REVISED AND RESTATED
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GAMING EQUIPMENT SALE AGREEMENT
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THIS REVISED AND RESTATED GAMING EQUIPMENT AGREEMENT ("Agreement") is
made and entered into as of this ___ day of July, 2001, by and between PHOENIX
LEISURE, INC., a Nevada corporation (the "Seller"); and ABD GAMING SUPPLY, a
Mississippi corporation, and its designees and assigns (the "Purchaser").
RECITALS
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WHEREAS, Seller owns certain gaming equipment (as more fully described
below the "Assets"); and
WHEREAS, the Purchaser is desirous of buying said Assets and Seller is
desirous of selling said Assets, for the consideration and pursuant to the terms
and conditions as set forth below; and
WHEREAS, the Purchaser and Seller are parties to a Gaming Equipment
Sale Agreement (the "Prior Sale Agreement"), dated April 18, 2001, and a related
convertible promissory note (the "Prior Note") of the same date, in the amount
of Four Hundred Thousand Dollars ($400,000)(collectively the "Prior
Agreements").
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
This Agreement shall revise and replace, supersede and replace the
Prior Agreements in their entirety.
1. SALE AND PURCHASE OF ASSETS
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1.1 Description of Assets. The Assets consist of gaming equipment
(the "Gaming Machines") described on Exhibit A, attached
hereto and incorporated herein by reference. It is agreed and
understood that One Hundred Sixty (160) of the total Six
Hundred (600) Gaming Machines were previously delivered to
Purchaser pursuant to the Prior Sale Agreement (described on
Exhibit A thereto), and Viva Gaming & Resorts, Inc., a Florida
corporation ("Viva") hereby acknowledges receipt of same to an
address designated by the Purchaser to Seller in writing (the
"Destination"), and agrees that the delivery of the Assets
described herein shall be net of such Assets previously
delivered (also referred to as the "Remaining Assets").
1.2 Sale of Assets. Subject to the terms and conditions
hereinafter set forth, and exchanged for the consideration
described herein, Seller shall sell, transfer, assign and
deliver to Purchaser and Purchaser shall purchase and acquire
from Seller on the Closing Date (as such term is hereinafter
defined), all of Seller's right, title and interest in and to
the Assets.
1.3. Use of Licensed Intermediary/True Party in Interest. It is
specifically agreed and understood that Purchaser is a
licensed gaming distributor under the laws of the State of
Mississippi, and is acting solely in an intermediary capacity
with respect to the purchase of the Assets. Accordingly,
Purchaser shall, immediately upon the effectiveness of this
Agreement, transfer the Remaining Assets to Viva, and that for
the purposes of the payment provisions herein, Viva shall be
an intended beneficiary of this Agreement, and an express
designee and assign of the Purchaser, and, that therefore,
Viva shall be considered the real party in interest receiving
the benefit of this Agreement, and shall be delivering the
Purchase Price to the Seller in consideration therefor.
1.4 Purchase Price. The total purchase price (the "Purchase
Price") to be paid by the Purchaser (by its designee and
assigns, Viva) to the Seller for all of the Assets shall be
equal to the sum of One Million Five Hundred Thousand Dollars
($1,500,000).
1.5 Manner of Payment of Purchase Price. The Purchase Price shall
be paid by delivery by Viva to Seller at Closing (defined
below): (i) a convertible promissory note in the amount of
Five Hundred Thousand Dollars ($500,000), with a one (1) year
maturity, convertible at any time prior to maturity into Five
Hundred Thousand 500,000 shares of Viva's common stock
("Common Stock"), par value $0.001 per share (the "Conversion
Shares") attached hereto as Exhibit B (the "Note"), and (ii)
One Million (1,000,000) shares of Viva's common stock (the
"Purchased Shares"). The Conversion Shares and the Purchased
Shares are collectively referred to as the "Shares."
1.6 Closing Date and Place. The Closing shall take place
concurrently with the execution of this Agreement and delivery
of the Note and the Purchased Shares by Viva to Seller, at the
offices of the Seller or attorney of the Seller, located in
Las Vegas, Nevada, or by mail. (The date of Closing is
sometimes referred to herein as the "Closing Date.")
