references to Articles, Sections,
Schedules and Exhibits are to the Articles and Sections hereof, and the Exhibits
and Schedules hereto, unless the context clearly indicates otherwise.
13.15 ENTIRE AGREEMENT; SEVERABILITY. The Seller Disclosure Schedule, the
STPD Disclosure Schedule and all other Schedules and Exhibits and other writings
referred to in this Agreement and in such Disclosure Schedules or any such other
Schedule or Exhibit or other
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writing are part of this Agreement, and together with this Agreement they embody
the entire agreement and understanding of the parties hereto in respect to the
transactions contemplated by this Agreement and together they are referred to as
"this Agreement" or the "Agreement." There are no restrictions, promises,
warranties, agreements, covenants or undertakings, other than those expressly
set forth or referred to in this Agreement. This Agreement supersedes all prior
and contemporaneous oral and written agreements and understandings between the
parties with respect to the transaction or transactions contemplated by this
Agreement. Provisions of this Agreement shall be interpreted to be valid and
enforceable under applicable law to the extent that such interpretation does not
materially alter this Agreement; provided, however, that if any such provision
shall become invalid or unenforceable under applicable law, such provision will
be stricken to the extent necessary and the remainder of such provisions and the
remainder of this Agreement will continue in full force and effect.
13.16 INJUNCTIVE RELIEF. It is expressly agreed among the parties hereto
that monetary damages would be inadequate to compensate a party hereto for any
breach by any other party of its covenants and agreements in Sections 6.07 and
12.02 hereof. Accordingly, the parties agree and acknowledge that any such
violation or threatened violation will cause irreparable injury to the other and
that, in addition to any other remedies which my be available, such party will
be entitled to injunctive relief against the threatened breach of Sections 6.07
and 13.02 hereof or the continuation of any such breach without the necessity of
proving actual damages and may seek to specifically enforce the terms hereof.
13.17 ARBITRATION. Except as otherwise expressly provided in Section 13.16
or elsewhere in this Agreement, any controversy or claim arising out of or
relating to this Agreement, or the making, performance or interpretation hereof,
including without limitation alleged fraudulent inducement hereof, will be
settled by binding arbitration in Las Vegas, Nevada, in accordance with the
Commercial Arbitration Rules then in effect of the American Arbitration
Association. Judgment upon any arbitration award may be entered in any court
having jurisdiction thereof.
13.18 ATTORNEYS' FEES. If any arbitration, litigation or similar
proceedings are brought by any party to enforce any obligation or to pursue any
remedy under this Agreement, the party prevailing in any such arbitration,
litigation or similar proceeding shall be entitled to costs of collection, if
any, and reasonable attorneys' fees incurred in connection with such proceedings
and in collecting or enforcing any award granted therein.
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39
13.19 LIMITATION AS TO RANCHITO. The provisions of this Agreement as to
Ranchito are limited to those sections which specifically refer to Ranchito, and
Ranchito shall have no liability or responsibility with respect to this
Agreement except as specifically enumerated herein.
13.20 LIMITATION AS TO SELLER'S WARRANTIES AND REPRESENTATIONS.
Notwithstanding any provision herein to the contrary, Sellers shall not have any
liability for any claim arising out of a breach of any warranty or
representation if the claim was caused solely by the actions of White and/or
▇▇▇▇▇ or the information was solely and exclusively known by White and/or ▇▇▇▇▇.
13.21 No Limitation of Rights of STPD:
-------------------------------
Nothing contained in the Agreement shall in any way limit any rights or
remedies against LVGC that STPD may have in connection with the promissory note
and leasehold mortgage held by STPD on the Project.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BUYERS:
-------
SENIOR TOUR PLAYERS DEVELOPMENT, INC.
By:
---------------------------------
Name:
Title:
SELLERS:
--------
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇
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RANCHITO: THE RANCHITO COMPANY LLC
--------
By:
---------------------------------
Name:
Title:
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SCHEDULE I
----------
-----------------------------------------------------------
Closing STPD
Seller's Name and Address Payment Shares
------------------------- ------- ------
-----------------------------------------------------------
-----------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $781,550.00 183,517
-----------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $134,017.00 25,388
-----------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇ $616,483.00 160,642
-----------------------------------------------------------
42
LIST OF EXHIBITS
Exhibit A First Amended and Restated Limited Liability Company Agreement of
Las Vegas Golf Center, L.L.C.
Exhibit B New LVGC Management Agreement
Exhibit C Instrument of Assignment
Exhibit D Shareholders' Agreement
Exhibit E Consulting And Non Competition Agreement
Exhibit F Registration Rights Agreement
Exhibit G Real Property Description
Exhibit H LVGC Balance Sheet as of November 30, 1996
Exhibit I List of Contracts
Exhibit J Consent to Assignment And Modification of Lease And Concession
Agreement
Exhibit K Assignment of Sublease And Guaranty With Spousal Consents
Exhibit L Estoppel Certificate
Exhibit M Contractor's Consent to Assignment And Estoppel Agreement
Exhibit N Architect's Consent to Assignment And Estoppel Agreement
Exhibit O Cooperation Agreement Between GCA And LVGC
Exhibit P Opinion of Allen, Matkins, ▇▇▇▇, ▇▇▇▇▇▇ And ▇▇▇▇▇▇▇, LLP
Exhibit Q Release Agreement Among the Sellers, the Buyers And LVGC
43
AGREEMENT
THIS AGREEMENT dated November 29, 1996 by and between ▇▇▇▇▇ ▇. ▇▇▇▇▇
("LKW"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇") (collectively "Sellers") and SENIOR TOUR
PLAYERS DEVELOPMENT, INC. ("STPD" "Buyer" or "Buyers"), a Nevada Corporation.
