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THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO THE
UNIFORM ARBITRATION ACT, S.C. CODE XXX. ss.15-48-10, ET SEQ.
(LAW CO-OP. 1976 AND SUPP. 1997).
MASTER COIN MASTER AGREEMENT
THIS MASTER COIN MACHINE AGREEMENT (this "Agreement") is made and
entered into effective as of the 9th day of November, 1998, by and between Gold
Strike, Inc., a South Carolina corporation (the "Company"), American Bingo &
Gaming Corp., a Delaware corporation ("ABG"), Xxxx & Dye Enterprises, LLC, a
South Carolina limited liability company (the "Operator"), and Xxxxxxx X. Xxxx
("Xxxx") and Xxxxx X. Xxx ("Dye"), individually, as to Sections 9 and 20 only.
WHEREAS, the Company and the Operator desire to enter into a contract
through which the Company will supply the Operator with video gaming machines
("Machines") to be used at the locations identified on Exhibit A attached
hereto (the "Existing Locations") and at additional locations operated by the
Operator for which the Company and the Operator shall mutually agree to have
the Company supply Machines (the "Future Locations", with the Existing
Locations and the Future Locations referred to collectively as the
"Locations");
NOW, THEREFORE, in consideration of the premises, the mutual promises
and covenants of the parties hereto set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company, ABG and the Operator, intending to be legally bound,
agree as follows:
1. Exclusive Right. The Company shall have the exclusive right
to place Machines in the Existing Locations, and any Future Locations as the
Company and the Operator may mutually agree, during the term of this Agreement
and any extension or renewal hereof, at the rates set forth in Section 2 below.
During the term of this Agreement and any extensions or renewals thereof, no
other person, firm or corporation, including the Operator, shall have the right
to operate, install, store, use or exhibit, in any manner, Machines upon any of
the Locations at which the Company is supplying Machines.
2. Consideration. The Company shall receive 30% of the total
gross revenues after payouts of winnings on all Machines in the Existing
Locations, whether such Machines are owned, leased or otherwise maintained in
such locations. The Company shall receive 30%, or such different percentage as
the Company and the Operator shall mutually agree, of the total gross revenues
after payouts of winnings on all Machines in the Future Locations, whether such
Machines are owned, leased or otherwise maintained in such locations. The
Operator shall be responsible for collecting all revenue generated by the
Machines and shall remit to the Company its share of the total gross revenues
on each Machine no less frequently than once every week when the Company's
representative visits each Location. The Operator shall be responsible for all
costs related to the operation of each location.
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3. Term. The term of this Agreement shall be for three years. At
the end of the three-year term, the Company and the Operator may extend this
Agreement on terms mutually agreeable to all parties if such parties can reach
agreement on the terms of the extension at least ninety days before the end of
the three-year term.
4. Machine Licenses. The Company shall be responsible for
obtaining all machine licenses necessary to operate the Machines at the
Locations. The Operator shall reimburse the Company for 50% of the cost of all
machine licenses for all Machines provided to the Operator during the term of
this Agreement by paying $20 per week per Machine. This weekly charge for
machine licenses shall be paid to the Company on a weekly basis when the
Company's representative visits each Location. The weekly charge for the
licenses is subject to increase or decrease at any time as the cost of such
licenses is adjusted by the applicable state regulatory agency. In the event
the Operator and the Company mutually agree for the Company to maintain
additional machine licenses for which there are no Machines provided to the
Operator under this Agreement, the Operator shall pay to the Company $40 per
week for each such license, or such higher amount as shall be calculated based
upon the cost of such license when amortized on a weekly basis. This weekly
charge for such additional licenses shall be paid to the Company on a weekly
basis and the Company's representative shall pick-up the money from the
Operator's corporate headquarters every Monday.
5. Machine Payouts. The payouts for all Machines operated
pursuant to this Agreement shall be set at no less than 92% and no more than
97%. The Operator shall not set the payouts outside of this range without
obtaining the prior written consent of the Company. For these purposes, the
payout percentage shall be calculated by dividing the total winnings by the
total play revenues.
6. Business of Operator,
a. The Operator shall obtain and maintain all necessary
business licenses and other licenses required to operate the
Locations; provided, however, the Company shall obtain and maintain
the necessary machine licenses as set forth in Section 4 above.
b. The Operator, ABG and the Company shall maintain
proper, timely and accurate books and records of all activities
undertaken pursuant to this Agreement as required by law or otherwise.
