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UNITED STATES
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): JUNE 11, 1997
TRANS WORLD GAMING CORP.
(Exact name of registrant as specified in its charter)
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COMMISSION FILE NO.: 0-25244
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NEVADA 13-3738518
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE PENN PLAZA, SUITE 1503 10119-0002
NEW YORK, NY (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 563-3355
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ITEM 5. OTHER EVENTS
On June 11, 1997, Trans World Gaming Corp. ("TWG" or the "Company') and Value
Partners, Ltd., a Texas Limited Partnership ("Value Partners"), executed a loan
agreement, and TWG made an unsecured Senior Promissory Note (the "Note") in
favor of Value Partners, for $350,000 due June 11, 1998. The Note will bear
simple interest at the rate of the lesser of 17% per annum or the highest rate
than allowed by applicable law. TWG has agreed to make payments on the Note by
paying to Value Partners each quarter an amount equal to 40% of the cash
received from the Boxer Casino (as described below) during such quarter.
Payment will be applied first to unpaid fees and expenses of Value Partners
arising in connection with the Note, next to unpaid interest, and then to unpaid
principal If such amount is zero or a negative number, no payment will be due
on the Note for such quarter. This provision does not, however, waive TWG's
obligation to make any other payments on the Note, including specifically the
balance due on June 11, 1998, the final maturity date. The Note may be prepaid
without penalty, upon written consent of Value Partners. During the term of the
Note, TWG will be subject to customary affirmative and negative covenants
including, with respect to the former, provision of quarterly financial
statements and, with respect to the latter, restrictions on incurring senior
debt or disposing of assets.
On March 31, 1997, Tottenham & Co. dba Art Marketing Ltd., a wholly owned
subsidiary of TWG ("Tottenham & Co."), executed a Joint Activity Agreement with
Mr. Mahmud Avdiyev, an individual. The Joint Activity Agreement (the
"Agreement") sets forth the parties' relative obligations with respect to
operation of the Boxer Casino (the "Casino") located in Gyandja, Azerbaijan
Republic. The term of the Agreement is 20 years. In general, Mr. Avdiyev will
arrange for leasing, refurbishment and local compliance matters with respect to
the Casino premises, and TWG and/or Tottenham & Co. will provide equipment,
funding and consultation services with respect to the Casino's operations.
Profits from the Casino will be distributed 40% to TWG and 60% to Mr. Avdiyev.
The Casino will be run on a day-to-day basis by a General Manager. If either
party wants to terminate its participation in the Casino, it must first offer to
sell its interest therein to the other party.
TWG issued a press release dated June 26, 1997 announcing its plans for the
Boxer Casino, as well as announcing the delisting of the Company's common stock
and warrants from the NASDAQ SmallCap Market effective June 25, 1997. The
common stock and warrants will immediately begin trading on the OTC Bulletin
Board. The delisting resulted from the fact that the Company's capital and
surplus are less than the minimum amount required for continued listing on the
NASDAQ SmallCap Market.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) 10.1 Loan Agreement
10.2 Senior Promissory Note
10.3 Joint Activity Agreement
99.1 Press Release, dated June 26, 1997
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NOTE ON FORWARD-LOOKING INFORMATION
This Form 8-K contains certain forward-looking statements. For this purpose,
any statements contained in this Form 8-K that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, words such as "may," "will," "expect," "believe," "anticipates,"
"estimates," or "continue' or comparable terminology are intended to identify
certain forward-looking statements. These statements by their nature involve
substantial risks and uncertainties, both known and unknown, and actual results
may differ materially from any future results expressed or implied by such
forward-looking statements. The Company undertakes no obligation to publicly
update or revise any forward-looking statements whether as a result of new
information, future events or otherwise.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: June 11, 1997
TRANS WORLD GAMING CORP.
/s/ Dominick J. Valenzano
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Dominick J. Valenzano
Chief Financial Officer (Principal Financial
and Accounting Officer)
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INDEX TO EXHIBITS
Exhibit 10.1 Loan Agreement dated as of June Filed herewith.
11, 1997 between TWG and Value
Partners
Exhibit 10.2 Senior Promissory Note in the amount Filed herewith.
of $350,000 dated June 11, 1997
made by TWG in favor of Value Partners
Exhibit 10.3 Joint Activity Agreement dated March Filed herewith.
31, 1997 between Tottenham & Co. dba
Art Marketing Ltd.,and Mr. Mahmud
Avdiyev
Exhibit 99.1 Press Release dated June 26, 1997 Filed herewith.
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LOAN AGREEMENT
This LOAN AGREEMENT ("AGREEMENT") is made and entered into as of this 11th
day of June, 1997, by and between Value Partners, Ltd., a Texas Limited
Partnership ("LENDER") and TransWorld Gaming Corp., a Nevada Corporation (the
"BORROWER").
R E C I T A L S
Borrower has requested that Lender loan to Borrower and Lender is willing
to loan to Borrower the sum of $350,000.00 upon the terms and subject to
conditions hereinafter set forth. To evidence this loan, Borrower shall
execute that certain Senior Promissory Note (the "Note") attached hereto as
Exhibit A and by the reference incorporated herein (this Agreement and the Note
shall be referred to collectively as the "Loan Documents").
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged, Lender and Borrower agree:
1. REFERENCES IN LOAN DOCUMENTS. All references in the Loan Documents
to the Note shall henceforth include references to the Note, as such Note may,
from time to time, be amended, modified, extended, renewed, decreased, and/or
increased.
2. EXECUTION OF DOCUMENTS. Subject to the terms and conditions set
forth herein, Borrower will execute in favor of Lender the Note in the form
attached hereto as Exhibit "A".
3. CONFIRMATION OF RIGHTS. Lender shall have the right to exercise all
rights and remedies of Lender under the Loan Documents and under applicable law
upon the occurrence of any default or event of default under any of the Loan
Documents and under any and all amendments or modifications to any of the Loan
Documents or to the terms thereof.
4. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower represents and
warrants to the Lender as follows:
(a) ORGANIZATION, STANDING, ETC. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and has all requisite corporate power and authority to own its assets and
carry on its business as presently conducted. Borrower has all requisite
corporate power and authority to (i) execute, deliver and perform its
obligations under the Loan Documents, and (ii) execute, deliver and perform its
obligations
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LOAN AGREEMENT, PAGE 1
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under all other agreements and instruments executed and delivered by it pursuant
to or in connection with the Loan Documents.
