Exhibit 99-3
MANAGEMENT SEVERANCE AGREEMENT
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THIS AGREEMENT (the "Agreement") is effective as of the 30th day of June,
2004, and is made by and among Xxxxxx Xxxxx ("Xxxxx"), Ten Stix, Inc., a
Colorado corporation ("Ten Stix"), Xxxxxx Xxxxxx ("Xxxxxx") and Xxxx Xxxxxxxx
("Xxxxxxxx"), collectively referred to hereinafter as the "Parties."
Recitals
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A. Whereas, on April 8, 2004, Xxxxxxxx and Xxxxxx, the current Directors
and Officers of Ten Stix, and Ten Stix entered into a Stipulation with Rapid
Funding, LLC ("Rapid Funding") wherein Rapid Funding (i) acquired ownership of a
total of 14,764,600 shares (the "Settlement Shares") of the common stock of Ten
Stix including shares previously owned by Xxxxxxxx and Xxxxxx, (ii) obtained the
right to receive an additional 11,000,000 shares of common stock, which shares
have since been issued to Rapid Funding, and (iii) obtained the right to receive
additional shares of Ten Stix's stock so that Rapid Funding would own at least
51% of the issued and outstanding shares of Ten Stix.. As a result of the
Stipulation Rapid Funding is the beneficial owner of 37,264,600 shares of common
stock of Ten Stix and is the majority shareholder of Ten Stix.
B. Whereas, the Stipulation provided that Ten Stix make monthly installment
payments to Rapid Funding in the amount of $15,000 per month, commencing July 1,
2004 and expiring upon payment to Rapid Finding of the total amount of
two-hundred thousand ($200,000) dollars. Upon payment of the total amount owed,
all shares of Ten Stix owned and held by Rapid Funding shall be deemed to have
been repurchased and reacquired by Ten Stix.
C. Whereas, Xxxxx has loaned Ten Stix $15,000, which has been deposited
with Xxxxxxx Xxxxxxx, counsel for Ten Stix, receipt of which is acknowledged, in
order for Ten Stix to make the initial $15,000 payment to Rapid Funding due on
July 1, 2004.
D. Whereas, Xxxxx will loan to, or arrange for a loan to, Ten Stix of
$185,000, in order for Ten Stix to pay the balance due and owing to Rapid
Funding, and Ten Stix desires to receive such loan.
E. Whereas, Xxxxxxxx and Xxxxxx have expressed their desire to not operate
as a public company due to the cost, time and effort which diverts their
attention from the core business and desire to operate the gaming related
business of Ten Stix privately.
F. Whereas, Xxxxx, Ten Stix, Xxxxxxxx and Xxxxxx hereby agree to
restructure Ten Stix, to retire of the debt owed to Rapid Funding and remove the
operational burden from Xxxxxxxx and Xxxxxx of operating a public company, all
in accordance with the terms and conditions set forth in this Agreement.
AGREEMENT
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NOW THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed:
1. Ten Stix shall execute a Promissory Note evidencing the loan of $15,000
made by Xxxxx to Ten Stix. At the option of Xxxxx, the unpaid principal and
interest due on this Note shall be paid by the receipt by Xxxxx of all shares of
the common stock, par value $0.001 per share, of the Ten Stix owned by Rapid
Funding at the time of the payment in full of all amounts due by the Ten Stix to
Rapid Funding in connection with the Stipulation. As of the date of this Note,
Rapid Funding is the owner of 37,264,600 of Ten Stix's common stock (the
"Shares"). In the event that Xxxxx elects to receive the Shares as payment in
full of this Note, Ten Stix shall transfer to Xxxxx or his assigns in
certificate amounts to be designated by the Xxxxx, all of the Shares and any
additional shares of Ten Stix's common stock if owned by Rapid Funding on the
date of payment. After the receipt of the Shares by the Xxxxx, Ten Stix shall
periodically issue enough additional shares of its common stock to Xxxxx to
ensure that the Xxxxx owns at least 51 percent of Ten Stix's outstanding common
stock until Ten Stix's next shareholder's meeting is held. Such outstanding
common stock shall include any outstanding securities currently exercisable for
or convertible into (i) common stock of Ten Stix, or (ii) securities convertible
into or exercisable for common stock of Ten Stix, each to include, without
limitation, any options, warrants, convertible preferred stock, convertible debt
or any other similar rights, interests or securities.
