SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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 10, 1999
LEISURE TIME CASINOS & RESORTS, INC.
(Exact name of registrant as specified in its charter)
Colorado 000-26935 34-1763271
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
4258 Communications Drive, Norcross, Georgia 30093
-------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 923-9900
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
On December 10, 1999, Prime Technological Services, Inc. ("Prime")
purchased 523,759 shares of Convertible Series A Preferred Stock ("Convertible
Series A") from Leisure Time Casinos & Resorts, Inc. ("Company") for a total
purchase price of $5,237,586 consisting of (i) the cancellation of a promissory
note dated August 1, 1999, in the amount of $2,000,000 from the Company to
Prime, (ii) a credit for the payment of interest of $63,500 due from the Company
to Prime, (iii) a credit for the payment of $69,532 of interest that the Company
might be obligated to pay to Prime that Prime has paid to Prime's suppliers,
(iv) a credit for the payment of $557,523 due as an account payable from the
Company to Prime and (v) a deposit of $2,547,031 against future purchases of
inventory by the Company from Prime. The Convertible Series A is entitled to a
dividend of 6 % per annum that is payable on a semi-annual basis beginning June
10, 2000, and continuing each December 10 and June 10 thereafter. Unpaid
dividends accumulate at a rate of 12% per annum until paid in full. Subject to
the prior redemption, the Convertible Series A is convertible into the Company's
common stock at a conversion price of $7.875 per share. The number of shares of
common stock which are issuable upon conversion of each share of Convertible
Series A is determined by dividing $10.00 by the conversion price of $7.875 per
share. If at any time after December 10, 2002, the market price of the Company's
common stock is not at least $7.875 per share, the conversion price will be
reduced to the market price as of the day prior to the date of conversion. In no
event, however, is the Convertible Series A convertible into more than 1,173,867
shares of the Company's common stock. For a three-year period beginning December
10, 1999, and ending on December 10, 2002, the Convertible Series A is subject
to redemption by the Company at a price of $10.00 per share plus cumulative
dividends that are accrued and unpaid to the date fixed for redemption.
The Company also agreed to register at its cost the Company's common stock
issuable upon conversion of the Convertible Series A upon demand after December
10, 2002, or prior to December 10, 2002, if the Company files a registration
statement prior to that date and an underwriter does not object to the inclusion
of the common stock in any such registration statement.
At the same time, the Company entered into a three-year Consulting
Agreement with Mogo Financial Management Company, d/b/a Mogo Technical
Consultants ("Mogo") pursuant to which Mogo agreed to provide the Company on an
"as-needed" basis with necessary consultation, advice, instruction and support
with respect to the design, development and manufacture of electronic circuit
boards. For rendering the consulting services, the Company agreed to pay Mogo
$608,400, payable $101,400 on May 10, 2000, and $16,900 per month for 30 months
commencing on June 10, 2000. The Consulting Agreement is for a period of three
years or until the agreement is terminated earlier by the mutual agreement of
Mogo and the Company or at such time as Prime no longer owns any shares of the
Company's Convertible Series A.
As a part of the transaction, the Company also paid Mogo a transaction fee
of $273,880 in the form of $175,000 in cash and the balance in the form of a
promissory note for $98,880 that bears interest at 8% per annum. The Company is
required to pay the principal amount of the note with interest as follows: (a)
the sum of $50,000 plus accrued interest is due and payable on January 10, 2000,
and (b) the remaining principal sum of $48,880 plus accrued interest is due and
payable on February 10, 2000.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
Not Applicable.
(b) Pro Forma Financial Information
Not Applicable.
(c) Exhibits
Exhibit 3.0 Articles of Amendment to the Articles of Incorporation of
Leisure Time Casinos & Resorts, Inc. filed on December 10, 1999.
Exhibit 10.1 Subscription Agreement dated December 10, 1999, between
Prime Technological Services and Leisure Time Casinos & Resorts,
Inc. (without exhibits B, C or D).
Exhibit 10.2 Consulting Agreement dated December 10, 1999, by and
between Leisure Time Casinos & Resorts, Inc. and Mogo Financial
Company d/b/a Mogo Technical Consultants.
Exhibit 10.3 Promissory Note in the amount of $98,880 and dated
December 10, 1999, from Leisure Time Casinos & Resorts, Inc. to
Mogo Financial Management Company.
<PAGE>
SIGNATURES
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 hereunto duly authorized.
Date: December 27, 1999
LEISURE TIME CASINOS & RESORTS, INC.
By: /s/ Alan N. Johnson
Alan N. Johnson, President
<PAGE>
EXHIBIT INDEX
Exhibit 3.0 Articles of Amendment to the Articles of Incorporation of
Leisure Time Casinos & Resorts, Inc. filed on December 10, 1999.
Exhibit 10.1 Subscription Agreement dated December 10, 1999, between
Prime Technological Services and Leisure Time Casinos & Resorts,
Inc. (without exhibits B, C or D).
Exhibit 10.2 Consulting Agreement dated December 10, 1999, by and
between Leisure Time Casinos & Resorts, Inc. and Mogo Financial
Company d/b/a Mogo Technical Consultants.
Exhibit 10.3 Promissory Note in the amount of $98,880 and dated
December 10, 1999, from Leisure Time Casinos & Resorts, Inc. to
Mogo Financial Management Company.
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
LEISURE TIME CASINOS & RESORTS, INC.
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is Leisure Time Casinos & Resorts, Inc.
SECOND: The following amendments to the Articles of Incorporation were
duly adopted by the board of directors on December 9, 1999, in accordance with
Section 7-106-102 of the Colorado Business Corporation Act.
Article SECOND of the Articles of Incorporation is hereby amended by
adding the following paragraph 5 thereto:
5. Of the 5,000,000 shares of the corporation's no par value preferred
stock authorized, 523,759 shares of the corporation's no par value preferred
stock shall be Convertible Series A Preferred Stock ("Convertible Series A").
The rights, preferences, privileges and restrictions imposed upon the
Convertible Series A are as follows:
(a) Dividends. The holders of the Convertible Series A shall be
entitled to received dividends, when, as, and if declared by the Board of
Directors, out of any funds legally available therefor, prior to and in
preference to any declaration or payment of any dividend (payable other than
in the common stock or other securities and rights convertible into or
entitling the holder thereof to receive, directly or indirectly, additional
shares of common stock of the corporation) at the rate of six percent (6%)
per annum. The dividend shall, to the extent declared by the Board of Directors,
be payable to holders of the Convertible Series A on a semi-annual basis
beginning June 10, 2000 and continuing each December 10 and June 10 thereafter.
Such cash dividends shall be cumulative.
If any dividends payable on the Convertible Series A are not paid by
the corporation for any reason whatsoever, including but not limited to a lack
of legally available funds, the right of the holders of the Convertible Series
A to receive payment of such dividends shall not lapse or terminate, but said
unpaid dividends shall accumulate at a rate of 12% per annum from the last
dividend payable date until paid in full by the corporation. After cumulative
dividends on the Convertible Series A for all past dividend periods and for the
then current year dividend period shall have been declared and paid in full by
the corporation then the dividend rate shall be readjusted to six percent (6%)
per annum so long as the corporation is not in default of the payment of the
dividend.
All cumulative dividends must be paid in full before any sum or sums
shall be set aside for or applied to the purchase or redemption of the
Convertible Series A or the purchase, redemption or other acquisition for value
of the common stock and before any dividend shall be paid or declared, or any
other distribution shall be ordered or made, upon the common stock.
(b) Liquidation and Dissolution. In the event of any liquidation,
dissolution or winding up of the corporation, either voluntary or involuntary,
the holders of Convertible Series A shall be entitled to receive, prior and in
preference to any distribution of any of the assets of this corporation to the
holders of the common stock of the corporation by reason of their ownership
thereof, an amount equal to Ten Dollars ($10.00) for each outstanding share of
Convertible Series A plus any accrued but unpaid dividend.
A consolidation or merger of this corporation with or into any other
corporation or corporations, or a sale, conveyance or disposition of all or
substantially all of the assets of this corporation or the effectuation by the
corporation of any of the foregoing or other transactions or series of related
transactions (the "Transactions") in which more than fifty percent (50%) of the
voting power of the corporation is disposed of in any of the Transactions shall
be deemed, at the election in writing of the holders of the Convertible Series
A within thirty (30) days prior to the effective date of the Transactions, to
be a liquidation, dissolution or winding up within the meaning of this
subparagraph 5(b).