WITNESSETH
WHEREAS, LKW owns and holds in the aggregate, beneficially and of record,
sixteen (16%) percent of the membership interests ("Interests") in Las Vegas
Golf Center, L.L.C., a Delaware limited liability company ("LVGC"), and DAW owns
and holds in the aggregate, beneficially and of record, five and one-half (5.5%)
percent of the Interests in LVGC; and
WHEREAS, STPD, or its nominee, desires to purchase from each of the
Sellers, and each of Sellers desires to sell to STPD, all of Sellers' Interests.
NOW THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. Subject to the terms of this Agreement, each of Sellers hereby agree to
sell, transfer, convey, assign and deliver to STPD, or its Nominee, and STPD, or
its Nominee, hereby agrees to purchase, acquire and accept from each of the
Sellers, all of such Seller's right, title and interest (whether held
beneficially or of record) in and to such Seller's Interest.
2. The aggregate purchase price to be paid by STPD for the Interests shall
be (i) Four Hundred Thousand Dollars ($400,000) ("Cash Consideration") and (ii)
Three Hundred Twenty Three Thousand, Two Hundred Eighty Nine (323,289) shares of
common stock, $0.001 par value per share, of STPD ("STPD Shares"), payable as
follows:
Cash Consideration: $20,000 on or before December 15, 1996
$180,000 on or before January 15, 1997
$200,000 on or before January 15, 1998
STPD Shares: 161,645 on or before January 15, 1997
161,644 on or before January 15, 1998
Each of the STPD shares shall be duly authorized, validly issued, fully
paid and non-assessable, and shall be restricted security, as defined in Rule
144 promulgated under the Securities Act of 1933, as amended by the Securities
and Exchange Commission. Sellers agree to vote their shares for management's
slate of directors through December 31, 1998.
3. Sellers hereby irrevocably and unconditionally (i) consent, in
accordance with the requirements of Article VI of the LVGC Agreement, to the
admission of STPD to LVGC as a member and the substitution of STPD for the
Sellers as Members, and (ii) waives any and all requirements and conditions of
execution and delivery by STPD of any assumption of any of the liabilities or
obligations of any of the Sellers under the LVGC Agreement.
4. At any time, at STPD's request and without further consideration, each
of the parties hereto shall promptly execute and deliver such documents and
instruments, and take all such other action, as STPD may reasonably request,
more effectively to transfer, convey and assign to STPD, and to confirm STPD's
admission of LVGC as a Member and the STPD's title to, all of the Sellers'
respective Interests, to assist STPD in exercising all rights with respect
thereto and to carry out the purpose and intent of this Agreement.
5. The parties hereto agree to their respective representations and
warranties as contained in Exhibit A attached hereto and incorporated herein.
6. The parties hereto agree to the indemnification provisions contained in
Exhibit B attached hereto and incorporated herein.
7. The closing shall be held in Las Vegas, Nevada on December 3, 1996 at
2:00 p.m. with the location to be agreed upon by the parties.
8. Simultaneous with the Closing ("Closing" or "First Closing") hereof,
Sellers shall cause Golf Centers of America, Inc. to assign and transfer to Las
Vegas Golf Center the Ground Lease and Sublease, as specified in Paragraph 2.06
of Exhibit A, and each of any outstanding contracts, as specified in Paragraph
2.11 of Exhibit A, to LVGC pursuant to documentation reasonably satisfactory in
form and substance to STPD and its counsel.
9. Each of the Sellers consents to the placing of the following legend on
the certificate or certificates for STPD Shares to be issued to each such Seller
in connection with the purchase or their respective Interests by STPD hereunder:
The Shares of Common Stock represented by this certificate have not
been registered under the Securities Act of 1993 or applicable state
securities laws and may be sold, pledged, assigned or otherwise
transferred only if a registration statement with respect to such
transaction is in effect pursuant to the provisions of such law or if,
in the opinion of counsel reasonably satisfactory to the issuer, and
exemption from the registration requirements of such laws is
available.
10. STPD agrees to ▇▇▇▇▇ ▇▇▇▇▇▇▇ the right to demand registration of their
STPD Shares on a Form S-3 registration statement or similar Form at any time
after July 1, 1997. STPD shall use its best efforts to cause a registration
statement to become effective immediately following July 1, 1997 or as soon as
practicable thereafter. STPD shall be responsible for the costs of any such
registration.
IN WITNESS WHEREOF, the parties hereto have cause this AGREEMENT to be duly
executed on the date above written.
44
BUYER: SENIOR TOUR PLAYERS DEVELOPMENT, INC.
By:
----------------------------------------------
Its: President
SELLER: ---------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
CALCULATION OF SHARES
Original Shares: 142,236
Original Cash: $830,000
Revised Cash: 400,000
Difference $430,000
Stock Price Per Share $ 2.375
$430,000 = 181,053 shares
2.375
+ 142,236 original shares
Revised # of Shares = 323,289 shares