Exhibit 10.18
AGREEMENT FOR THE TERMINATION OF THE CONTRACT OF OPERATION OF THE CASINO BETWEEN
SODAK GAMING INTERNATIONAL, INC. AND ADMIHOTEL COMPANY, LTDA. THAT OPERATES IN
THE HOTEL CROWN PLAZA OF QUITO, ECUADOR, SALE WITH RESERVATION OF TITLE,
ASSIGNMENT OF RIGHTS AND OBLIGATIONS AND GUARANTEES
APPEARANCES: The parties to this Agreement are (I) SODAK GAMING INTERNATIONAL,
INC., domiciled at the street 0000 Xxxxx Xxxxxxx 00, Xxxxx Xxxx, Xxxxx Xxxxxx,
XXX, represented by Xx. Xxxxxx X. Xxxxxxx, with special powers; (II) ADMIHOTEL
COMPANY, LTDA. Society organized pursuant to the laws of Ecuador, domiciled in
Quito, Ecuador, represented by Dr. Xxxxx Xxxxx Xxxxx Xxxxxx, pursuant to the
attached power; (III) ECUASODAK, S.A., anonymous society organized pursuant to
the laws of Ecuador, represented by the Company PBP Representations Company,
Ltda. represented through its Manager Xx. Xxxxxxxxx Xxxxx Arteta, pursuant to
the attached power; and (IV) ARQ. XXXX XXXXXXX XXXXXX, in his own right married,
adult, capable of contracting and obligating himself, all of which appear for
the following purposes.
1. PREAMBLE:
1.1 On the 3rd day of November, 1995, Sodak Gaming International, Inc.
domiciled in the street 0000 Xxxxx Xxxxxxx 00, Xxxxx Xxxx, Xxxxx Xxxxxx, XXX,
represented by its President of Corporate Development, Xxxxx Xxxxxxxx, and
Admihotel Company Ltda., (Admihotel) domiciled in Xx. xx Xxx Xxxxxx 0000 Xxxxx,
Xxxxx, Xxxxxxx, represented by its representative Xx. Xxxxxxxx Xxxxxxx, entered
into a contract of operation of the casino (The Contract for the Operation of a
Casino), in which Sodak International, Inc. obligated itself to install and
maintain an operation in the first basement of the Hotel Crowne Plaza of Quito,
a casino consisting of video and electronic slot machines and table games which
administration was under the control of Sodak Gaming International, Inc.
1.2 During the time that the Company Ecuasodak, S.A. was being incorporated
to facilitate the importation of machines, installations and supplements
necessary for the operation of the casino, the company Rimex S.A. acted as
importer and consignatary of the machines; but once constituted said Company
Rimex S.A. by way of a public writing issued the 24th of October, 1998, before
the 27th Notary of Quito, Xxxxxxxx Xxxx Elmir, ratified that the ownership of
the machines , installations and supplements imported in its name on behalf of
Ecuasodak, S.A. with the authoritative annex which is incorporated having acted
as an official agent of Ecuasodak, S.A.
1.3 Ecuasodak, S.A. was incorporated in the City of Quito, the 9th of
February, 1996 before the 9th Notary of Quito, Xx. Xxxxxxx Xxxxxx Uzacategui,
and was approved by the legal branch of the Superintendent of Companies by way
of Resolution 96.1.1.1.1.0544, the 21st of February, 1996 inscribed in the Board
of Trade of the Canton of Quito, the 1st of March, 1996, Company which was
incorporated without intervention or knowledge by Admihotel.
1.4 The machines, equipment and accessories of the casino imported as
stated above, and all subsequent importations were imported using the official
license of Admihotel. These machines, equipment and accessories are found
installed and in operation of the first basement of Hotel Crowne Plaza of Quito.
Said goods are the assets of Ecuasodak, S.A.
1.5 The books of Ecuasodak have been maintained by its accountants without
intervention by Admihotel. Being therefore that the books are its exclusive
responsibility.
1.6 Sodak Gaming International, Inc. through itself and by third parties,
(Ecuasodak, S.A.) has controlled the technical and financial operation of the
casino without participation of Admihotel.
1.7 Therefore, Sodak Gaming International, Inc. assumes the responsibility
of the technical, financial and accounting operation as well as the fiscal,
municipal and any other obligations arising out of the operation of the casino
through December 31, 1998.
1.8 Sodak Gaming International has resolved in a voluntary fashion to
termination of its operations in South America which include the casino at the
Hotel Crowne Plaza of Quito, Ecuador.
1.9 As a result of this decision by Sodak Gaming International, Inc., the
subsidiary, Ecuasodak, S.A. is going to liquidate its operations and for that
reason it desires to sell its machines, installations and accessories installed
in the casino.