(c) Voting. Except as required by law, a holder of a share of Convertible
Series A shall not be entitled to vote on any matter.
(d) Conversion Rights. The holders of Convertible Series A have the
following conversion rights (the "Conversion Rights"):
(i) Right to Convert. Until such time as all of the Convertible Series
A has been redeemed by the corporation, each share of Convertible Series A shall
be convertible, at the office of the corporation or of any transfer agent for
such Convertible Series A, as the case may be, into fully paid and nonassessable
shares of common stock, at a price of $7.875 per share of common stock subject
to adjustment pursuant to subparagraph 5(d)(iii) below ("Conversion Price").
The number of shares of common stock which are issuable upon conversion of
each share of Convertible Series A shall be determined by dividing $10.00 by
the Conversion Price.
(ii) Mechanics of Conversion. Before any holder of shares of
Convertible Series A shall be entitled to convert the same into full shares of
common stock pursuant to subparagraph 5(d)(i) above, the holder shall surrender
the certificate or certificates therefor, duly endorsed, at the office of the
corporation or of any transfer agent for such Convertible Series A, as the case
may be, and shall give written notice to the corporation at such office that
the holder elects to convert the same and shall state therein the holder's name
or the name or names of the holder's nominees in which the holder wishes the
certificate or certificates for shares of common stock to be issued. The
corporation shall, as soon as practicable thereafter, issue and deliver or
cause to be issued and delivered at such office to such holder, or to the
holder's nominee or nominees, a certificate or certificates for the number of
full shares of common stock to which the holder shall be entitled as aforesaid.
A conversion pursuant to subparagraph 5(d)(i) above shall be deemed to have
occurred immediately prior to the close of business on the date of such
surrender of the shares of Convertible Series A to be converted, and the person
or persons entitled to receive the shares of common stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of common stock on such date.
(iii)Adjustments to Conversion Price.
(1) Special Definitions. For purposes of this subparagraph 5(d)
(iii), the "Original Issue Date" shall mean December 10, 1999 and "Market Price"
shall be determined as follows:
a) if the common stock is listed and registered on any
national securities exchange or traded on The Nasdaq Stock Market ("Nasdaq"),
the closing sale price for such common stock;
b) if the common stock is not at the time listed on any such
exchange or traded on Nasdaq but is traded on the OTC Bulletin Board, or if not,
on the over-the-counter market as reported by the National Quotation Bureau or
other comparable service, the closing sale price for such common stock; or
c) if clauses a) and b) above are not applicable, the fair
value per share of such common stock as determined in good faith and on a
reasonable basis by the board of directors of the corporation.
(2) Adjustment for Stock Splits and Combinations. If the
corporation shall at any time or from time to time after the Original Issue
Date effect a subdivision of the outstanding common stock, the applicable
Conversion Price then in effect immediately before that subdivision shall be
proportionately decreased and, conversely, if the corporation shall at any time
or from time to time after the Original Issue Date combine the outstanding
shares of common stock, the applicable Conversion Price then in effect
immediately before the combination shall be proportionately increased. Any
adjustments under this subparagraph 5(d)(iii)(2) shall become effective at the
close of business on the date the subdivision or combination becomes effective.
(3) Adjustment for Certain Dividends and Distributions. In the
event the corporation at any time, or from time to time, after the Original
Issue Date shall make or issue, or fix a record date for the determination of
holders of common stock entitled to receive, a dividend or other distribution
payable in shares of common stock, then and in each event the applicable
Conversion Price then in effect shall be decreased as of the time of such
issuance or, in the event such a record date shall have been fixed, as of the
close of business on such record date, by multiplying the Conversion Price then
in effect by a fraction:
a) the numerator of which shall be the total number of
shares of common stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and
b) the denominator of which shall be the total number of
shares of common stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the number of
shares of common stock issuable in payment of such dividend or distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Conversion Price shall be recomputed accordingly as of the close
of business on such record date and thereafter such Conversion Price shall be
adjusted pursuant to this subparagraph 5(d)(iii)(3) as of the time of actual
payment of such dividends or distributions.
(4) Adjustment for Other Dividends and Distributions. In the
event the corporation at any time or from time to time after the Original Issue
Date shall make or issue, or fix a record date for the determination of holders
of common stock entitled to receive, a dividend or other distribution payable in
securities of the corporation other than shares of common stock, then and in
such event provisions shall be made so that the holders of Convertible Series A
shall receive upon conversion thereof, in addition to the number of shares of
common stock receivable thereon and any accrued but unpaid dividends that may be
due on such shares of Convertible Series A, the amount of securities of the
corporation which they would have received had their Convertible Series A been
converted into common stock on the date of such event and had thereafter, during
the period from the date of such event to and including the conversion date,
retained such securities (together with any distributions payable thereon during
such period) receivable by them as aforesaid during such period, giving
application to all adjustments called for during such period under this
subparagraph 5(d) with respect to the rights of the holders of the Convertible
Series A.
(5) Adjustment for Reclassification, Exchange, or Substitution.
If the common stock issuable upon the conversion of the Convertible Series A at
any time or from time to time after the Original Issue Date, shall be changed
into the same or different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividends provided for in
subparagraphs 5(d)(iii)(2) and (3) above, or a reorganization, merger,
consolidation, or sale of assets provided for in subparagraph 5(d)(iii)(6))
below, then, and in each such event, provisions shall be made (by adjustment to
the Conversion Price or otherwise) so that the holder of each share of
Convertible Series A shall have the right thereafter to convert each share of
Convertible Series A into the kind and amount of shares of stock and other
securities receivable upon such reorganization, reclassification, or other
change, by holders of the number of shares of common stock into which such share
of Convertible Series A might have been converted immediately prior to such
reorganization, reclassification, or change, all subject to further adjustment
as provided herein.
(6) Adjustment for Reorganization, Merger, Consolidation or Sales
of Assets. If at any time or from time to time after the Original Issue Date,
there shall be a capital reorganization of the corporation (other than a
subdivision, combination, reclassification, exchange or substitution of shares
provided for in subparagraphs 5(d)(iii)(2) and (5) above) or a merger or
consolidation of the corporation with or into another corporation, or the sale
of all or substantially all of the corporation's properties and assets to any
other person or entity, then, as a part of such reorganization, merger,
consolidation, or sale, provision shall be made (by adjustment to the Conversion
Price or otherwise) so that the holders of the Convertible Series A shall
thereafter be entitled to receive upon conversion of the Convertible Series A,
the number and kind of shares of stock or other securities or property of the
corporation, or of any successor corporation resulting from such merger or
consolidation or sale, to which a holder of common stock deliverable upon
conversion of such shares would have been entitled if such capital
reorganization, merger, consolidation, or sale occurred on the date of the
conversion.
(7) Adjustment for Stock Price. If at any time after December 10,
2002, the Market Price of the common stock is not at least $7.875 per share, as
adjusted after giving effect to the adjustments in subparagraphs 5(d)(iii)(2)
and (3) above, the Conversion Price will be reduced to the Market Price of the
common stock as of the day prior to the date of conversion. Notwithstanding the
foregoing, at no time will the Convertible Series A be convertible into more
than 1,173,867 shares of common stock, as adjusted after giving effect to the
adjustments in subparagraphs 5(d)(iii)(2) and (3) above.
(iv) No Impairment. The corporation will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of all or
substantially all assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this subparagraph 5(d) and in the taking of all such
action as may be necessary or appropriate, in order to protect the conversion
rights of the holders of the Convertible Series A against impairment.
(v) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price or any other adjustment
pursuant to this subparagraph 5(d), the corporation at its expense shall, upon
request by a holder of Convertible Series A, promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
such Convertible Series A a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The corporation shall, upon the written request at any
time of any holder of such affected Convertible Series A, furnish or cause to be
furnished to such holder a like certificate setting forth the (i) such
adjustment and readjustment, (ii) the Conversion Price at the time in effect,
and (iii) the number of shares of common stock and the amount, if any, of other
property which at the time would be received upon the conversion of a share of
such Convertible Series. A.