Each party shall provide such information to any other party as
requested by such other party in order for such other party to
maintain proper, timely and accurate books and records of all
activities undertaken pursuant to this Agreement.
c. The Operator shall operate its business and each of
the Locations, and ABG and the Company shall conduct their respective
businesses related to providing Machines hereunder, in compliance with
all applicable laws, regulations, rules and ordinances. The Operator
shall not permit any violations of any laws, regulations, rules or
ordinances to occur on any of the Locations which result from actions
of the Operator. In addition, the Operator shall take all actions
which are reasonable and
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customary for the Operator's business to prevent any violations of any
laws, regulations, rules or ordinances to occur on any of the
Locations which result from actions of any third party.
d. The Operator acknowledges and agrees that the
Locations shall only be used to conduct a video gaming business. The
Operator shall not maintain, permit or allow any action, product or
service at any of the Locations which would be counter to the positive
image of the Company or an impairment to the licensing of any
operations of the Company or any subsidiary or affiliate in any
jurisdiction or venue.
e. The Operator shall notify the Company, and ABG or
the Company shall notify the Operator, in writing within 24 hours
after obtaining any knowledge that the notifying party is not, or
allegedly is not, in compliance with any of the terms of this Section,
unless such notice is prohibited by applicable laws or regulations.
7. Machines. All Machines placed at any of the Locations shall
remain the sole and exclusive property of the Company and neither the Operator
nor any third party shall have any right or claim to any Machine. AR Machines
so placed at any Location shall bear the name of the Company and shall state
thereon that said Machines are the sole property of the Company. The Operator
shall take all actions which are reasonable and customary for the Operator's
business in an effort to protect and safeguard the Machines, not only from
theft and damage but also from any lien, encumbrance or other attachment. The
Operator is also responsible for directing and supervising its employees,
agents and other representatives in a way that is reasonable and customary for
the Operator's business in an effort to protect the Machines from being
cheated, robbed or damaged, and the Operator shall pay the Company for any such
loss or damage caused by the Operator's failure to so direct and supervise its
employees, agents or other representatives.
8. Repair and Maintenance of Machines. The Operator shall have
the full responsibility for taking all action which is reasonable and customary
for the Operator's business to maintain and repair the Machines during the term
of this Agreement, and shall at all times keep each Machine in good repair and
working order; provided, however, the Operator shall not be responsible for
repairing or replacing Machines that are damaged or destroyed by fire, flood,
vandalism or some other catastrophic event unless the damage or destruction
resulted from or involved the negligence or willful, wanton, reckless or
intentional conduct of the Operator or an employee, agent or other
representative of the Operator. The Company shall be responsible for providing
all parts which may be necessary to repair or maintain any Machine, with all
used parts returned to the Company; provided, however, the Company shall not be
responsible for providing parts due to damage to a Machine that resulted from
or involved the negligence or willful, wanton, reckless or intentional conduct
of the Operator or an employee, agent or other representative of the Operator.
9. Cage Cash. At the time of execution of this Agreement, the
Company loaned to the Operator "cage cash" at the Existing Locations which in
the aggregate totaled $70,000. The total amount of such "cage cash" loaned to
the Operator is evidenced by an unsecured
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promissory note (the "Note") which accrues interest at the prime interest rate
(as quoted in the Wall Street Journal) plus 2% per annum. The principal and
interest on the Note is due in full six months after the date of this
Agreement, without notice. The Note may be prepaid at any time without
penalties. The Note is personally guaranteed by Xxxxxxx X. Xxxx and Xxxxx X.
Xxx, jointly and severally.