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1.10 For this effect, the general meeting of shareholders of Ecuasodak,
S.A. authorized the sale of these machines, installations and accessories which
were imported under the official license of Admihotel for the casino, a copy of
which is attached hereto.
1.11 Admihotel accepts termination of the contract of operation of the
casino with Sodak Gaming International, Inc. due to its decision to conclude
South American operations.
Based on the above, the parties appear and agree as follows:
2. TERMINATION OF THE CONTRACT OF THE OPERATION OF THE CASINO
2.1 Admihotel and Sodak Gaming International, Inc. agree freely and
voluntarily in the greatest harmony to terminate the contract of operation of
the casino prior to the set out termination date without any rights to a claim
by either party; in other words, they mutually waive forever any claim or
judicial action that could arise from the contract of operation of casino that
is terminated.
2.2 Consequently, as of January 8, 1999, the responsibility of Sodak Gaming
International, Inc. and Ecuasodak, S.A. disappears for the maintenance,
operation and administration of the casino. This excludes the contracts of
employment of personnel that are not included in Personal Temps as well as any
legal claims that could exist against Ecuasodak, S.A.
2.3 If any claim appears in the future after January 8, 1999, but was
generated during the administration of Sodak Gaming International, Inc. and/or
Ecuasodak prior to said date, they are exclusive responsibility of Sodak Gaming
International, Inc., especially with relationship to Xx. Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx XxXxxxx, Xxxxx Xxxxx, Xxxxxx Xxxxxx, the accountants and any
other person who was involved in the administration, management and activities
of the casino. It is not the responsibility of Sodak Gaming International and/or
Ecuasodak any claim or obligation that arises after January 8, 1999 related to
the Company Personal Temps and the personnel which it provides.
3. SALE WITH RESERVATION OF TITLE
3.1 Ecuasodak, S.A. reserves the title until the entire purchase price has
been paid in full, agrees to sell to the Arq. Xxxx Xxxxxxx Xxxxxx who agrees to
buy the machines, equipment and accessories installed in the casino of the Hotel
Crowne Plaza of Quito, Ecuador which are in the attached inventory which is
attached to this Agreement and in this Exhibit are detailed the characteristics,
serial number, xxxx and other specifications that identify each one of the
machines, accessories and equipment that are sold. This Exhibit is incorporated
into this Agreement. It is understood that the sale includes all of which is in
the casino although it may not be found in the inventory.
3.2 The Arq. Xxxx Xxxxxxx Xxxxxx declares that he has had the opportunity
to verify the existence, condition and operation of the machines, equipment, and
accessories and pursuant to the description and identification found in the
inventory of said machines, equipment and accessories which is attached hereto.
3.3 Method of Payment: The buyer and the selling company agree freely and
voluntary in establishing the price of the machine, equipment and accessories in
the amount of Four Hundred Ten Thousand US Dollars ($410,000) that shall be paid
as follows: Fifty Thousand Dollars ($50,000) at the moment of signing this
agreement; Fifty Thousand Dollars ($50,000) sixty days after the execution of
this agreement which is March 8, 1999; and Three Hundred Ten Thousand Dollars
($310,000) in three equal installments of One Hundred Three Thousand Three
Hundred Thirty Dollars and 33/100ths ($103,330.33) each one which will carry the
annual interest of 8% in the way that the amounts payable shall be as follows:
_ First installment shall be paid on November 8, 1999 in the amount of
One Hundred Nineteen Thousand Eight Hundred Sixty seven Dollars ($119,867)
_ The second installment shall be paid May 8th of the year 2000 in the
amount of One Hundred Eleven Thousand Six Hundred Dollars ($111,600);
_ The third installment shall be payable on the 8th of November of the
year 2000 in the amount of One Hundred Seven Thousand Four Hundred and Sixty
seven Dollars ($107,467); these installments include the respective interests
over the principle amounts on the dates stated.
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3.4 It is agreed that if any payment is required on a Saturday, Sunday or
legal holiday in Ecuador, the date of the payment shall be the first working day
thereafter in Ecuador. The buyer shall make payments to the seller or to Sodak
by way of transferring amounts immediately to a bank account designated by the
seller or Sodak in writing. If this contract is assigned by the seller the
payment shall be made to the designee. The buyer shall pay interest to the
seller or to Sodak in the amount of 8% in American dollars. In the event of late
payment the interest penalty shall apply and the maximum amount of interest that
is allowed in Ecuador for operations in American dollars. If it is necessary to
hire the services of a lawyer to enforce any of the obligations of buyer, or the
rights of buyer or of Sodak by way of legal proceedings or in any other way the
buyer agrees to pay said reasonable legal fees and judicial costs.
The parties agree that payment can be made prior to due dates in which case the
amount of interest due and owing shall be recomputed.
