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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 31, 1996
FLORIDA GAMING CORPORATION
(Exact name of registrant as specified in charter)
Delaware 0-9099 59-1670533
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
3500 N.W. 37th Avenue
Miami, Florida 33142
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (407) 464-7500
1750 South Kings Highway
Fort Pierce, Florida 34945
(Former name or former address,
if changed since last report.)
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The Registrant hereby amends Item 7 of its Current Report on Form 8-K dated
December 31, 1996 to read in its entirety as follows:
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) The financial statements required by this Item are not available at
the time of this filing; the Registrant expects to file with the
Commission the financial statements required no later than March 17,
1997.
(b) The pro forma financial information required by this Item is not
available at the time of this filing; the Registrant expects to file
with the Commission the pro forma financial information required no
later than March 17, 1997.
(c) Exhibits.
Exhibit 2.1 -- Assets Purchase Agreement dated as of November 20, 1996
between the Registrant, Florida Gaming Centers, Inc., and WJA Realty
Limited Partnership (World Jai-Alai), as incorporated by reference to
Exhibit 10.1 of the Registrant's Current Report on Form 8-K dated
November 25, 1996 [File No. 0-9099]. Omitted from this Exhibit, as
filed, are the schedules and annexes as referenced in the Agreement.
The Registrant will furnish supplementally a copy of any such
schedules and annexes to the Commission upon request.
Exhibit 10.1 -- Totalisator Services Agreement dated November 11, 1993
between Autotote Systems, Inc. and W.J.A. Realty Limited Partnership,
D.B.A. Miami Jai Alai.
Exhibit 10.2 -- Consulting and Noncompetition Agreement dated December
31, 1996 by and among Florida Gaming Centers, Inc. and Richard P.
Donovan.
Exhibit 10.3 -- Consulting and Noncompetition Agreement dated December
31, 1996 by and among Florida Gaming Centers, Inc. and Roger M.
Wheeler, Jr.
Exhibit 10.4 -- Credit Line Agreement dated October 1, 1996 from
Freedom Financial Corporation to Florida Gaming Corporation.
Exhibit 10.5 -- Mortgage dated December 31, 1996 by Florida Gaming
Corporation and Florida Gaming Centers, Inc. to Bank of Oklahoma, N.A.
Exhibit 10.6 -- Promissory Note dated September 12, 1996 from Florida
Gaming Corporation to Bank of Oklahoma, N.A.
Exhibit 10.7 -- Promissory Note dated October 1, 1990 from WJA Realty
Limited Partnership to Wheeler-Phoenix, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FLORIDA GAMING CORPORATION
By /s/ Timothy L. Hensley
Timothy L. Hensley
Executive Vice President,
Treasurer
and Chief Financial Officer
Date: February 7, 1997
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TOTALISATOR SERVICES AGREEMENT
THIS AGREEMENT, made this 11th day of November 1993, between AUTOTOTE
SYSTEMS, INC. a corporation of the State of Delaware (hereinafter called
AUTOTOTE), and W.J.A. REALTY LIMITED PARTNERSHIP, D.B.A. MIAMI JAI ALAI, a
Limited Partnership of the State of Massachusetts (hereinafter called the
OWNER);
WITNESSETH:
WHEREAS, AUTOTOTE provides wagering services and designs, programs and
manufactures totalisator systems for use in wagering applications; and
WHEREAS, OWNER wishes to obtain such wagering services utilizing computer
programs and equipment from AUTOTOTE at a facility known as MIAMI JAI ALAI
(hereinafter called the FRONTON) located at 3500 N.W. 37th Avenue, Miami,
Florida 33142; and
WHEREAS, AUTOTOTE wishes to provide totalisator services utilizing its
computer programs and equipment to OWNER for use at the FRONTON, all on the
terms and conditions hereinafter set forth;
WHEREAS, OWNER and AUTOTOTE mutually agree that this Totalisator Services
Agreement shall, when fully executed by the duly authorized officers of both
parties, supersede the Totalisator Services Agreement dated May 17, 1990; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
I. BASIC TERMS
A. AUTOTOTE shall provide totalisator services utilizing its computer
programs and equipment as described in Schedules A, C and D hereof
(the SERVICES) to OWNER for all wagering held at the FRONTON,
consisting of not less than four (4) operating days per week (other
than the opening and closing weeks), during the six (6) year period
commencing November 17, 1993, and ending September 30, 1999, and OWNER
shall use these SERVICES exclusively during said period for all
wagering held at the FRONTON during the term of this Agreement. A
performance is defined as the betting period for a game or games,
which shall commence no sooner than one-
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half (1/2) hour prior to scheduled post time for the first such game
and which shall be limited to a maximum of fifteen (15) games.
B. OWNER agrees to pay to AUTOTOTE for the said SERVICES:
(i) The following percentage of the gross monies wagered, as shown
by the totalisator as having been received from the sale of
tickets issued:
.005 of all monies handled
(ii) In the event the FRONTON operates on Sundays, OWNER agrees to
pay AUTOTOTE an additional Seven Hundred dollars ($700.00) for
such Sunday performance, such payments to be over and above
the rates in subparagraph B(i) and Paragraph C.
(iii) In the event that OWNER requires customer-operated Screen
Activated Self-Service AutoVend terminals over and above the
total number of AutoVend terminals provided for in Schedule
"A" hereof, OWNER agrees to pay to AUTOTOTE an additional fee
of Ten dollars ($10.00) per operating day per terminal, such
payment to be over and above the rates in subparagraph B(i)
and Paragraph C.
(iv) In the event that OWNER requires customer-operated Voucher
Dispenser Terminals over and above the total number of Voucher
Dispenser Terminals provided for in Schedule "A" hereof.
OWNER agrees to pay to AUTOTOTE an additional fee of Ten
dollars ($10.00) per operating day per terminal, such
payment to be over and above the rates in subparagraph B(i)
and Paragraph C.
(v) In the event that OWNER installs Tiny TIM personal account
terminals with account wagering, OWNER agrees to install a
minimum of twenty-five (25) terminals for wagering at dining
tables and certain reserved seat areas. OWNER agrees to pay
to AUTOTOTE an additional fee of Three dollars ($3.00) per
performance per terminal, such payment to be over and above
the rates in sub-paragraph B(i) and Paragraph C.
Notwithstanding the foregoing,
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OWNER shall have the right at the end of a season, either
summer or winter, to remove and return to AUTOTOTE any Tiny
TIM personal account terminals installed pursuant to this
Agreement, and Owner shall not be liable for any such payment
after such return.
C. The minimum annual amount to be paid by OWNER to AUTOTOTE under
subparagraph B(i) for the SERVICES for the first three (3) years of
this Agreement shall not be less than the sum of Four Hundred Fifty
Thousand dollars ($450,000) per annum and the minimum annual amount
to be paid by OWNER to AUTOTOTE under subparagraph "B(i)" for the
services for the three (3) remaining years of this Agreement shall
not be less than the sum of Four Hundred Thousand dollars
($400,000.) per annum. Except as stated in paragraph IV.I below,
in the event the amount payable to AUTOTOTE under subparagraph B(i)
above is less than this minimum amount for any such year, OWNER
shall pay AUTOTOTE the difference (hereinafter called "the
deficiency") within ten (10) days after the end of such year.
D. All amounts due hereunder, except the deficiency amount due AUTOTOTE
under Paragraph C above shall be payable weekly without deduction not
later than Wednesday of the following week. If not paid within five
(5) days after the due date, interest at the rate of two percent (2%)
per month or to the extent allowed by law if less, starting from the
day immediately following the due date shall be imposed on such
amounts, and AUTOTOTE may refuse to provide SERVICES hereunder for
so long as the failure of OWNER to pay continues, and AUTOTOTE may
require payment on a per performance basis for subsequent
performances, or, by five (5) days written notice, may terminate
this Agreement and be relieved and discharged from any and all
further responsibility, liability or obligation hereunder.
E. The totalisator system, computer programs and ancillary equipment
incident thereto or necessary to the operation thereof, shall remain
the property of AUTOTOTE except that junction boxes, wiring and
cabling provided by AUTOTOTE and made a part of the fixed installation
shall become the property of OWNER upon payment for same by OWNER
under paragraph I(H) herein. The
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totalisator system, computer programs and ancillary equipment shall at
all times be and remain under the exclusive control of AUTOTOTE.
F. Not applicable. Intentionally left blank.
G. Not applicable. Intentionally left blank.
H. OWNER shall provide, at its expense, all labor and materials required
to install the alternating current power and other changes necessary
to the permanent installation materials for modifications to the
totalisator system in accordance with AUTOTOTE'S specifications.
AUTOTOTE shall provide design and supervision of the installation at
no additional cost to OWNER.
I. Not applicable. Intentionally left blank.
J. OWNER shall provide adequate security for all AUTOTOTE equipment and
materials at the FRONTON. In the event that such equipment is damaged
or missing due to no fault of AUTOTOTE, there shall be an appropriate
adjustment in the delivery date.
K. Annexed hereto as Schedule "C" is a description of the reports to be
provided by AUTOTOTE.
L. Annexed hereto as Schedule "D" is a detailed description of the
required capabilities for which the totalisator system will be
programmed.
M. AUTOTOTE agrees to keep OWNER'S standard operating program updated on
an equal basis with the standard operating program used at AUTOTOTE'S
other VAX/Autotrak II full service operations in the United States, at
no cost to OWNER; provided, however, any changes necessary to conform
to special requirements of OWNER and/or the Florida Department of
Business Regulation shall be for OWNER'S account.
N. AUTOTOTE shall continue to maintain OWNER'S electronic color matrix
display board under the warranty terms of the Sales Agreement dated
August 18, 1987 between AUTOTOTE and OWNER. Such warranty expires
November 26, 1992. Starting November 27, 1992 through September 30,
1995 labor for the installation of replacements parts shall be
provided to OWNER by AUTOTOTE at no charge to OWNER during OWNER'S
normal Jai Alai season. At the
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expiration of the warranty, OWNER agrees to purchase all replacement
spare parts in stock from AUTOTOTE at AUTOTOTE'S selling price (market
competitive) in effect at that time and all other necessary
replacement parts to service the board. Should OWNER desire service
for the matrix board when OWNER'S Fronton is not operating a Jai Alai
season OWNER agrees to pay to AUTOTOTE AUTOTOTE'S labor and expenses
necessary to service said matrix board.
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II. AUTOTOTE HEREBY FURTHER AGREES AS FOLLOWS:
A. Should additions be necessary after the initial permanent installation
AUTOTOTE shall furnish all necessary DC and signal installation
materials and equipment required for the electrical installation of
the "Tote" room, the selling lines and in the public display board(s),
the cost of such materials shall be borne by the OWNER at prices in
effect at the time of delivery.
B. To service the Totalisator System and maintain it in efficient
operating condition during each race betting interval on all gaming
days during the term of this Agreement.
C. To provide the necessary high speed printer paper, betting slips,
teletype paper and other stationery supplies as may be required for
use with the totalisator system, and OWNER shall pay AUTOTOTE for
these supplies at the prices in effect at the time of delivery.
D. To notify OWNER of new or improved services perfected by AUTOTOTE and
to implement changes in the SERVICES provided hereunder to reflect
such of the new or improved services as OWNER may desire, provided
that OWNER shall pay for all such modifications and changes and for
such new or improved SERVICES to be provided by AUTOTOTE at the prices
agreed upon by the parties.
E. To furnish and maintain at the FRONTON on each wagering day the
personnel necessary for AUTOTOTE to perform the SERVICES, including
operating the central controls and maintaining the Totalisator System
in efficient operating condition. The number of personnel provided
shall be at the sole discretion of AUTOTOTE.
F. To maintain adequate fire insurance, theft, vandalism and riot
insurance coverage on all ancillary materials and equipment which are
required by AUTOTOTE in order to perform the SERVICES, and which are
the property of AUTOTOTE in an amount adequate to replace same.
G. To carry Workmen's Compensation insurance on its own employees and at
least One Million dollars ($1,000,000) of public liability insurance
on the totalisator and supply OWNER with evidence of such insurance
coverage.
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H. To furnish all necessary ticket paper for the Sell/Cash terminals.
I. To reimburse OWNER for all amounts which OWNER shall be required to
disburse by reason of errors made by AUTOTOTE or its employees or its
equipment (other than as provided for in paragraph IV C.), provided
however that in arriving at the amount, if any, to be so reimbursed,
AUTOTOTE shall receive credit for all like overages to the extent to
which AUTOTOTE has the approval of the Florida Department of Business
Regulation for the credit to AUTOTOTE of such overages, and, provided
further, that AUTOTOTE shall not be required to make a reimbursement
if any error is due to the neglect, acts, omission or mistakes of
OWNER or any of its employees, the State or any of its employees, or
acts of other parties for whom AUTOTOTE is not responsible, and
provided further that AUTOTOTE shall not be required to reimburse
OWNER for any errors regardless of cause in the Big "P", Big "Q", Twin
Double or similar pools in which winning tickets in a prior division
of the pool are exchanged for tickets in a subsequent division of that
pool.