10. Leases and Subleases.
a. Effective as of the date of execution of this
Agreement, the Operator subleased from ABG or a subsidiary of ABG
those Existing Locations which are leased by ABG or a subsidiary of
ABG as noted on Exhibit B attached hereto. The terms and conditions of
the subleases are comparable to the terms of the lease agreements for
such properties; provided, however, the monthly rents for the
subleases are as follows: (i) for the Charleston area locations
identified as Gold Strike/Lucky I, Ponderosa and Beacon I, the monthly
rent is equal to $100 multiplied by the number of Machines operated at
the respective location during the month, but in no event less than
the number of Machines operated at the respective location on the date
of execution of this Agreement, which monthly rent per Machine shall
increase at each anniversary date of the respective sublease by the
consumer price index for the applicable region for the prior
twelve-month period plus one percent; and (ii) for the Augusta area
locations identified as Lucky 4, Double 7/Wild Cherry and Golden
Palace, the monthly rent is equal to the monthly rent set forth in the
underlying lease agreement for each such location. The Operator hereby
agrees that it will not take any action, or fail to take any action,
which in any way may jeopardize the effectiveness of any of the leases
underlying these subleases. In addition, ABG and the Company each
agree that they will take all reasonable efforts to obtain the
necessary consents required for these respective locations to be
subleased to the Operator under the existing underlying leases, and to
maintain and preserve the leases underlying these subleases. Upon
termination of the lease underlying a sublease, it is understood that
the respective sublease will also terminate and that accordingly this
Agreement will terminate with respect to that respective Existing
Location.
b. Effective as of the date of execution of this
Agreement, the Operator leased from ABG or a subsidiary of ABG the
Existing Location at 0000 Xxxxxxxxxx Xxxxxxx xx Xxxx Xxxxxxxx, Xxxxx
Xxxxxxxx. The Operator and ABG or its subsidiary, as applicable,
entered into a lease agreement for this location. The monthly rent for
this lease is equal to $100 multiplied by the number of Machines
operated at the location during the month, but in no event less than
the number of Machines operated at the location on the date of
execution of this Agreement, which monthly rent per Machine shall
increase at each anniversary date of the lease by the consumer price
index for the applicable region for the prior twelve-month period plus
one percent.
c. The Operator is also leasing from the Company the
furniture, fixtures and equipment, excluding the Machines and the
machine licenses (the "Personal Property"), at the respective
Locations as of the date of execution of this Agreement.
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For the six locations which are subleased by the Operator, as noted in
Section 10.a. above, and the one location which is leased by the
Operator, as noted in Section 10.b. above, the Personal Property being
leased is listed on an exhibit attached to the respective subleases
and lease. For the Southern Sport location in North Augusta, the
Personal Property being leased is set forth on Exhibit C attached
hereto. The Operator is responsible for all maintenance, service and
repairs that are reasonable and customary for the Operator's business
to keep the Personal Property in good repair and working order,
ordinary wear and tear excepted, during the term of this Agreement,
including but not limited to replacing any Personal Property that is
destroyed or damaged such that it cannot be repaired. The Operator is
also responsible for paying taxes and maintaining insurance on the
Personal Property during the term of this Agreement. The Operator
acknowledges and agrees that it is receiving the Personal Property "as
is" and that the Company and ABG are not providing any representations
or warranties regarding the condition of the Personal Property or the
performance of such Personal Property during the term of this
Agreement. In addition, the parties expressly agree that the Company
and ABG will not be liable or responsible for any defects or
deficiencies related to the Personal Property.
d. The Operator shall reimburse ABG, or its respective
subsidiary, for the cost of utilities at each leased and subleased
Location, as set forth in each respective sublease agreement and lease
agreement.
e. All monthly lease and sublease payments by the
Operator shall be received by ABG no later than the first day of the
respective month without notice. With respect to the Operator's
payment of its pro rata share of fire insurance and real estate taxes
for certain Locations where applicable, the Company shall provide the
Operator with notice of the Operator's pro rata amount of such
expenses and the due date for such payment to the Company.
f. The lease and all of the subleases shall immediately
terminate upon termination of this Agreement.
11. Employee Nonsolicitation. The Operator agrees that during the
term of this Agreement and for six months after the termination of this
Agreement the Operator and its subsidiaries and affiliates will not, directly
or indirectly, without the Company's prior written consent, employ or solicit
the employment of any person who is employed by ABG or any subsidiary or
affiliate of ABG while such person is employed by ABG and/or its subsidiaries
or affiliates, and for a period of six months after such person has terminated
employment with, or has been terminated from employment with, ABG and/or any of
its subsidiaries or affiliates.
12. Escrow. Upon execution of this Agreement, the shareholders of
the Operator provided the Company with shares of ABG common stock equal to
$200,000 based on the closing price of the stock on the business day prior to
the date of execution of this Agreement, which stock shall be held in escrow
during the term of this Agreement. In addition, 2% of the total gross revenues
after payouts of winnings on all Machines in the Existing Locations to be
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paid to the Company during the first twelve months of this Agreement shall also
be held in escrow during the term of this Agreement. The purpose of this escrow
is to provide security to the Company and ABG for any liabilities of the
Operator for which a third party could reasonably be expected to seek to
recover from ABG or the Company ("Liabilities"), and as a means to compensate
the Company and ABG in the event there is a deficiency or penalty relating to
any Machine supplied to the Operator pursuant to this Agreement issued by any
regulatory or enforcement authority as a result of the action or failure to act
of the Operator which deficiency or penalty could reasonably be expected to, or
actually does, result in a fine or penalties, the revocation or termination of
the license for such Machine, or the seizure of such Machine ("Deficiencies").