(b) AUTHORIZATION AND EXECUTION. The execution, delivery and
performance by Borrower of the Loan Documents have been duly and validly
authorized and Borrower has the corporate power and authority to execute,
deliver and perform this Agreement and execute the Loan Documents. The Loan
Documents have been duly executed and delivered by Borrower and constitute a
valid and binding agreement of Borrower.
(c) CONTRAVENTION. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby do not
contravene or constitute a default under or violate (i) any provision of
applicable law or regulation the violation of which would have a material
adverse effect on Borrower or on the Loan Documents, (ii) the Articles of
Incorporation or Bylaws of Borrower, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon Borrower or any of
its assets or properties, the violation of which would have a material adverse
effect on Borrower or result in the creation or imposition of any lien on any
asset of Borrower or on the Loan Documents.
(d) LITIGATION, PROCEEDINGS, DEFAULTS. Other than a lawsuit
commenced by the Borrower against the State of Louisiana, Docket No. 434,700-D,
pending in East Baton Rouge Parrish and the proceeding by the NASDAQ Stock
Market to delist the Common Stock and warrants of the Borrower, there is no
action, suit, investigation or proceeding pending against, or to the knowledge
of the Borrower threatened against or affecting, Borrower or its assets before
or by any court or arbitrator or any governmental body, agency, department,
instrumentality or official. Borrower is not in violation of its Articles of
Incorporation or Bylaws, and Borrower is not in violation of, or in default
under any provision of any applicable law or regulation or of any agreement,
judgment, injunction, order, decree or other instrument binding upon Borrower
which violation or default (i) would effect the validity of this Agreement, the
Note, or any other document or agreement executed or to be executed by Borrower
pursuant hereto or in connection herewith, or (ii) would impair the ability of
Borrower to perform in any material respect the obligations which it has under
the Loan Documents, or any such other document or agreement.
(e) GOVERNMENTAL REGULATION. Except as required pursuant to the
Securities Act of 1933 as Amended (the "Act"), the Securities and Exchange Act
of 1934, as amended, and State securities laws, Borrower is not subject to any
Federal or State law or regulation limiting its ability to execute or issue the
Loan Documents.
(f) OWNERSHIP OF PROPERTY. Borrower has good record title in fee
simple to, or valid and subsisting leasehold interests in, all its real
property, and good title to all its other
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LOAN AGREEMENT, PAGE 2
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property, in each case which is necessary or useful in the conduct of its
business. Each lease agreement under which Borrower holds an interest in leased
property is in full force and effect.
(g) DOCUMENTATION; NO MATERIAL MISSTATEMENTS. All of the necessary
documents related to the consummation of this transaction requested by Lender
have been provided by Borrower to the Lender and are true, correct and complete
in all material respects, and no written representation, warranty or statement
made by the Borrower in or pursuant to this Agreement contains or will contain,
when made, any untrue statement of a material fact or omits or will omit to
state any material fact necessary to make such representation, warranty or
statement not misleading to a prospective purchaser of securities from Borrower,
who is seeking full information with respect to Borrower.
5. REPRESENTATIONS AND WARRANTIES OF LENDER. The Lender represents and
warrants to Borrower as follows:
(a) AUTHORIZATION AND EXECUTION. The Lender has full legal right,
power, and authority (including the due authorization by all necessary
partnership action) to enter into this Agreement and to perform the Lender's
obligations hereunder without the need for the consent of any other person; and
this Agreement has been duly authorized, executed and delivered and constitutes
the legal, valid and binding obligation of the Lender enforceable against the
Lender in accordance with the terms hereof.
(b) FINANCIAL RISK. The Lender is in a financial position to hold
the Note until maturity and is able to bear the economic risk and withstand a
complete loss of investment in the Note.
(c) KNOWLEDGE AND EXPERIENCE. The Lender has such knowledge and
experience in financial and business matters that the Lender is capable of
evaluating the merits and risks of the investment in the Note and has the net
worth to undertake such risks.
(d) ADVICE. The Lender has obtained, to the extent the Lender has
deemed necessary, the Lender's own professional advice with respect to the
risks inherent in the investment in the Note , and the suitability of the
investment in the Note in light of the Lender's financial condition and
investment needs.
(e) SUITABLE INVESTMENT. The Lender believes that the investment in
the Note is suitable for the Lender based upon the Lender's investment
objectives and financial needs, and the Lender has adequate means for providing
for the Lender's current financial needs and has no need for liquidity of
investment with respect to the Note.
(f) RISK FACTORS. The Lender realizes that (i) the purchase of the
Note is a long term investment; (ii) the Lender must bear the economic risk of
investment until the Note
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LOAN AGREEMENT, PAGE 3
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matures and because the Note has not been registered under the Act, the Note
cannot be sold unless it is subsequently registered under the Act or an
exemption from such registration is available; and (iii) there is presently no
public market for the Note and the Lender may not be able to liquidate the
Lender's investment in the event of an emergency or pledge the Note as
collateral security for loans.
(g) OWN ACCOUNT. The Lender acknowledges that the Note is being
purchased for the Lender's own account and for investment and without the
intention of reselling or redistributing the same, and that the Lender made no
agreement with others regarding any of such Note.
(h) NO AGREEMENTS. The Lender has no agreements (written or oral),
arrangements, understandings or commitments with any other investor subscribing
for Note in this private placement of same.
(i) ACCREDITED INVESTOR. The Lender is an "accredited investor" as
defined under Regulation D under the Act .
(j) ENTITY REPRESENTATIONS. The Lender was not organized for the
specific purpose of acquiring the Note and has total assets in excess of
$5,000,000.
6. SECURITIES LAWS RESTRICTIONS. The Lender acknowledges the Note will
not be sold or assigned unless the Lender shall have obtained (i) an opinion of
counsel satisfactory to the Borrower that such proposed disposition or transfer
lawfully may be made without the registration of such Note pursuant to the Act
and applicable state securities laws, or (ii) such registration.