J. To indemnify and save OWNER harmless from any loss, liability, costs
or expenses (including reasonable attorney's fees) arising out of or
related to and to defend at its own cost, any patent claim or
litigation of any kind, including any claim for damages which may be
instituted against OWNER, or to which OWNER may be made a party, by
reason of the SERVICES provided herein by AUTOTOTE, provided written
notice of such claim is given to AUTOTOTE within ten (10) days after
receipt of same by OWNER. AUTOTOTE shall have the right to exercise
full control of all negotiations and litigation in connection
therewith, including selection of counsel, and shall not be liable for
any costs or expense incurred by OWNER without AUTOTOTE'S prior
written approval, which approval shall not be unreasonably withheld,
nor shall AUTOTOTE be responsible for any claim or litigation based on
equipment not furnished by AUTOTOTE as part of its SERVICES hereunder.
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III. OWNER HEREBY FURTHER AGREES AS FOLLOWS:
A. After the initial permanent Totalisator installation OWNER will
furnish, at its expense, all necessary labor required for additions to
the installation of the Totalisator System, which labor includes the
laying, pulling, connecting and terminating of all necessary cables,
terminals, switches, junction boxes, and other similar material, as
required in the "Tote" room, display boards, ticket selling lines,
judges and/or stewards locations, mutuel manager and head banker
locations, which services shall be performed in accordance with
AUTOTOTE'S specifications.
B. It will furnish at its expense:
(i) Adequate electrical power for the proper operation of the
Totalisator System. For this purpose incoming power lines
having sufficient capacity shall be brought from the local
utility to the "Tote" room, the selling lines, and the display
boards, and distributed and terminated at locations as specified
by AUTOTOTE.
(ii) A "Tote" room of sufficient size to house the central control
equipment in a secure manner with an efficient layout, free
from dampness and reasonably free from dust, with necessary air
conditioning, suitable lighting, raised flooring, and with
adequate entrances capable of being secured so as to limit
access to such control room in accordance with paragraph
III(L).
(iii) Teller windows having ticket counters of sufficient size and
structural strength to accommodate AUTOTOTE'S ticket issuing
machines in areas reasonably free from dust and dirt.
(iv) A fieldboard structure sufficiently secure and dry with
adequate ventilation, interior lighting and AC electric power
to permit the accommodation and satisfactory operation of
fieldboard display equipment.
(v) Adequate and appropriate facilities, under the exclusive
control of and satisfactory to AUTOTOTE for proper maintenance
of its materials and equipment and for the safe and secure
storage of ticket paper and other supplies.
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(vi) Adequate and appropriate rest rooms, convenient free parking,
and other facilities for AUTOTOTE'S personnel on a par with
facilities provided for other similar level personnel employed
by the FRONTON.
(vii) All facilities furnished by OWNER hereunder shall conform to all
applicable fire, electrical, building and similar codes;
O.S.H.A. standards, and other government regulations.
C. In carrying out its undertaking hereunder, OWNER may be required to
provide new structures or housings for the materials and equipment
utilized by AUTOTOTE in performing the SERVICES hereunder, or to alter
its existing structures or housings for such purpose. In such event,
it will furnish at its expense, all materials and labor required for
such structures or housings in accordance with specifications supplied
by AUTOTOTE, including opening and closing of necessary trenches
required, surrounding underground cable ducts with suitable casing,
burying cable ducts if run underground, opening and closing of walls,
floors or ceilings, clean-up and disposition of refuse, and repair of
any damage to buildings, grounds, plantings, etc. caused by
installation, provided such damage was not caused by negligence of
AUTOTOTE.
D. It will keep proper records and books of account and make true and
complete entries therein of all appropriate information relating to the
operation of wagering at the FRONTON.
E. Except as herein otherwise provided, it will pay the cost of any
alterations in or additions to the SERVICES, including programming
changes, as may hereafter be desired by OWNER, and such alterations,
if practicable, will be made by AUTOTOTE promptly after receipt from
OWNER of its written request therefor.
F. It will furnish, at its own expense, an adequate staff of paper
changers, tellers, mutuel personnel and any other personnel as are
required in connection with the operation of the wagering at the
FRONTON, except for the personnel to be furnished by AUTOTOTE as
provided in paragraph II(E) hereof. OWNER'S paper changers, tellers,
mutuel personnel and any other personnel will operate the terminals
strictly in accordance with AUTOTOTE'S instructions, will account as
required to AUTOTOTE'S Manager at the FRONTON for all rolls of ticket
paper removed from
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paper storage room(s) and/or terminals, and will not otherwise attempt
to handle or operate the Totalisator System.
G. It will afford AUTOTOTE and its duly authorized agents or
representatives access at all reasonable times to the buildings and
premises at the FRONTON.
H. It will not use the Totalisator System for any purpose other than as
specified in this Agreement and will not permit any part of the system
to be removed from the FRONTON by persons other than agents or
employees of AUTOTOTE.
I. It will, at its expense, furnish electricians to maintain and service
the electric power facilities required to be furnished by OWNER as
provided in paragraph III(B).
J. It will take, at its expense, all necessary measures to keep the
Totalisator System materials and equipment kept by AUTOTOTE at the
FRONTON free from any restraint, levy, execution or seizure or other
process of law arising from any acts or omissions of OWNER or its
agent(s) or representative(s) which would in any way impair the title
of AUTOTOTE to such Totalisator System, materials and equipment or
possession or repossession thereof when permitted under this
Agreement. At AUTOTOTE'S request, it will provide AUTOTOTE with a
waiver of landlord's lien.
K. It will comply with all rules, laws, request, ordinances and
requirements of every government, county, state or municipality,
department, bureau or board which may arise out of or in connection
with the possession, use and/or operation of wagering at the FRONTON
including fire insurance underwriters' requirements. OWNER shall also
furnish, at its expense, the safety devices needed to comply with such
requirements.
L. It will maintain and furnish to AUTOTOTE a list of persons authorized
to have access to any room or structure housing any part of the
Totalisator System, which list shall specify the particular position
to which each such person is assigned and the place or location of
employment, the persons on such list being subject to the approval of
AUTOTOTE, which approval shall not be unreasonably withheld. It will
not permit access to the "Tote" room or fieldboard by any
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unauthorized persons, and will protect the secured areas from trespass
or interference by such persons. OWNER further agrees to indemnify
AUTOTOTE for damages or loss to AUTOTOTE caused as a result of access
to the secured areas having been given by OWNER or its employees or
agents.
M. It will indemnify and hold AUTOTOTE harmless against any loss,
liability, costs or expenses (including reasonable attorney's fees)
arising out of or related to claims or suits for damages to persons or
property resulting from the operation of the wagering by agents and
employees of OWNER.
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IV. OTHER TERMS AND CONDITIONS
A. Except as herein provided, AUTOTOTE shall be under no obligation to
furnish SERVICES to OWNER in excess of those specified herein, nor
shall OWNER be entitled to additional SERVICES unless a supplementary
agreement is entered into between the parties, providing for the
desired additions, upon terms acceptable to both parties.
B. OWNER shall notify AUTOTOTE in writing of the operating days allowed
to it by the appropriate governmental authority each year during the
term of this Agreement at least ninety (90) days prior to the start of
such operating days and will not change, without the written consent
of AUTOTOTE, such dates including the number of performances,
including matinees if applicable, and the beginning and closing dates
of any performances. AUTOTOTE shall have the right to remove any of
its personnel, materials and equipment at any time during the term of
this Agreement when wagering is not scheduled at the FRONTON but no
removal shall in any way effect AUTOTOTE'S obligation, subject to
ninety (90) days written notice, to return the necessary materials and
equipment and reinstitute the SERVICES for operation on all wagering
days at the FRONTON, provided such wagering days fall within the
beginning and closing dates of any performances as previously notified
and herein specified. If during any scheduled operating period
wagering does not, for any reason other than a default by AUTOTOTE,
commence as scheduled, or having commenced, is interrupted, AUTOTOTE
shall have the right to remove its personnel, materials and equipment
from the FRONTON. In such case, AUTOTOTE shall be obligated to
reinstitute the SERVICES at the FRONTON no later than sixty (60) days
after receipt by AUTOTOTE of written notice that wagering is to
commence or resume and the original closing date of the performances
may at OWNER'S option, be extended by the number of performances that
wagering did not take place in accordance with the original schedule.
C. AUTOTOTE guarantees and warrants that the Totalisator System utilized
by it to perform the SERVICES will be suitable for betting and that it
will operate efficiently and without interruption on all wagering days
for the term of this Agreement; provided, however, that there shall
not be
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deemed to be a breach of the foregoing guarantee and warranty if
wagering is interrupted for less than thirty (30) consecutive minutes
at any one time on any operating day, or if any interruption in the
function of any component part or unit of the Totalisator System takes
place which does not prevent the efficient operation of wagering on
any wagering day, or if not more than ten percent (10%) of the ticket
issuing machines fail to operate at any one time on any wagering day,
or if the failure of the Totalisator System to operate efficiently or
without interruption shall be due to or result from one or more of the
causes enumerated in paragraph IV(K) hereof, or acts of neglect of the
OWNER, its agents or employees, or of any third party, or for any
other cause not within the control of AUTOTOTE and/or its employees.
If the failure of the Totalisator System to operate efficiently or
without interruption shall be due to any acts other than those
enumerated or referred to by reference in the proceeding sentence, or
other than as a result of the failure of OWNER to perform its
obligations hereunder, then OWNER shall be entitled to liquidated
damages in an amount to be calculated as follows: five (5%) of the
difference between the amount of money handled on the day of such
interruption and the amount of money handled on a comparable day
during the current meeting; in the event there is no comparable day in
the current jai alai meeting, then the amount to be paid by AUTOTOTE to
OWNER shall be five percent (5%) of the difference between the amount
of money handled on the date of such interruption and the amount of
money handled on a comparable jai alai day of the season immediately
proceeding.
D. AUTOTOTE shall not be liable either directly, indirectly or
consequentially for any counterfeit, altered, or illegally printed
tickets. AUTOTOTE shall be liable, however, for all amounts as
branded by the Sell/Cash Terminals on any counterfeit, altered, or
illegally printed tickets on which the branded serial number digits
are identical to those of such tickets. However, AUTOTOTE shall not
be liable for such counterfeit, altered, or illegally printed tickets
arising out of acts by OWNER or its employees or agents, or by failure
of OWNER to provide proper security.
E. If at any time during the term of this Agreement, any kind of a tax,
license, duty, commission or fee shall be imposed upon or levied or
assessed against AUTOTOTE by any governmental or other
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authority because of the nature of its business, or on the
installation, use or the SERVICES provided under this Agreement, or
the receipt of monies hereunder, AUTOTOTE agrees to give OWNER notice
thereof promptly upon AUTOTOTE'S receipt of same from the governmental
or other authority, and OWNER agrees to pay to AUTOTOTE an amount
equivalent thereto, together with any penalties or interest assessed
thereon, such payment to be made by the OWNER as and when such tax or
fee is assessed. If the OWNER fails to pay any such amounts as
aforesaid, then OWNER shall be charged interest at the rate of two
percent (2%) per month or to the extent allowed by law if less,
starting from the day after the due date, and AUTOTOTE may, by five
(5) days prior written notice to OWNER terminate the Agreement and be
relieved and discharged from any and all further responsibility,
liability, or obligation hereunder. In the event AUTOTOTE terminates
the Agreement as provided herein, the OWNER shall remain liable as
aforesaid for payment of such tax or fee, and any penalty or interest
accrued thereon, or if AUTOTOTE fails to contest the validity of any
such tax or fee after written demand by the OWNER, the OWNER, at its
expense, may contest the validity thereof in the name of AUTOTOTE.
Nothing herein contained shall make the OWNER responsible for federal
or state income taxes of AUTOTOTE by reason of the receipt of payments
hereunder. If, by reason of its use of the SERVICES provided by
AUTOTOTE under this Agreement, the OWNER is assessed or has imposed or
levied upon it any tax or fee by any governmental authority, the OWNER
agrees to pay such taxes or fees directly to the appropriate taxing
authority and also agrees to provide to AUTOTOTE, from time to time as
required by AUTOTOTE, documentation as proof that such taxes or fees
have been paid; but this requirement shall not preclude OWNER from
paying such taxes or fees under protest and thereafter contesting the
validity of their assessment or imposition.