3.5 Duration of Reservation of Title:
The reservation of title by the seller or Sodak shall be in full force and
effect until the buyer has paid the totality of the obligations described in
Paragraph 2. The title over the property of the machines shall not pass to the
buyer until all the amounts that would have to be paid, have been paid totally
by the buyer to the seller. Notwithstanding, the buyer assumes all the risks
related to the property of the machines as of the moment of signing this
contract. The rights, costs of transportation, charges or taxes including
without limitation, rights of customs, import duties and charges for services of
custom agents, supervision inspection and dispatch that were necessary to
maintain the machines in Ecuador, including without limitation, all the charges,
taxes and costs established in Article 11 of the Supreme Decree No. 548-CH of
the 14th of September, 1963 included in Title 2 of the second book of the
Commercial Code in Ecuador and others that are generated by this transaction or
by other related transactions are the exclusive responsibility of the buyer. The
buyer is prohibited from selling, changing or leasing the machines or to permit
that they be subject to any claim or used as collateral with the exception that
the same can be done if (i) any right of guarantee can be retained by the seller
prior to payment and totality of the obligations of the buyer under this
instrument and (ii) awarded to Sodak Gaming International or other company
designated by it.
However, the parties can partially release some of the equipment and machines.
To do so the parties shall enter into an agreement by way of an Addendum to the
present contract which shall also be registered. In the event that the buyer
prepays the entirety of the price the parties agree that this agreement shall be
immediately terminated once payment is verified.
3.6 Conservation and Immobilization:
The buyer shall the maintain the machines free of any liens, taxes or charges;
shall maintain the machines in good condition, reasonable wear and tear
accepted, and pursuant to the prudent operational practices; it shall not use
nor shall it permit the machines to be used illegally or to be leased; and it
shall not do any of the following without the express written knowledge of the
buyer: (i) remove the machines or allow that they be removed from the Hotel
Crowne Plaza of Quito; (ii) transfer any participation in this contract or in
the machines; or (iii) the effect any and all substantial alterations of the
machine that does not include maintenance or refurbishment.
3.7 Default:
If the buyer defaults on any of the conditions of this purchase / sale
agreement, including those related with the dates of payment or if it becomes
bankrupt, insolvent or if it there is a meeting of creditors against the buyer
or if the buyer is in dissolution, liquidation or if the buyer violates in any
form, any of the conditions in this agreement, or legal norms that regulate the
laws related to sale with reservation of title, then in such case the seller or
Sodak shall be free to choose any of the following judicial processes:
(a) repossessions of the machines pursuant to law and pursuant to
Article 14 of the Supreme Decree No. 548-CH of the 24th of September of 1963
which formed part of the Code of Commerce in Ecuador and in which case the
payments made pursuant to this agreement shall be retained by the buyer or
seller or Sodak plus the judicial costs resulting from said repossession, said
payments being by way of indemnification;
(b) sale of the goods as provided in Article 10 of the Supreme Decree
548-CH pursuant to the provisions of Article 596 of the Commercial Code of
Ecuador and pertinent dispositions in the Code of Civil Procedure in Ecuador and
other legal norms that are applicable; or
(c) obtain the right from the buyer to revenues of the machines.
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3.8 Insurance:
The buyer shall be responsible for the cost of all insurance coverage required
as of January 8, 1999. Consequently, the buyer shall be obligated to insure the
machines and provide a copy of the insurance policy to the seller. The seller
reserves the right to verify coverage with the insurance company contracted for
said of purpose.
The insurance policy shall cover all risks, including injury to third persons,
fire, robbery, breakage of the machines, etc. for the amount of the purchase
price.
3.9 Rights and Taxes:
Whatever right or tax caused due to registration of this contract shall be paid
by the seller. The seller or Sodak is authorized to publicly register this
agreement. On the other hand, the buyer accepts to pay all other taxes that are
necessary such as the aggregated value tax (IVA), and others that could be
occasioned by the sale of these goods.
3.10 Nonwaiver of Default:
Failure to act by the seller or Sodak for any default of the buyer, shall not
constitute a waiver of the seller or Sodak s right to enforce buyers
obligations.
4. ASSIGNMENT:
4.1 The Arq. Xxxx Xxxxxxx Xxxxxx authorizes Ecuasodak to transfer and
assign to Sodak Gaming International, Inc. the rights and obligations that are
established in this agreement. In this case, the Arq. Xxxx Xxxxxxx Xxxxxx
provides that he has been notified of any assignment and accepts as of the date
of this agreement, the obligation to satisfy and comply with the obligations
described in Clause 3 to Sodak Gaming International, Inc.
as Assignee or holder of said rights or obligations.
4.2 Ecuasodak S.A. assigns to Sodak Gaming International, Inc. all rights
and obligations that emanate from this purchase / sale with reservation of
title. Sodak Gaming International, Inc. accepts this assignment and consequently
it becomes the creditor and entitled to the rights and obligations contained in
the Purchase / Sale with reservation of right before Arq. Xxxx Xxxxxxx as buyer.