7. LEGEND ON NOTE. The Lender acknowledges that the Note will bear a
legend conspicuously endorsed reading substantially as follows:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS NOTE
THEREFORE MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR OTHERWISE
DISTRIBUTED FOR VALUE IN THE ABSENCE OF (i) AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE MAKER THAT SUCH SALE, TRANSFER,
ASSIGNMENT, PLEDGE OR OTHER DISTRIBUTION IS EXEMPT FROM (OR NOT
OTHERWISE SUBJECT TO) THE REGISTRATION (OR QUALIFICATION) AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT OR LAWS, OR (ii) SUCH
REGISTRATION OR QUALIFICATION.
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LOAN AGREEMENT, PAGE 4
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8. WAIVER OF CLAIMS. Borrower warrants and represents to Lender that as
of the date hereof the Note is subject to no credits, charges, claims, or rights
of offset or deduction of any kind or character whatsoever; and the Borrower
releases and discharges Lender from any and all claims and causes of action,
whether known or unknown and whether now existing or hereafter arising,
including, without limitation, any usury claims, that have at any time been
owned, or that are hereafter owned by Borrower and that arise out of or are
related to the execution, delivery and performance of the Loan Documents.
9. SPECIAL NOTICES TO BORROWERS AND ALL OTHER OBLIGORS. THIS LOAN IS
PAYABLE IN FULL NO LATER THAN JUNE 11, 1998. AT MATURITY, YOU MUST PAY THE
ENTIRE UNPAID PRINCIPAL BALANCE OF THE LOAN AND ACCRUED UNPAID INTEREST THEN
DUE. THE LENDER IS UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. YOU
WILL THEREFORE BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY OWN, OR
YOU WILL HAVE TO FIND A LENDER WILLING TO LEND THE MONEY AT PREVAILING MARKET
RATES, WHICH MAY BE CONSIDERABLY HIGHER THAN THE INTEREST RATE ON THIS LOAN. IF
YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL OF THE
CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN REFINANCING
FROM THE SAME LENDER.
10. COSTS AND EXPENSES. Borrower agrees to pay all costs and expenses
incurred by Lender in connection with the execution and consummation of this
Agreement, including, without limitation, the reasonable fees and expenses of
Lender's counsel
11. CONTINUED EFFECT. Except to the extent amended hereby or in
connection herewith, all terms, provisions, and conditions of the Loan Documents
shall remain enforceable and binding in accordance with their respective terms.
12. GOVERNING LAW. The terms and provisions hereof shall be governed by
and construed in accordance with the laws of the State of Texas.
13. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the parties hereto, and
each of the parties hereto hereby represents, warrants, and covenants to the
other that the persons executing this Agreement on behalf of such party have
full authority, power, and authorization to execute such document and to bind
its principal.
14. ENTIRE AGREEMENT. This Agreement supersedes all prior oral and
written agreements and understandings of the parties hereto with respect to the
subject matter hereof.
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LOAN AGREEMENT, PAGE 5
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15. HEADINGS. The headings of the sections and subsections hereof are
inserted as a matter of convenience and for reference only and in no way define,
limit or describe the scope of this Agreement or the meaning of any provision
hereof.
16. WAIVERS. The failure of any party to act to enforce rights hereunder
shall not be deemed a waiver and shall not preclude enforcement of any rights
hereunder. No waiver of any term or provision of this Agreement on the part of
a party shall be effective for any purpose whatsoever unless such waiver is in
writing and signed by such party.
17. INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the terms hereof, such provision shall be fully severable. This Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, and the remaining provisions hereof shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom. Furthermore,
in lieu of such illegal, invalid or unenforceable provision there shall be added
automatically as a part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
18. NOTICES. Any request, demand, authorization, direction, notice,
consent, waiver, instruction, document or other communication provided or
permitted by this Agreement to be made upon, given or furnished to, or filed
shall be sufficient for every purpose hereunder if in writing and mailed,
registered or certified mail, postage prepaid or delivered by facsimile or
telecopier (if confirmed), as follows:
If to Borrower, to:
Trans World Gaming Corp.
One Penn Plaza, Suite 1503
New York, NY 10019
Attn: Dominick Valenzano
With copies to:
Elias, Matz, Tiernan & Herrick L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
Attn: Jeffrey Koeppel
If to Lender, to:
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LOAN AGREEMENT, PAGE 6
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Value Partners, Ltd.
2200 Ross Avenue
Suite 4660 West
Dallas, Texas 75201
Attn: Timothy G. Ewing
With copies to:
Bergman, Yonks, Stein & Bird L.L.P.
4514 Travis Street
Travis Walk, Suite 300
Dallas, Texas 75205
Attn: Jack R. Bird, Esquire
19. ATTORNEY'S FEES. In the event attorneys' fees or other costs are
incurred to secure performance of any of the obligations herein provided for, or
to establish damages for the breach thereof, or to obtain any other appropriate
relief, whether by way of prosecution or defense, the prevailing party shall be
entitled to recover reasonable attorneys' fees and costs incurred therein.
20. FURTHER ASSURANCES. Each party hereto agrees to execute any and all
documents, and to perform such other acts, whether before or after closing, that
may be reasonably necessary or expedient to further the purposes of this
Agreement or to further assure the benefits intended to be conferred hereby.
21. NOTICE OF INVALIDITY OF ORAL AGREEMENTS. THIS WRITTEN AGREEMENT, THE
LOAN DOCUMENTS, AND ALL EXHIBITS HERETO REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
22. USURY. All agreements between Borrower and Lender, whether now
existing or hereafter arising and whether written or oral, are hereby limited so
that in no contingency, whether by reason of demand or acceleration of the Final
Maturity Date, as that term is defined in the Note, or otherwise, shall the
interest contracted for, charged, received, paid or agreed to be paid to Lender
exceed the maximum amount permissible under the laws of the State of Texas
(hereinafter the "Applicable Law"). If, from any circumstance whatsoever,
interest would otherwise be payable to Lender in excess of the maximum amount
permissible under the Applicable Law, the interest payable to Lender shall be
reduced to the maximum amount permissible under the Applicable Law, and if from
any circumstance Lender shall ever receive anything of value deemed interest by
the Applicable Law in excess of the maximum amount permissible under the
Applicable Law, an amount equal to the excessive interest shall
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LOAN AGREEMENT, PAGE 7
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be applied to the reduction of the principal hereof and not to the payment of
interest, or if such excessive amount of interest exceeds the unpaid balance of
principal hereof, such excess shall be refunded to Borrower. All interest paid
or agreed to be paid to Lender shall, to the extent permitted by the Applicable
Law, be amortized, prorated, allocated and spread throughout the full period
(including any renewal or extension) until payment in full of the principal so
that the interest hereon for such full period shall not exceed the maximum
amount permissible under the Applicable Law. Lender expressly disavows any
intent to contract for, charge or receive interest in an amount which exceeds
the maximum amount permissible under the Applicable Law. This paragraph shall
control all agreements between Borrower and Lender.