The Company or ABG may pay such fines and penalties directly out of the
escrowed funds in the event any such fine or penalty of the Operator is not
paid timely by the Operator, unless the Operator has diligently protested such
fine or penalty in good faith. Upon termination of this Agreement, an audit or
review of the Operator shall be performed and an audit or review report (the
"Report") issued within sixty days after the date of termination of this
Agreement. If, the audit or review reveals that there are no outstanding
Liabilities or Deficiencies, the remaining shares of ABG common stock held in
escrow shall be returned to the registered owners of such stock and the
remaining cash balance held in escrow shall be returned to the Operator not
later than the close of business on the fifth business day following the
issuance of the Report; provided, however, if ABG's Chief Executive Officer
believes such action should be approved by ABG's Board of Directors, the cash
and stock shall be returned as soon as ABG's Board can meet or otherwise take
action to approve the return of the cash and stock. However, if such audit or
review reveals that there are any such Liabilities or Deficiencies, then the
Company may continue to hold in escrow an amount of stock and cash sufficient
to provide for such Liabilities and Deficiencies. In the event the value of the
cash and stock held in escrow exceeds the estimated liability for such
Liabilities and Deficiencies, then the Company shall first release stock from
escrow and then cash from escrow to reduce the value in escrow to approximate
the estimated liability for such Liabilities and Deficiencies. To the extent
additional Liabilities or Deficiencies are identified after the completion of
the audit or review, sufficient cash and/or stock shall be retained in the
escrow to provide for such additional Liabilities and Deficiencies. The escrow
shall be decreased from time to time as Liabilities and/or Deficiencies are
resolved, but only to the extent that the escrow exceeds the remaining
identified Liabilities and Deficiencies. The escrow shall be maintained until
such time as all identified Liabilities and Deficiencies are resolved.
Regardless of the existence of the escrow, the Operator shall remain liable for
all such Liabilities and Deficiencies.
13. Inspection of Records and Locations. The Operator shall make
available to the Company, or its designated representatives, all records and
information necessary for the Company to audit and confirm the amount of the
proceeds paid to the Company pursuant to the terms of this Agreement. In
addition, the Company, or its designated representatives, shall have the right
to enter any of the Locations at any time to inspect the Machines or read the
video game meters.
14. License to Use Trade Name. The Company hereby grants to the
Operator a license to use the trade name "Gold Strike" during the term of this
Agreement at all of the
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Locations, to the extent the Company has any rights to the use of such trade
name. By granting this license, the Company is not providing any sort of
assurance or representation that it actually has any right to use such trade
name. This license does not grant the Operator any right to use any other
corporate name of ABG, the Company or any of their subsidiaries or affiliates
and the Operator is expressly prohibited from using the corporate names of ABG
or any of its subsidiaries or affiliates or in any way implying that any of
such entities are in any way involved in the ownership, management or operation
of any of the Locations.
15. Insurance. The Operator shall maintain insurance, as the
primary insured party, in connection with the operation of its business at the
Locations which is reasonable and customary for such business, including, but
not limited to, fire and casualty insurance, commercial property insurance,
commercial general liability insurance, and workers' compensation insurance.
The Company and ABG shall be additional named insured parties under such
insurance policies.
16. Relationship of the Parties. Nothing contained in this
Agreement shall be deemed to constitute a relationship of agency, joint
venture, partnership or any other relationship between the parties other than
that specified. The Operator certifies that it is not a party to, nor does it
have a covenant or restriction with, any other party in connection with any
coin machine agreement, lease and/or service agreement which may conflict with
the Operator's obligations and duties under this Agreement, and the Operator
will not enter into any such restrictive agreement without the prior written
consent of the Company.