F. In the event that wagering at the FRONTON shall be prohibited or
become illegal by statute or court decision or by action of cognizant
governmental agency, the period of this Agreement shall be deemed to
have terminated as of the date of such prohibition or cessation of
such legal wagering,
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but without prejudice to the rights of either party up to the date of
termination; provided, however, that in the event the prohibition or
cessation of legal wagering is removed and racing on the
abovementioned premises becomes legal, this Agreement shall be
returned to force intact, subject to availability of personnel and
equipment, for the unused balance of the term of the Agreement. Upon
termination AUTOTOTE shall have the right to remove its personnel,
materials and equipment from the FRONTON.
G. Any charges for work done by AUTOTOTE under any section of this
Agreement, or for additional material or equipment supplied by
AUTOTOTE in accordance with order(s) of the OWNER or his agent, shall
be considered as amounts due to AUTOTOTE from the OWNER in accordance
with Paragraph I(D) hereof.
H. In the event that AUTOTOTE shall default in the performance of any
provision of this Agreement on its part to be performed (except a
breach by AUTOTOTE of the provisions of paragraph IV(C) hereof as to
which the provisions of said paragraph shall apply) and such default
shall not be cured within a period of ten (10) days after written
notice shall have been received by AUTOTOTE specifying such default,
then the OWNER may terminate this Agreement by delivering to AUTOTOTE
written notice of such termination prior to the expiration of thirty
(30) days after the expiration of said ten (10) day period; and in the
event of any such termination AUTOTOTE, at its expense, shall remove
its personnel, materials and equipment from the FRONTON.
I. In the event that the OWNER shall default in the performance of any
provisions of this Agreement on its part to be performed (except a
breach by the OWNER of the provisions of Paragraphs I(D) and IV(E)
hereof as to which the provisions of said paragraphs shall apply) and
such default shall not be cured within a period of ten (10) days after
notice shall have given by AUTOTOTE to the OWNER specifying such
default, then AUTOTOTE may terminate this Agreement by delivering to
the OWNER written notice of such termination prior to the expiration
of thirty (30) days after the expiration of said ten (10) day period;
and in the event of any such termination
15
<PAGE>
AUTOTOTE shall remove its personnel, materials and equipment from the
RACETRACK, and the cost of such removal shall be paid for by the OWNER.
J. If it becomes necessary for AUTOTOTE to undertake work or activities, or
purchase or install equipment or materials, which herein are made the
obligations of the OWNER, in order to assure AUTOTOTE'S proper performance
of the Agreement, then any costs incurred by AUTOTOTE as a result of
such work, activities, purchases, or installations shall be considered
as amounts due to AUTOTOTE from the OWNER in accordance with
Paragraph I(D) hereof.
K. It is understood and agreed that, in the event that it is found that any
payments, gratuities, gifts or emoluments were made to officers or
employees or members of their families or associates of OWNER or its
affiliates during the term of their employment or thereafter by AUTOTOTE
for securing this agreement or maintaining this agreement in effect, the
OWNER may, forthwith upon discovery of the same, terminate this agreement
by written notice to AUTOTOTE. The foregoing shall not, however, apply to
Christmas gifts or entertaining of the sort routinely and openly extended
by AUTOTOTE, or other similarly innocent instances of customary social
hospitality or holiday celebration.
L. Failure to perform any provision of this Agreement by either party
hereto shall not constitute a default hereunder if such failure shall be
caused by fire, strike, boycott, picketing, or other industrial
disturbances, riot, civil commotion, theft, vandalism, flood, lightning,
tempest, storm, acts of God, war, acts of war and defense, power failure,
failure of any cable or interference by any government or government
agency.
M. If any of the said sums of money due AUTOTOTE under this Agreement are
not promptly and fully paid when the same individually or severally become
due and payable, or if OWNER becomes insolvent, ceases to do business as a
going concern, a petition in bankruptcy or for arrangement or
reorganization be filed by or against OWNER, the materials or equipment
provided by AUTOTOTE be attached, or a receiver be appointed for OWNER, or
if any proceeding shall be instituted against the materials or equipment
provided by AUTOTOTE under
16
<PAGE>
this Agreement upon any other lien or claim, whether alleged to be
superior or inferior toward the lien of this Agreement, or if each and
every stipulation, condition and term of this Agreement are not duly and
fully performed or complied with, the aggregate sum of the minimum annual
amount specified in paragraph I(C) remaining to be paid for the balance of
the term of this Agreement shall become due and payable forthwith, or
thereafter at the option of AUTOTOTE, as fully and completely as if the
said amounts were originally stipulated as due prior to such time,
anything in this Agreement herein to the contrary notwithstanding. In any
of said events AUTOTOTE is authorized and empowered to enter the premises
of the OWNER or other place where AUTOTOTE'S materials and equipment may
be and resume possession of the same without notice or demand or without
legal process, such notice and demand being expressly waived, and AUTOTOTE
may at its option, by suit or otherwise, enforce payment of all due
obligations, plus interest and reasonable attorney's fees, and no suit or
legal proceedings with respect thereto shall be deemed any waiver of said
rights of AUTOTOTE to resume possession of said property as herein
provided.
N. Absent a transfer to any partner of a kind and nature which, were WJA a
corporation and the partner a shareholder, would be void as to creditors
of the corporation, the partners of WJA Realty Limited Partnership (WJA)
shall not be personally liable hereunder, and the private property of the
partners shall not be subject to claims on account of any obligations of
WJA arising out of the transaction evidenced hereby or in connection
herewith and all parties to contracts with WJA agree to look solely to the
assets of WJA for the satisfaction of any claims thereunder.
O. No waiver of any term, condition or obligation of this Agreement or
assent to the breach of any term, condition or obligation shall be
construed by the failure of either party to act in the event the other
party shall be in default of this Agreement, nor shall such failure to act
be construed as assent to any other or future breach of the same or any
other term, condition or obligation of this Agreement. This Agreement
shall not be modified, amended or changed without the prior written
consent of both parties.
17
<PAGE>
P. Any notice to be given to AUTOTOTE hereunder shall be duly given by
mailing the same by registered mail addressed to AUTOTOTE at 100 Bellevue
Road, P.O. Box 6009, Newark, Delaware 19714-6009, or such other address as
AUTOTOTE shall specify in writing to the OWNER. Any notice to be given to
the OWNER hereunder shall be duly given by mailing the same by registered
mail addressed to the OWNER at 3500 N.W. 37th Avenue, Miami, Florida
33142, or such other address as the OWNER shall specify in writing to
AUTOTOTE.
Q. Any controversy or claim not settled by the parties arising out of or
relating to this contract, or the breach thereof, shall be settled by
arbitration in accordance with the Rules of the American Arbitration
Association, and judgement upon the award rendered by the Arbitrator(s)
may be entered in any Court having jurisdiction thereof.
R. The remedies expressly provided in this Agreement for breach thereof by
AUTOTOTE or the OWNER shall constitute the sole and exclusive remedies to
the aggrieved party, and all other remedies which might be otherwise
available under the law of any jurisdiction are hereby waived by both
AUTOTOTE and OWNER.
S. This Agreement shall be binding upon and inure to the benefit of
AUTOTOTE and the OWNER and their successors and assigns. No assignment of
this Agreement shall be made without the prior written consent of the
other party, which consent shall not be unreasonably withheld, however,
OWNER herein agrees to any assignment AUTOTOTE may make for the purpose
of obtaining financing with a prime institution on the strength of this
Agreement.
T. OWNER acknowledges that AUTOTOTE provides inter-track wagering services
("ITW Services") to other AUTOTOTE customers. If OWNER desires ITW
Services at the fronton, (Owner Requested ITW Services") AUTOTOTE shall
be obligated to provide such Owner Requested ITW Services at prevailing
market prices for such ITW Services, on terms which will be negotiated in
good faith by both OWNER and AUTOTOTE. In the event that owner negotiates
in good faith (or is ready, willing and able to negotiate in good faith
but is prevented from negotiating by the refusal or inability of AUTOTOTE
to negotiate in good faith) for the
18
<PAGE>
provision by AUTOTOTE of such Owner Requested ITW Services, at
prevailing market prices, and in the further event that OWNER and AUTOTOTE
do not reach a written, mutually acceptable agreement with respect to the
provision of such Owner Requested ITW Services, within 30 days after
OWNER's request that AUTOTOTE provide such Owner Requested ITW Services
at the fronton, then OWNER shall be free to enter an agreement with a
party other than AUTOTOTE for such Owner Requested ITW Services without
any further notice and without any liability to AUTOTOTE under this
Agreement.
U. Any provision of the foregoing Agreement to the contrary
notwithstanding, the OWNER and AUTOTOTE agree that this Agreement does
not cover the subject matter of video lottery devices and services
("Video Lottery"). OWNER shall have the absolute right to deal with a
party other than AUTOTOTE for any Video Lottery requirements without any
notice and without any liability to AUTOTOTE under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, duly attested, all as
of the day and year first above written.
ATTEST: W.J.A. REALTY LIMITED PARTNERSHIP
D.B.A. MIAMI JAI ALAI
BY
- ---------------------------------- -----------------------------------
TITLE President
-----------------------------
ATTEST: AUTOTOTE SYSTEMS, INC.
/s/ illegible BY
- ---------------------------------- -----------------------------------
VICE PRESIDENT
19
<PAGE>
MIAMI JAI ALAI
SCHEDULE "A"
Autotrak II Sell/Cash Totalisator System which is installed at Autotote's
Orlando Hub and other equipment residing at Miami Jai Alai consisting of:
Digital VAX Computers*
Disk Units*
Mag Tape Units*
Board Control Units
Color Video Channels
High Speed Line Printers**
Consoles**
Logging Printers**
Tote Control Desk**
Up to 135 Autotrak II Sell/Cash Terminals
(with Brander and Bet Slip Reader in all terminals)
Up to 25 Screen Activated Self-Service AutoVend Terminals (SAM).
For all over 25 SAM's supplied to OWNER by AUTOTOTE OWNER will pay AUTOTOTE
Ten dollars ($10.00) per operating day per terminal in addition to all other
payments.
Up to 5 customer operated voucher dispenser terminals. For all over 5 Voucher
Dispenser Terminals supplied to OWNER by AUTOTOTE OWNER will pay AUTOTOTE Ten
dollars ($10.00) per operating day per terminal in addition to all other
payments.
A minimum of twenty five (25) Tiny TIM Personal Account Touch Screen
Terminals. To be invoiced starting May 17, 1990. Subject to OWNER'S right of
removal as stated in the Agreement.
All existing 9" Lamp Boxes and 9" Dashes
Set of Power Equipment for above Public Display Board
Magnetic Tape Storage Cabinet w/set of Magnetic Tapes to store History of
Performances for 1 Full Year*
Motorola Beeper System with Beepers
Autotrak II Sell/Cash Software*
2 - 50 VDC 100 Amp motor generators
1-30 KVA Kohler Generator
Uninterrupted Power Supply (UPS)
* Equipment installed at Orlando Hub
** Equipment installed at Miami Jai Alai and Orlando Hub
AUTOTOTE RESERVES THE RIGHT TO SUBSTITUTE EQUIVALENT FUNCTION COMPONENTS IN
PLACE OF ANY OF THE ABOVE ITEMS.
20
<PAGE>
MIAMI JAI ALAI
SCHEDULE "C"
LINE PRINTER REPORTS
The following reports are provided:
CYCLIC REPORTS (Totals, Odds, Probable Pays)
REFUNDS REPORT
RESULTS AND DIVIDENDS REPORTS
PRICE CALCULATION REPORTS
WILL-PAYS REPORTS (FOR DOUBLE)
TELLER BANK BALANCE REPORT
FINAL TELLER BALANCE REPORTS (with Overs and Shorts)
WINDOW BALANCE REPORTS
WINDOW ALLOCATION REPORTS
PERFORMANCE POOL TOTALS REPORT
PERFORMANCE SALES SUMMARY REPORT
SALES SUMMARY REPORTS (by Pool)
IRS REPORT
CASHED TICKETS REPORT
UNCASHED TICKETS REPORT
CASHING SUMMARY REPORTS (All Cashing Activity)
PERFORMANCE PARAMETERS REPORT
BETTING ACTIVITY BREAKDOWN BY BET TYPE AND TICKET COUNT
WINDOW TRANSACTION REPORTS
* HISTORY REPORTS
SUPPLIED IF APPLICABLE:
ADVANCE POOL TOTALS REPORTS
PURGED TICKETS REPORT (Overage unpaid winners)
FUTURE DAY POOLS REPORT
FUTURE DAY BETTING SUMMARY REPORT
* Teller Histories will be supplied on request for up to an average of
three (3) tellers per performance. Charges will be billed for AUTOTOTE'S
labor for all Teller Histories in excess of that amount.