23. COUNTERPARTS. This Agreement may be executed in separate or multiple
counterparts by the parties, and all of such counterparts shall be considered as
one and the same instrument notwithstanding the fact that various counterparts
are signed by only one or more of the parties, and all of such Agreements shall
be deemed but one and the same Agreement.
EXECUTED as of the date first above written.
LENDER:
VALUE PARTNERS, LTD.
By: Fisher Ewing Partners,
a Texas general partnership
General Partner
By:
-----------------------------------------
Timothy G. Ewing
Its: General Partner
BORROWER:
TRANS WORLD GAMING CORP.,
A NEVADA CORPORATION
By:
-----------------------------------------
Its:
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LOAN AGREEMENT, PAGE 8
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THE TRANSFER OF THIS NOTE IS RESTRICTED - SEE SECTION 12 HEREOF
SENIOR PROMISSORY NOTE
$350,000.00 JUNE 11, 1997
NEW YORK, NEW YORK
1. AGREEMENT TO PAY. FOR VALUE RECEIVED, the receipt of which is hereby
acknowledged, the undersigned, TRANS WORLD GAMING CORP., a Nevada Corporation
(hereinafter referred to as the "Maker"), promises to pay to the order of VALUE
PARTNERS, LTD., a Texas limited partnership, (hereinafter referred to as the
"Payee", and Payee and each successive owner and holder of this Note being
hereinafter generally referred to as the "Holder") in the manner provided for
herein of the principal sum of
THREE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($350,000.00)
together with interest on the outstanding principal balance hereof remaining
from time to time unpaid at the rate provided in Section 2 hereof.
2. INTEREST RATE.
(a) The outstanding principal balance hereof shall bear simple interest at
the rate of the lesser of seventeen percent per annum ( 17%) or the Highest
Lawful Rate, as defined herein (the "Regular Rate"), computed daily on the
basis of a 360 day year consisting of twelve 30-day months for each day all or
any part of the principal balance hereof shall remain outstanding, but to the
extent such computation of interest might cause the rate of interest which this
Note bears to exceed the Highest Lawful Rate, such interest shall be computed on
the basis of a three hundred sixty-five (365) day or a three hundred sixty-six
(366) day year, as the case may be.
(b) "HIGHEST LAWFUL RATE" shall mean at the particular time in question
the maximum rate of interest which, under Applicable Law, Payee is then
permitted to charge Maker on this Note. "Applicable Law" shall mean (i) the
laws of the United States of America applicable to contracts made or performed
in the State of Texas, now or at any time hereafter prescribing maximum rates of
interest or eliminating maximum rates of interest on loans and extensions of
credit, (ii) the laws of the State of Texas including, without limitation,
Article 5069-1.04 of the Texas Revised Civil Statutes Annotated, as the same may
be amended from time to time ("Article 1.04"), now or at any time hereafter
prescribing or eliminating maximum rates of interest on loans and extensions of
credit and (iii) any other laws at any time applicable to contracts made or
performed in the State of Texas which permit a higher interest rate ceiling
hereunder. If the maximum rate of interest which, under Applicable Law, Payee
is permitted to charge Maker on this Note shall change after the date hereof,
the Highest
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SENIOR PROMISSORY NOTE, PAGE 1
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Lawful Rate shall be automatically increased or decreased, as the case may be,
from time to time as the effective date of each change in the Highest Lawful
Rate without notice to Maker. For purposes of determining the Highest Lawful
Rate under the Applicable Law of the State of Texas, the applicable rate ceiling
shall be the indicated rate ceiling described in and computed in accordance with
the provisions of section (a)(1) of Article 1.04; provided, however, that in
determining the Highest Lawful Rate, all fees and other charges contracted for,
charged or received by Payee in connection with the loan evidenced by this Note
which are either deemed interest under Applicable Law or required under
Applicable Law to be deducted from the principal balance hereof to determine the
rate of interest charged by this Note shall be taken into account. To the
extent permitted by Applicable Law, Payee may from time to time substitute for
the "indicated rate ceiling" referred to above any ceiling under Article 1.04 or
any other statute and revise the rate, index, formula or provision of law used
to compute the rate hereunder as provided therein.
(c) All agreements between Maker and Payee, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of demand or acceleration of the Final Maturity
Date or otherwise, shall the interest contracted for, charged, received, paid or
agreed to be paid to Payee exceed the maximum amount permissible under
Applicable Law. If, from any circumstance whatsoever, interest would otherwise
be payable to Payee in excess of the maximum amount permissible under the
Applicable Law, the interest payable to Payee shall be reduced to the maximum
amount permissible under the Applicable Law, and if from any circumstance Payee
shall ever receive anything of value deemed interest by the Applicable Law in
excess of the maximum amount permissible under the Applicable Law, an amount
equal to the excessive interest shall be applied to the reduction of the
principal hereof and not to the payment of interest, or if such excessive amount
of interest exceeds the unpaid balance of principal hereof, such excess shall be
refunded to Maker. All interest paid or agreed to be paid to Payee shall, to
the extent permitted by the Applicable Law, be amortized, prorated, allocated
and spread throughout the full period (including any renewal or extension) until
payment in full of the principal, so that the interest hereon for such full
period shall not exceed the maximum amount permissible under the Applicable Law.
Payee expressly disavows any intent to contract for, charge or receive interest
in an amount which exceeds the maximum amount permissible under the Applicable
Law. This paragraph shall control all agreements between Maker and Payee.