2. Xxxxx or his investors shall loan to Ten Stix the amount of $185,000, in
order for Ten Stix to pay and satisfy the outstanding indebtedness of Ten Stix
due to Rapid Funding. This loan shall be evidenced by a Convertible Debenture
which is convertible at the option of the holder into Common Stock of Ten Stix
on terms and conditions agreed to by Xxxxx and Ten Stix.
3. Ten Stix shall, following its annual meeting of shareholders and
completion of its reincorporation and change of domicile from Colorado to
Nevada, authorize 3,000,000 shares of Series B Preferred Stock with Rights and
Preferences as specified by Xxxxx. Xxxxx shall exchange the common shares
received pursuant to paragraph 1 above for 2,500,000 shares of Series B
Preferred Stock and Ten Stix shall cancel the common shares returned by Xxxxx.
4. Ten Stix shall, following its annual meeting of shareholders and
completion of its reincorporation and change of domicile from Colorado to
Nevada, form a gaming subsidiary named Pro Shuffler, Inc.., and all gaming
related assets, licenses, and liabilities, of Ten Stix relating to said gaming
business shall be transferred by Ten Stix to Pro Shuffler, Inc.
5. Xxxxxx and Xxxxxxxx will be appointed as the officers and directors of
Pro Shuffler, Inc. and Ten Stix will transfer 80% of the common stock of Pro
Shuffler, Inc. to Xxxxxxxx and Xxxxxx, in consideration of their forgiveness of
all unpaid accrued payroll due and owing by Ten Stix to Xxxxxx and Xxxxxxxx.
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6. Xxxxxx and Xxxxxxxx shall, concurrently with the formation of Pro
Shuffler, Inc., execute Consulting Agreements under which they shall receive an
aggregate of $60,000 to consult with Ten Stix regard the transition of
operations. Pro Shuffler, Inc. shall receive an additional $40,000 for
transitional and spin-off related costs.
7. Following the Ten Stix annual meeting of shareholders, the completion of
its reincorporation, and the formation of Pro Shuffler, Xx. Xxxxxx shall resign
as the President and CEO of Ten Stix, and the Board of Directors of Ten Stix
shall appoint one additional director as designated by Xxxxx to join the
existing members of the Board of Directors of Ten Stix.
8. Entire Agreement: This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto and contains
all of the covenants and agreements between the parties with respect to this
Agreement in any manner whatsoever. Each party to this Agreement acknowledges
that no representations, inducements, promises, or agreements, orally or
otherwise, have been made by any party, or anyone acting on behalf of any
parties, which are not embodied herein, and that no other agreement, statement,
or promise not contained in this Agreement shall be valid or binding.
9. Attorneys' Fees and Costs: If this Agreement gives rise to a lawsuit or
other legal proceeding between any of the parties hereto, the prevailing party
shall be entitled to recover court costs, necessary disbursements (including
expert witnesses' fees) and reasonable attorneys' fees, in addition to any other
relief such party may be entitled.
10. Modifications: Any modification of this Agreement will be effective
only if it is in writing signed by the party to be charged.
11. Partial Invalidity: If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
12. Law Governing Agreement: This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
13. Construction: If any construction is to be made of any provision of
this Agreement, it shall not be construed against either party on the ground
such party was the drafter of the Agreement or any particular provision.
14. Corporate Authorization: If any signatory of this Agreement is a
corporation, said signatory represents and warrants that this Agreement and the
undersigned's execution of this Agreement have been duly authorized and approved
by the corporation's Board of Directors. The undersigned officers and
representatives of the corporation(s) executing this Agreement on behalf of the
corporation(s) represent and warrant they are officers of the corporation(s)
with full authority to execute this Agreement on behalf of the corporation(s).
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IN WITNESS WHEREOF, the undersigned have executed this Agreement, effective
as of the date and year first above written.
Ten Stix, Inc.
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Dated: 6-30-2004 /s/ Xxxxxx Xxxxxx
_______________________ _________________________________
By: Xxxxxx Xxxxxx
Its: President and CEO
Dated: 6-30-2004 /s/ Xxxx Xxxxxxxx
_______________________ _________________________________
By: Xxxx Xxxxxxxx
Its: Vice President and Secretary
Dated: 6-30-2004 /s/ Xxxxxx Xxxxxx
_______________________ _________________________________
Xxxxxx Xxxxxx, individually
Dated: 6-30-2004 /s/ Xxxx Xxxxxxxx
_______________________ _________________________________
Xxxx Xxxxxxxx, individually
Dated: 6-30-2004 /s/ Xxxxxx Xxxxx
_______________________ __________________________________
Xxxxxx Xxxxx
