EXHIBIT 10.2
SETTLEMENT AGREEMENT
This Settlement Agreement, (hereinafter referred to as the
"Agreement"), is entered into and executed on this, the 2nd day of February,
1999, but to become effective as of March 31st, 1999, by and between Xxx X.
Xxxxxx, Xxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxx Xxxxxx, O.P. Xxxxxxx, Xxxxxx Xxxxxxx,
Xxxxx Xxxxxx, Xxxxx Xxxxxx, Marry Xxxxxxx, Xxxxx Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxx
Xxxxxx, Xxxxx Xxxxxx and Arlington Farms, Inc., all competent adults and
citizens of the State of Louisiana, (hereinafter referred to collectively as
"Xxxxxx, et al"), and North American Gaming & Entertainment Corporation,
(hereinafter referred to as "NAG"), a Delaware Corporation having Dallas, Texas
as its principal place of business.
RECITALS
WHEREAS, both Xxxxxx, et al, and NAG, (hereinafter sometimes
collectively referred to as the "Parties"), agree that Xxxxxx, et al, may have
several claims and legal rights against NAG, including but not limited to,
rights derived from their position as holder of common and preferred stock of
that corporation; and
WHEREAS, the parties have engaged in significant negotiations in order
to settle the claims and potential claims mentioned above without the necessity
for further litigation; and
WHEREAS, the parties acknowledge that NAG currently owns and possesses
a 49% ownership and revenue interest in O.M. Operating, L.L.C., (hereinafter
referred to as "O.M.O."); and
WHEREAS, the parties acknowledge that NAG possesses a 49.9%
ownership/revenue interest in River Port Truck Stop, L.L.C., (hereinafter
referred to as "River Port"); and
WHEREAS, the parties acknowledge that NAG, through its wholly owned
subsidiary, Ozdon Investments, Inc., owns the property commonly known as the
Gold Rush Truck Stop and Video Poker Casino, (hereinafter referred to as the
"Gold Rush"), located near
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Opelousas, Louisiana; and
WHEREAS, the parties acknowledge that NAG has executed a lease with
O.M.O. regarding the Gold Rush for the purpose of operating a truck stop and
video poker casino; and
WHEREAS, the parties acknowledge that, in order to bring an end to the
aforementioned litigation between the parties, NAG has freely chosen and elected
to transfer and deliver 50% of its current Louisiana gaming interests, including
but not limited to, O.M.O., Gold Rush and River Port, (hereinafter referred to
as the "Current Gaming Interests"); to Xxxxxx, et al; and
WHEREAS, the parties acknowledge that, for purposes of this Agreement,
the term "interests" shall include rights to and claims regarding: cash, real
estate, gaming devices, furniture, other property and such contractual/legal
rights that NAG may currently possess, or may subsequently be entitled to
exercise regarding the ownership and/or operation of Current Gaming Interests
within the state of Louisiana; and
WHEREAS, the parties acknowledge that, in order to bring an end to the
aforementioned litigation between the parties, Xxxxxx, et al, have freely chosen
and elected to waive, dismiss and relinquish all claims and legal actions it may
currently have against NAG and others by execution of that certain Release and
Settlement Agreement dated of even date, herewith between NAG. Xxxxxx, et al,
and the other parties named therein (the "Release Agreement"); and
WHEREAS, Xxxxxx, et al, herein specifically reserve the right to
assign any and all rights they may obtain herein unto a Louisiana Corporation or
L.L.C. as they may create hereinafter; and
WHEREAS, Xxx Xxxxxx, herein specifically represents, warrants and
guarantees that his is vested with the legal authority to ratify this settlement
on behalf of Xxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxxxx X. Xxxxxx, Xxx
Xxxxxx, Xxxxx Xxxxxx, O.P. Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx,
Marry Xxxxxxx, Xxxxx Xxxxxxx and Arlington
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Farms, Inc. and that this settlement, including all actions necessary to
consummate the transactions contemplated herein, are legally binding on, and
enforceable against, Xxxxxx, et al, (Photocopies of the documents evidencing
this authority are attached hereto as Exhibits "A", "B", "C", "D" and "E"); and
NOW, THEREFORE, in consideration of the mutual assurances, covenants,
conditions and promises contained herein, Xxxxxx, et al, and NAG, agree as
follows:
1) Xxxxxx, et al, agree to waive, relinquish and surrender all claims to
any dividends from NAG;
2) Xxxxxx, et al, agree to dismiss the lawsuit presently pending
against NAG with prejudice;
3) Xxxxxx, et al, agree to waive, relinquish and surrender all claims to
subordinated debentures of NAG and to return all debentures to NAG marked
"cancelled";
4) On the earlier of (i) the day following the vote by the shareholders of
NAG (either at a duly called meeting or by written consent) on the
approval or ratification of such of the transactions contemplated by the
Release Agreement as NAG shall submit to the shareholders for approval or
ratification, or (ii) upon written notice to Xxxxxx, et al, that the
surrender of their common stock held in NAG shall be deemed effective (the
"Redemption Date"), Xxxxxx, et al, shall deliver to NAG for cancellation,
the original stock certificates representing all shares of common stock
owned by Xxxxxx, et al, (which totals 5,614,632 shares), which
certificates shall be duly and properly endorsed reflecting NAG as
transferee. After the date of this Agreement, Xxxxxx, et al, shall not
sell, assign, pledge, encumber, hypothecate or otherwise transfer or
dispose of such shares, or otherwise restrict in any way their ability to
deliver such shares to NAG on the Redemption Date;
5) Xxxxxx, et al, agree to be responsible for 50% of any funds expended in
settlement with other former holders of Class A Preferred Stock of NAG;
6) The Parties agree that Xxxxxx, et al, shall immediately assume 50% of the
debt owed to Regions Bank, Springhill Branch, formerly known as Springhill
Bank & Trust Company,
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that is associated with loans secured by the Gold Rush;
7) NAG agrees to transfer 50% of its Louisiana Current Gaming Interests to
Xxxxxx, et al, including but not limited to, all interests held and/or
related to O.M.O., Gold Rush & River Port;
8) NAG asserts that its board of directors has authorized X.X. Xxxxx, XX, in
his capacity as an officer of that corporation, to execute this agreement
on behalf of NAG;
9) The parties agree that all information exchanged during the course of the
negotiations is confidential in nature and subject to the exercise of a
"settlement & negotiation" privilege, except to the extent NAG is required
to disclose it in its SEC filings or otherwise required to disclose it to
any government authority;
10) The parties hereby agree to co-operate in the execution of all further
documents necessary to effectuate this agreement;
11) This agreement may be modified or amended only in writing, duly executed
by Xxxxxx, et al, and NAG;
12) In the event that any portion of this agreement is found to be invalid,
illegal, void or unenforceable, all other provisions of this agreement
shall, nevertheless, remain in full force and effect;
13) This agreement shall be binding both upon Xxxxxx, et al, and NAG, as well
as their respective heirs, assigns and/or legatees; and
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14) The law of the State of Louisiana shall govern this agreement.
By:
-------------------------------------- North American Gaming &
Xxx X. Xxxxxx (personally and as Entertainment Corporation
authorized agent Arlington Farms, Inc.
O.P. & Xxxxxx Xxxxxxx, Xxxxx & Marry
Xxxxxxx, Xxxxx & Xxxxx Xxxxxx, Xxx &
Xxxxx Xxxxxx, Xxxxxxx X. Xxxxxx and By:
Xxx & Xxxxxx Xxxxxx) -------------------------
X.X. Xxxxx, XX, President
By:
--------------------------------------
Xxxxxx Xxxxxx
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