3. LOAN AGREEMENT. Maker shall, upon execution of this Note, execute and cause
to be delivered to Bergman, Yonks, Stein & Bird, L.L.P., to the benefit of
Payee, that certain Loan Agreement.
4. PAYMENTS.
(a) PAYMENT SCHEDULE. Maker shall, until all obligations under the terms of
this Note are satisfied, on or before the 10th calendar day following each three
(3) calendar month period, pay or cause to be paid the lesser of (i) the unpaid
accrued interest, unpaid principal and other sums due Holder under the terms
hereof, or (ii) the sum equal to forty percent (40%) of all
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SENIOR PROMISSORY NOTE, PAGE 2
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cash received during that prior three (3) month period, if any, by it or its
wholly owned subsidiary, Tottenham & Co., dba ART Marketing Ltd. (the
"Subsidiary") for services rendered by Maker or the Subsidiary as to the Boxer
Casino located in the city of Gyandja (Azerbaijon Republic), including pursuant
to that Joint Activity Agreement dated March 31, 1997 by and between Subsidiary
and Mahmud Audiyev. The payment shall be applied first to unpaid fees and
expenses of Payee arising in relation to this Note, next to unpaid interest, and
then to unpaid principal. All accrued unpaid interest and unpaid principal
together with any unpaid fees and expenses owing Holder under the terms hereof
shall be due and payable June 11, 1998 ("Final Maturity Date"). The obligation
to pay this Note is a general unsecured obligation of the Maker and is not
limited to proceeds received from the operation of the Boxer Casino. However,
if the sum described in Section 4(a)(ii) is zero or a negative number, no
payment to the Payee will be due for such quarterly period. This does not waive
the obligation of Maker as to any other payment due hereunder, specifically
including that due on the Final Maturity Date as set forth herein.
(b) DEBT OFFERING. The Borrower has represented that it is considering the
issuance of debt and equity instruments in the approximate total sum of
$12,000,000, the proceeds of which are to be used in part to acquire an interest
in casinos located in the Czech Republic (the"New Issue"). Should the New Issue
occur, the Final Maturity Date shall become the earlier of June 11, 1998 or ten
(10) days following the receipt by Borrower of $1,000,000 in cash from the New
Issue.
(c) PLACE OF PAYMENT. All payments to be made by Maker to the Payee
hereunder shall be made to the Payee at 2200 Ross Avenue, Suite 4660 West,
Dallas, Texas 75201, not later than 4:00 p.m. Central Time on the date when due
in lawful money of the United States, and immediately available funds. The
Maker will promptly and punctually pay when due (whether on a scheduled payment
date or at maturity or upon the prepayment of such Note) the principal of and
interest on the Note, without any presentment thereof, directly to Holder of
the Note at the address of such Holder shown in the register maintained by the
Maker for such purposes or at such other address as the Holder may from time to
time designate in writing to the Maker or, if a bank account is designated in
any written notice to Maker from the Holder, the Maker will make such payments
by wire transfer or other immediately available funds to such bank account,
marked for attention as indicated, or in such other manner or to such other
account of the Holder in any bank in the United States as such holder may from
time to time direct in writing.
(d) TRANSFER; PREPAYMENT. The Holder of the Note agrees that in the event it
shall sell or transfer the Note it will, prior to the delivery of the Note, make
a notation thereon of all principal, if any, prepaid on such Note and will also
note thereon the date to which interest has been paid on such Note. Upon
repayment in full of the Note, the Holder of the Note shall deliver such Note to
the Maker for cancellation. Maker shall not be charged a penalty in the event
of prepayment of the Note, to the extent such prepayment is consented to in
writing by the Holder.
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SENIOR PROMISSORY NOTE, PAGE 3
<PAGE>
5. AFFIRMATIVE COVENANTS. Maker covenants and agrees that so long as the Note
shall be outstanding:
(a) PRINCIPAL AND INTEREST. Maker will pay or cause to be paid punctually
the principal of and interest on the Note at the times and places and
in the manner specified in the Note.
(b) MAINTENANCE OF EXISTENCE. Maker will at all times do or cause to be
done all things necessary to maintain, preserve and renew its
existence and its rights, patents and franchises.
(c) COMPLIANCE WITH LAWS. Maker will comply in all material respects with
all applicable laws, rules, regulations, and orders of the United
States of America and of all foreign countries and of any state or
municipality, and of any instrumentality or agency of any thereof
(including applicable statutes, regulations, orders and restrictions
relating to equal employment opportunities and environmental standards
or controls) in respect of the conduct of business and the ownership
of property by Maker.
(d) INSURANCE. Maker will maintain adequate insurance with financially
sound and reputable insurance companies in such amounts and covering
such risks as is customarily carried by companies engaged in similar
businesses and similarly situated as Maker. Maker shall notify Holder
of any cancellations or material changes within five (5) business days
of notice of such cancellation or change to the Maker.
(e) TAXES, ASSESSMENTS AND OTHER CHARGES. Maker will pay punctually and
discharge when due and payable: (i) all taxes, assessments and other
governmental charges levied or imposed upon it or upon its income,
profits or properties and (ii) all claims (including, without
limitation, claims for labor, materials, supplies or services) which
might, if unpaid, become a lien upon any property of Maker, except
those which the Maker is disputing in good faith and which dispute is
being prosecuted in good faith, so long as such process does not
endanger the ability of Maker to perform its obligations herein.
(f) INDEBTEDNESS. Maker will pay punctually and discharge when due and
payable any indebtedness heretofore or hereafter incurred or assumed
by it and discharge, perform and observe the covenants, provisions and
conditions to be discharged, performed and observed on the part of
Maker in connection therewith, or in connection with any agreement or
other instrument relating thereto.
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SENIOR PROMISSORY NOTE, PAGE 4
<PAGE>
(g) BOOKS. Maker will keep at all times proper books of record and
account in which full, true and correct entries will be made of its
transactions in accordance with Generally Accepted Accounting
Principles.
(h) STATEMENTS, REPORTS AND CERTIFICATES TO BE DELIVERED BY THE MAKER.