1.7 Delivery of Assets. Seller shall ship the Remaining Assets to
the Destination. The cost of such shipping shall be paid by
the Seller, provided, however, that upon the delivery of the
Assets to the shipping carrier, Seller shall have no further
liability or obligation for the Assets (including, without
limitation, the condition of the Assets and the ultimate
delivery of the Assets to the Destination). By its execution,
Purchaser and Viva specifically acknowledge and agree that
while Seller shall pay the cost of shipping the Assets to Viva
at the Destination, Seller shall have no liability,
obligation, or other responsibility whatsoever with respect to
the transport of the Assets to the Destination, and Viva
agrees to be solely responsible for the Assets during shipping
and upon arrival at the Destination.
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1.8 Condition of the Assets. The Assets shall be in reasonable
working order but without any further or continuing guaranty
or warranty, either express or implied by the Seller, as to
the condition thereof. Viva shall have thirty (30) days after
its receipt of the Assets at the Destination to notify Seller
that the Assets are not in reasonable working order ("Notice
Period") together with a reasonably detailed explanation of
the defects ("Defect Notice"). If Viva has not so notified
Seller within the Notice Period, the Assets shall be
considered to be in reasonable working order for the purposes
of this Agreement. If a Defect Notice has been given to Seller
by Viva within the Notice Period, Seller shall have the right
to (a) repair the Asset and re-deliver, (b) replace the Asset
and re-deliver, or (c) deduct the prorata portion of the value
of the Asset ($2,500 per machine) from the balance due on the
Note. Re-delivery of a repaired Asset or a replaced Asset
shall recommence the Notice Period with respect to such Asset.
Seller agrees to provide to Viva technical support and
maintenance for the Assets once they commence gaming
activities in the Grandsur Casino located in the Grandsur Mall
in Mexico City, Mexico by Seller, under the terms of a
Technical Services Agreement to be executed at a later date
between parties.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
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The Seller represents and warrants to Purchaser and Viva that the
following representations and warranties are true and correct on the date
hereof, and will be so on the Closing Date.
2.1. Power and Authority; Authorization and Validity. The Seller
has full power and authority to execute, deliver, and perform
its obligations under this Agreement and all other agreements
and documents it is or will be executing in connection with
this Agreement and the transactions contemplated hereby. This
Agreement and each other agreement contemplated by this
Agreement have been or will be duly executed and delivered by
the Seller and constitute or will constitute legal, valid, and
binding obligations of the Seller, enforceable in accordance
with their terms, except as may be limited by applicable
bankruptcy, insolvency, or similar laws affecting creditors'
rights generally or the availability of equitable remedies.
2.2. Organization and Good Standing. The Seller is a corporation
validly existing under the laws of Nevada.
2.3. Title. The Seller has good and marketable title to the
Remaining Assets and there are no liens thereon which will
interfere with Viva's use and enjoyment of said Assets.
2.4 Investment.
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2.4.1 Purchase Entirely for Own Account. The Shares to be
received by the Seller pursuant to the terms hereof
will be acquired for investment for the Seller's own
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account, not as a nominee or agent, and not with a
view to the resale or distribution of any part
thereof. The Seller has no present intention of
selling, granting any participation in, or otherwise
distributing the Shares acquired by the Seller. The
Seller has no contract, undertaking, agreement or
arrangement with any person to sell or transfer, or
grant any participation to such person or to any
third person, with respect to any of the Shares to be
acquired by the Seller.
2.4.2 Access to Information, Experience, Etc
(a) The Seller has been furnished access to the
business records of the Company and such
additional information and documents as the
Investor has requested and has been afforded
an opportunity to ask questions of, and
receive answers from, representatives of the
Company concerning the terms and conditions
of this Agreement, the purchase of the
Shares, the business, operations, market
potential, capitalization, financial
condition and prospects of the Company, and
all other matters deemed relevant to such
Investor.
(b) The Seller acknowledges that it has had an
opportunity to evaluate all information
regarding the Company as it has deemed
necessary or desirable in connection with
the transactions contemplated by this
Agreement, has independently evaluated the
transactions contemplated by this Agreement
and has reached its own decision to enter
into this Agreement.
2.4.3 Restricted Securities. The Seller understands that
the Shares to be acquired by the Seller have not been
registered under the Securities Act or the laws of
any state and may not be sold or transferred, or
otherwise disposed of, without registration under the
Securities Act and applicable state securities laws
or an exemption therefrom. The Seller will sell or
transfer, or otherwise dispose of, the Shares to be
acquired by the Seller only in a manner consistent
with the representations and warranties set forth
herein and any applicable federal and state
securities laws.