(vi) Notices of Record Date. In the event that:
(1) the corporation shall set a record date for the purpose of
entitling the holders of its shares of common stock to receive a dividend, or
other distribution, payable otherwise than in cash;
(2) the corporation shall set a record date for the purpose of
entitling the holders of its shares of common stock to subscribe for or purchase
any shares of any class or to receive any other rights;
(3) there shall occur any capital reorganization of the
corporation, reclassification of the shares of the corporation (other than a
subdivision or combination of its outstanding common stock), consolidation or
merger of the corporation with or into another corporation or conveyance
of all or substantially all of the assets of the corporation to another person
or entity; or
(4) there shall occur a voluntary or involuntary dissolution,
liquidation, or winding up of the corporation;
then, and in any such case, the corporation shall cause to
be mailed to the holders of record of the outstanding shares of the Convertible
Series A, at least 45 days prior to the date hereinafter specified, a notice
stating (a) the date which (x) has been set as the record date for the purpose
of such dividend, distribution, or rights, or (y) such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation
or, winding up is to take place and (b) the record date as of which holders of
common stock of record shall be entitled to other property deliverable upon such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
(vii)Notices. Any notice required by the provisions of this
subparagraph 5(d) to be given to the holders of shares of Convertible Series A
shall be in writing and shall be delivered by personal service or agent, by
registered or certified mail, return receipt requested, with postage thereon
fully prepaid. All such communications shall be addressed to each holder of
record at its address appearing on the books of the corporation. Service of any
such communication made only by mail shall be deemed complete on the date of
actual delivery as shown by the addressee's registry or certification receipt or
at the expiration of the fourth business day after the date of mailing,
whichever is earlier in time.
(viii) Fractional Shares. No fractional shares of common stock shall
be issued upon conversion of Convertible Series A. In lieu of any fractional
shares to which the holder would otherwise be entitled, the corporation shall
pay cash equal to the product of such fraction multiplied by the Market Price of
one share of the corporation's common stock on the date of conversion.
(ix) Payment of Taxes. The corporation will pay all taxes (other than
taxes based upon income) and other governmental charges that may be imposed with
respect to the issue or delivery of shares of common stock upon conversion of
shares of Convertible Series A, including without limitation any tax or other
charge imposed in connection with any transfer involved in the issue and
delivery of shares of common stock in a name other than that in which the
shares of the Convertible Series A so converted were registered.
(x) Reservation of Common Stock. The corporation shall at all times
reserve and keep available, out of its authorized but unissued shares of common
stock, solely for the purpose of effecting the conversion of the Convertible
Series A, the full number of shares of common stock deliverable upon the
conversion of all shares of Convertible Series A from time to time outstanding.
The corporation shall from time to time increase the authorized number of shares
of common stock if the remaining unissued authorized shares of common stock
shall not be sufficient to permit the conversion of all of the Convertible
Series A at the time outstanding.
(xi) Retirement of Convertible Series A Converted. No shares of
Convertible Series A that have been converted shall ever again be reissued, and
all such shares so converted shall, upon such conversion, cease to be a part of
the authorized shares of the corporation.
(e) No Preemptive Rights. No holder of the Convertible Series A shall be
entitled as of right to subscribe for, purchase, or receive any part of any new
or additional shares of any class, whether now or hereafter authorized, or of
bonds, debentures, or other evidences of indebtedness convertible into or
exchangeable for shares of any class, but all such new or additional shares of
any class, or bonds, debentures, or other evidences of indebtedness convertible
into or exchangeable for shares, may be issued and disposed of by the board
of directors on such terms and for such consideration (to the extent permitted
by law), and to such person or persons as the board of directors in their
absolute discretion may deem advisable.
(f) Optional Redemption of Convertible Series A.
(i) Redemption. For a three year period beginning December 10, 1999 and
ending on December 10, 2002, the Convertible Series A is subject to redemption
by the corporation, out of funds legally available therefor, in whole, at the
option of the board of directors. The redemption price shall be Ten Dollars
($10.00) per share plus cumulative dividends as provided in subparagraph
5(a) accrued and unpaid to the date fixed for redemption.
(ii) Adjustment for Stock Splits and Combinations. If the corporation shall
at any time or from time to time after the Original Issue Date applicable to
Convertible Series A effect a subdivision of the outstanding Convertible Series
A, the applicable Convertible Series A redemption price then in effect
immediately before that subdivision shall be proportionately decreased and,
conversely, if the corporation shall at any time or from time to time after the
Original Issue Date applicable to Convertible Series A combine the outstanding
shares of Convertible Series A, the applicable Convertible Series A redemption
price then in effect immediately before the combination shall be proportionately
increased. Any adjustments under this subparagraph 5(f)(ii) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
(iii)Notice. At least 45 days before the date fixed for redemption
(hereinafter referred to as the "Redemption Date"), written notice (hereinafter
referred to as the "Redemption Notice") shall be mailed postage prepaid, to each
holder of record of the Convertible Series A which is to be redeemed, at the
holder's address shown on the records of the corporation. The Redemption Notice
shall contain the following information:
(1) the number of shares of Convertible Series A held by the holder
which are to be redeemed by the corporation, and the total number of shares of
Convertible Series A held by all holders to be so redeemed;
(2) the Redemption Date and the applicable Redemption Price; and
(3) that the holder is to surrender to the corporation, at the place
designated therein, the holder's certificate or certificates representing the
shares of Convertible Series A to be redeemed.
(iv) Surrender. Each holder of shares of Convertible Series A to be
redeemed shall surrender the certificate or certificates representing such
shares to the corporation at the place designated in the Redemption Notice, and
thereupon the applicable redemption price for such shares as set forth herein
shall be paid to the order of the person or entity whose name appears on such
certificate or certificates and each surrendered certificate shall be cancelled
and retired.
(v) Dividends. From and after the later of the Redemption Date or 45 days
from the date the corporation shall have given the Redemption Notice, no shares
of Convertible Series A thereupon subject to redemption shall be entitled to any
further accrual of any dividends.
(vi) Payment. The corporation's deliverance of payment of the redemption
price shall be good and sufficient discharge to the corporation of the
Convertible Series A redeemed. If less than the full number of a holder's shares
of Convertible Series A is redeemed, the corporation shall deliver to the holder
a new Convertible Series A certificate representing the balance of the
holder's shares of Convertible Series A.
Dated:December 10, 1999
LEISURE TIME CASINOS & RESORTS, INC.,
a Colorado corporation
By:/s/ Alan H. Johnson
------------------------------
Alan N. Johnson, President
December 10, 1999
Leisure Time Casinos & Resorts, Inc.
4258 Communications Drive
Norcross, Georgia 30093
Ladies and Gentlemen:
1. Subscription. Pursuant to this Subscription Agreement (the "Agreement"),
the undersigned, Prime Technological Services, Inc. (the "Subscriber"),
intending to be legally bound, irrevocably applies to purchase from Leisure Time
Casinos & Resorts, Inc., a corporation organized under the laws of the State of
Colorado (the "Company"), 523,759 shares of the Company's Convertible Series A
Preferred Stock, no par value ("Convertible Series A"), for a total purchase
price of a total of $5,237,586 consisting of (i) the cancellation of a
promissory note dated August 1, 1999, in the amount of $2,000,000 from the
Company to the Subscriber, (ii) a credit for the payment of interest of $63,500
due from the Company to the Subscriber, (iii) a credit for the payment of
$69,532 of interest that the Company might be obligated to pay to the Subscriber
that the Subscriber has paid to the Subscriber's suppliers, (iv) a credit for
the payment of $557,523 due as an account payable from the Company to the
Subscriber and (v) a deposit of $2,547,031 against future purchases of inventory
by the Company from the Subscriber at the prices set forth on Exhibit A.
The Convertible Series A issued hereunder shall have the rights and
preferences set forth on Exhibit B hereto. The Convertible Series A is being
offered to the Subscriber without registration under the Securities Act of 1933,
as amended (the "Securities Act"). For purposes of this Agreement, the shares of
common stock of the Company into which the Convertible Series A will be
converted shall be referred to as the "Conversion Shares."
2. Acceptance. The subscription shall be deemed accepted by the Company
upon execution of this Agreement by the Company.
3. Delivery of Certificate for Shares and Promissory Note. At the Closing,
the Company will deliver to the Subscriber a certificate or certificates
representing the Convertible Series A subscribed for hereby, registered in the
name of the Subscriber and the Subscriber will deliver to the Company the
promissory note dated August 1, 1999, marked "CANCELLED", and evidence of
Subscriber's forgiveness of the items set forth above and evidence of the credit
set forth above.