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<PAGE>
MIAMI JAI ALAI
SCHEDULE "D"
The equipment listed in Schedule "A" annexed shall have the following minimum
capabilities:
1 The central totalisator system shall accurately total the amounts wagered
in the Win, Place, Show, Daily Double, Quiniela, Quiniela Double,
Perfecta, Trifecta, Superfecta, Pick-6 Pools and all other pools in
Autotote's U.S. on-track VAX/Autotrak II program. It shall provide a
record of all such totals and be capable of transmitting to the
appropriate display board(s) at regular intervals the data presently
prescribed for display on such board(s). The system shall be capable of
performing the following functions:
(A) Accepting wagers on a maximum of eight (8) players per game in each
of the pools referred to in paragraph 1 above.
(B) Accepting wagers in any integral multiple of $1 to a maximum of
$1,000. The Pick-6 pool shall consist of only one (1) bet value.
(C) Accepting and storing wagers on each game and pool held or operated
at the site from the time of opening of wagering at the site on the
day such game or pool is held or operated, and ending at the time of
closing of wagering for such game or pool. Also, accepting and storing
wagers for the next day's performance and one additional future game
or pool on a subsequent operating day up until the time of closing of
wagering for such future game or performance.
(D) Providing those reports listed on Schedule "C" attached hereto.
(E) Providing for an accounting of outstanding live tickets as an
integral part of the system during the operating season in which such
outstanding tickets were purchased. At the conclusion of such
operating season, AUTOTOTE shall deliver to OWNER such listing of
outstanding tickets listing serial number, date of purchases, bet
details and value of each such ticket.
(F) Cancelling any ticket prior to the close of wagering of the game for
which the ticket was purchased, and reducing the appropriate pool or
pools by the amount(s) so wagered.
(G) Provide the necessary display indicators to display all information
currently formatted for the public's benefit at the site.
(H) Making available up to six (6) channels of color video out-put to the
OWNER'S closed-circuit TV supplier for use over such network.
(1) Order of finish of the first four (4) players and pay-off prices
for the first three official finishers for the base set amount OR
for $2.00 wagers.
(2) Teller Assignments.
(3) Probable odds for Win and Quiniela pools, also Time of Day, Post
Time, and Minutes to Post.
(4) Probable odds for the Daily Double and Perfecta pools.
(5) Lead runner totals for Trifecta pools.
(6) All-Pay cyclic display, consisting of results and prices for
each game during current performance.
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<PAGE>
(I) Provide update information for the following video display units:
(1) EXECUTIVE INFORMATION CONSOLE - The Executive Information
Console is an additional control console provided to allow a
fronton's management the ability to obtain the most current
information and statistics about the currently running
performance. This console can be used to report a variety of types
of information, such as total money wagered during the performance
or betting totals of a specified game, that may be relevant to
fronton management.
(2) PUBLIC INFORMATION CONSOLE - The Public Information Console is
an additional video display console which would normally be used
at a fronton's public information (non-betting) window. The
console is used to obtain game results and prices from any
previous game during the current season for use in responding to
patrons requests for information.
2. TERMINALS
(A) Each terminal shall be capable of:
(1) Printing and issuing standard length tickets for all pools and
denominations as described in paragraph 1(A) (SCHEDULE "D").
(2) Reading, transmitting to and receiving from the central
totalisator data for betting slips and cashing winning tickets
and branding on such winning tickets their total value and an
integral portion of their unique serial number.
(3) Accommodating up to four compound wagers on each standard length
ticket issued.
(4) Providing status indicators and error messages to terminal
operators.
(5) Providing special terminal functions to the terminal operators
which allow them to report to the system draws or returns of cash
and final cash balance at end of performance, inquire of the
system current cash position and convert their terminal to
calculator mode.
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<PAGE>
CONSULTING AND NONCOMPETITION AGREEMENT
This is a Consulting and Noncompetition Agreement (this "Agreement") dated
December 31, 1996, among Florida Gaming Centers, Inc., a Delaware Corporation
(the "Company") and Richard P. Donovan (the "Consultant").
RECITALS
A. The Company is purchasing the assets of WJA Realty Limited
Partnership, a Massachusetts limited partnership ("Seller") pursuant to an
Assets Purchase Agreement dated as of November 20, 1996 (the "Purchase
Agreement"), between Florida Gaming Corporation ("FGC"), the Company and Seller.
All capitalized terms used, but not defined herein shall have the meanings
assigned to them in the Purchase Agreement.
B. Following the Company's purchase of the Assets, the Company wishes to
benefit from the Consultant's experience and knowledge by utilizing him as a
consultant to the Company, and the Company further wishes to prevent Consultant
from competing with the Company subject to the terms and conditions set forth
herein.
TERMS AND CONDITIONS
1. CONSULTING SERVICES. In consideration of the Company's purchase of
the Assets from Seller and the payment by the Company to the Consultant of
$20,000.00 per month for each of the sixty months following the date hereof, the
Consultant agrees for a period of five years from the date hereof to provide
such consulting services as may reasonably be requested by officers or directors
of the Company, including, without limitation, (i) advising the Company
regarding the operations of the business; (ii) advising the Company regarding
its marketing and promotional plans and activities; (iii) participating in the
preparation of competitive analyses; (iv) advising the Company regarding
political matters (v) assisting with Corporate expansion and business
development programs. Notwithstanding the foregoing, the Consultant shall be
obligated to assist and advise the Company sixty hours per month (but no more)
to the extent he is requested to do so by officers or directors of the Company.
2. INSURANCE. The Company will pay the premiums for Consultant's life
insurance policy with John Alden Insurance Company for the term of this
Agreement. The premium obligation of the Company for the Consultant's life
insurance policy will not exceed $14,000 per annum. During the term of this
Agreement, the Company shall provide the Consultant with coverage under the
group health insurance plan in effect from time to time for the Company's
employees (the "Plan") on the same terms and conditions that the Company
generally provides such insurance to its employees from time to time; provided,
that the Company shall have no obligation to provide the Consultant with health
insurance except to the extent that the Plan permits the Company to do so under
the Plan.
3. STOCK OPTION. Concurrent with the purchase of the Assets, and the
execution of this Agreement, the Company will cause FGC to grant Consultant an
option to purchase 50,000 shares of the common stock of FGC pursuant to an
option agreement between the Company and the
<PAGE>
Consultant in the form of Attachment A hereto. The exercise price shall be the
market price at the close of business on the Closing Date. The option shall be
exerciseable at any time within five years of the Closing.
4. COVENANTS OF THE CONSULTANT. In further consideration for the
Company's purchase of the Assets and the payments to be made to the Consultant
hereunder, the Consultant covenants and agrees as follows:
(a) COVENANT NOT TO COMPETE. During the term of this Agreement,
except for the services to be rendered by the Consultant under this Agreement,
the Consultant shall not, directly or indirectly, either individually or as an
employee, agent, partner, shareholder, investor, director, consultant or in any
other capacity (i) participate or engage in, or assist others in participating
or engaging in, a parimutuel or gaming business within 75 miles of any of the
jai-alai frontons located in Miami, Ft. Pierce, Tampa, and Ocala, Florida; or
(ii) solicit, or assist others in soliciting, any employees of Company from
leaving their employ (including the current and former employees of Seller).
(b) CONFIDENTIALITY. The Consultant shall not communicate, disclose
or use for the benefit of himself or any other person, firm, partnership,
corporation or other entity (a "Person") in any way, or anywhere, any customer
or supplier lists, business secrets or methods, business policies, manuals of
instruction, reports, research, records, catalogs, samples, advertising,
brochures, or other forms, or any other confidential or proprietary information
or trade secrets of any type or description whatsoever belonging to the Company,
including, without limitation, those formerly belonging to Seller which are
being purchased by the Company pursuant to the Purchase Agreement ("Confidential
Information"). The Consultant acknowledges that to the best of his knowledge,
after due investigation, he has delivered to the Company all documents,
memoranda, notes, and other writings whatsoever (and all copies thereof)
prepared by the Consultant or otherwise, which contain or relate to Confidential
Information (the "Confidential Documents") which were in his possession or
control whether prepared by the Consultant or otherwise. Should the Consultant
discover that he does have possession or control of any Confidential Documents,
he shall immediately deliver them to the Company.
(c) REASONABLENESS OF COVENANTS. It is expressly understood and
agreed that although the Company and the Consultant consider the covenants
contained in this paragraph 4 to be reasonable for the purpose of preserving the
Company's proprietary rights and ongoing business value including, without
limitation, such rights and value transferred to the Company pursuant to the
Purchase Agreement, if a final judicial determination is made by a court having
jurisdiction that the time or territory or any other restriction contained in
this paragraph 4 is an unenforceable restriction against the Consultant, the
provisions of such restriction shall not be rendered void but shall be deemed
reduced as to a duration or scope or otherwise amended to such extent as such
court may judicially determine or indicate to be reasonable. Alternatively, if
the court referred to above finds that any restriction contained in this
paragraph 4 is unenforceable, and such restriction cannot be amended so as to
make it unenforceable, such finding shall not affect the enforceability of any
of the other restrictions contained herein.
-2-
<PAGE>
5. REMEDIES. The Consultant acknowledges that the Company has
consummated the transactions contemplated in the Purchase Agreement in reliance
upon Consultant's fulfillment of the obligations imposed by this Agreement. The
Consultant agrees that the Company may not be adequately compensated by money
damages for a breach by the Consultant of any of the covenants contained herein,
and the Consultant agrees that the Company shall be entitled, in addition to all
other remedies, to injunctive relief and specific performance of this Agreement.
The parties further agree that, if the Company reasonably determines that the
Consultant has breached any of his covenants contained herein, in addition to
all other remedies, the Company shall have the right to set off the amount of
any damages which it sustains as a result of such breach against any amounts the
Company owes to the Consultant, including, without limitation, any payments owed
to Seller pursuant to the Purchase Agreement.
6. REIMBURSEMENT OF EXPENSES. The Company shall reimburse the Consultant
for all reasonable travel, entertainment, and similar expenses that the Company
directs the Consultant to incur in connection with the provision of consulting
services under this Agreement. The Company shall not reimburse any expense that
is not specifically approved by the Company before it is incurred. Any
reimbursements under this paragraph shall be made upon the Consultant's
presentation to the Company, from time to time, of an account of such expenses
in such form and in such detail as the Company may reasonably request.
7. HOLD HARMLESS FROM AGREEMENT WITH SELLER. The Consultant has been an
employee of the Seller for a number of years. The Consultant represents and
warrants to the Company that (i) he has not received compensation from the
Seller in the last six months in excess of the Consultant's base salary plus
benefits listed in the schedules to the Purchase Agreement, (ii) he has not
received in the last six months any bonus, (iii) he is not entitled to any bonus
from Seller with respect to all or any part of calendar year 1996 or any period
thereafter, (iv) he is not entitled to any severance payment from Seller or any
similar benefit, and (v) the Seller owes nothing to the Consultant other than
the Consultant's base pay for the days completed in the current pay period. The
Consultant shall indemnify and hold the Company harmless against any losses it
incurs as a result of any inaccuracy in any of the foregoing representations and
warranties. The Company may setoff the amount of any such losses against
amounts that would otherwise be payable to the Consultant under this Agreement.
8. MISCELLANEOUS.
(a) ASSIGNABILITY. The services to be rendered by the Consultant
under this Agreement are unique and personal, and the Consultant may not assign
any of his rights or delegate any of his duties under this Agreement. The
rights or obligations of the Company under this Agreement shall benefit and bind
the successors and assigns of the Company.
(b) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida.
(c) ENTIRE AGREEMENT. This Agreement and the accompanying Option
Agreement constitute the entire agreement of the parties and supersedes all
prior understandings
-3-
<PAGE>
with respect to the subject matter hereof. No change in or modification of this
Agreement shall be enforceable, unless in writing and signed by the party
against whom enforcement is sought.
(d) INDEPENDENT CONTRACTOR. The parties acknowledge and agree that
the Consultant shall perform his consulting services hereunder as an independent
contractor and not as an employee of the Company. The Consultant shall not
have, receive or be entitled to receive under this Agreement any of the rights,
privileges, or benefits of employees of the Company.
(e) SEVERABILITY. If any provision of this Agreement or the
application thereof shall be adjudged by any court of competent jurisdiction to
be invalid, illegal, or unenforceable in any respect, the validity, legality,
and enforceability of all other applications of such provision, and of all other
provisions and applications hereof, shall not in any way be affected or impaired
unless such provision is of the essence of this Agreement.
(f) NO WAIVERS. No failure or delay on the part of any party
exercising any power or right under this Agreement shall operate as a waiver
thereof, and no single or partial exercise of any such right or power shall
preclude any other or further exercise thereof, or the exercise of any other
right or power under this Agreement.
(g) HEADINGS. The headings used in this Agreement have been included
solely for ease of reference and shall not be deemed a part of this Agreement in
construing or interpreting the provisions hereof.
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original. It shall not be
necessary in making proof of this Agreement or the terms hereof to produce or
account for more than one such counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first set forth above.
