MUTUAL RELEASE AGREEMENT
THIS AGREEMENT, dated as of August 29, 1997, by and between CASINO
RESOURCE CORPORATION, a Minnesota corporation ("CRC") , CASINO BUILDING
CORPORATION, a Minnesota corporation ("CBC"), and the XXXX XXXXXX FAMILY
GENERAL PARTNERSHIP, a Minnesota general partnership ("BFP").
WHEREAS, CRC has borrowed Eight Hundred Thousand and 00/100 Dollars
($800,000.00) from BFP pursuant to a Loan Agreement (the "LOAN AGREEMENT")
and note (the "NOTE") each dated as of the date hereof.
WHEREAS, in connection with the Loan Agreement, CRC and BFP entered into
a stock pledge agreement dated as of the date hereof (the "STOCK PLEDGE
AGREEMENT") whereby CRC pledged all the issued and outstanding common stock
of CBC as the collateral for the Note (the "COLLATERAL").
WHEREAS, CBC is a wholly-owned subsidiary of CRC.
WHEREAS, CRC, CBC and BFP desire to enter into this agreement to reflect
the obligation of CRC and CBC to each other following an Event of Default,
(as defined in the Loan Agreement) whereby such Event of Default was not
timely cured by CRC and BFP obtains ownership of the Collateral pursuant to
the Loan Agreement and the Stock Pledge Agreement.
NOW THEREFORE, in consideration of the foregoing premises, and
further in consideration of the execution of the Loan Agreement, the Stock
Pledge Agreement and the Note, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending
to be legally bound hereby, the parties hereto agree as follows:
1. CRC RELEASE. In the event BFP obtains ownership of the Collateral
pursuant to the terms of the Loan Agreement and the Stock Pledge Agreement
following the occurrence of an uncured Event of Default, CRC agrees to fully
release, acquit and forever discharge all monetary claims CRC may have
against CBC and its successors and assigns as of the date of the uncured
Event of Default excepting, however, any claim CRC may have against CBC, its
officers or directors with respect to any payments that CRC may be called
upon to make with respect to that certain Guaranty Agreement (the "GUARANTY
AGREEMENT") between CRC and Xxxxxx & Xxxxxxxxx Investments Corporation dated
April 1, 1994.
2. CBC RELEASE. In the event BFP obtains ownership of the Collateral
pursuant to the terms of the Loan Agreement and the Stock Pledge Agreement
following the occurrence of an uncured Event of Default, CBC agrees to fully
release, acquit and forever discharge all monetary claims CBC may have
against CRC and its successors and assigns as of the date of the uncured
Event of Default; PROVIDED, HOWEVER, the determination of the existence and
amount of any inter-company transactions between CRC and CBC shall be
according to generally-accepted accounting principles, consistently applied.
3. HOLD HARMLESS. In the event BFP obtains ownership of the Collateral
pursuant to the terms of the Loan Agreement and the Stock Pledge Agreement,
BFP and CBC agree to indemnify, defend and hold CRC harmless from and against
any claim, loss, cost, expense or damage arising under or pursuant to the
Guaranty Agreement.
4. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota.
IN WITNESS WHEREOF, CRC, CBC and BFP have executed and delivered this
Agreement to be effective as of the date and year first above mentioned.
CASINO RESOURCE CORPORATION
By
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Xxxx X. Xxxxxx
Chief Executive Officer and President
CASINO BUILDING CORPORATION
By
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Xxxx X. Xxxxxx
Chief Executive Officer and President
XXXX XXXXXX FAMILY GENERAL
PARTNERSHIP
By
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Its
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