From the date hereof and so long as the Holder shall hold the Note,
Maker will deliver to Holder at the address shown in the register
maintained by Maker the following:
(i) QUARTERLY FINANCIAL STATEMENTS. As soon as reasonably possible,
and in any event within 45 days after the close of each of the
first three fiscal quarters of Maker in each fiscal year, (1) the
unaudited balance sheet of the Maker as of the end of such
period, setting forth in comparative form the corresponding
figures for the corresponding quarter of the preceding fiscal
year, and (2) the unaudited statements of income and retained
earnings and cash flows of the Maker for such quarter and for the
portion of the fiscal year ended with such quarter, and setting
forth in comparative form the corresponding figures for the
corresponding periods of the preceding fiscal year, all in
reasonable detail and certified by a principal financial officer
of Maker subject to year-end audit adjustments.
(ii) BOXER CASINO. Not later than the fifteenth (15) day of each
month, an unaudited statement of income and expenses for the
prior month of the Boxer Casino shall be provided to the Holder.
(iii)OTHER REPORTS AND STATEMENTS. Promptly upon the mailing to its
equity holders of each annual report or other report or
communication, a copy of each such report or communication; and
promptly upon any filing by Maker with the Securities and
Exchange Commission, or any governmental agency or agencies
substituted therefor, or with any national securities exchange,
of any annual or periodic or special report or registration
statement, a copy of such report or statement.
(iv) CERTIFICATE OF DEFAULT. Deliver to the Payee, forthwith upon
becoming aware of any default or defaults in the performance of
any covenant, agreement or condition contained in the Note or
Loan Agreement (including notice of any event which with the
giving of notice, lapse of time or both would become an Event of
Default), an Officer's Certificate specifying such default or
event of default.
(v) ADDITIONAL INFORMATION. Such other data and information as from
time to time may be reasonably requested by the Holder.
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SENIOR PROMISSORY NOTE, PAGE 5
<PAGE>
(i) OTHER DOCUMENTS. Maker will comply with all other convents,
representations, warranties, terms and obligations of that
certain Loan Agreement.
6. NEGATIVE COVENANTS. Maker covenants and agrees that so long as the Note
shall be outstanding:
(a) GUARANTEES. Maker will not guarantee, directly or indirectly, any
obligation or indebtedness of any other Person, other than any
guarantee made with respect to the contemplated Czech Republic
transaction. "Person" shall include any individual, a corporation, a
partnership, a business entity, or a government, foreign or domestic,
or any agency or political subdivision thereof.
(b) DISTRIBUTIONS. Maker will not declare, pay, or set apart any funds
for the payment of any distribution to any shareholder, make any
distribution in respect of equity interests, or redeem, repurchase, or
effect any other sale or exchange upon any equity interest in Maker.
(c) MERGER AND CONSOLIDATION. Maker will not consolidate with or merge
into any other entity.
(d) DISPOSITION OF ASSETS. Maker will not sell, assign, lease, transfer
or otherwise dispose of all or any portion of its properties or
assets to any third party, in any transaction or series of
transactions.
(e) SENIOR DEBT. Subsequent to the date hereof, Maker will not incur,
create, assume or at any time become liable, contingently or otherwise
for any borrowed or other indebtedness that is senior in right of
payment to the obligations created herein.
7. NEGOTIABILITY; OFFSETS, DEFENSES OR COUNTERCLAIMS. Subject to applicable
law and regulation, including but not limited to Federal and State securities
laws and regulations, this Note is freely negotiable. As of the date hereof,
Maker knows of no defenses, setoffs, or counterclaims existing as of the date
hereof which could be asserted or brought by the Maker or any other party in any
suit or action for the collection of any sum due hereunder.
8. EVENT OF DEFAULT. An Event of Default shall mean the occurrence or
existence of any one or more of the following events: The Maker
a. should fail to pay the principal of, or interest on, this Note as and
when due and payable at the Final Maturity Date, which failure shall
continue for a period of ten (10) days;
b. shall fail to perform or observe any term, covenant, or agreement
contained herein or in the Loan Agreement or any document related
hereto, which failure
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SENIOR PROMISSORY NOTE, PAGE 6
<PAGE>
shall continue for a period of ten (10) days after Holder gives Maker
notice of such failure;
c. commences any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution, or liquidation law or
statute of any jurisdiction, whether now or hereafter in effect;
d. generally, does not pay, or shall be unable to pay, or shall admit in
writing its inability to pay its debts as such debts become due, which
inability applies only to a cash flow test for insolvency, as opposed
to the balance sheet test for insolvency;
e. makes an assignment for the benefit of creditors, or petitions or
applies to any tribunal for the appointment of a custodian, receiver,
or trustee for it or a substantial part of its assets; or,
f. takes any action indicating its consent to, approval of, or
acquiescence in any such petition, application, proceeding or order
for relief of the appointment of a custodian, receiver, or trustee for
all or any substantial part of its properties.
It is understood and agreed that time is of the essence in the performance
of this Note. If an Event of Default exists, then this Note at the time
outstanding shall immediately become due and payable together with interest
accrued thereon without presentment, demand, protest or notice of any kind,
including notice of intent to accelerate the payment of the unpaid balance of
this Note or of notice of acceleration, all of which are hereby waived by the
Maker. The Holder of this Note may also proceed to protect and enforce its
rights either by suit in equity and/or by action at law, or by other appropriate
proceedings, whether for the specific performance (to the extent permitted by
law) of any covenant or agreement contained in this Note, or in aid of the
exercise of any power granted in this Note, or may proceed to enforce the
payment of this Note or to enforce any other legal or equitable right of the
holder of this Note.
9. NOTICES. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted by this Note to be made upon,
given or furnished to, or filed with the Maker shall be sufficient for every
purpose hereunder if in writing and mailed, registered or certified mail,
postage prepaid, or delivered by facsimile or telecopy to the Maker, addressed
to it at One Penn Plaza, Suite 1503, New York, New York 10119, telecopier number
212-563-3380, (or such other address, or telecopier number, as Maker may from
time to time direct). Any notice to Payee shall be sufficiently given if in
writing and mailed, registered or certified mail, postage prepaid, to the
address set forth herein (or such other address as Payee may from time to time
direct). Any notice to a Holder (other than Payee) shall be sufficiently given
if in writing and mailed, registered or certified mail, postage prepaid, to such
address as Holder shall from time to time direct in writing.