17. Breach by Operator.
a. In the event the Operator breaches (i) the
exclusivity provision of Section I of this Agreement by placing the
Machine of another supplier in any Location in which the Company's
Machines are placed pursuant to this Agreement, or (ii) the access to
Machines provision of Section 13 of this Agreement by refusing to
grant the Company or its employees, agents or other representatives
access to any Machine during normal business hours, or (iii) its
obligations to pay money to the Company or ABG pursuant to this
Agreement by making any such payment more than three days late, then
the Company shall provide the Operator with notice of such breach. If
there are two or more breaches of the type set forth in (i) above
during the term of this Agreement, or eleven or more breaches of the
type set forth in (ii) above during any twelve-month period, or five
or more breaches of the type set forth in (iii) above during any
twelve-month period, then in addition to any other remedy which may
exist at law or in equity, the Company and ABG may elect to terminate
this Agreement in whole, or partially terminate this Agreement by
terminating it only with respect to the Location to which the breach
relates, terminate the related subleases and leases and remove the
Machines from all of the Locations, or only the Location with respect
to which this Agreement is terminated in part, without interference
from the Operator and shall be entitled to damages of a sum equal to
the cost of the unexpired portion of the license on each such Machine,
plus the Company's portion of the average weekly total gross revenue
after payouts of winnings for each such Machine multiplied by the
number of
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weeks that each such Machine is out of service as a result of such
termination, in whole or in part, of this Agreement; provided,
however, in the event the Company and ABG elect to terminate this
Agreement in whole, such damages shall be limited to the damages
related to the Location or Locations at which the breach occurred. The
average weekly total gross revenue after payouts of winnings for each
Machine shall be calculated based upon the respective Machine's actual
activity for the ten week period prior to such breach. The parties
acknowledge and agree that a surprise inspection of the Machines at a
time other than during normal business hours at which the Company is
unable to access the Machines will not be deemed a breach under (ii)
above; provided, however, the Operator must take all reasonable
efforts to comply with the Company's requests to grant the Company
access to the Machines.
b. If the Operator breaches any other obligation under
this Agreement, the Operator shall have 15 days to cure such breach
following written notice of such breach; provided, however, that if
the breach cannot be cured with due diligence within such 15-day
period but the Operator commences to cure such breach within such
period, the time within which to cure the breach shall be extended for
such period as may be necessary to complete the curing of the same
with all due diligence. If the Operator fails to cure its breach
within the cure period, (i) the Company and ABG may take any action at
law or in equity as may be necessary or desirable to enforce
observance or performance of the obligation of the Operator under this
Agreement and (ii) if the breach materially adversely affects the
benefits to be received by the Company or ABG under this Agreement,
the Company and ABG may terminate this Agreement in whole, or
partially terminate this Agreement by terminating it only with respect
to the Location to which the breach relates, upon giving written
notice of termination to the Operator.
18. Breach by Company or ABG. If the Company or ABG breaches any
obligation under this Agreement, the Company or ABG shall have 15 days to cure
such breach following written notice of such breach; provided, however, that if
the breach cannot be cured with due diligence within such 15-day period but the
Company or ABG commences to cure such breach within such period, the time
within which to cure the breach shall be extended for such period as may be
necessary to complete the curing of the same with all due diligence. If the
Company or ABG fails to cure its breach within the cure period, (i) the
Operator may take any action at law or in equity as may be necessary or
desirable to enforce observance or performance of the obligation of the Company
and ABG under this Agreement and (ii) if the breach materially adversely
affects the benefits to be received by the Operator under this Agreement, the
Operator may partially terminate this Agreement by terminating it only with
respect to the Location to which the breach relates upon giving written notice
of termination to the Company and ABG.
19. Indemnification.
a. The Operator agrees to indemnify, defend and hold
harmless the Company, ABG and all of their subsidiaries, affiliates,
agents, employees, assigns and
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other related parties against any and all liabilities, claims,
damages, losses, expenses, costs or actions, including but not limited
to legal fees and expenses, which are incurred due to the Operator's
negligence, action or inaction which results in a violation of any
law, regulation, rule or ordinance or which otherwise is detrimental
to the Company in connection with this Agreement. The indemnification
provided by the Operator pursuant to this provision shall not exceed
$300,000, subject to the following two exceptions: (i) there shall be
no limitation on the amount of the indemnification provided in the
event such liabilities, claims, damages, losses, expenses, costs or
actions, including but not limited to legal fees and expenses, are the
result of any criminal charge or conviction involving Mims, Dye, or
the Operator, or any of its employees, agents or other
representatives; and (ii) in the event such liabilities, claims,
damages, losses, expenses, costs or actions, including but not limited
to legal fees and expenses, are the result of any willful, intentional
action by Mims, Dye, or the Operator, or any of its employees, agents
or other representatives, the indemnification provided hereunder shall
be limited to $500,000 if such willful, intentional action occurred
during the first twelve months of this Agreement and $400,000 if such
willful, intentional action occurred during the second twelve months
of this Agreement.