Florida Gaming Centers, Inc. Consultant
Name:
By ------------------------------
--------------------------------- Richard P. Donovan
Title: Signature:
----------------------------- -------------------------
Date: Date:
------------------------------ ------------------------------
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<PAGE>
CONSULTING AND NONCOMPETITION AGREEMENT
This is a Consulting and Noncompetition Agreement (this "Agreement") dated
December 31, 1996, among Florida Gaming Centers, Inc., a Delaware Corporation
(the "Company") and Roger M. Wheeler, Jr. (the "Consultant").
RECITALS
A. The Company is purchasing the assets of WJA Realty Limited
Partnership, a Massachusetts limited partnership ("Seller") pursuant to an
Assets Purchase Agreement dated as of November 20, 1996 (the "Purchase
Agreement"), between Florida Gaming Corporation ("FGC"), the Company and Seller.
All capitalized terms used, but not defined herein shall have the meanings
assigned to them in the Purchase Agreement.
B. Following the Company's purchase of the Assets, the Company wishes to
benefit from the Consultant's experience and knowledge by utilizing him as a
consultant to the Company, and the Company further wishes to prevent Consultant
from competing with the Company subject to the terms and conditions set forth
herein.
TERMS AND CONDITIONS
1. CONSULTING SERVICES. In consideration of the Company's purchase of the
Assets from Seller and the additional consideration described below, the
Consultant agrees for a period of ten years from the date hereof to provide such
consulting services as may reasonably be requested by officers or directors of
the Company, including, without limitation, (i) advising the Company regarding
the operation of its business; (ii) advising the Company regarding its marketing
and promotional plans and activities; (iii) participating in the preparation of
competitive analyses; and (iv) advising the Company regarding political matters.
Notwithstanding the foregoing, the Consultant shall be obligated to consult with
and advise the Company not more than ten hours per month if so requested by
officers or directors of the Company. The Company shall:
(a) Pay to the Consultant a fee (the "Consulting Fee"), as follows:
(1) One hundred thousand dollars ($100,000) for each of the first
five years commencing at the Closing Date, payable in arrears in
twelve equal monthly installments commencing one month after the
Closing Date,
(2) Fifty thousand dollars ($50,000) for each of the five years
commencing at the fifth anniversary of the Closing Date, payable
in arrears in twelve equal monthly installments, commencing one
month after such fifth anniversary,
(b) Cause to be issued to the Consultant an option to purchase twenty five
thousand (25,000) shares of the Common Stock of FGC pursuant to an
option agreement in the form of Attachment A hereto. The exercise
price shall be the market price of such stock as of the close of
business on the date of the Closing contemplated by the Purchase
Agreement. Such option shall be exercisable for five years.
<PAGE>
(c) Cause the Consultant and one other person designated by the Consultant
and approved by the Company (such approval shall not to be
unreasonably withheld) (i) to be appointed to the board of directors
of FGC and (ii) unless it would be inconsistent with the fiduciary
duties of the directors of FGC (as determined in good faith by such
directors) (a "Fiduciary Inconsistency"), to be renominated for
election to the FGC board of directors in connection with each
expiration of each of their terms during the entire ten year period
commencing at the Closing Date (the "Ten Year Period"). Upon each
Fiduciary Inconsistency, if any, FGC shall give notice to the
Consultant and the Consultant may, but shall not be required to,
propose by written notice to FGC a different individual to serve on
the FGC board. Upon such a proposal, the designated individual shall
be treated as the Consultant (or his designee, as appropriate) for the
purposes of clause (ii) of the first sentence of this subsection 1(c)
and shall therefore be nominated to the FGC board absent a Fiduciary
Inconsistency with respect to that individual. If the Consultant
should die during the Ten Year Period, Seller shall have the authority
to designate a different individual who shall, for the remainder of
the Ten Year Period, be treated as the Consultant for all purposes
under this subsection 1(c).
The Consulting Fee shall terminate upon the death of the Consultant, provided,
however, that the Company shall pay a death benefit to the estate of the
Consultant, in an amount equal to the Consulting Fee payments remaining to be
paid during the entire ten year duration of the Consulting Fee, as and when
those payments would have been due in the absence of the death of the
Consultant.
2. COVENANTS OF THE CONSULTANT. In further consideration for the
Company's purchase of the Assets and the payments to be made to the Consultant
hereunder, the Consultant covenants and agrees as follows:
(a) COVENANT NOT TO COMPETE. For a period of three years after the
date of this Agreement, except for the services to be rendered by the Consultant
under this Agreement, the Consultant shall not, directly or indirectly, either
individually or as an employee, agent, partner, shareholder, investor, director,
consultant or in any other capacity (i) participate or engage in, or assist
others in participating or engaging in, a parimutuel or gaming business within
75 miles of any of the jai alai frontons located in Miami, Ft. Pierce, Tampa,
and Ocala Florida; or (ii) solicit, or assist others in soliciting, any
employees of Company from leaving their employ (including the current and former
employees of Seller).
(b) CONFIDENTIALITY. The Consultant shall not communicate, disclose
or use for the benefit of themselves or any other person, firm, partnership,
corporation or other entity (a "Person"), in any way, or anywhere, any customer
or supplier lists, business secrets or methods, business policies, manuals of
instruction, reports, research, records, catalogs, samples, advertising
brochures, or other forms, or any other confidential or proprietary information
or trade secrets of any type or description whatsoever belonging to the Company,
including, without limitation, those formerly belonging to Seller which are
being purchased by the Company pursuant to the Purchase Agreement ("Confidential
Information"). The Consultant acknowledges that he has in his possession or
control documents, memoranda, notes and other writings (and copies thereof)
prepared by the Consultant or otherwise, which contain or relate to Confidential
Information (the "Confidential
-2-
<PAGE>
Documents"). Consultant shall take all steps necessary to maintain the
confidentiality of the Confidential Documents and shall not use the Confidential
Documents for any purpose other than in connection with (i) his duties under
this Agreement and (ii) any matters related to the Purchase Agreement.
(c) REASONABLENESS OF COVENANTS. It is expressly understood and
agreed that although the Company and the Consultant consider the covenants
contained in this paragraph 2 to be reasonable for the purpose of preserving the
Company's proprietary rights and ongoing business value including, without
limitation, such rights and value transferred to the Company pursuant to the
Purchase Agreement, if a final judicial determination is made by a court having
jurisdiction that the time or territory or any other restriction contained in
this paragraph 2 is an unenforceable restriction against the Consultant, the
provisions of such restriction shall not be rendered void but shall be deemed
reduced as to a duration or scope or otherwise amended to such extent as such
court may judicially determine or indicate to be reasonable. Alternatively, if
the court referred to above finds that any restriction contained in this
paragraph 2 is unenforceable, and such restriction cannot be amended so as to
make it unenforceable, such finding shall not affect the enforceability of any
of the other restrictions contained herein.
3. REMEDIES. The Consultant acknowledges that the Company has
consummated the transactions contemplated in the Purchase Agreement in reliance
upon Consultant's fulfillment of the obligations imposed by this Agreement. The
Consultant agrees that the Company may not be adequately compensated by money
damages for a breach by the Consultant of any of the covenants contained herein,
and the Consultant agrees that the Company shall be entitled, in addition to all
other remedies, to injunctive relief and specific performance of this Agreement.
The parties further agree that, if the Company reasonably determines that the
Consultant has breached any of his covenants contained herein, in addition to
all other remedies, the Company shall have the right to set off the amount of
any damages which it sustains as a result of such breach against any amounts the
Company owes to the Consultant, including, without limitation, any payments owed
to Seller pursuant to the Purchase Agreement.
4. REIMBURSEMENT OF EXPENSES. The Company shall reimburse the Consultant
for all reasonable travel, entertainment, and similar expenses that the Company
directs the Consultant to incur in connection with the provision of consulting
services under this Agreement. The Company shall not reimburse any expense that
is not specifically approved by the Company before it is incurred. Any
reimbursements under this paragraph shall be made upon the Consultant's
presentation to the Company, from time to time, of an account of such expenses
in such form and in such detail as the Company may reasonably request.
5. MISCELLANEOUS.
(a) ASSIGNABILITY. The services to be rendered by the Consultant
under this Agreement are unique and personal, and the Consultant may not assign
any of his rights or delegate any of his duties under this Agreement. The
rights or obligations of the Company under this Agreement shall benefit and bind
the successors and assigns of the Company.
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<PAGE>
(b) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the state of Florida.
(c) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties and supersedes all prior understandings with respect to
the subject matter hereof. No change in or modification of this Agreement shall
be enforceable, unless in writing and signed by the party against whom
enforcement is sought.
(d) INDEPENDENT CONTRACTOR. The parties acknowledge and agree that
the Consultant shall perform his consulting services hereunder as an independent
contractor and not as an employee of the Company. The Consultant shall not
have, receive or be entitled to receive under this Agreement any of the rights,
privileges, or benefits of employees of the Company.
(e) SEVERABILITY. If any provision of this Agreement or the
application thereof shall be adjudged by any court of competent jurisdiction to
be invalid, illegal, or unenforceable in any respect, the validity, legality,
and enforceability of all other applications of such provision, and of all other
provisions and applications hereof, shall not in any way be affected or impaired
unless such provision is of the essence of this Agreement.
(f) NO WAIVERS. No failure or delay on the part of any party
exercising any power or right under this Agreement shall operate as a waiver
thereof, and no single or partial exercise of any such right or power shall
preclude any other or further exercise thereof, or the exercise of any other
right or power under this Agreement.
(g) HEADINGS. The headings used in this Agreement have been included
solely for ease of reference and shall not be deemed a part of this Agreement in
construing or interpreting the provisions hereof.
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original. It shall not be
necessary in making proof of this Agreement or the terms hereof to produce or
account for more than one such counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first set forth above.
Florida Gaming Centers, Inc. Consultant
Name:
By ------------------------------
--------------------------------- Roger M. Wheeler, Jr.
Title: Signature:
----------------------------- -------------------------
Date: Date:
------------------------------ ------------------------------
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<PAGE>
Freedom Financial Corporation, in order to induce the Consultant to enter into
this Agreement, hereby agrees to cast, or to cause to be cast, one vote for each
of the shares of FGC to which it (or any entity controlled by it) is entitled to
vote in the election of FGC directors in favor of the individuals nominated
pursuant to clause (ii) of the first sentence of subsection 1(c) of the
agreement set forth above between the Company and the Consultant.
Freedom Financial Corporation
By
---------------------------------
Title:
-----------------------------
Date:
------------------------------
W. Bennett Collett, in order to induce the Consultant to enter into this
Agreement, hereby agrees to cast, or to cause to be cast, one vote for each of
the shares of FGC to which he (or any entity controlled by him) is entitled to
vote in the election of FGC directors in favor of the individuals nominated
pursuant to clause (ii) of the first sentence of subsection 1(c) of the
agreement set forth above between the Company and the Consultant.
- -----------------------------------
W. Bennett Collett
Date:
------------------------------
Florida Gaming Corporation, in order to induce the Consultant to enter into this
Agreement, hereby guarantees the Company's performance of its obligations under
Section 1 of the agreement set forth above between the Company and the
Consultant.
Florida Gaming Corporation
By
---------------------------------
Title:
-----------------------------
Date:
------------------------------
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<PAGE>
CREDIT LINE AGREEMENT
Date: 10/1/96
On or before DEMAND, I (we), FREEDOM FINANCIAL CORPORATION, promise to pay to
the order of Florida Gaming Corporation, at its office in New Albany, Indiana or
at such other place as is designated by the holder hereof up to $2,000,000
advanced under this agreement for value received with interest from date at the
rate of TWO percent (2%) above prime rate as published in the Wall Street
Journal per annum until paid, and all costs of collection, including fifteen
percent attorneys fees if collected by law or through an attorney at law.
Maker hereby waives demand, protest sand notice of demand, protest and
nonpayment.
This note is ( ) Unsecured
(X) Secured by: A FIRST LIEN ON FREEDOM FINANCIAL
CORPORATION'S FEDERAL TAX REFUNDS RECEIVABLE TOTALING APPROXIMATELY $95,000
THROUGH AND FOR THE YEAR ENDED 12/31/95 AND A SECURITY INTEREST IN 265 ACRES OF
COMMERCIAL PROPERTY OWNED BY FREEDOM IN WALTON COUNTY GEORGIA.
It is expressly agreed that time is of the essence of this agreement. Given
under the hand and seal of each party hereto:
FREEDOM FINANCIAL CORPORATION
/s/ Timothy L. Hensley By: /s/ W. B. Collett
- ----------------------------------- --------------------------------
Witness W. B. Collett, Chairman
<PAGE>
THIS DOCUMENT PREPARED BY AND
RETURN TO:
James. A. Huguenard
Brown, Todd & Heyburn
3200 Providian Center
Louisville, Kentucky 40202-3363
MORTGAGE
THIS MORTGAGE, made this 31st day of December, 1996 by FLORIDA GAMING
CORPORATION, a Delaware corporation, and FLORIDA GAMING CENTERS, INC., a Florida
Corporation, having an address of 1750 South Kings Highway, Ft. Pierce, Florida
34945 (hereinafter called "Mortgagor"), to BANK OF OKLAHOMA, N.A. a national
banking associations having an address of One Williams Center, 8th Floor, Tulsa,
OK 74172 (hereinafter called "Mortgagee").
