EXHIBIT 6.3
THIS AGREEMENT made and dated for reference the 17th day of July, 1996.
BETWEEN:
ADVANCED GAMING TECHNOLOGY, INC., a company incorporated pursuant to the
laws of the State of Wyoming and having an office at 2482 - 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0;
("AGTI")
OF THE FIRST PART
AND:
FORTUNE ENTERTAINMENT CORPORATION, a company incorporated pursuant to the
laws of the Bahamas, x/x 0000 - 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx X0X 0X0;
("FEC")
OF THE SECOND PART
WHEREAS AGTI has varying interests in certain gaming ventures in China the
Philippines, the United States and the United Kingdom;
AND WHEREAS FEC desires to acquire from AGTI certain interests in AGTI's
interests in those gaming ventures;
NOW THEREFORE THIS AGREEMENT WITNESSETH and in consideration of the mutual
premises and covenants and for other good and valuable consideration, the
receipt and sufficiency whereof is hereby acknowledged by AGTI, the parties
hereto hereby agree as follows:
1. AGTI hereby grants to FEC the right to acquire an interest in various
gaming ventures in which AGTI has an interest including, but not limited to, the
following:
a) AGTI grants to FEC the right to acquire 50% of AGTI's interest in each
and every gaming project in the People's Republic of China ("PRC"),
with all future costs and liabilities of each such project in which
FEC acquires an interest to be assumed pro-rate by AGTI and FEC to the
extent of their respective interests in such projects. The
consideration for this right and
for FEC to acquire a fully paid up 50% interest in AGTI's interest in
the slot parlor currently under construction in Kaikou, Kainan Island,
PRC shall be the amount of $250,000 U.S. payable on or before July 31,
1996. FEC may acquire a 50% interest in AGTI's interest in each
additional slot parlor project in the PRC by payment to AGTI of
$250,000 (U.S.) in respect of each such project, said amount to be
paid following receipt by FEC of a properly executed Joint Venture
Agreement with the Chinese party (it being acknowledged that prior to
making the payment FEC will have a reasonable period of time to
conduct a legal due diligence review of the Joint Venture Agreement).
When all payments made to AGTI by FED under this section 1(a)
(excluding FEC's pro-rate) share of costs and liabilities) total
$2,000,000 U.S., FEC shall thereafter automatically receive 50% of
AGTI's interest in each and every project in the PRC, subject to FEC
paying its pro-rata share of all costs and liabilities of each
project. FEC shall have the right to appoint one representative to the
board of directors of each joint venture for every two directors
appointed by AGTI, but shall nonetheless have a minimum of one
director on the board of directors for each joint venture project. All
revenues payable to FEC will be paid monthly;
(b) AGTI grants to FEC the right to purchase up to a 25% interest in
AGTI's interest in AGTI's slot parlor projects in the city of Pasay,
Philippines. The "Pasay project" entails the installation and
operation of up to 4,000 slot machines. FEC may acquire 25% of AGTI's
interest in each slot machine by paying AGTI:
(i) $250 U.S. for each slot machine in which FEC desires to acquire
an interest payable upon documented proof of shipment; provided
that
(ii) FEC shall receive a minimum of a 20% interest in the complete
project involving 4,000 slot machines and any other gaming
machines installed in the city of Pasay in which AGTI derives an
interest upon aggregate payment of a total of $1,000,000 U.S. by
FEC to AGTI pursuant to section 1(b)(i) of this Agreement;
FEC will also pay its pro rata share of all future costs and
liabilities in respect of the projects and slot machines in which it
acquires and interest. All revenues will be paid to FEC on a monthly
basis;
(c) (i) AGTI grants to FEC the right to participate in revenue received
from the leasing of the first 3,000 in-house account Max Lite
handsets. In order to exercise the right, FEC shall pay AGTI the sum
of $1,000,000 U.S. as to $350,000 U.S. on or before
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September 30, 1996 and the balance of $650,000 U.S. on or before
December 1, 1996. Upon FEC exercising the right.