b. The Company and ABG agree to indemnify, defend and
hold harmless the Operator and all of its subsidiaries, affiliates,
agents, employees, assigns and other related parties against any and
all liabilities, claims, damages, losses, expenses, costs or actions,
including but not limited to legal fees and expenses, which are
incurred due to the Company's or ABG's negligence, action or inaction
which results in a violation of any law, regulation, rule or ordinance
or which otherwise is detrimental to the Operator in connection with
this Agreement. The indemnification provided by the Company and ABG
pursuant to this provision in the aggregate shall not exceed $300,000;
provided, however, in the event such liabilities, claims, damages,
losses, expenses, costs or actions, including but not limited to legal
fees and expenses, are the result of any willful, intentional action
by the Company or ABG, or any of their employees, agents or other
representatives, the indemnification provided hereunder shall be
limited to $500,000 if such willful, intentional action occurred
during the first twelve months of this Agreement and $400,000 if such
willful, intentional action occurred during the second twelve months
of this Agreement.
c. This Section 19 shall survive the termination of
this Agreement.
20. Noncompete. The Operator, and its subsidiaries and
affiliates, and Xxxx and Dye hereby agree to the following noncompete
provisions:
a. For a period of six months following the execution
of this Agreement, such parties shall not engage in the video gaming
business as it relates to route operations anywhere within South
Carolina.
b. For a period of five years following the execution
of this Agreement, such parties shall not compete with any gaming
route operation of the Company, ABG
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or any of their subsidiaries or affiliates by in any way attempting to
place Machines in any route location at which Machines are being
provided as of the date of this Agreement by the Company, ABG or any
of their subsidiaries or affiliates.
c. For a period of five years following the execution
of this Agreement, such parties shall not engage in the business of
operating, owning, managing, supervising, promoting, providing
consulting services to, or otherwise participating in a bingo gaming
facility in Alabama, Florida, Georgia, Kentucky, Maryland,
Mississippi, Montana, Nevada, New York, South Carolina, or Texas;
provided, however, this shall not prohibit the Operator, Xxxx or Dye
from operating a bingo gaming facility pursuant to a "Class C" bingo
license, as that term is defined in Section 12-21-4020 of the South
Carolina Code, issued by the State of South Carolina, or a comparable
bingo license issued by any other jurisdiction.
d. With respect to Xxxx, the provisions of this Section
20 shall not apply to businesses operated by Xxxx Amusement Company
Partnership, Xxxx Amusement Operating Co., Palmetto State Distributing
Company, Inc., or Universal Mortgage and Loan Co. (collectively, the
"Xxxx Businesses"), provided that within the twelve month period
immediately preceding the date of this Agreement Xxxx has had, and
during the term of this noncompete Xxxx shall have, no role, directly
or indirectly, in management or operations of any of the Xxxx
Businesses, nor shall Xxxx receive any payment or distribution of any
kind, as compensation or otherwise, from any such business other than
dividends upon corporate stock which are strictly proportional to the
percentage of stock owned by him, or distributions with respect to his
capital accounts in partnerships which are strictly proportional to
the percentage of his capital account ownership in any such
partnership. However, if, due to the death or legal incapacity of
Xxxx' father and the inability or refusal of Xxxx' brother to manage
any of the Xxxx Businesses, Xxxx becomes active in managing one or
more of the Xxxx Businesses, Xxxx agrees that for a period of five
years following the execution of this Agreement the Xxxx Businesses in
which Xxxx' is active in management will not compete with the Company,
ABG or any of their subsidiaries or affiliates by in any way
attempting to place Machines in any route location at which Machines
are being provided by the Company, ABG or any of their subsidiaries or
affiliates, and the Company and ABG agree that for such five-year
period the Company, ABG and their subsidiaries and affiliates will not
compete with any of the Xxxx Businesses in which Xxxx is active in
management by in any way attempting to place Machines in any route
location at which Machines are being provided by any Xxxx Businesses
in which Xxxx is active in management.