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SENIOR PROMISSORY NOTE, PAGE 7
<PAGE>
10. CONSENTS, WAIVERS AND MODIFICATIONS. No term, covenant, agreement or
condition of the Note may be amended, supplemented or modified, or compliance
therewith waived (either generally or in a particular instance and either
retroactively or prospectively), except pursuant to a written instrument signed
by the Maker and the Holder. No course of dealing between the Maker and the
Holder of the Note or any delay or failure on the part of the Holder of the Note
in exercising any rights hereunder shall operate as a waiver of any rights of
such holder.
11. GOVERNING LAW. THIS NOTE SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL
LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF
TEXAS. WHENEVER POSSIBLE EACH PROVISION OF THIS NOTE SHALL BE INTERPRETED IN
SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY
PROVISION OF THIS NOTE SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW,
SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR
INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE
REMAINING PROVISIONS OF THIS NOTE. WHENEVER IN THIS NOTE REFERENCE IS MADE TO
THE PAYEE OR THE MAKER, SUCH REFERENCE SHALL BE DEEMED TO INCLUDE, AS
APPLICABLE, A REFERENCE TO THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. THE
PROVISIONS OF THIS NOTE SHALL BE BINDING UPON AND SHALL INURE TO THE BENEFIT OF
SUCH SUCCESSOR AND ASSIGNS. THE MAKER'S SUCCESSORS AND ASSIGNS SHALL INCLUDE,
WITHOUT LIMITATION, A RECEIVER, TRUSTEE OR DEBTOR IN POSSESSION FOR THE MAKER.
12. SECURITIES LAWS. THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS NOTE
THEREFORE MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR OTHERWISE
DISTRIBUTED FOR VALUE IN THE ABSENCE OF (i) AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE MAKER THAT SUCH SALE, TRANSFER, ASSIGNMENT, PLEDGE OR OTHER
DISTRIBUTION IS EXEMPT FROM (OR NOT OTHERWISE SUBJECT TO) THE REGISTRATION (OR
QUALIFICATION) AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT OR LAWS, OR (ii)
SUCH REGISTRATION OR QUALIFICATION.
13. ATTORNEYS FEES. In the case of a default, the Maker shall pay to the
Holder, to the extent permitted by law, such further amount as shall be
sufficient to cover the cost and expense of collection, including (without
limitation) reasonable attorneys' fees, costs and expenses.
14. WAIVER OF PROTEST. The Maker expressly waives demand, grace, notice of
intent to accelerate, notice of acceleration, presentment for payment, and
protest, and further agrees
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SENIOR PROMISSORY NOTE, PAGE 8
<PAGE>
that this Note and the Loan Agreement may be renewed, and the time for payment
extended without notice.
15. SUCCESSORS AND ASSIGNS. All the covenants, stipulations, promises and
agreements in this Note contained by or on behalf of the Maker shall bind its
successors and assigns, whether so expressed or not.
16. HEADINGS. The headings of the Sections of this Note are inserted for
convenience only and shall not be deemed to constitute a part of this Note.
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SENIOR PROMISSORY NOTE, PAGE 9
<PAGE>
IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed and
delivered as of the date first above written.
TRANS WORLD GAMING CORP.,
A NEVADA CORPORATION
By:
---------------------------------------
Its:
---------------------------------------
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SENIOR PROMISSORY NOTE, PAGE 10
<PAGE>
JOINT ACTIVITY AGREEMENT
BAKU CITY MARCH 31, 1997
This Joint Activity Agreement (hereafter referred to as "Agreement") is between
Mr. Mahmud Avdiyev and Tottenham & Co., DBA ART marketing LTD, a whole owned
subsidiary of "Trans World Gaming Corporation," registered in the USA,
represented by its President, Mr. Andrew Tottenham.
1. SUBJECT OF AGREEMENT
The Parties express their readiness in cooperation for establishment and joint
running of the Boxer Casino (hereafter referred to as "Casino") in the city of
Gyandja (Azerbaijan Republic).
The Casino shall be located at the noted address:
Azerbaijan Republic, Gyandja city, Shah Ismail Khatayi avenue, hotel "Gyandja."
The Term of this Agreement is 20 (twenty) years. The Agreement shall come into
force since the date of signing by both Parties.
2. OBLIGATION OF PARTIES
The Parties accept the following responsibilities for steps to be provided prior
to the opening of Casino:
2.1 Mr. Mahmud Avdiyev shall:
* Provide the Casino with all necessary documents as listed:
- Premises Lease Agreement (for basement, ground and first
floors of the hotel) for 20 years term,
- Permission from the Ministry of Justice and Approval from
the Head of Gyandja City Executive Powers for casino
activity. These are sufficient documents for casino
activity in Azerbaijan in compliance with the legislative
requirements, and Mr. Mahmud Avdiyev shall guarantee such
sufficiency;
* Provide the refurbishment of the hotel's basement and ground
floors in order to prepare the premises (for the further
furnishing with casino equipment). Such premises must be
suitable for arrangement of:
- Casino game tables (the request for such tables shall be
made to TWG)
- Cashier's Desk
- Bar
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- Office
- Reception Hall
- Cloak Room
- Staff rest room
- Salon - private
- Warehouse facilities
- Toilets for guests and for staff
* Provide the refurbishment of the first floor's premises to the
condition suitable for arrangement of the personnel offices;
* Provide additional investments to the casino establishment
project, in case if the investments made in accordance with this
Agreement by TWG would not be sufficient.
2.2 TWG shall:
* Provide and deliver on the C&F Gyandja terms gaming equipment to
furnish the Casino with the all required tables, chips,
accessories and furniture for 3 American Roulette tables, 4
Blackjack tables, 4 Stud Poker tables and also all needed
uniforms for the Casino's staff. From this list gaming equipment
(including 10 gaming tables and chairs) on amount 70,000 USD has
to be buy in local market of Azerbaijan and this amount will
transfer to the bank account in Baku not later than 3 days after
the receiving of such information.
* Provide to the Casino the sum of 100,000 USD to be used
exclusively for the purpose of refurbishment of the Casino space.
The money to be made available to Casino's General Manager to
spend on the following items: furniture, carpets, paintings,
diesel power generator, refrigerators, computers, lighting
devices, toilet accessories and others prior to the opening of
Casino.