A. AGTI will pay FEC $1.25 U.S. per day per handset during the first
year from the date of exercise of the right based on a 6-day
week, 52 weeks per year (312 days);
B. AGTI will pay to FEC $0.75 U.S. per day per handset during the
second year from the date of exercise of the right based upon a
6-day week. 52 weeks per year (312 days);
C. AGTI will pay to FEC $0.25 U.S. per day per handset during the
third year from the date of exercise of the right based upon a
6-day week, 62 weeks per year (312) days); and
D. AGTI will pay FEC $0.25 U.S. per day per handset during the
fourth year from the date of exercise of the right based upon a
6-day week, 52 weeks per year (312 days);
AGTI will guarantee full payment on a monthly basis and hereby agrees
to a late payment charge of 18% annually;
FEC shall be able to exercise the right on a lesser number of handsets
than the 3,000 referred to in section 1(c)(i) with pro rate
adjustments in the revenue and exercise price, and
(d) AGTI grants to FEC the right to acquire up to a 15% carried interest
in AGTI's interest in Bingo Projects currently being developed by AGTI
in the United Kingdom. The payment for the 15% interest shall be the
sum of $600,000 U.S. payable on or before September 15, 1996. FEC must
also pay its pro rata share of all future costs and liabilities of the
Bingo Projects. AGTI will grant to FEC the right to acquire a minimum
15% carried interest in AGTI's interest in Bingo Projects in the
European Economic Community and South America under terms and
conditions to be negotiated in good faith between the parties;
(e) AGTI grants to FEC the right to acquire an 18.75% interest in AGTI's
interest in the development and marketing of the Sega Sonic Bingo
game. In order to exercise the right FEC must pay to AGTI the sum of
$750,000 U.S. on or before September 30, 1996. FEC must also pay its
pro rata share of all future costs and liabilities in respect of the
development and marketing of the Sega Sonic Bingo game; and
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(f) AGTI grants to FEC the right to acquire a 50% interest in AGTI's
interest in the Sega Royal Ascot, Craps & Golden Knight entertainment
units at a price of approximately $375,000 U.S. for every unit
installed. In order to exercise the right FEC must pay its pro rata
share of AGTI's costs at the time of the purchase order being issued
to Sega.
AGTI acknowledges receipt from FEC of a non-refundable deposit in the
amount of $289,000 U.S. The sum of $289,000 U.S. hereby paid shall be applied to
the right payments required to be made by FED under section 1(a) above, or as
otherwise directed by FED.
3. FEC and AGTI agree to enter into a formal agreement (the "Formal
Agreement") to be negotiated between the parties embodying the following terms:
(a) right of first refusal to acquire each other's interests in the
various projects;
(b) restrictions or assignments and transferability of the parties'
interests in the various projects;
(c) default provisions;
(d) representations and warranties by the parties as to corporate power
and authority to enter into the Formal Agreement, AGTI's ownership of
an interest in the various projects and its right to transfer a
portion of its interest to FEC; and
(e) such other terms and provisions as are commonly contained in
agreements of the nature of the Formal Agreement.
4. The parties agree that the funds which are advanced for the specific
projects shall be used substantially to fund the specific project for which they
were advanced and that separate accounting will be maintained for each project
and that the accounting will be made available to both parties on a timely
basis, in no event longer than 30 days after each month end. FEC shall have the
right to examine the accounting for all projects in which FEC has invested
monies and shall be permitted full access to all records upon giving 14 days
notice to AGTI or AGTI's joint venture partner. The parties further acknowledge
that each of the rights set forth in sections 1(a) - 1(e) hereof is a separate
right and the exercise of any particular right is not dependent on the exercise
of any other right.
5. AGTI hereby represents and warrants to FED that it has the full
corporate power and authority to enter into this Agreement and to consummate the
transactions
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contemplated hereby and that there are no restrictions on AGTI's ability to
grant the rights to FEC described herein and to transfer its interests to FEC in
the event FEC exercises such rights.
6. If either party is in default of any provision of this Agreement, it
will not lose the reasonable steps to any of its rights hereunder, and this
Agreement may not be terminated unless the non-defaulting party has first given
written notice to the defaulting party specifying the nature of the default and
the defaulting party has failed to cure the default or to cure the default
within 30 days of receipt of such notice.
7. In the even the parties are unable to agree on the terms of a Formal
Agreement on or before the expiration of 90 days from the date of this
Agreement, this Agreement shall constitute a final and binding agreement between
the parties.
8. For purposes of this Agreement, all references to AGTI shall be deemed
to include AGTI and any other company with which it is affiliated within the
meaning of section 1(3) of the Securities Act (British Columbia), as amended.
9. This Agreement enures to the benefit of and is binding upon the parties
and their respective successors and assigns.
10. This Agreement supersedes and replaces all previous agreements between
the parties in respect of the subject matter hereof.
11. This Agreement shall be construed and interpreted in accordance with
the laws of the Province of British Columbia.
IN WITNESS WHEREOF the parties hereof have executed this Agreement
effective as of the day and year first above written.
THE COMMON SEAL OF )
ADVANCED GAMING TECHNOLOGY )
INC. was hereunto affixed in the )
presence of: )
___________________________________________________ ) c/s
Authorized Signatory
XXXXX DEAR ON behalf of )
FORTUNE ENTERTAINMENT )
CORPORATION )
___________________________________________________ ) c/s
Authorized Signatory
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