e. The parties hereto expressly agree that the
noncompete provisions of this Section 20 shall not apply to businesses
operated by Edgefield Plaza Associates ("Edgefield") at the real
property located at 0000 Xxxxxxxxxx Xxxx in Edgefield County, South
Carolina, and in connection herewith Xxxx, as a general partner of
Edgefield, hereby agrees that before Edgefield shall enter into leases
for any of the twelve rooms for which Xxxx has authority and control
for leasing at such real
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property, the Company shall have the first option to enter into a coin
machine agreement with any such lessee whereby the Company shall
supply the lessee with the Machines to be operated on such property,
on terms to be agreed by the lessee and the Company. In addition, if
Edgefield, or its subsidiaries or affiliates, intends to operate a
video gaming business at any of the twelve rooms for which Xxxx has
authority and control for leasing at such real property, the Company
shall have the first option to enter into a coin machine agreement
with Edgefield whereby the Company shall supply Edgefield with the
Machines to be operated on such property, on terms to be agreed by
Edgefield and the Company.
f. ABG and Xxxx mutually agree to terminate Section 8
of the Employment Agreement dated September 24, 1997, as amended July
27, 1998, by and between ABG and Xxxx; provided, however, Section 8.1
of such Employment Agreement, and the other provisions of Section 8 of
such Employment Agreement to the extent such other provisions are
relevant to Section 8.1, shall survive this termination of Section 8
of the Employment Agreement. The Company, ABG and Xxxx also mutually
agree to terminate Article XI of the Agreement and Plan of
Reorganization by and among such parties dated August 13, 1997.
g. In the event of a breach by the Operator, or any of
its subsidiaries or affiliates, or Xxxx or Dye of any provision of
this Section 20, the Company and ABG shall have, in addition to any
other remedies that they may have at law or under this Agreement, the
right to a temporary restraining order, temporary injunction and
permanent injunction restraining such person or entity from violating
or continuing a violation of the terms of this Section. The Operator,
Xxxx and Dye agree that in the event of such a breach, the amount of
damages would be difficult or impossible to determine, and as a
result, in the event of a breach by them they agree to a bond in the
amount to be determined by a court of competent jurisdiction.
h. Should any court of competent jurisdiction hold any
portion of this Section 20 to be unenforceable in whole or in part,
such court shall be authorized and requested to sever the offending
provision from this Section, and to reform this Section so as to
comply as closely as possible with the intentions of the parties as
stated herein, so that it will be enforceable by injunction.
i. This Section 20 shall survive the termination of
this Agreement.
21. Impacts of Judicial, Legislative or Regulatory Actions.
If during the term of this Agreement the South Carolina legislature enacts
legislation or the South Carolina Supreme Court definitively (after all
applicable appeals) issues a ruling and as a result of such legislation or
ruling (a) game rooms of the nature operated by the Operator become illegal,
and the Operator cannot reasonably modify its operations to bring its
operations into compliance with the legal requirements, thereby resulting in
the Operator being forced to discontinue its operations or (b) the primary and
substantial portion of the revenue from any Location must come from non-video
poker operations thereby making it impossible or unreasonable for the
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Operator to modify its operations to bring its operations into compliance with
the legal requirements, then the Operator or ABG and the Company may terminate
this Agreement upon notice to the other party. Likewise, if during the
twelve-month period preceding each July 1 during the term of this Agreement,
beginning July 1, 1999, there is a change in the tax rate on revenues from
video gaming operations or other rules or regulations governing video gaming
activities that materially impacts the profitability to the Operator or to ABG
and the Company of operating their respective businesses pursuant to this
Agreement, the party whose profitability is so impacted may terminate this
Agreement by giving notice to the other party not later than July 10 of such
year, which notice shall include a detailed statement of the reasons and
support for such termination.
22. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
23. Assignment. This Agreement and the rights and duties
hereunder are not assignable or transferable by the Operator without the prior
written consent of the Company and ABG, which consent will not be granted
unless, among other things, such assignee is determined, in the sole discretion
of the Company and ABG, to be qualified as to experience and character. This
Agreement and the rights and duties hereunder are freely assignable by the
Company and ABG.
24. Waiver. Any failure on the part of any party hereto to comply
with any of its obligations, agreements or conditions hereunder may be waived
by any other party to whom such compliance is owed. No waiver of any provision
of this Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver.
25. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes and cancels any prior
agreements, representations, warranties, or communications, whether oral or
written, among the parties hereto relating to the transactions contemplated
hereby or the subject matter herein. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated, except in writing
signed by the party against whom or which the enforcement of such change,
waiver, discharge or termination is sought.
26. Severability. In the event that any provision of this
Agreement or any word, phrase, clause, sentence or other portion thereof should
be held to be unenforceable or invalid for any reason, such provision or
portion thereof shall be modified or deleted in such a manner so as to make
this Agreement as modified legal and enforceable to the fullest extent
permitted under applicable laws.
27. Notices. AR notices, requests, demands and other
communications hereunder shall be in writing and shall be delivered by hand
with a signed receipt, by registered or certified mail, return receipt
requested, postage prepaid, by a recognized overnight courier, or
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by facsimile transmission with the original sent by mail on that same day,
addressed as follows:
If to the Company or ABG:
American Bingo & Gaming Corp.
0000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
and to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.
0000 Xxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxx Xxxxxxxx
X.0. Xxx 00000 (29211)
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
If to the Operator:
Xxxx & Dye Enterprises, LLC
0000-X Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxx
and to:
XxXxxx Law Firm, P.A.
P.0. Xxx 00000
Xxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
If delivered personally, the date on which a notice, request,
instruction or document is delivered shall be the date on which such delivery
is made and, if delivered by mail, courier or facsimile, the date on which such
notice, request, instruction or document is received shall be the date of
delivery. Any party hereto may change its address specified for notices herein
by designating a new address by notice in writing in accordance with this
Section.
28. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina, without
regard to choice of law principles.
29. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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30. Arbitration. Except to the extent preempted by the Federal
Arbitration Act, 9 U.S.C. ss.1 et seq. (1970), any claim or controversy
arising out of, or relating to, any provision of this Agreement or the breach
thereof shall, upon written demand of any party, be settled by a panel of three
arbitrators in accordance with the Commercial Arbitration Rules then in effect
of the American Arbitration Association to the extent consistent with the laws
of the State of South Carolina and the Uniform Arbitration Act, S.C. Code
ss.15-48-10, et seq., (Law. Co-Op. 1976, as amended). Judgment rendered by the
arbitrators may be entered in the appropriate Court in Richland County, South
Carolina, having jurisdiction thereof. Arbitration shall be held in the County
of Richland, State of South Carolina.
IN WITNESS WHEREOF, the parties hereto have caused this Master Coin
Machine Agreement to be executed as of the date first above written.
GOLD STRIKE, INC.
By:/s/ Xxxxxx X. III. Xxxxxxxx, Jr.
-------------------------------
Name: Xxxxxx X. III. Xxxxxxxx, Jr.
-----------------------------
Title: V P
----------------------------
AMERICAN BINGO & GAMING CORP.
By:/s/ Xxxxxx X. III. Xxxxxxxx, Jr.
-------------------------------
Name: Xxxxxx X. III. Xxxxxxxx, Jr.
-----------------------------
Title: Vice Chairman
----------------------------
XXXX & DYE ENTERPRISES, LLC
By:/s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X Xxxx
-----------------------------
Title: Member
----------------------------
/s/ Xxxxxxx X. Xxxx
----------------------------------
Xxxxxxx X. Xxxx
As to Sections 9 and 20 Only
/s/ Xxxxx X. Xxx
----------------------------------
Xxxxx X. Xxx
As to Sections 9 and 20 Only
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EXHIBIT A
EXISTING LOCATIONS
Charleston Area:
Gold Strike/Lucky I
Ponderosa
Beacon I
North Augusta Area:
Double 7/Wild Cherry
Golden Palace
Lucky 4
Southern Sport
Columbia Area:
Xxxxxxxxxx Xxxxxxx
00
EXHIBIT B
LEASED AND SUBLEASED LOCATIONS
Charleston Area:
Gold Strike/Lucky I - subleased
Ponderosa - subleased
Beacon I -subleased
North Augusta Area:
Double 7/Wild Cherry - subleased
Golden Palace - subleased
Lucky 4 - subleased
Columbia Area:
Charleston Highway -leased
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EXHIBIT C
PERSONAL PROPERTY FOR SOUTHERN SPORT LOCATION
5 Bar stools
2 Regular chairs
1 Table
2 Calculators
2 Cameras
1 VCR
1 Monitor
9 Wastebaskets
1 Time clock
1 Coffee pot
1 Microwave
