Exhibit
10.1
EXECUTION
COPY
SATISFACTION AND TERMINATION
AGREEMENT
This Satisfaction and Termination Agreement
(this “ Agreement ”), is made and entered into
as of October 24, 2008 (the “ Effective Date ”),
by and among Las Vegas Gaming, Inc. a Nevada corporation (the
“ Company ”), CAMOFI MASTER LDC, a Cayman
Islands limited duration company (“ CAMOFI ” or
“ Holder ”), Imagineering Gaming, Inc., a Nevada
corporation (“IGI”), and Las Vegas Keno, Inc., a Nevada
corporation (“ LVKI ”).
RECITALS
WHEREAS, the Company and Holder were parties to
that certain Securities Purchase Agreement dated as of June 30,
2005 (the “ 2005 Purchase Agreement ”), pursuant
to which the Company issued to Holder certain senior secured notes
and that certain Common Stock Purchase Warrant dated June 30, 2005
granting Holder the right to purchase up to 1,050,000 shares of the
Company’s common stock, $0.001 par value per share (the
“ Common Stock ”) at an exercise price of $1.48
per share (the “ 2005 Warrant ”);
WHEREAS, the Company and Holder are parties to
that certain Securities Purchase Agreement dated as of March 31,
2006 (the “ 2006 Purchase Agreement ”), pursuant
to which the Company issued to Holder certain senior secured notes
and that certain Common Stock Purchase Warrant dated March 31, 2006
granting Holder the right to purchase up to 2,500,000 shares of
Common Stock at an exercise price of $1.48 per share (the “
2006 Warrant ”);
WHEREAS, in connection with the execution of the
2006 Purchase Agreement and the issuance of the 2006 Warrant, the
Company and Holder agreed that each the 2005 Purchase Agreement and
the 2005 Warrant were terminated;
WHEREAS, in connection with prior commitments to
the senior secured notes issued to the Holder, the Company issued
to the Holder 300,000 shares of Common Stock represented by share
certificate #2517 dated February 14, 2008;
WHEREAS, the original senior secured notes
issued to the Holder by the Company have been amended and restated
into the Amended and Restated Senior Secured Convertible Note Due
January 1, 2010 in the aggregate principal amount of $6,051,250.00
(the “ Note ”);
WHEREAS, IGI, LVKI and the Holder are parties to
a Subsidiary Guarantee dated as of March 31, 2006 (the “
Subsidiary Guarantee ”), as amended pursuant to
Amendment No. 1 to Subsidiary Guarantee dated effective as of April
30, 2008 among IGI, LVKI and the Holder (the Subsidiary Guarantee
as amended by Amendment No. 1 to Subsidiary Guarantee, the “
Guarantee ”);
WHEREAS, the Company, IGI, LVKI and the Holder
are parties to a Security Agreement dated as of March 31, 2006 (the
“ Original Security Agreement ”), as amended
pursuant to Amendment No. 1 to Security Agreement, dated effective
April 30, 2008 between the Company, IGI, LVKI and the Holder (the
Original Security Agreement as amended by Amendment No. 1 to
Security Agreement, the “ Security Agreement
”);
WHEREAS, on March 22, 2007 the
Company issued to Holder that certain Stock Purchase Warrant dated
as of such date pursuant to which the Company granted the Holder
the right to purchase up to 175,000 shares of Common Stock at an
exercise price of $1.48 per share (the “ 2007 Warrant
”);
WHEREAS, the Company, IGI, LVKI and
the Holder are parties to a Security Interest Agreement executed
May 13, 2008 (the “ First Security Interest Agreement
”);
WHEREAS, the Company, IGI, LVKI and
the Holder are parties to a Security Interest Agreement executed
June 10, 2008 (the “ Second Security Interest
Agreement ”) (the First Security Interest Agreement and
the Second Security Interest Agreement together the “
Security Interest Agreements ”)
WHEREAS, the Company and the Holder
are parties to an Amended and Restated Registration Rights
Agreement dated as of April 30, 2008 (the “ RRA
”);
WHEREAS, in connection with the
repayment of the Note, the Company, IGI, LVKI and the Holder are
confirming the terminations of the 2005 Purchase Agreement and the
2005 Warrant, and terminating the 2006 Purchase Agreement (except
for the Surviving Provisions (as defined herein)), the Note, the
Guarantee, the Security Agreement and the Security Interest
Agreements (all of the foregoing documents collectively, the
“ Credit Documents ”) and the RRA (together with
the Credit Documents, the “ Existing Agreements
”), except to the extent otherwise expressly provided for
herein, on the terms and conditions set forth in this Agreement;
and
WHEREAS, each of the Company, IGI
and LVKI, on the one hand, and Holder, on the other hand, has
agreed to release the other from all claims, rights and obligations
arising from or relating to the Existing Agreements.