2.4.4 Legends. It is understood that the certificates
evidencing the Shares may bear one or all of the
following legends:
(a) THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT TO THE
SECURITIES EVIDENCED BY THIS CERTIFICATE,
FILED AND MADE EFFECTIVE UNDER THE
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SECURITIES ACT OF 1933, AS AMENDED, AND SUCH
APPLICABLE STATE SECURITIES LAWS, OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY TO
THE EFFECT THAT REGISTRATION UNDER SUCH ACT
AND SUCH APPLICABLE STATE SECURITIES LAWS IS
NOT REQUIRED.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
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Purchaser (including Viva) represents and warrants to Seller, knowing
and intending that Seller shall rely thereon in entering into this Agreement and
performing the obligations on its part to be performed hereunder, that the
following representations and warranties are true and correct on the date
hereof, and will be so on the Closing Date.
3.1. Power and Authority; Authorization and Validity. The Purchaser
has full power and authority to execute, deliver, and perform
its obligations under this Agreement and all other agreements
and documents it is or will be executing in connection with
this Agreement and the transactions contemplated hereby. This
Agreement and each other agreement contemplated by this
Agreement (including the Note) have been or will be duly
executed and delivered by the Purchaser and constitutes or
will constitute the legal, valid, and binding obligations of
the Purchaser, enforceable in accordance with their terms,
except as may be limited by applicable bankruptcy, insolvency,
or similar laws affecting creditors' rights generally or the
availability of equitable remedies.
3.2 Organization and Good Standing. Purchaser is duly organized
and in good standing in its jurisdiction of formation, and is
qualified to do business where it is required to be so
qualified.
3.3 Binding Obligation. The execution and delivery of this
Agreement and the other instruments and agreements
contemplated hereby by Purchaser and the performance by
Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all required corporate action of
Purchaser and will not violate Purchaser's articles of
incorporation or bylaws, or any judgment, indenture, agreement
or contract to which Purchaser is a party or by which
Purchaser is bound. The Agreement constitutes the valid and
legally binding obligation of Purchaser, enforceable in
accordance with its terms and conditions, except as such
enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of
creditors rights generally and by general principals of
equity.
3.4 Authorization. The Shares are duly authorized and, when
delivered in compliance with this Agreement, or pursuant to
the Convertible Note, as the case may be, will be duly and
validly issued and outstanding, fully paid and nonassessable,
and will be free of any liens, encumbrances and restrictions
whatsoever.
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3.5 Compliance with Securities Laws. Viva has issued the Purchased
Shares, and will issue the Conversion Shares, in compliance
with all applicable state and federal laws regulating the
offer, sale and issuance of securities.
3.6 Availability of Shares. Viva shall at all times reserve and
maintain a sufficient number of its authorized but unissued
Common Stock to satisfy the conversion feature of the
Convertible Note and deliver the Conversion Shares.
3.7 Rule 144. Viva has and shall continue to meet all the
prerequisites of Rule 144 of the Securities Act such that
Purchaser shall be entitled to rely on the "Safe Harbor"
provisions of same if and when it re-sells the Shares.
4. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION.
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Notwithstanding any other provision of this Agreement to the contrary,
Purchaser's obligations hereunder are subject to, and Purchaser shall have no
obligation to consummate the transactions contemplated hereunder unless all of
the following conditions are satisfied (provided that any of the same may be
waived in writing by Purchaser). Unless otherwise expressly provided elsewhere
in this Agreement, no failure of any of the following conditions shall
constitute a breach or default hereunder on the part of the Seller.
4.1 Representations and Warranties. Seller's representations and
warranties contained herein and in any certificate or document
delivered to Purchaser pursuant hereto shall be deemed to have
been made again at and as of the date of the Closing and shall
then be true and correct in all material respects.
4.2 Performance. Seller shall have performed and complied with all
covenants and agreements that Seller is required to perform or
with which it is required to comply prior to or at the
Closing.
4.3 No Liens. The Assets shall be free and clear of all liens and
encumbrances, except liens that are terminated simultaneously
with the Closing.
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5. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS.