4.3 In simultaneous manner, the Arq. Xxxx Xxxxxxx Xxxxxx is notified of
this assignment and he accepts expressly manifesting his consent to said
assignment.
4.4 The Arq. Xxxx Xxxxxxx Xxxxxx accepts as valid and legal this assignment
as it complies with all the requirements established in the Civil Code, Code of
Civil Procedure and other applicable norms.
4.5 Ecuasodak, S.A. at the time of assigning to Sodak Gaming International
the rights and obligations of this Purchase / Sale Agreement with reservation of
right declares expressly that it does so as compensation for the debts that it
actually owes to Sodak Gaming International, Inc.
4.6 The Arq. Xxxx Xxxxxxx Xxxxxx authorizes Ecuasodak and/or Sodak Gaming
International, Inc. to take whatever action necessary for the validity of the
assignment including described in the Supreme Decree 548-CH in Article 96 of the
Code of Civil Procedure.
4.7 Whatever cost or tax be generated by the assignment are responsibility
of Ecuasodak and/or Sodak Gaming International, Inc.
5. THE FOREIGN CORRUPT PRACTICES ACT OF THE UNITED STATES AND OF ECUADOR
5.1 Admihotel S.A., Sodak Gaming International, Inc. and its subsidiary
Ecuasodak declare and ratify that these companies their directors, agents, and
employees have not been involved in any direct or indirect way in any act that
could constitute or be interpreted as payment, promise to pay or authorization
to give a gift or donation of anything of any value to any authority of the
governments of their countries in order to influence any act or decision of said
government officials in their official capacity including any decision to avoid,
comply with, any of their official functions or any government official to use
it to influence over any person or government official in their countries with
the object of effecting or influencing any act or decision of said government,
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5.2 Likewise, the companies declare and ratify that their employees,
directors and agents have not acted in any way that could be interpreted as a
violation of the law of the Foreign Corrupt Practices Act of the United States
or of Ecuador nor have they offered to any political party authority or
candidate with the purpose of influencing any act or decision of said party in
its official capacity including the decision to fail to act in their official
functions or to persuade said political party, authority or candidate to use his
influence in any manner with any government to adopt or influence any act or
decision of the government of said countries or their dependents.
6. GUARANTEES
6.1 Sodak Gaming International, Inc. guarantees to Arq. Xxxx Xxxxxxx Xxxxxx
as buyer and for one year after execution of this agreement to provide the
necessary parts for the machines, equipment and accessories that are the object
of this purchase / sale at list price maintained by Sodak Gaming International,
Inc. at the moment of request. The buyer shall be responsible for the costs and
taxes required by importation to Ecuador. In the event that Sodak Gaming
International, Inc. does not have an inventory, some or all of the parts listed
by the buyer, it is obligated to obtain them in the market and the price
conditions of the moment that the request is made. Always prior payment of the
list price of the replacement being paid by buyer and provide within a
reasonable amount of time.
6.2 Sodak Gaming International, Inc. during this agreement is obligated to
designate an attorney in Quito, Ecuador to respond to whatever claim could be
made within this agreement. This designation shall be realized within 90 days of
the execution of this agreement.
7. ABOUT THE INTERNATIONAL CHAIN, HOLIDAY INN WORLDWIDE AND THE CORPORATION
BASS HOTELS AND RESORTS
7.1 As in the contract of operation of casino of November 3, 1995, it is
expressly stated that this contract does not include nor affect in any form or
fashion the franchise or concession of operation the Arq. Xxxx Xxxxxxx Xxxxxx
declares that this agreement does not affect said franchise agreement with the
franchisor or contract that has been complied with and respected by the parties
in said franchise.
8. JURISDICTION AND PROCEDURE:
Parties herein agree to submit any controversy or claim with respect to
compliance or interpretation of this agreement to arbitration before the
arbitration tribunal of the center for arbitration and mediation in the Chamber
of Commerce in Quito, pursuant to the law of Arbitration and Mediation and the
Regulations of Arbitration and Mediation of said center.
Based on the above, the parties to this agreement accept without reservation
whatever, and subscribe in Quito, the 8th day of January, 1999, in four
originals that each shall have the same tenor and validity.
ECUASODAK, S.A. ADMIHOTEL CIA LTDA.
By:______________________________ By:______________________________
Xxxxxxxxx Xxxxx Arteta Gerente Xxxxx Xxxxx Apoderado
SODAK GAMING INTERNATIONAL, INC. ARQ. XXXX XXXXXXX XXXXXX
By:______________________________ By:______________________________
Xxxxxx Xxxxxxx Arq. Xxxx Xxxxxxx Xxxxxx
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