W I T N E S S E T H:
WHEREAS, Mortgagor is justly indebted to Mortgagee, having executed and
delivered to Mortgagee its promissory note, ("Note"), dated September 12, 1996,
wherein Mortgagor promises to pay to Mortgagee the principal sum with interest
thereon at the rate and times and in the manner and according to the terms and
conditions specified in the Note, which note was made, executed, delivered and
is payable outside the state of Florida.
NOW THIS INDENTURE WITNESSETH, that Mortgagor, in consideration of the
indebtedness and to secure the payment to Mortgagee of ONE MILLION EIGHT HUNDRED
THOUSAND AND 00/100 DOLLARS ($1,800,000.00) of the principal with interest due
under the Note, has granted, bargained, sold and conveyed and by these presents
does grant, bargain, sell and convey unto Mortgagee that certain tract or parcel
of land lying and being in the County of St. Lucie and the State of Florida more
particularly described and set forth on EXHIBIT A hereto and made part hereof
(hereinafter the "Property").
TOGETHER with all and singular the tenements, hereditaments, easements,
appurtenances, passages, waters, water courses, riparian rights, other rights,
liberties and privileges thereof or in any way now or hereafter appertaining,
including any other claim at law or in equity as well as any after acquired
title, franchise or license and the reversion(s) and remainder(s).
TOGETHER with all buildings and improvements of every kind and description
now or hereafter erected or placed thereon. The Property and buildings, parking
spaces, improvements, fixtures,
<PAGE>
machinery, equipment, tenements, personal property, property interests and all
other rights herein being hereinafter collectively called the "Mortgaged
Property".
TOGETHER with all of Mortgagor's right, title and interest now or
hereafter acquired by Mortgagor in and to all leases, agreements of sale and
other agreements in connection with the real property covered by this Mortgage,
and the rents, issues and profits payable therefrom.
TO HAVE AND TO HOLD the above granted and described Mortgaged property unto
Mortgagee, its successors and assigns, forever.
AND Mortgagor hereby represents, warrants and covenants with Mortgagee that
Mortgagor is indefeasibly seized of the Mortgaged Property in fee simple; that
Mortgagor has full power and lawful right to convey the same in fee simple as
aforesaid; that it shall be lawful for Mortgagee at all times peaceably and
quietly to enter upon, hold, occupy and enjoy the Mortgaged Property and every
part thereof; that the Mortgaged Property is free from all liens and
encumbrances, that all property, fixtures and equipment described herein will be
fully paid for and free from all liens, encumbrances, title retaining contracts
and security interests when delivered and/or installed upon the Mortgaged
Property; that such property, fixture and equipment shall be deemed to be realty
and a part of the freehold; that Mortgagor will make such further assurances to
prove the fee simple title to all and singular the Mortgaged Property in
Mortgagee; to prove the lien and priority of this Mortgage, as may be reasonably
required, that Mortgagor does hereby and will forever fully warrant and defend
the lien and priority of this Mortgage, the title to the Mortgaged Property and
every part thereof against the lawful claims and demands of all persons
whomsoever.
PROVIDED ALWAYS, and these presents are upon the express condition that if
Mortgagor or the successors or assigns of Mortgagor shall pay unto Mortgagee,
its successors or assigns, the sums of money secured hereby, and any renewals or
extensions thereof in whatever form, and the interest thereon as it shall become
due, according to the true intent and meaning thereof, together with all
advances hereunder, costs, charges and expenses, including reasonable attorneys'
fees, which Mortgagee may incur in collecting the same by foreclosure or
otherwise; and shall duly, promptly and fully perform, discharge, execute,
effect, complete, comply with and abide by each and every of the stipulations,
agreements, conditions and covenants of the Note and this Mortgage, then this
Mortgage and the estate hereby created shall cease and be
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<PAGE>
null and void and this instrument shall be released by Mortgagee, at the cost
and expense of Mortgagor.
MORTGAGOR COVENANTS AND AGREES to and with Mortgagee that until the
indebtedness secured hereby is fully repaid:
1. PAYMENT AND PERFORMANCE. Mortgagor shall pay to Mortgagee, in
accordance with the terms of the Note and this Mortgage, the principal and
interest, and other sums therein set forth; and shall perform and comply with
all the agreements, conditions, covenants, provisions and stipulations of the
Note and this Mortgage, the terms of which are incorporated herein by reference.
2. INTEREST RATE. Notwithstanding any provisions contained in this
Mortgage or in the Note secured hereby, the total liability for payment of
interest, or payment in the nature of interest, shall not exceed the limits
imposed by applicable usury laws, including the applicable choice of law rules
in effect at the time such interest shall become due. In the event of the
acceleration of the Note hereby secured, the total charges for interest and in
the nature of interest shall not exceed the maximum amount allowed by law, and
any excess portion of such charges that may have been prepaid shall be refunded
to the maker thereof. Such refund may be made by application of the amount
involved against the sums then due hereunder, but such crediting shall not cure
or waive the default occasioning acceleration. Nothing herein contained nor in
any transaction related hereto shall be construed or shall so operate either
presently or prospectively to require Mortgagor to make any payment or do any
act contrary to law, but if any clause or provision herein contained shall
otherwise so operate to invalidate this mortgage, in whole or in part, then such
clause or provision only shall be held or naught as though not herein contained
and the remainder of this Mortgage shall remain operative and in full force and
effect.
3. MAINTENANCE OF MORTGAGED PROPERTY. Mortgagor shall abstain from and
shall not permit the commission of waste, impairment or deterioration in or
about the Mortgaged Property and shall not remove or demolish or alter the
structural character of any building erected at any time on the mortgaged
property, without the prior written consent of Mortgagee; shall not permit the
Mortgaged Property to become vacant, deserted, or unguarded; and shall maintain
the Mortgaged Property in good condition and repair, reasonable wear and tear
excepted.
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<PAGE>
4. INSURANCE. Mortgagor shall keep the Mortgaged Property continuously
insured, including, but not limited to, insurance against loss or damage by
fire, with extended coverage, for all improvements now or hereafter located on
the Mortgaged Property, and Mortgagor shall also continuously maintain public
liability insurance and property damage insurance, all of which shall be issued
by an insurance company, or companies reasonably satisfactory to Mortgagee, and
in such total amounts as Mortgagee may reasonably determine from time to time.
Each policy shall be in a form reasonably satisfactory to Mortgagee, shall be
maintained in full force and effect, shall be endorsed with a standard mortgagee
clause in favor of Mortgagee as first mortgagee and shall provide for at least
ten (10) days notice to Mortgagee prior to cancellation thereof. If the
insurance, or any part thereof, shall expire, or be withdrawn, or become void by
Mortgagor's breach of any condition thereof, or become void or unsafe by reason
of failure or impairment of the capital of any company in which the insurance
may then be carried, Mortgagor shall place new insurance on the Mortgaged
Property. In the event of loss, Mortgagor will give immediate notice thereof to
Mortgagee, and Mortgagee may make proof of loss if not made promptly by
Mortgagor. Any proceeds of such insurance shall, at Mortgagor's full option,
either be applied against the Note (to the extent of the amount then outstanding
under the Note) or used to restore the Mortgaged Property. Neither the
Mortgagee nor any assignee of the Mortgagee shall have any interest in such
proceeds to the extent they exceed the amount then outstanding under the Note.
5. TAXES AND OTHER CHARGES. Mortgagor shall pay when due and payable
without any deduction, defalcation or abatement, all taxes, assessments, levies,
liabilities, obligations, encumbrances, water and sewer rents and all other
charges or claims of every nature and kind which may be imposed, suffered,
placed, assessed, levied, or filed at any time against Mortgagor, the Mortgaged
Property or any part thereof or against the interest of Mortgagee therein, or
which by any present or future law may have priority over the indebtedness
secured hereby either in lien or in distribution out of the proceeds of any
judicial sale, without regard to any law heretofore or hereafter to be enacted
imposing payment of the whole or any part upon Mortgagee.
6. SECURITY AGREEMENT. This Mortgage constitutes a security agreement
under the Uniform Commercial Code as adopted in the State of Florida and creates
a security interest in the "personal property" included in the Mortgaged
Property. Mortgagor shall execute, deliver, file and refile any financing
statements or other security agreements Mortgagee may require from time to time
to
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<PAGE>
confirm the lien of this Mortgage with respect to such property. A carbon,
photographic or other reproduction of this Mortgage or any financing statement
relating hereto shall be sufficient as a financing statement and may be filed in
any public office as a financing statement.
7. COMPLIANCE WITH LAW AND REGULATIONS. Mortgagor shall comply with all
restrictions of record and all laws, statutes, codes, ordinances, rules,
regulations, resolutions and orders of all federal, state, municipal, other
governmental, quasi-governmental authorities and agencies relating in any way to
the Mortgaged Property.
8. INSPECTION. Mortgagee, and any persons authorized by Mortgagee, shall
have the right at any time, upon reasonable notice to Mortgagor, to enter the
Mortgaged Property at a reasonable hour to inspect its condition and state of
repair.
9. REQUIRED NOTICES. In addition to any notice requirements contained
elsewhere in this Mortgage or in any of the other loan documents, Mortgagor
shall notify Mortgagee promptly of the occurrence of any of the following:
(a) casualty causing damage to the Mortgaged Property;
(b) receipt of notice of condemnation of the Mortgaged Property; and
(c) receipt of notice from any government or quasi-governmental
authority relating to the development of, improvements on, use of, or occupancy
of the Mortgaged Property.
10. CONDEMNATION.
(a) In the event of any condemnation or taking of any part of the
Mortgaged Property by eminent domain, alteration of grade of street, other
injury to or decrease in the value of the Mortgaged Property by any public,
quasi-public authority or corporation, all proceeds (that is, the award or
agreed compensation for the damages sustained) allocable to Mortgagor shall be
applicable first to payment of the indebtedness secured hereby. Mortgagor shall
continue to pay installments of interest and other charges until payment of the
proceeds have been received by Mortgagee in the full amount secured hereunder.
(b) If the amount of the initial award of damages for the
condemnation is insufficient to pay in full the indebtedness
-5-
<PAGE>
secured hereby with interest and other appropriate charges, Mortgagee shall have
the right to prosecute, of final determination or settlement, of an appeal, or
other appropriate proceedings in the name of Mortgagee or Mortgagor, for which
Mortgagee is hereby appointed irrevocably as attorney-in-fact for Mortgagor,
which appointment, being for security, is irrevocable. In that event, the
expenses of the proceedings, including reasonable counsel fees, shall be paid
first out of the proceeds, and only the excess, if any, paid to Mortgagee shall
be credited against the amounts due under this Mortgage.
(c) Nothing herein shall limit the rights otherwise available to
Mortgagee, at law or in equity, including the right to intervene as a party to
any condemnation proceeding.
11. EVENTS OF DEFAULT. Each of the following shall constitute an event of
default ("Event of Default") hereunder:
(a) Mortgagor's noncompliance or nonperformance of any term, covenant
or condition contained this Mortgage or the Note.
(b) The commencement of any levy, execution or attachment proceedings
against Mortgagor or the Mortgaged Property, the application for or appointment
of a liquidator, receiver, custodian, sequestrator, conservator, trustee, or
other similar judicial officer (and such appointment continues for a period of
thirty (30) days).
(c) The insolvency (in the bankruptcy or equity sense), of Mortgagor
or any principal thereof, which condition continues for a period of thirty (30)
days.
(d) The assignment for the benefit of creditors, or the admission in
writing, of an inability to pay any debts generally as they become due, or the
ordering of the liquidation of its affairs, by Mortgagor under insolvency,
bankruptcy, creditor adjustment, debtor rehabilitation or similar state or
federal law.
(e) Failure of Mortgagor to pay any installment of interest or
principal and interest, or any other sum, on the date it is due under the Note
or this Mortgage.
(f) Any default under any other term of this Mortgage or the Note.
12. REMEDIES.
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<PAGE>
(a) Upon the happening of any Event of Default, this conveyance shall
become absolute and the entire unpaid balance of the principal, the accrued
interest and all other sums due hereunder or under the loan documents and
secured by this Mortgage shall become immediately due and payable, at the option
of Mortgagee, without notice or demand.