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Seller's obligations hereunder are subject to the fulfillment prior to
or at the Closing of each of the following conditions and Seller shall have no
obligation to consummate the transactions contemplated hereunder unless all of
the following conditions are satisfied (provided that any of the same (except
the Gaming Laws, as defined below) may be waived in writing by Seller):
5.1 Gaming Laws. This Agreement and Seller's obligations
hereunder, are expressly subject to all applicable gaming
laws, rules and regulations (the "Gaming Laws"), including,
without limitation, the laws of the States of Mississippi,
Nevada and Washington. Any action herein in contravention of
such laws, rules and regulations shall be null and void ab
initio.
5.2 Representations and Warranties. The Purchaser's
representations and warranties contained herein and in any
certificate or document delivered to Seller pursuant hereto
shall be deemed to have been made again at and as of the date
of the Closing and shall then be true and correct in all
material respects.
5.3 Performance. Purchaser shall have performed and complied with
all covenants and agreements that Purchaser is required to
perform or with which it is required to comply prior to or at
the Closing.
5.4 Purchase Price. Viva shall deliver the Purchase Price in the
form and on or before the date provided for herein.
6. INDEMNIFICATION
6.1 Indemnification by Seller. From and after completion of the
Closing, Seller will indemnify, defend, and hold harmless
Purchaser and Viva and its shareholders, directors and
officers from and against:
(a) all damages to Purchaser and Viva resulting from or
arising out of (A) any breach of any representation
or warranty made by Seller in this Agreement; or (B)
any act or omission of Seller with respect to, or any
event or circumstance related to, the ownership of
the Assets, which occurred or existed prior to or at
the Closing Date; and
(b) all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties,
costs and expenses (including settlement costs and
reasonable legal, account, experts and other fees,
costs and expenses) resulting from the foregoing.
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6.2 Indemnification by Purchaser and Viva. From and after the
completion of the Closing, Purchaser will indemnify, defend
and hold harmless Seller, and Seller's shareholders,
directors, officers, employees, agents, successors and
assigns, from and against:
(a) all damages to Seller or any such other indemnified
person resulting from or arising out of (i) any
breach of any representation or warranty made by
Purchaser in this Agreement; (ii) the breach of any
covenant, agreement, or obligation of Purchaser
contained in this Agreement, (iii) any act or
omission of Purchaser with respect to, or any event
or circumstance related to, the ownership or
operation of the Assets, which act, omission, event
or circumstance occurs after the Closing Date, or
(iv) the failure by Purchaser to perform any of its
obligations hereunder and with regard to the Assets;
and
(b) all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties,
costs and expenses (including, without limitation,
settlement costs and reasonable legal, accounting,
experts and other fees, costs and expenses) incident
or relating to or resulting from any of the
foregoing.
6.3 Procedures; Third-Party Claims.
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(a) If a claim to which the indemnification provisions of
this Article 6 apply arises out of any suit, claim or
other assertion of liability by a third party
(hereinafter referred to collectively as the "Claims"
and individually as a "Claim"), the indemnified party
agrees to promptly give written notice to the
indemnifying party of the existence of such claim.
(b) The obligations and liabilities of the parties hereto
with regard to their respective indemnities hereunder
resulting from any Claim shall be subject to the
following additional terms and conditions:
(i) The indemnifying party shall have the right
to undertake, by counsel or other
representatives of its own choosing, the
defense of or opposition to such Claim;
(ii) In the event that the indemnifying party
shall elect not to undertake such defense or
opposition, or within fourteen (14) days
after notice of any such Claim the
indemnified party shall fail to defend or
oppose such Claim, the indemnified party
(upon further written notice to the
indemnifying party) shall have the right to
undertake the defense, opposition,
compromise or settlement of such Claim, by
counsel or other representatives of its own
choosing, on behalf of and for the account
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and risk of the indemnifying party (subject
to the right of the indemnifying party to
assume defense of or opposition to such
Claim at any time prior to settlement,
compromise or final determination thereof).
(iii) Anything in this Article 6 to the contrary
notwithstanding: (A) if there is a
reasonable probability that a Claim may
materially and adversely affect the
indemnified party, the indemnified party
shall have the right, at its own cost and
expense, to participate in the defense,
opposition, compromise or settlement of the
Claim; (B) the indemnifying party shall not,
without the indemnified party's written
consent, settle or compromise any Claim or
consent to entry of any judgment which does
not include as an unconditional term thereof
the release of the indemnified party by the
claimant or the plaintiff to such Claim from
all liability regarding said Claim, and (C)
in the event that the indemnifying party
undertakes defense of or opposition to any
Claim, the indemnified party, by counsel or
other representative of its own choosing,
and at its sole cost and expense, shall have
the right to consult with the indemnifying
party and its counsel or other
representatives concerning such Claim and
the indemnifying party and the indemnified
party, and their respective counsel or other
representatives, shall cooperate in good
faith with respect to such Claim.