4. Closing. The closing will be held on December 10, 1999, at 2:00 p.m. in
the offices of Smith McCullough, P.C. at 4643 South Ulster Street, Suite 900,
Denver, Colorado 80237.
5. Representations, Warranties and Covenants of Subscriber. In order to
induce the Company to sell the Convertible Series A to the Subscriber, the
Subscriber hereby represents, warrants and covenants to the Company as follows:
a) Requisite Power and Authority. Subscriber has all necessary power
and authority under all applicable provisions of law to execute and deliver this
Agreement and to carry out its provisions. All actions on Subscriber's part
required for the lawful execution and delivery of this Agreement have been or
will be effectively taken prior to the Closing. Upon execution and delivery,
this Agreement will be a valid and binding obligation of Subscriber, enforceable
in accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights, and (b) general principles of equity
that restrict the availability of equitable remedies.
b) Investment Representations. Subscriber understands that neither
the Convertible Series A nor the Conversion Shares have been registered under
the Securities Act. Subscriber also understands that the Convertible Series A is
being offered and sold pursuant to an exemption from registration contained in
the Securities Act based in part upon Subscriber's representations contained in
the Agreement. Subscriber hereby represents and warrants as follows:
(i) Subscriber Bears Economic Risk. Subscriber has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Subscriber must bear the economic risk of
this investment indefinitely unless the Convertible Series A (or the Conversion
Shares) are registered pursuant to the Securities Act, or an exemption from
registration is available. Subscriber also understands that there is no
assurance that any exemption from registration under the Securities Act will be
available and that, even if available, such exemption may not allow Subscriber
to transfer all or any portion of the Convertible Series A or the Conversion
Shares under the circumstances, in the amounts or at the times Subscriber might
propose.
(ii) No Transfer Without Registration. The Subscriber will not
sell or otherwise transfer any or all of the Convertible Series A or Conversion
Shares without registration under the Securities Act or an exemption therefrom
such as permitted by Rule 144.
(iii)Legend. The Subscriber acknowledges and agrees that the
certificate or certificates representing the Convertible Series A and Conversion
Shares shall bear a legend restricting the transfer of the Convertible Series A
and Conversion Shares.
(iv) Acquisition for Own Account. Subscriber is acquiring the
Convertible Series A and the Conversion Shares for Subscriber's own account for
investment only, and not with a view towards their distribution.
(v) Subscriber Can Protect Its Interest. Subscriber represents
that by reason of its, or of its management's, business or financial experience,
Subscriber has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement. Further, Subscriber is aware of no
publication of any advertisement in connection with the transactions
contemplated in the Agreement.
(vi) Documents. The Subscriber understands that all documents,
records and books pertaining to this investment have been made available for
inspection by the Subscriber, the Subscriber's attorney and/or accountant
including, but not limited to, the Company's Prospectus dated September 15, 1999
and the Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1999.
(vii)Rule 144. Subscriber acknowledges and agrees that the
Convertible Series A, and, if issued, the Conversion Shares, must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. Subscriber has been advised or
is aware of the provisions of Rule 144 promulgated under the Securities Act as
in effect from time to time, which will permit the limited sales of the
Conversion Shares purchased in the private placement by the Company subject to
the satisfaction of certain conditions, including, among other things, the
availability of certain current public information about the Company, the
resales occurring following the required holding period under Rule 144 and the
number of Conversion Shares being sold during any three-month period not
exceeding specified limitations.
6. Representations and Warranties of the Company.
a) Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Colorado. The Company has all requisite corporate power and
authority to own and operate its properties and assets to carry on its business
as presently conducted and to execute and deliver this Agreement, and by
Closing, the Company will have all requisite corporate power and authority, to
issue and sell the Convertible Series A and the Conversion Shares and to carry
out the provisions of this Agreement and the Articles of Amendment to the
Company's Articles of Incorporation that describe the Convertible Series A
("Articles of Amendment"). The Company is duly qualified and is authorized to do
business and is in good standing as a foreign corporation in all jurisdictions
in which the nature of its activities and of its properties (both owned and
leased) makes such qualification necessary, except for those jurisdictions in
which failure to do so would not have a material adverse effect on the Company
or its business.
b) Authorization; Binding Obligations. All corporate action on the
part of the Company, its officers, directors and shareholders necessary for the
authorization of this Agreement, the performance of all obligations of the
Company hereunder and thereunder at the Closing and the authorization, sale,
issuance and delivery of the Convertible Series A pursuant hereto and the
Conversion Shares pursuant to the Articles of Amendment has been taken or will
be taken prior to the Closing. The Agreement, when executed and delivered, will
be a valid and binding obligation of the Company enforceable in accordance with
its terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights; and (b) general principles of equity that
restrict the availability of equitable remedies. The sale of the Convertible
Series A and the subsequent conversion of the Convertible Series A into
Conversion Shares are not and will not be subject to any preemptive rights or
rights of first refusal that have not been properly waived or complied with.
c) Title to Convertible Series A and Conversion Shares. Upon issuance
of the Convertible Series A by the Company to Subscriber at Closing, the
Convertible Series A will be fully paid and nonassessable and Subscriber will
have good and marketable title to the Convertible Series A (and upon conversion,
the Conversion Shares) free and clear of all mortgages, liens, pledges,
encumbrances, charges or other security interests.
d) Compliance with Other Instruments. Except as disclosed in the
Company's filings with the Securities and Exchange Commission (the
"Commission"), the Company is not in violation or default of any term of its
Articles of Incorporation or Bylaws, or of any provision of any mortgage,
indenture, contract, agreement, instrument or contract to which it is party or
by which it is bound or of any judgment, decree, order, writ or, to its
knowledge, any statute, rule or regulation applicable to the Company which would
materially and adversely affect the business, assets, liabilities, financial
condition, operations or prospects of the Company. The execution, delivery, and
performance of and compliance with this Agreement, and the issuance and sale of
the Convertible Series A pursuant hereto and the issuance of the Conversion
Shares upon conversion of the Convertible Series A as provided in the Articles
of Amendment, will not, with or without the passage of time or giving of notice,
result in any such material violation, or be in conflict with or constitute a
default under any such term, or result in the creation of any mortgage, pledge,
lien, encumbrance or charge upon any of the properties or assets of the Company
or the suspension, revocation, impairment, forfeiture or nonrenewal of any
permit license, authorization or approval applicable to the Company, its
business or operations or any of its assets or properties.
e) Litigation. Except as disclosed in the Company's filings with the
Commission, there is no action, suit, proceeding or investigation pending or to
the Company's knowledge currently threatened against the Company that questions
the validity of this Agreement, or the right of the Company to enter into this
Agreement, or to consummate the transactions contemplated hereby, or which might
result, either individually or in the aggregate, in any material adverse change
in the assets, condition, affairs or prospects of the Company, financially or
otherwise, or any change in the current equity ownership of the Company, nor is
the Company aware that there is any basis for the foregoing. The Company is not
a party or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality that has not been
satisfied. There is no action, suit, proceeding or investigation by the Company
currently pending or which the Company intends to initiate.
f) Compliance with Laws; Permits. Except as disclosed in the
Company's filings with the Commission, to its knowledge, the Company is not in
violation of any applicable statute, rule, regulation, order or restriction of
any domestic or foreign government or any instrumentality or agency thereof in
respect of the conduct of its business or the ownership of its properties which
violation would materially and adversely affect the business, assets,
liabilities, financial condition, operations or prospects of the Company. No
governmental orders, permissions, consents, approvals or authorizations are
required to be obtained and no registrations or declarations are required to be
filed in connection with the execution and delivery of this Agreement and the
issuance of the Convertible Series A or the Conversion Shares, except such as
has been duly and validly obtained or filed, or with respect to any filings that
must be made after the Closing, as will be filed in a timely manner. The Company
has all franchises, permits, licenses and any similar authority necessary for
the conduct of its business as now being conducted by it, the lack of which
could materially and adversely affect the business, properties, prospects or
financial condition of the Company and believes it can obtain, without undue
burden or expense, any similar authority for the conduct of its business as
planned to be conducted.
g) Offering Valid. Assuming the accuracy of the representations and
warranties of the Subscriber contained in Section 5(b) hereof, the offer, sale
and issuance of the Convertible Series A and the Conversion Shares will be
exempt from the registration requirements of the Securities Act and will have
been registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable
state securities laws. Neither the Company nor any agent on its behalf has
solicited or will solicit any offers to sell or has offered to sell or will
offer to sell all or any part of the Convertible Series A to any person or
persons so as to bring the sale of such Convertible Series A by the Company
within the registration provisions of the Securities Act or any state securities
laws.
h) Full Disclosure. This Agreement, and all other documents delivered
by the Company to Purchaser or its attorneys or agents in connection herewith or
with the transactions contemplated hereby, do not contain any untrue statement
of a material fact nor, to the Company's knowledge, omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading.