(b) When the entire indebtedness shall become due and payable, either
because of maturity or because of the occurrence of any Event of Default, or
otherwise, then forthwith:
(i) FORECLOSURE. Mortgagee may institute an action to foreclose
this Mortgage against the Mortgaged Property, or take such other action at law
or in equity for the enforcement of this Mortgage and realization on the
mortgage security or any other security herein or elsewhere provided for, as the
law may allow, and may proceed therein to final judgment and execution for the
entire unpaid balance of the principal debt, with interest at the rate
stipulated in the Note to the date of default, together with all other sums due
by Mortgagor in accordance with the provisions of the Note and this Mortgage,
including all sums which may have been loaned by Mortgagee to Mortgagor after
the date of this Mortgage, and all sums which may have been advanced by
Mortgagee for taxes, water or sewer rents, charges or claims, payments on prior
liens, completion of construction of improvements, insurance or repairs to the
Mortgaged Property, all costs of suit, together with interest at such rate on
any judgment obtained by Mortgagee from and after the date of any foreclosure
sale until actual payment is made as of the full amount due Mortgagee, and
reasonable attorneys' fees for collection, or Mortgagee may foreclose only as to
the sum past due with interest and costs as above provided (including attorneys'
fees), without injury to this Mortgage or the displacement or impairment of the
remainder of the lien thereof, and at such foreclosure sale the Mortgaged
Property shall be sold subject to all remaining items of indebtedness; and
Mortgagee may again foreclose, in the same manner, as often as there may be any
sum past due. In the event Mortgagee forecloses this Mortgage against the
Mortgaged Property, Mortgagee may, at its option and in its sole and absolute
discretion, assume all rights (but not the obligation unless consented to by
Mortgagee) as owner of the Mortgaged Property; or
(ii) POSSESSION. Mortgagee may enter into possession of the
Mortgaged Property; collect therefrom all rentals (which term shall also include
sums payable for use and occupation) and, after deducting all costs of
collection and administration expenses, apply the net rentals to any or all of
the following in
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<PAGE>
such order and amounts as Mortgagee, in Mortgagee's sole discretion, may elect:
the payment of taxes, water and sewer rents, charges and claims, insurance
premiums and all other carrying charges, the completion of construction of the
buildings and improvements of the Mortgaged Premises, on account and in
reduction of the principal or interest, or both, hereby secured; or
(iii) RECEIVER. Mortgagee, without regard to the value or
occupancy of the Mortgaged Property or the solvency of Mortgagor, with or
without notice to Mortgagor, shall be entitled as a matter of right, if it so
elects, to the appointment of a receiver to enter upon and take possession of
the Mortgaged Property and to collect all rents, revenues, issues, income,
products and profits thereof and apply the same as the court may direct. The
receiver shall have all rights and powers permitted under the laws of the state
where the Mortgaged Property is located and such other powers as the court
making such appointment shall confer. The expenses, including receiver's fees,
attorneys' fees, costs and agent's compensation, incurred pursuant to the powers
herein contained shall be secured by this Mortgage. The right to enter, take
possession of, manage and operate the Mortgaged Property, collect the rents,
issues and profits thereof, whether by a receiver or otherwise, shall be
cumulative to any other right or remedy hereunder or afforded by law, and may be
exercised concurrently therewith or independently thereof. Mortgagee shall be
liable to account only for such rents, issues and profits as are actually
received by Mortgagee. Notwithstanding the appointment of any receiver or other
custodian, Mortgagee shall be entitled as pledgee to the possession and control
of any cash, deposits, or instruments at the time held by, payable or
deliverable under the terms of this Mortgage to Mortgagee.
(c) Mortgagee shall have the right, from time to time, to bring an
appropriate action to recover any sums required to be paid by Mortgagor under
the terms of this Mortgage, as they become due, without regard to whether or not
the principal indebtedness or any other sums secured by the Note and this
Mortgage shall be due, and without prejudice to the right of Mortgagee
thereafter to bring an action of mortgage foreclosure, or any other action, for
any default by Mortgagor existing at the time the earlier action was commenced.
13. RIGHTS AND REMEDIES CUMULATIVE.
(a) The rights and remedies of Mortgagee as provided in the Note and
this Mortgage shall be cumulative and concurrent; may be pursued separately,
successively or together against Mortgagor
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<PAGE>
or against the Mortgaged Property, or both, at the sole discretion of Mortgagee,
and may be exercised as often as occasion shall arise. The failure to exercise
any such right or remedy shall in no event be construed as a waiver or release
thereof.
(b) Any failure by Mortgagee to insist upon strict performance by
Mortgagor of any of the terms and provisions of this Mortgage or the Note shall
not be deemed to be a waiver of any of the terms or provisions thereof, and
Mortgagee shall have the right thereafter to insist upon strict performance by
Mortgagor of any and all of them.
(c) Mortgagor nor any other person now or hereafter obligated for
payment of all or any part of the sums now or hereafter secured by this Mortgage
shall be relieved of such obligation by reason of failure of Mortgagee to comply
with any request of Mortgagor, or any other person so obligated to take action
to foreclose on this Mortgage or otherwise enforce any provisions of the
Mortgage or Note, or by reason of release, regardless of consideration, of all
or any part of the security held for the indebtedness secured by this Mortgage,
or by reason of any agreement or stipulation between any subsequent owner of the
Mortgaged Property and Mortgagee extending the time of payment or modifying the
terms of the Note, without first having obtained the consent of Mortgagor, or
such other person; and in the latter event, Mortgagor, and all such other
persons shall continue to be liable to make payments according to the terms of
any such extension or modification agreement, unless expressly released and
discharged in writing by Mortgagee.
(d) Mortgagee may release, regardless of consideration, any part of
the security held for the indebtedness secured by this Mortgage without, as to
the remainder of the security, in any way impairing or affecting the lien of
this Mortgage or its priority over any subordinate lien.
(e) For payment of the indebtedness secured hereby Mortgagee may
resort to any other security therefor held by Mortgagee in such order and manner
as Mortgagee may elect.
14. FUTURE ADVANCES. Pursuant to the laws of the State of Florida, this
Mortgage shall secure not only the existing indebtedness evidenced by the Note,
but also such future advances as may be made by Mortgagee to Mortgagor in
accordance with the Note or this Mortgage, whether or not such advances are
obligatory or are to be made at the option of Mortgagee, or otherwise, as are
made within twenty (20) years from the date hereof, to the same
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<PAGE>
extent as if such future advances were made on the date of the execution of this
Mortgage, and the total amount of indebtedness that shall be so secured by this
Mortgage may decrease or increase from time to time, provided that the total
unpaid balance so secured at any one time shall not exceed a principal amount of
TWO MILLION EIGHT HUNDRED THOUSAND AND NO/100's ($2,800,000.00) DOLLARS plus
interest thereon and plus any disbursements made for the payment of taxes,
levies or insurance on the property covered by the lien of this Mortgage,
together with interest on such disbursements.
15. COMMUNICATIONS. All communications required under this Mortgage or
the Note shall be in writing, and shall be sent by registered or certified mail,
postage prepaid, addressed to Mortgagor and Mortgagee at the address set forth
in the heading of this Mortgage, or to such other address as either party may
designate from time to time by notice to the other in the manner set forth
herein.
16. AMENDMENT. This Mortgage cannot be changed or amended except by an
agreement in writing duly executed by the party against whom enforcement of the
change is sought.
17. DEFINITIONS. Whenever used in this Mortgage, unless the context
clearly indicates a contrary intent:
(a) the word "Mortgagor" shall mean the person who executed this
Mortgage and any subsequent owner of the Mortgaged Property and his respective
heirs, executors, administrators, successors and assigns;
(b) the word "Mortgagee" shall mean the person specifically named
herein as "Mortgagee" or any subsequent holder of this Mortgage;
(c) the word "Person" shall mean individual, corporation, partnership
or unincorporated association;
(d) the use of any gender shall include all genders;
(e) the singular number shall include the plural and
the plural number the singular as the context may require; and
(f) if Mortgagor be more than one person, all agreements, conditions,
covenants, provisions, stipulations,
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<PAGE>
warrants of attorney, authorizations, waivers, release, options, undertakings,
rights and benefits made or given by Mortgagor shall be joint and several, and
shall bind and affect all persons who are defined as "Mortgagor" as fully as
through all of them were specifically named herein wherever the word "Mortgagor"
is used.
18. CAPTIONS. The captions preceding the text of the paragraphs or
subparagraphs of this Mortgage are inserted only for convenience of reference
and shall not constitute a part of this Mortgage, nor shall they in any way
affect its meaning, construction or effect.
19. APPLICABLE LAW. This Mortgage shall be governed by and construed in
accordance with the laws of the State of Florida.
20. JURISDICTION. Mortgagor consents to the exclusive
jurisdiction of the courts of the state of Florida and the Federal Courts
located in Florida in any and all actions and proceedings whether arising
hereunder or under any other agreement or undertaking, and irrevocably agrees to
service of process by certified mail, return receipt requested, postage prepaid,
to its address set forth herein or such other address as Mortgagor specifies to
Mortgagee in writing.
21. VENUE. Mortgagor agrees that venue for any action brought by
Mortgagee under this Mortgage shall be St. Lucie County, Florida.
IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly executed
on the day and year first above written.
Signed, sealed and delivered FLORIDA GAMING CORPORATION,
in the presence of: a Delaware corporation
By
---------------------------------
(Print Name) W. Bennett Collett, Chairman
and Chief Executive Officer
(Corporate Seal)
(Print Name)
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<PAGE>
STATE OF )
) SS:
COUNTY OF )
THE FOREGOING INSTRUMENT was acknowledged before me this ____ day of _____,
1996, by W. Bennett Collett, as Chairman and Chief Executive Officer of Florida
Gaming Corporation, a Delaware corporation, on behalf of the corporation. He
has produced a Driver's License as identification and took an oath.
---------------------------------------
Notary Public
(Notary Seal) My Commission Expires:
Signed, sealed and delivered FLORIDA GAMING CENTERS, in the
presence of: INC.
a Florida corporation
By
--------------------------------
(Print Name) W. Bennett Collett, Chairman
and Chief Executive Officer
(Corporate Seal)
(Print Name)
STATE OF )
) SS:
COUNTY OF )
THE FOREGOING INSTRUMENT was acknowledged before me this ____ day of
________, 1996, by W. Bennett Collett, as Chairman and Chief Executive Officer
of Florida Gaming Centers, Inc., a Florida corporation, on behalf of the
corporation. He has produced a Driver's License as identification and took an
oath.
---------------------------------------
Notary Public
(Notary Seal) My Commission Expires:
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<PAGE>
Exhibit A
Property Description
The South 1/2 of the SW 1/4 of the NW 1/4 of Section 13, Township 35 South,
Range 39 East, St. Lucie County, Florida; EXCEPTING therefrom the right of way
for Kings Highway and ALSO EXCEPTING therefrom the following described property,
to-wit: From the SW corner of said South 1/2 of the SW 1/4 of the NW 1/4
running East 25 feet to the East right of way of Kings Highway for the Point of
Beginning; thence continue East 333.4 feet; thence North 243.0 feet; thence West
333.4 feet to the East right of way of Kings Highway; thence South along the
said East right of way 243 feet to the Point of Beginning, as delineated on a
survey dated March 24, 1972, prepared by A. G. Weatherington and Associates,
Inc., Florida Certificate No. 1859.
The North 1/2 of the NW 1/4 of the SW 1/4 Less the South 150 feet of the
North 300 feet of the East 247 feet, more or less, of the West 272 feet, more or
less, and LESS the West 134 feet of the East 218 feet of the South 165 feet of
the North 337 feet and LESS the East 264 feet of the West 536.4 feet of the
North 334.41 feet; ALSO LESS AND EXCEPTING the right of way for Kings Highway
(State Road 607), all lying and being in Section 13, Township 35 South, Range 39
East, St. Lucie County, Florida, as delineated on a survey dated March 24, 1972,
prepared by A. G. WEATHERINGTON and Associates, Inc., Florida Certificate No.
1859.
The West 134 feet of the East 218 feet of the South 165 feet of the North
337 feet of the North 1/2 of the NW 1/4 of the SW 1/4 of Section 13, Township 35
South, Range 39 East, St. Lucie County, Florida.
<PAGE>
SECURED NOTE
NEGOTIABLE PROMISSORY INSTALLMENT NOTE
$6,000,000.00 Tulsa, Oklahoma
SEPTEMBER 12, 1996
FOR VALUE RECEIVED, FLORIDA GAMING CORPORATION (the "Borrower") hereby
promises to pay to the order of BANK OF OKLAHOMA, NATIONAL ASSOCIATION (the
"Bank"), at the Bank's principal offices in Tulsa, Oklahoma, in lawful money of
the United States of America, the principal sum of SIX MILLION and NO/100
DOLLARS ($6,000,000), together with interest thereon from the date hereof on the
unpaid balance of principal from time to time outstanding, and on any past due
interest, at the variable annual rate of interest hereinafter specified, due and
payable as follows:
(i) interest only on the last day of September 1996, October 1996,
November 1996, December 1996, January 1997, and February 1997;
(ii) principal amount of $83,333.33 plus interest on the last day of
March 1997, April 1997, May 1997, June 1997, July 1997, and
August 1997;
(iii) principal amount of $166,666.66 plus interest on last day of
September 1997 and thereafter on the last day of each month
until August 31,1998; and,
(iv) a final installment in the amount of all principal then
outstanding plus interest on September 12, 1998 (the "Maturity
Date").