* Provide the sum of 50,000 USD to be used exclusively for the
purpose of funding the cash desk in the Casino.
* Provide Mr. Mahmud Avdiyev with US dollars 10,000 for to cover
his expenses for training of the Casino's personnel, personnel's
accommodation and scholarship expenses and other expenses;
* Provide non-chargeable consulting and information services to the
Management of Casino if necessary and where it is considered
possible by the Management of TWG.
* Provide the above noted orders for equipment and cash placements
as soon as the relevant information received from Mr. M. Avdiyev
and not later than seven days after the receiving of such
information.
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<PAGE>
* Provide the transfer of the needed amount to the bank account in
Baku as soon as it will be possible, in case if Mr. M. Avdiyev
informs TWG that it would be possible to provide a purchase of a
part of the Casino equipment (which initially had been planned to
be imported) in Baku. In this case the expenses of TWG for
purchase of the Casino Equipment shall not exceed US dollars
150,000.
The Parties also agreed to avoid large expenses on the first stage after the
opening of the Casino and until the Parties would compensate all their expenses
in accordance with the establishment of the Casino.
3. DISTRIBUTION OF PROFITS
The profit of Casino is calculated as the extraction of all Casino expenses
(including payroll, lease charge, bar expenses, personnel's accommodation
expenses, if required by the related employment contracts, all other expenses
and other expenses related to the Casino activity) from the net result of the
game from the 1st till the end of each month. Ten percent of the monthly profit
of Casino shall be paid as a salary to the Casino's General Manager.
The distribution of the profit shall be made on the 2nd of each month.
Profit shall be distributed as follows: 40% to TWG and 60% to Mr. M. Avdiyev.
* In accordance with the request of TWG, the portion of TWG's
profit (40%) shall be referred to as the payment for consulting
services upon transfer must be covered by TWG.
The Casino's General Manager is responsible for the interests of both Parties
and for the running of the Casino. The Casino's General Manager is obliged to
assist and help the audit carried on by such inspection.
The Parties may arrange the independent audit of the Casino's financial
activity. In this case the Party arranging such audit shall inform the other
Party. The Casino's General Manager is obliged to assist and help the audit
carried on by such inspection.
The Casino's General Manager is not responsible for the activity of the Casino
only in case of force-majeure (e.g. fires, acts of God, earthquakes, wars,
governmental restrictions, and also other circumstances that do not depend on
the will of the General Manager).
4. TERMINATION OF ACTIVITY
The activity of the Casino may be terminated only upon the mutual agreement of
the Parties. If any Party wants to cancel its participation in the Casino and
sell its interests, it is a condition that the selling portion of interests will
be offered to the other Party under this Agreement first. If
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<PAGE>
both Parties decide to sell the Casino, the money obtained after such selling
will be distributed in accordance with their shares in the Casino's profits.
5. GENERAL CONDITIONS
The Parties are mutually responsible for the fulfilling of their obligations
under this Agreement.
This Agreement could not be canceled or changed without the agreement of both
Parties.
Any matters, which may arise in course of the Parties fulfilling of their
obligations under this Agreement, must be decided through the negotiations by
the Parties.
/s/ A. Tottenham /s/ M. Avdiyev
- --------------------------------- -----------------------------
for Trans World Gaming Corp. Mr. M. Avdiyev
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<PAGE>
Company Contact: Dominick J. Valenzano
Chief Financial Officer
212-583-3355
From: TRANS WORLD GAMING CORP.
One Penn Plaza
Suite 1503
New York, NY 10119
TRANS WORLD GAMING CORP. ANNOUNCES OPENING OF BOXER CASINO
-COMPANY BEGINS TRADING ON OTC BULLETIN BOARD -
NEW YORK, NEW YORK, JUNE 26, 1997 - TRANS WORLD GAMING CORP. ("TWG") (OTC
Bulletin Board; IBET, IBETW) today announced the opening of the Boxer Casino on
Sunday, June 15, 1997, the first casino located in Ghandjya, Republic of
Azerbaijan.
The Company had previously announced that Tottenham & Co., a wholly owned
subsidiary of Trans World Gaming, had signed a 20-year consulting agreement with
the owner and operator of Boxer Casino. Under the terms of the contract, TWG
provided the casino with the capital to renovate, purchase gaming equipment,
fund the cash desk and train personnel. In return, TWG will receive 40% of the
net operating profits until recovery of its initial investment and a reduced
percentage rate thereafter.
Commenting on the news, Andrew Tottenham, Chief Executive Officer of Trans
World Gaming, stated, "The initial results from the Boxer Casino have exceeded
our expectations and we look forward to a long and profitable venture in
Ghandjya."
The company further announced that effective June 25, 1997, the NASDAQ
Stock Market determined to delist the company's common stock and warrants from
the NASDAQ SmallCap Market. The company's shares and warrants will immediately
begin trading on the OTC Bulletin Board. The NASDAQ listing and qualifications
panel cited NASD Marketplace Rule 4330 which states that the company will be
required to satisfy the initial inclusion requirements including a minimum bid
price of $3.00 per share.
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Tottenham stated, "The local option vote in Louisiana in November 1996
which resulted in an extraordinary write-off of $11.0 million for Trans World
Gaming created a capital deficit of $3 million; as well, our bid price fell
below $3.00 per share and as a result we do not meet the new listing
requirements set by the NASDAQ. Although we are extremely disappointed with
NASDAQ's decision, it does not change the fundamental strength of the company
and does not hinder us as we aggressively pursue additional opportunities in the
worldwide gaming arena."
Trans World Gaming owns and operates two casinos featuring video poker in
Louisiana and plans to specialize in small to medium casinos and gaming parlors
in local venues worldwide. Through its subsidiary, Tottenham & Company, an
international gaming consultancy, the company provides clients in the U.S. and
abroad with assistance in corporate strategy development, mergers and
acquisitions, feasibility studies, company/operational reviews, gaming policy
guidance, casino development and executive search. The company maintains
offices in New York and London.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: The statements contained in this release which are not historical facts
contain forward looking information with respect to plans, projections or future
performance of the Company, the occurrence of which involve certain risks and
uncertainties detailed in the Company's filings with the Securities and Exchange
Commission.
2