7. Registration Rights.
a) Definitions. For purposes of this Section 7, the following terms
shall have the respective meanings set forth below:
i) "Commission" shall mean the Securities and Exchange Commission
or any other Federal agency at the time administering the Securities Act.
ii) The term "Common Stock" means the Company's $0.001 par value
common stock.
iii) The term "Holder or Holders of Registrable Stock" shall mean
any holder of Convertible Series A or Conversion Shares issued or issuable upon
conversion of the Convertible Series A issued pursuant to this Agreement,
including any transferee of any such holder.
iv) The term "Participating Holder" shall mean a holder of
Registrable Stock that requests the Company to register the holder's Registrable
Stock.
v) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document by the
Commission.
vi) The term "Registrable Stock" means the Conversion Shares
issued or issuable upon the conversion of the Convertible Series A issued
pursuant to this Agreement; provided, however, that shares of the Registrable
Stock shall cease to be Registrable Stock if they are sold or transferred
pursuant to a registered public offering or other transaction which does not
result in restrictions on resale being imposed on the transfer by virtue of
Federal or state securities laws; and provided further that Registrable Stock
shall cease to be Registrable Stock to the extent the holder could sell or
transfer such Registrable Stock held by the holder pursuant to Rule 144
promulgated under the Securities Act.
b) Demand Registration.
i) Upon the written request of one or more of the Holders after
December 10, 2002, which request shall state the intended method or disposition
by such Participating Holders and shall request that the Company effect the
registration of all or part of the Registrable Stock under the Securities Act,
the Company shall use its best efforts to prepare and file with the Commission a
registration statement and such other documents, including a prospectus, as may
be necessary to permit a public offering and sale of such Registrable Stock in
the United States in compliance with the provisions of the Securities Act, all
to the extent required to permit the disposition (in accordance with the
intended methods thereof as aforesaid) by the Participating Holders of the
Registrable Stock so to be registered. If such sale of Registrable Stock is to
be pursuant to an underwritten offering, the underwriter shall be selected by
the Holders and shall be reasonably acceptable to the Company. If the
underwriter selected determines that the number of shares of Registrable Stock
so to be included is required to be limited due to market conditions or
otherwise, the Holders of Registrable Stock proposing to sell their shares of
Registrable Stock in such underwritten registration shall share pro rata
(according to the number of shares of Registrable Stock requested to be
registered) in the number of shares of Registrable Stock being underwritten (as
determined by such underwriter) and registered for their account. The Company
shall only be required to effect one registration pursuant to this Section 7(b);
provided, however, that if at the time of the exercise of the rights of the
Participating Holders under this Section 7(b), the Company is not permitted by
law to register all of the Registrable Stock, the Company may be required to
effect one additional registration pursuant to this Section 7(b).
ii) The Company shall not be required to effect any registration under
this Section 7(b) within nine months after the completion of any public offering
of its securities pursuant to which the Holders of Registrable Stock were
afforded the right to register as many shares of their Registrable Stock as
requested nor within six months after the effective date of any other public
offering by the Company.
iii) The Company shall have the right to include in any registration
statement or post-effective amendment filed pursuant to this Section 7(b) other
securities of the Company then proposed to be distributed, except that, to the
extent consistent with the rights of other holders of the Company's securities,
if and to the extent that the underwriter or underwriters acting with respect of
such public offering reasonably determine that the inclusion of such other
securities may substantially prejudice or hinder the offering of Registrable
Stock, the number of such other securities shall be reduced or eliminated prior
to any reduction in the number of shares of Registrable Stock so to be
registered.
iv) If the registration under this Section 7(b) is effected on Form
S-3 (or any successor form thereto), and the effectiveness of such registration
statement can be maintained without significant additional expense to the
Company, then the Company agrees to maintain the effectiveness of such
registration statement for a period of two years after its initial effective
date. Otherwise, the Company shall not be required to maintain the effectiveness
of such registration statement for a period in excess of six months after its
initial effective date.
c) Incidental Registration.
i) If prior to December 10, 2002, the Company at any time and from
time to time proposes to file with the Commission a registration statement under
the Securities Act with respect to any proposed distribution of any of its
securities (other than a registration to be effected on Form S-4, S-8 or other
similar limited purpose form), whether for sale for its own account or for the
account of any other person holding registration rights with respect to the
securities of the Company, or both, then the Company each such time shall give
written notice of such proposed filing to the Holders of Registrable Stock at
least thirty (30) days before the anticipated filing date, and such notice shall
describe in detail the proposed registration and distribution (including those
jurisdictions where registration or qualification under the securities or blue
sky laws is intended) and shall offer the Holders of Registrable Stock the
opportunity to register such number of shares of Registrable Stock as the
Holders of Registrable Stock may request. Upon receipt by the Company by the
anticipated filing date of written requests from Participating Holders for the
Company to register their Registrable Stock, the Company shall permit, or in the
event of any underwritten offering, shall use its best efforts to cause the
managing underwriter or underwriters of such proposed underwritten offering to
permit, the Participating Holders to include such Registrable Stock in such
offering on the same terms and conditions as any similar securities of the
Company included therein; provided, however, that if in the written opinion of
the managing underwriter of such offering, the inclusion of the total amount or
kind of securities in such offering would adversely effect the marketing or the
success of the offering of the Company's securities proposed to be so registered
then the amount of Registrable Stock proposed to be registered (other than any
person's exercising demand registration rights) shall be eliminated or reduced
in proportion to their respective values to the extent necessary to reduce the
total amount of securities to be included in such offering on behalf of such
holders of securities to the amount recommended by such managing underwriter.
For purposes of this Section, "value" shall mean principal amount with respect
to debt securities and the proposed offering price per share with respect to
equity securities. Notwithstanding the foregoing, if, at any time after giving
written notice of its intention to register the Company's securities and prior
to the effectiveness of the registration statement filed in connection with such
registration, the Company determines for any reason either not to effect such
registration or to delay such registration, the Company may, at its election, by
delivery of written notice to the Participating Holders, (i) in the case of a
determination not to effect registration, relieve itself of its obligation to
register any Registrable Stock in connection with such registration, or (ii) in
the case of determination to delay the registration, delay the registration of
such Registrable Stock for the same period as the delay in the registration of
such other securities.
ii) The Company shall not be required to include any of the
Registrable Stock of a Participating Holder in any registration statement or
post-effective amendment prepared at its own instance unless the Participating
Holders shall convert all of the Convertible Series A to Common Stock
immediately after the date the Company's registration statement for the
Registrable Stock filed with the Commission is declared effective by the
Commission and unless the Participating Holders furnish such information and
sign such documents as may be required by the Commission or reasonably requested
by the Company in accordance with generally accepted practices, in connection
with such proposed distribution.
d) Covenants of the Company with Respect to Registration. In connection
with any registration under this Section 7, the Company shall, as expeditiously
as is reasonably possible:
i) Prepare and file with the Commission a registration statement with
respect to such Registrable Stock and, subject to the last sentence of Section
7(c)(i) hereof, use its best efforts to cause such registration statement to
become effective.
ii) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
until, in the case of an underwritten public offering, each underwriter has
completed the distribution of all securities purchased by it, and, subject to
Section 7(b)(iv), in all other cases until the earlier of (i) the sale of all
included Registrable Stock covered thereby or (ii) 180 days from the effective
date of the registration statement, and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all included
Registrable Stock covered by such registration statement;
iii) Furnish to the Participating Holders such number of copies of a
prospectus, including, if applicable, a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents as the
selling shareholders may reasonably request in order to facilitate the
disposition of Registrable Stock owned by the Participating Holders.
iv) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions within the United States as shall be reasonably
requested by the Participating Holders, or, in the case of an underwritten
public offering the managing underwriter shall reasonably request, provided,
however, that the Company shall not be required in connection therewith or as a
condition hereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdiction.
v) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. The Participating Holders
shall also enter into and perform their obligations under such an agreement.
vi) Notify the Participating Holders, at any time when a prospectus
relating to Registrable Stock covered by such registration statement is required
to be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and at
the request of the Holder, as promptly as practicable prepare, file and furnish
to the Holder a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing.
vii) If the Company has delivered preliminary or final prospectuses to
the Holder and after having done so the prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the Holder
and, if requested, the Holder shall immediately cease making offers of included
Registrable Stock and return prospectuses to the Company. The Company shall
promptly provide the Holder with revised prospectuses and, following receipt of
the revised prospectuses, the Holder shall be free to resume making offers of
the included Registrable Stock.
e) Payment of Costs and Expenses of Registration. The Company shall pay all
costs, fees and expenses in connection with all registration statements filed
under this Section 7 including, without limitation, the Company's legal and
accounting fees and disbursements, printing expenses and blue sky fees and
expenses, but not including the fees and expenses of counsel and accountants and
advisors for the Participating Holders in connection with such registration.