All payments shall be applied first to accrued but unpaid interest with the
excess, if any, applied in reduction of the outstanding principal balance
hereof.
The rate of interest payable upon the indebtedness evidenced by this Note
shall be a variable annual rate of interest equal from day to day to the
Applicable Prime Rate, as hereinafter defined. Any change in the Applicable
Prime Rate shall be effective with respect to this Note as of the date upon
which any change in such rate of interest shall occur. Interest shall be
computed on the basis of a year of 360 days per year, but assessed for the
actual number of days lapsed.
For the purposes of this Note, "Applicable Prime Rate" shall mean the
annual rate of interest announced by Chase Manhattan Bank, National Association,
New York, New York ("Chase") from time to time as its prime or base rate, which
shall be the rate used by Chase as a base or standard for pricing purposes and
which shall not necessarily be its best or lowest rate. Should Chase cease to
announce a prime or base rate, or should it be merged, consolidated, liquidated
or dissolved in such a manner that it loses its separate corporate or banking
identity, then the Applicable Prime Rate shall be the Prime Rate published by
the WALL STREET JOURNAL in its "Money Rates" column or a similar rate if such
rate ceases to be published. Any change in the Applicable Prime Rate shall be
effective as of the date of the change.
After default in the payment of any amount of principal or interest owing
hereunder within fifteen (15) days of the due date thereof (whether on maturity,
acceleration or otherwise)
<PAGE>
or upon the occurrence of any Event of Default as described in the Pledge
Agreement between the Borrower and the Bank dated as of even date herewith
("Pledge Agreement"), the unpaid principal amount hereof shall bear interest
computed at a variable annual rate equal from day to day to the Applicable Prime
Rate plus five (5%) percent, but in no event at a rate which is greater than the
maximum rate which permitted by law. Upon default in the payment of any amount
of interest payable hereunder, such interest shall, to the full extent permitted
by law, bear interest at the same rate as principal.
This Note is made pursuant to and secured by the Pledge Agreement.
Reference is hereby made to the Pledge Agreement, as well as any supplemental
security agreements, for a description of the property, assets and interests
thereby mortgaged, conveyed, pledged and/or assigned, as the case may be, the
nature and extent of the security thereunder and the security interests carried
forward or created thereby, and the rights of the Bank (or the holder of this
Note) and the Borrower in respect thereof.
Should the indebtedness represented by this Note be collected at law or in
equity or in bankruptcy, receivership or other court proceedings or the Note be
placed in the hands of attorneys for collection after default, the Borrower
agrees to pay hereunder, in addition to the principal and interest due and
payable hereon, reasonable attorneys fees, court costs, and other collection
expenses incurred by the holder hereof.
The Borrower hereby waives presentment for payment, demand, notice of
nonpayment, protest and notice of protest with respect to any payment hereunder
and agrees to any substitution or release of the security or collateral
described in the Pledge Agreement and to the addition or release of any party
liable hereunder. No delay on the part of the holder hereof in exercising any
rights hereunder shall operate as a waiver of such rights.
Upon the occurrence of any default hereunder or pursuant to the Pledge
Agreement, Bank shall have the right, immediately and without further action by
it, to set off against this Note all money owed by Bank in any capacity to each
or any maker or other person who is or might be liable for payment hereof,
whether or not due, and also to set off against all other liabilities of the
maker to Bank all money owed by Bank in any capacity to the maker; and Bank
shall be deemed to have exercised such right of setoff and to have made a charge
against such money immediately upon the occurrence of such default even though
such charge is made or entered into the books of Bank subsequently thereto.
This Note and the indebtedness evidenced hereby shall be construed and
enforced in accordance with and governed by the laws of the State of Oklahoma.
FLORIDA GAMING CORPORATION
By /s/ W. Bennett Collett
----------------------------
W. Bennett Collett,
its Chairman and CEO
DUE: September 12, 1998 "Borrower"
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<PAGE>
THE INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATE AND JUNIOR IN ALL
RESPECTS TO ANY AND ALL INDEBTEDNESS, OBLIGATIONS AND LIABILITIES OF THE MAKER
HEREOF TO SOUTHEAST BANK, N.A., AND BANK OF OKLAHOMA, NATIONAL ASSOCIATION IN
THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT,
DATED AS OF OCTOBER 1, 1990 (THE "SUBORDINATION AGREEMENT"), FROM THE MAKER AND
THE HOLDER IN FAVOR OF SOUTHEAST BANK, N.A., BANK OF OKLAHOMA, NATIONAL
ASSOCIATION AND SOUTHEAST BANK, N.A., AS AGENT (COLLECTIVELY, THE "SENIOR
CREDITORS"), TO WHICH REFERENCE IS HEREBY MADE FOR A MORE FULL STATEMENT
THEREOF.
PROMISSORY NOTE
Dated as of October 1, 1990 $500,000.00 Tulsa, Oklahoma
FOR VALUE RECEIVED, the undersigned, WJA Realty Limited Partnership, a
Massachusetts Limited Partnership ("Maker"), promises to pay to the order of
Wheeler-Phoenix, Inc., an Oklahoma Corporation (hereafter, together with any
holder hereof, called "Holder"), at the office of the Holder, c/o Roger M.
Wheeler, Jr., at 2021 South Lewis, Suite 675, Tulsa, Oklahoma 74104, or at such
other place as the Holder may designate and notify the undersigned, in lawful
money of the United States, and in immediately available funds, the principal
sum of FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS ($500,000.00), together with
interest on the principal balance outstanding hereunder (computed on the basis
of a 360 day year) from the date hereof until paid in full at the rate of
thirteen percent (13%) per annum.
Accrued interest shall be payable hereunder quarterly beginning December 31,
1990. Principal on this note shall be due July 31, 1992.
Overdue principal (and interest to the extent permitted by law) shall bear
interest at the rate of one and one-half percent (1.5%) per month in excess of
the interest rate otherwise in effect hereunder until paid, and shall be payable
on demand.
Maker acknowledges that this Promissory Note is secured pursuant to the terms of
the following instruments (the "Security Documents" which are incorporated by
reference herein:
(b) Assignment of Pari-Mutuel Permits by Maker to Holder;
(c) Assignment of Beneficial Interest in Land Trust by Maker to Holder.
Maker may, at its option, voluntarily prepay the indebtedness evidenced by this
Note, either in whole or in part, at any time without penalty, with interest
thereon to the date of prepayment.
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<PAGE>
If (1) Maker fails to pay any installment of principal and interest that is due
and payable within ten (10) days after written notice and demand to the Maker;
(2) Maker neglects to comply with any of the terms or provisions hereof; (3)
Maker executes or makes an assignment for the benefit of its creditors and/or a
receiver or trustee is appointed for its creditors or the Maker is unable
generally to pay its debts as they become due; (4) any petition for and/or any
order for relief is filed and/or entered against Maker under Title 11, United
States Code, and Maker by any act indicates its approval thereof, consent
thereto, or acquiescence therein, or any such order for relief remains in effect
unstayed for more than sixty (60) days; (5) Maker commences any proceedings
relating to Maker under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation statutes of any jurisdiction or
under Title 11, United States Code, whether now or hereafter in effect; (6)
there is a seizure and sale, or post judgment attachment or post judgment
garnishment or other post judgment judicial process upon all or a substantial
part of the property of Maker; or (7) a default occurs as is defined in the
Security Documents and such default is not either waived, or cured within the
period of time permitted for such cure by such Security Documents, then the
Holder upon the occurrence of any such event, may at the option of the Holder,
declare any or all of the indebtedness evidenced by this Note to be immediately
due and payable, and the Holders shall be entitled to exercise any and all
rights and remedies that the Holders has against Maker, including foreclosure
under the Security Documents.
In case this Note should be placed in the hands of an attorney for collection,
compromise or other action, Maker agrees to pay the fees of the attorney who may
be employed for that purpose. Where permitted by law, Maker shall also pay all
court costs and disbursements incurred by the holder hereof when it is referred
for collection.
Maker hereby waives presentment for payment, demand, notice of nonpayment,
protest, and notice of protest, and agrees that the time of payment hereof may
be extended from time to time, one or more times without notice of such
extension or extensions and without previous consent. No delay on the part of
the Holder in exercising any rights hereunder shall operate as a waiver of such
rights, nor shall any single or partial exercise of any power or right hereunder
preclude other or further exercise of any power or right hereunder.
This Note has been executed and delivered in, and its terms and conditions are
to be governed and construed by, the internal laws of the State of Oklahoma.
This Note shall be binding upon the successors and assigns of Maker.
-2-
<PAGE>
Any provision of this Note to the contrary notwithstanding:
1. This Note is executed and delivered to the Holder by the Maker subject
to the terms and provisions of the Subordination Agreement, and by its
acceptance of this Note Holder hereby expressly acknowledges that its
rights to receive payment of this Note and to collect and enforce
collection of this Note, and to foreclose upon, liquidate or otherwise
pursue or realize upon any collateral given as security for this Note, are
expressly subject to and limited by the terms and provisions of the
Subordination Agreement.
2. Without limiting the generality of the provisions of clause 1 above,
if, as of the date any payment is due on or with respect to this Note,
after giving effect to any such payment, any Default or Event of Default
(as such terms are defined in the Subordination Agreement) shall have
occurred and would be continuing, such payment shall not be permitted to be
made, and if, as of any principal payment date hereunder, the Maker is
indebted to the Senior Creditors, or any of them, maker shall not pay any
such principal payment then due under this Note until any and all
indebtedness of the Maker to the Senior Creditors, and each of them, shall
have been paid in full, and any commitments of the Senior Creditors, and
each of them, to extend further credit to the Maker shall have been
terminated in full.
Anything herein to the contrary notwithstanding, the obligations of the Maker
under this Note shall be subject to the limitation that payments of interest to
the Holder shall not be required to the extent that receipt of any such payment
by the Holder would be contrary to provisions of law applicable to the Holder
(if any) which limit the maximum rate of interest which may be charged or
collected by the Holder; PROVIDED, HOWEVER, that nothing herein shall be
construed to limit the Holder to presently existing maximum rates of interest,
if an increased interest rate is hereafter permitted by reason of applicable
federal or state legislation. In the event that the Maker makes any payment of
interest, fees, or other charges, however denominated, pursuant to this Note,
which payment results in the interest paid to the Holder to exceed the maximum
rate of interest permitted by applicable law, any excess over such maximum shall
be applied in reduction of the principal balance owed to the Holder as of the
date of such payment, or if such excess exceeds the amount of principal owed to
the Holder as of the date of such payment, the difference shall be paid by the
Holder to the Maker.
This Note and the obligations, agreements and undertakings of the Maker under
this Note are the obligations, agreements and undertakings of the Maker as a
partnership, and shall bind and be effective as against all of the assets of the
Maker, and no recourse shall be had against the other assets of each of the
partners of the Maker for the payment of the indebtedness of the Maker under
this Note; PROVIDED, HOWEVER, the general partners of the Maker shall be fully
liable to the Holder for their own gross
-3-
<PAGE>
negligence and/or willful misconduct in performing or observing, or failing to
perform or observe, or causing the Borrower to, or to fail to, perform or
observe, any of the covenants, terms or conditions of this Note.
THE BORROWER HEREBY, AND THE LENDER BY ITS ACCEPTANCE OF THIS NOTE, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE OR SAID AMENDED AND RESTATED CREDIT AGREEMENT AND ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH OR THEREWITH, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
LENDER ENTERING INTO THE FIRST AMENDMENT AND AMENDING SAID AMENDED AND RESTATED
CREDIT AGREEMENT AND MAKING THE LOANS EVIDENCED BY THIS NOTE.
IN WITNESS WHEREOF, the Maker has caused this Note to be dated for convenience
as of the date first above written, but has in fact executed this Note this 5th
day of October, 1990.
WJA REALTY LIMITED PARTNERSHIP, a
Massachusetts limited partnership
By: /s/ Roger M. Wheeler, Jr.
---------------------------------
Roger M. Wheeler, Jr.
General Partner
STATE OF OKLAHOMA )
)ss:
COUNTY OF TULSA )
Sworn to and subscribed before me this 5th day of October, 1990.
/s/ Susan D. Spencer
-------------------------------------------
Notary Public, State of Oklahoma
My Commission Expires: March 28, 1994
-----------------------
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