(iv) No undertaking of defense or opposition to a
Claim shall be construed as an
acknowledgment by such party that it is
liable to the party claiming indemnification
with respect to such Claim or other similar
Claims.
6.4 Certain Limitations on Indemnity.
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(a) Notwithstanding the abovesaid, no claims shall be
brought against either party hereunder and/or
pursuant to the indemnification provisions of this
Agreement (except as the result of the intentional
misconduct or fraud of a party) until the aggregate
amount of such claims or losses exceeds the total of
$15,000, provided that if such aggregate claims and
losses by such party exceed $15,000, Purchaser,
Seller or the other indemnified parties hereunder,
as the case may be, may seek indemnification
hereunder for the entire amount of all such claims
and losses (and shall not be limited to seeking
indemnification for the claims and losses in excess
of up to the amount of the Purchase Price
hereunder).
(b) Except for losses, claims or liabilities arising due
to the intentional or gross misconduct and/or
fraudulent action of the Seller with regard to which
there will be no time limitation pursuant to this
Section 6.4 or otherwise, any claim, loss or
liability by the Purchaser for breaches of the
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representations and warranties made by Seller in this
Agreement must be first made by Purchaser no later
than 1 year from the date of the Closing.
7. NOTICES
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All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given when either personally
served or mailed by certified or registered mail, return receipt requested, at
the addresses set forth on the signature page of this Agreement or to such other
address or to such other persons as Purchaser or Seller shall have last
designated by written notice to the other party hereto.
8. MISCELLANEOUS.
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(a) Benefits. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their
respective successors, heirs, designees and/or
assigns.
(b) Further Assurances. The parties hereto agree and
acknowledge that they shall execute and deliver any
and all additional writings, instruments, and other
documents contemplated hereby or referred to herein,
and shall take such further action as is reasonably
required in order to effectuate the terms and
conditions of this Agreement.
(c) Governing Law. This Agreement shall be governed by
and construed according to the laws of the State of
Nevada, without regard to its conflicts of law
principles.
(d) Article Headings. The article headings contained in
this Agreement are for reference purposes only, and
shall not affect the meaning or interpretation of
this Agreement or any provision hereof.
(e) Costs and Expenses. Purchaser and Seller shall each
pay its own costs and expenses, including attorneys'
fees, relating to the execution and delivery of this
Agreement and the consummation of all transactions
contemplated herein.
(f) Assignment. Seller may assign its rights and
obligations under this Agreement to an entity under
common control with and/or affiliated with or a
partner or joint venturer with the Seller. Except as
set forth above, neither Seller nor Purchaser may
assign this Agreement or any rights or obligations
hereunder without the prior consent of the other
party. Any such consents required hereunder shall
not be unreasonably withheld or delayed, provided
the assignee agrees to perform all of the
obligations of the assignor and the assignor is not
relieved of its obligations hereunder.
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(g) Modification. This Agreement shall not be amended,
modified or supplemented at any time except by a
writing executed by the parties hereto. No
amendment, supplement or termination of this
Agreement shall affect or impair any rights or
obligations that have heretofore matured hereunder.
(h) Confidentiality. The parties (including their
respective designees and/or assigns) will keep the
existence and terms of this Agreement, including
without limitation, the Purchase Price, confidential
and will not disclose the same to any person, except
for disclosures required by law, disclosures on tax
returns, disclosures to employees of Purchaser or
Seller who have a need to know such information, and
to attorneys, accountants and similar advisors of
Purchaser or Seller.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused these presents to be
signed sealed and delivered as of the date first above written.
PURCHASER:
ABD GAMING SUPPLY, a Mississippi corporation
By:
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Title:
Address: 0000 X. Xxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention:
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PURCHASER DESIGNEE - VIVA:
VIVA GAMING & RESORTS INC., a Florida
corporation
By:
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Title:
Address: 0000 X. Xxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention:
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SELLER:
PHOENIX LEISURE, INC., a Nevada corporation
By:
-----------------------------------------
Title:
Address: 0000 X. Xxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention:
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