Further, the Company shall not pay for underwriting discount and commissions and
underwriter's expense allowance allocable to the Registrable Stock being
registered or state transfer taxes.
f) Indemnification.
i) The Company shall indemnify each Participating Holder and any such
person controlling it within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended, against any
loss, claim, damage, expense or liability (including without limitation all
expenses reasonably incurred in investigating, preparing, or defending against
any claim whatsoever, such expenses to be reimbursed by the Company as they are
incurred) to which they may become subject under the Securities Act, the
Exchange Act or otherwise, arising out of or based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement or prospectus or any amendments or supplements thereto in which
Registrable Stock is included or in any application, statement or other document
filed by the Company with the Commission or any securities exchange or in any
jurisdiction in connection with qualifying such Registrable Stock under the
securities laws thereof, or (ii) the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading, unless such statement or omission is made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Participating Holder expressly for use in any such registration statement
or other document.
ii) Each Participating Holder shall, as a condition to such
registration of Registrable Stock, agree to indemnify the Company and any person
controlling the Company within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act, against any loss, claim, damage or expense
or liability (including without limitation all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever, such
expenses to be reimbursed by the Participating Holder as they are incurred) to
which they may become subject under the Securities Act, the Exchange Act or
otherwise, arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus or any amendments or supplements thereto in which Registrable Stock
is included or in any application, statement or other document filed by the
Company with the Commission or any securities exchange or in any jurisdiction in
connection with qualifying such Registrable Stock under the securities laws
thereof, or (ii) the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading,
provided, in each case that such statement or omission is made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such Participating Holder expressly for use in any such registration
statement or other document.
iii) Promptly upon receipt by a party claiming indemnification
hereunder of notice of the commencement of any action involving a claim referred
to above, such indemnified party will, if a claim in respect thereof is to be
made against a party which may be required to indemnify such party hereunder,
give written notice to the latter of the commencement of such action. In any
case, if any such action is brought against an indemnified party, the
indemnifying party shall be entitled to participate in and to assume the defense
of such action, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party. Except as set forth herein, the
indemnified party and any party cooperating in the defense of such claim shall
not settle or compromise any such claim or admit liability without the express
written consent of the indemnifying party. The indemnified party shall have the
right to be represented by an advisory counsel and accountants, at its own
expense, and the indemnified party shall be kept fully informed of such action,
suit or proceeding at all stages thereof whether or not the indemnified party is
so represented.
Notwithstanding the foregoing, the indemnified party may immediately cause
to be paid or discharged any asserted claim the non-payment of which would have
an immediate substantial adverse impact on the indemnified party and any claim
which the indemnifying party has not disputed within thirty days of notice as
provided above.
iv) If the indemnification provided for in this Section 7(f) is
unavailable or insufficient to hold harmless an indemnified party under such
Section in respect of any losses, claims, damages or liabilities or action in
respect thereof or referred to therein, then each indemnifying party shall in
lieu of indemnifying such indemnified party as a result of such losses, claims,
damages, liabilities or actions contribute to the amount paid by the indemnified
party in such proportion as is appropriate to reflect the relative fault of the
Company, on the one hand, and the Participating Holders, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or actions as well as any other relevant equitable
considerations, including the failure to give the notice required under such
Section. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
relates to information supplied by the Company on the one hand, or the
Participating Holders on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Participating Holders agree that it
would not be just and equitable if contribution pursuant to this Section
7(f)(iv) were determined by pro rata allocation or by any other method of
allocation which did not take account of the equitable considerations referred
to above in this subsection. No person guilty of fraudulent misrepresentations
(within the meaning of Section 11(f) of the Securities Act), shall be entitled
to contribution from any person who is not guilty of such fraudulent
misrepresentations.
v) The obligations of the Company and the Participating Holders under
this Section 7(f) shall survive the completion of any offering of Registrable
Stock in a registration statement under this Section 7.
vi) The rights of indemnification contained in this Section 7 shall
not be deemed to be the exclusive remedy of the parties hereto and such rights
shall be in addition to any other rights or remedies which any party hereto may
have at law or equity.
g) Assignment of Registration Rights. The Subscriber's rights and
obligations set forth in this Section 7 shall automatically be deemed assigned
to any transferee or assignee of Registrable Stock, provided that immediately
following such transfer the further disposition of such Registrable Stock by the
transferee or assignee is restricted under the Securities Act; provided however,
that the termination of registration rights in respect of any shares of
Registrable Stock by reason of the operation of Section 7(a) shall be binding
upon any transferee of such Registrable Stock. Upon the request of any such
Holder, the Company will confirm in writing to any transferee of such Holder's
Registrable Stock the Company's agreements contained in this Section 7, but no
failure of the Company to confirm such obligations shall in any way impair such
transferee's rights under this Section 7.
h) Reporting Requirements Under the Securities Exchange Act of 1934, as
Amended (the "Exchange Act"). The Company agrees to keep its Common Stock
registered under Section 12 of the Exchange Act and to file timely (whether or
not it shall then be required to do so) such information, documents and reports
as the Commission may require or prescribe under Section 13 of the Exchange Act.
The Company forthwith upon request agrees to furnish to any Holder of
Convertible Series A and Conversion Shares (a) a copy of the most recent annual
or quarterly report of the Company and (b) such other reports and documents
filed by the Company with the Commission as such Holder may reasonably request
in availing itself of an exemption for the sale of Conversion Shares without
registration under the Securities Act.
i) Rule 144. With a view to making available the benefits of certain rules
and regulations of the Commission which may permit the sale of the Conversion
Shares to the public without registration, the Company agrees to use its best
efforts to make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act and to use its best
efforts to file with the Commission in a timely manner all reports and other
documents required of the Company under the Exchange Act.
j) Forms. All references in this Agreement to particular forms of
registration statements are intended to include, and shall be deemed to include,
references to all successor forms which are intended to replace, or to apply to
similar transactions as, the forms herein referenced.
k) Termination. This Agreement shall terminate and be of no further force
and effect on the earlier of (i) the date ten (10) years from the date hereof;
or (ii) the date on which all of the Conversion Shares subject hereto shall no
longer be Registrable Stock.
8. Conditions to Closing.
a) Conditions to Subscriber's Obligations at the Closing. Purchaser's
obligations to purchase the Convertible Series A at the Closing are subject to
the satisfaction, at or prior to the Closing Date, of the following conditions:
i) Representations and Warranties True; Performance of Obligations.
The representations and warranties made by the Company in Section 6 hereof shall
be true and correct in all material respects as of the Closing Date with the
same force and effect as if they had been made as of the Closing Date, and the
Company shall have performed all obligations and conditions herein required to
be performed or observed by it on or prior to the Closing.
ii) Legal Investment. On the Closing Date, the sale and issuance of the
Convertible Series A and the proposed issuance of the Conversion Shares shall be
legally permitted by all laws and regulations to which the Purchaser and the
Company are subject.
iii) Filing of Articles of Amendment. The Articles of Amendment shall
have been filed with the Secretary of State of the State of Colorado.
iv) Reservation of Conversion Shares. The Conversion Shares issuable
upon conversion of the Convertible Series A shall have been duly authorized and
reserved for issuance upon such conversion.
v) Compliance Certificate. The Company shall have delivered to the
Subscriber a Compliance Certificate, executed by the President or a Vice
President of the Company, dated the Closing Date, to the effect that the
conditions specified in subsections (i), (iii), and (iv) of this Section 8 have
been satisfied.
vi) Consulting Agreement. A Consulting Agreement substantially in the
form attached hereto as Exhibit C shall have been executed and delivered by the
parties thereto.
vii) Promissory Note. A Promissory Note substantially in the form
attached hereto as Exhibit D shall have been executed and delivered by the
parties thereto.
viii)Cash Payment. The Company shall have delivered to Mogo Financial
Management Company the sum of One Hundred Seventy-Five Thousand Dollars
($175,000.00) in immediately available funds.
(ix) Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated at the Closing hereby and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchaser and its counsel, and the
Purchaser and its counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably request.
9. Conditions to Obligations of the Company. The Company's obligation to
issue and sell the Convertible Series A at the Closing is subject to the
satisfaction, on or prior to such Closing, of the following conditions:
a) Representations and Warranties True. The representations and warranties
made by the Subscriber in Section 5 hereof shall be true and correct in all
material respects at the date of the Closing, with the same force and effect as
if they had been made on and as of said date.
b) Filing of Articles of Amendment. The Articles of Amendment shall have
been filed with the Secretary of State of the State of Colorado.
c) Cash Payment. The Company shall have delivered to Mogo Financial
Management Company d/b/a Mogo Technical Consulting the sum of One Hundred
Seventy-Five Thousand Dollars ($175,000.00) in immediately available funds.
10. Confidentiality. The Subscriber shall hold and shall cause its
consultants and advisors to hold in strict confidence, unless compelled to
disclose by judicial or administrative process or by other requirements of law,
all documents and information concerning the Company furnished to it (except to
the extent that such information can be shown to have been (a) previously known
by the party to which it was furnished, (b) in the public domain through no
fault of such party or (c) later lawfully acquired from other sources by the
party to which it was furnished), and Subscriber shall not release or disclose
such information to any other person or entity, except its auditors, attorneys,
financial advisors, bankers and other consultants and advisors in connection
with this Agreement. Subscriber shall be deemed to have satisfied its obligation
to hold confidential information concerning or supplied to it if it exercises
the same care as it takes to preserve confidentiality for its own similar
information.
11. Governing Law. This Agreement has been made in, and shall be construed
in accordance with, the laws of the State of Georgia applicable to contracts
made and to be fully performed therein.
12. Entire Agreement. This Agreement and the Exhibits and other documents
delivered pursuant hereto contain the entire understanding and agreement of the
parties with respect to the subject matter hereof and supersedes all
negotiations, representations, and other agreements made by and between such
parties with respect hereto.
13. Assignment. The Subscriber may assign its rights to acquire shares of
Convertible Series A hereunder with the written consent of the Company. Any such
assignment must be in compliance with the Securities Act.
14. Survival of Representations, Warranties and Covenants. The parties
agree that all representations, warranties and covenants contained in this
Agreement shall survive the closing of the transaction as set forth herein in
the Agreement.
15. Waivers and Amendments. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally or by course of
dealing, but only by a statement in writing signed by the party against which
enforcement of the change waiver, discharge or termination is sought, except to
the extent provided in this Section 15. Specifically, but without limiting the
generality of the foregoing, the failure of any party at any time or times to
require performance of any provision hereof by the Company shall in no manner
affect the right of such party at a later time to enforce the same. No waiver by
any party of the breach of any term or provision contained in this Agreement, in
any one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement
16. Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by the Subscriber and the
closing of the transactions contemplated hereby.
17. Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of the Convertible Series A and Conversion Shares from time to time.
18. Severability. In case any provision of the Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
19. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
and to the Subscriber at the addresses set forth below or at such other address
as the Company or Subscriber may designate by ten (10) days advance written
notice to the other.
20. Expenses. Each party shall pay all costs and expenses that it incurs
with respect to the negotiation, execution, delivery and performance of this
Agreement.
21. Attorneys' Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
22. Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
23. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
24. Broker's Fees. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party indirectly in connection with the transactions
contemplated herein. Each party hereto further agrees to indemnify each other
party for any claims, losses or expenses incurred by such other party as a
result of the representation in this Section 24 being untrue.
PRIME TECHNOLOGICAL SERVICES, INC.
By:/s/ C. Glen Farr
--------------------
Name:C. Glen Farr
Title:CEO
Taxpayer Identification Number:
_____________________________
Address:_____________________
_____________________________
_____________________________
Agreed to and accepted this 10th day of December, 1999.
LEISURE TIME CASINOS & RESORTS, INC.
By:/s/ Alan N. Johnson
----------------------------
Alan N. Johnson, President
Address: 4258 Communications Drive
Norcross, Georgia 30093
<PAGE>
EXHIBIT A
# of Original
Item Description Units Price PO # Totals
----------- ------------- -------- ----------- ------- --------------
1 LTT-91000 T340+ Main 2233 $362.87 $ 810,288.71
2 LTT-91000 T340+ Main 4961 $350.08 $1,736,741.92
-------------
$2,547,030.63
=============
Items to be taken from line 1 first then line 2 after line one is completely
delivered.
CONSULTING AGREEMENT
This Consulting Agreement is entered into this 10th day of December, 1999,
by and between LEISURE TIME CASINOS & RESORTS, INC., a Colorado corporation,
having an address at 4258 Communications Drive, Norcross, Georgia 30093
("Leisure Time"), and MOGO FINANCIAL MANAGEMENT COMPANY D/B/A MOGO TECHNICAL
CONSULTANTS, a Georgia corporation, having an address at 1125 Satellite
Boulevard, Suite 110, Suwanee, Georgia 30024 ("Consultant").
RECITALS
1. Consultant is in the business of consulting with certain companies
in connection with the designing, developing and manufacturing of electronic
circuit boards for use in the electronics industry.
2. Leisure Time develops and manufactures video gaming machines which
could use the electronic circuit boards designed, developed and manufactured by
companies with which Consultant works.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, Leisure Time and Consultant,
intending to be legally bound, agree as follows:
1. Consultant shall, for a period of three years from the date of this
Agreement, make itself available to Leisure Time on an "as needed" basis, to
assist and provide Leisure Time with necessary consultation, advice, instruction
and support with respect to the design, development and manufacture of
electronic circuit boards.
2. If employees of Consultant are required to travel in performing
Consultant's services hereunder, then in addition to the fee paid hereunder,
Consultant shall be entitled to receive reimbursement of the out-of-pocket
expenses it incurs in connection with such travel.
3. For rendering the consulting services to Leisure Time hereunder and
for agreeing to be available on an "as needed" basis, Consultant shall be paid
$608,400, payable $101,400 on May 10, 2000, and $16,900 per month for 30 months
commencing on June 10, 2000.
4. This Agreement calls for performance of services of Consultant as an
independent contractor and Consultant will not be considered an employee, joint
venturer or partner of Leisure Time for any purpose.
5. The term "termination" of this Agreement for purposes of this
Agreement shall be deemed to have occurred whenever the first of the following
occurs:
a. Three years from the date hereof;
b. Mutual agreement of Consultant and Leisure Time; or
c. Consultant's affiliate, Prime Technological Services, Inc., no
longer owns any shares of Leisure Time's Convertible Series A
Preferred Stock; or
d. Consultant (i) applies for or consents to the appointment of, or
if there shall be a taking of possession by, a receiver, custodian, trustee or
liquidator for the Consultant or any of its property; (ii) becomes generally
unable to pay its debts as they become due; (iii) makes a general assignment for
the benefit of creditors or becomes insolvent; or (iv) files or is served with
any petition for relief under the Bankruptcy Code or any similar federal or
state statute.
6. Termination shall not entitle Leisure Time to a refund of any fees
paid hereunder or to a right of offset of other funds due by Leisure Time to
Consultant unless such termination is due to Consultant's failure to perform
services hereunder or other breach of any of the terms hereunder. In that event,
Leisure Time shall be entitled to pursue any and all remedies available to it,
at law or in equity, and Consultant agrees to pay, in addition to any damages
which may be awarded to Leisure Time, Leisure Time's costs to pursue any such
remedies, including its attorneys' fees and legal costs.
7. This Agreement and the rights and duties of Consultant may not be
assigned or subcontracted to any third party by Consultant without the prior
written consent of Leisure Time.
8. Consultant acknowledges that any and all information that Leisure
Time has or will disclose to Consultant with respect to the business of Leisure
Time, including, but not limited to trade secrets, trademarks, proprietary
marks, plans, methods, data, processes, marketing strategies, techniques,
identification schemes, know-how, financial records and financial condition of
Leisure Time of any kind or nature ("Confidential Information"), is confidential
nonpublic information of Leisure Time and, without the prior written consent of
Leisure Time, Consultant agrees that it will not disclose such Confidential
Information directly or indirectly to any person other than its employees,
agents, advisors and representatives (the persons to whom such disclosure is
permissible being collectively called "Designated Persons") who need to know
such information for the purpose of Consultant performing under this Agreement
(it being understood that those Designated Persons shall agree to be bound by
this agreement and shall be informed by Consultant of the confidential nature of
such information and directed by Consultant to treat such information
confidentially).
Consultant acknowledges that all Confidential Information of Leisure Time
is proprietary information of Leisure Time and, without the prior written
consent of Leisure Time, Consultant agrees that it will not utilize or otherwise
incorporate or use any such Confidential Information in any of its or any
subsidiary or affiliated company's business, regardless if such subsidiary or
affiliated company is presently in existence or hereafter formed. Pursuant to
this paragraph, Consultant agrees not to, directly or indirectly, sell to,
manage, operate, own, control, engage in or have any interest in any other
business which as part of its operations offers services in competition with the
business of Leisure Time during the term of this Agreement; provided, however,
that nothing herein shall prevent Consultant or any subsidiary or affiliated
company of Consultant from conducting its business as it is presently conducted.
Consultant agrees that all of the Confidential Information provided to
Consultant by Leisure Time as described above shall be deemed to be confidential
and proprietary information of Leisure Time, unless otherwise designated by
Leisure Time. All such written Leisure Time Confidential Information provided to
Consultant shall be immediately returned to Leisure Time upon termination of
this Agreement and Consultant shall not keep any copies thereof. Consultant
acknowledges that any disclosure or unauthorized use of such Leisure Time
Confidential Information will cause Leisure Time irreparable harm, for which an
adequate remedy at law will not exist and, that upon breach of paragraph 8 of
this Agreement by Consultant, Leisure Time may seek and receive an immediate
injunction, restraining order or preliminary injunction against Consultant to
further prevent the breach of this Agreement, in addition to any other remedy to
which Leisure Time would be entitled as a result of the breach of this Agreement
by Consultant.
9. This Agreement shall be binding upon Consultant, and Leisure Time
and their respective heirs, personal representatives, executors, administrators,
successors or assigns.
10. Any notices to be given hereunder by either party to the other may
be affected by personal delivery in writing or by mail, registered or certified,
postage prepaid with return receipt requested. Mail notices shall be addressed
to the parties at the following addresses:
To Consultant:
MOGO Financial Management Company
d/b/a MOGO Technical Consultants
1125 Satellite Boulevard, Suite 110
Suwanee, Georgia 30024
Attn: President
To Leisure Time:
Leisure Time Casinos & Resorts, Inc.
4258 Communications Drive
Norcross, Georgia 30093
Attn: President
Notices delivered personally shall be deemed communicated as of actual receipt;
notices mailed pursuant to this paragraph shall be deemed communicated as of
three business days after mailing.
11. This Agreement supersedes any and all other agreements, either oral
or in writing and contains all the covenants and agreements between Leisure Time
and Consultant relating to the matter described herein. Any modification of this
Agreement will be effective only if it is in writing, executed by the party to
be charged.
12. If any part of this Agreement shall be determined by competent
authorities to be invalid, the remainder hereof shall be construed as if the
invalid portion had been omitted.
13. This Agreement shall be governed by and construed in accordance with
the laws of the State of Georgia.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
CONSULTANT
MOGO FINANCIAL MANAGEMENT COMPANY
D/B/A MOGO TECHNICAL CONSULTANTS
By:/s/ C. Glen Farr
-------------------------
C. Glen Farr, President
LEISURE TIME CASINOS & RESORTS, INC.
By:/s/ Alan N. Johnson
-------------------------
Alan N. Johnson, President
PROMISSORY NOTE
$98,880.00
Atlanta, Georgia
Original Issue Date: December 10, 1999
FOR VALUE RECEIVED, LEISURE TIME CASINOS & RESORTS, INC., a Colorado
corporation ("Maker"), promises to pay MOGO FINANCIAL MANAGEMENT COMPANY, a
Georgia corporation, or any subsequent holder of this Note (the initial holder
or any such subsequent holder being hereafter referred to as "Holder"), at 1125
Satellite Boulevard, Suite 110, Suwanee, Georgia 30024, the principal sum of
NINETY-EIGHT THOUSAND EIGHT HUNDRED EIGHTY DOLLARS ($98,880.00) with interest
which shall accrue from the Original Issue Date at the rate of eight percent
(8%) per annum as set forth below.
Capitalized terms used but not defined herein are used with the meanings
ascribed to such terms in the Convertible Series A Preferred Subscription
Agreement dated December 10, 1999, by and between Maker and Prime Technological
Services, Inc.
(1) Payment of Principal and Interest. All principal and all accrued and
unpaid interest thereon due Holder hereunder, shall be paid in lawful money of
the United States of America. Maker shall pay the principal amount of this Note
with interest as follows: (a) the sum of Fifty Thousand Dollars ($50,000.00)
plus accrued interest shall be due and payable on January 10, 2000; and (b) the
remaining principal sum of Forty-Eight Thousand Eight Hundred Fifty Dollars
($48,850.00) plus accrued interest shall be due and payable on February 10,
2000.
(2) Events of Default. An Event of Default shall occur under this Note if
Maker shall (i) fail to make any payment of principal or interest hereunder when
due, which failure is not cured within ten business (10) days following Maker's
receipt of written notice from Holder; (ii) admit in writing its inability to
pay its debts generally as they become due; (iii) file a petition in bankruptcy
or petition to take advantage of any insolvency act; (iv) make an assignment for
the benefit of its creditors; (v) consent to the appointment of a receiver of
itself or of the whole or any substantial part of its property; (vi) a petition
in bankruptcy filed against it which petition is not removed or discharged
within ninety have (90) days from the date of filing; (vii) file a petition or
answer seeking reorganization or arrangement under the federal bankruptcy laws
or any other applicable law or statute of the United States or any state
thereof; (viii) distribute any of its assets upon any dissolution, winding up,
liquidation, or reorganization of Maker; (ix) sell, transfer or assign 50% or
more of the then issued and outstanding common stock of Maker in a single
Transaction, or sell substantially all of the business or assets of Maker; or
(x) default under any other loan agreements with any other lender.
(3) Acceleration. It is hereby expressly agreed that upon an Event of
Default the stated principal amount of this Note, with accrued and unpaid
interest thereon, shall, at the option of Holder, become immediately due and
payable, anything contained herein to the contrary notwithstanding, time being
of the essence of this Note. Upon an Event of Default and thereafter so long as
there is a continuing Event of Default the interest rate shall be twelve percent
(12%).
(4) Costs of Collection. If this Note is not paid when due, either at the
scheduled installments or upon the written demand of Holder after acceleration,
Maker promises to pay all costs of collection, including, but not limited to,
reasonable attorney's fees.
(5) Presentment. Maker hereby waives presentation for payment and notice
of protest, dishonor, and nonpayment of this Note, and consents that Holder may
extend the time of payment or otherwise modify the terms of payment of any part
of the debt evidenced by this Note, and such consents shall not alter nor
diminish the liability of Maker.
(6) Prepayment. Maker may prepay this Note in whole or in part without any
prepayment penalty attaching thereto.
(7) Assignment. Holder may sell, assign, or transfer this Note or its
interest in this Note and this Note shall inure to the benefit of any such
assignee.
(8) CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THE VALIDITY OF THIS NOTE,
THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE
PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO
SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF GEORGIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS NOTE SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF GWINNETT, STATE OF GEORGIA OR,
AT THE SOLE OPTION OF HOLDER, IN ANY OTHER COURT IN WHICH HOLDER SHALL INITIATE
LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER
THE MATTER IN CONTROVERSY. EACH OF MAKER AND HOLDER WAIVES, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 8.
IN WITNESS WHEREOF, this Note has been executed and delivered by Maker's
duly authorized officer on the date first above written.
LEISURE TIME CASINOS & RESORTS, INC.
By: /s/ Alan N. Johnson
---------------------------
Alan N. Johnson, President