WITNESSETH
NOW, THEREFORE, in consideration of
the terms and conditions contained in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties, intending to be legally
bound hereby, agree as follows:
1. Capitalized
Terms . Capitalized terms used and not otherwise
defined herein shall have the following meanings:
“ Affiliate ”
shall mean, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such
Person. For purposes of this definition,
“control” of a Person means the power, directly or
indirectly, to (a) vote five percent (5%) or more of the equity
capital having ordinary voting power for the election of directors
(or similar Persons) of such Person or (b) direct or cause the
direction of the management and policies of such Person whether by
contract or otherwise.
“ Person ” shall
mean individual, corporation, partnership, governmental or
quasi-governmental agency, authority, commission, board or other
body, or other entity.
“ Trading Day ”
shall mean a day on which Common Stock is traded on a Trading
Market.
“ Trading Market
” shall mean the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in
question: the Nasdaq Small Cap Market, the American
Stock Exchange, the New York Stock Exchange, the Nasdaq National
Market or the OTC Bulletin Board.
2. Incorporation
of Preliminary Statements and Acknowledgement . The
recitals and preliminary statements set forth above are hereby
incorporated into this Agreement and made a part
hereof. Without limiting the foregoing, the Company
hereby acknowledges that each of the 2006 Warrant and 2007 Warrant
(together, the “ Warrants ”) shall remain in
effect in accordance with their respective terms;
3. Termination of
Existing Agreements.
(a) The Holder, in
consideration of the mutual release set forth herein and expressly
subject to and conditioned upon receipt of the Outstanding Balance
amount set forth in Section 4 by wire transfer of
immediately available funds, hereby confirms, covenants and agrees
that:
(i) The Company, IGI
and LVKI are hereby fully and completely discharged from all
liabilities, covenants and obligations under and pursuant to the
Note and the other Existing Agreements, except for (1) the Warrants
and (2) sections 4.1, 4.3, 4.5, 4.7, 4.11 (provided that the only
portion of Section 4.11 that will survive as contemplated in this
Section 3(a)(i) shall be the obligation of the Company to
indemnify in respect of any breach by the Company after the
Effective Date of any of the other surviving Provisions), 4.12, 5.7
and 5.9 of the 2006 Purchase Agreement (such sections, which shall
survive solely to the extent applicable to the 2006 Warrant and the
shares of Common Stock issuable upon exercise thereof,
collectively, the “ Surviving Provisions
”);
(ii) all liens, claims,
mortgages, security interests and other encumbrances of any nature
(collectively, “ Liens ”) under the Existing
Agreements are hereby terminated and released;
(iii) all of the
Holder’s rights, remedies, powers and privileges under and
with respect to all Existing Agreements (excluding the Warrants and
the Surviving Provisions) are hereby extinguished and
terminated;
(iv) each of the
Existing Agreements (except for the Warrants and the Surviving
Provisions) is hereby fully and completely terminated and is of no
further force and effect, except as and to the extent otherwise
expressly set forth in Section 8 ;
(v) The Holder shall
(1) promptly return to the Company the original Note marked
“VOID” or “CANCELLED” or
“PAID”; provided, that if the Note is not so marked
upon its return to the Company, the Company is hereby authorized to
so mark the Note, and (2) promptly execute and deliver to the
Company (or its designees) any and all necessary release documents,
including without limitation, UCC-3 financing statements and
releases of Liens, to evidence the release and termination of the
Holder’s Liens on any assets of the Company, IGI, LVKI and
any of their respective Affiliates; and
(vi) The Holder
irrevocably authorizes the Company to file or cause to be filed in
any jurisdiction any UCC-3 financing statements and terminations on
behalf of the Holder necessary to evidence the release and
termination of the Holder’s Liens on any assets of the
Company, IGI, LVKI and any of their respective
Affiliates.
(b) The Holder waives
any notice or other formality required under the Note and any of
the other Credit Document for the payoff of the Note and the
termination of the Existing Agreements as provided in this
Agreement, and any rights or remedies the Holder may have as a
result of such payoff.
(c) The Company hereby
acknowledges that the share certificate #2517 issued on February
14, 2008 for 300,000 shares of the Company’s Common Stock
shall not be terminated by this Agreement.
4. Payoff of
Note . The Holder hereby acknowledges and agrees
that the aggregate sum necessary to pay and satisfy in full all
principal, interest, fees, and any other amounts whatsoever owing
under the Note and the other Credit Documents (the “
Outstanding Balance ”) is as follows as of the date of
this Agreement:
|
|
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$
|
6,051,250.00
|
|
Prepayment
Penalty (20%):
|
|
$
|
1,210,250.00
|
|
|
|
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$
|
357,022.00
|
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Outstanding
Balance as of October 24, 2008:
|
|
$
|
7,618,522.00
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Outstanding Balance shall increase by a per diem
amount of $2,017.00 (the " Per Diem Interest ") for each day
after October 24, 2008 until full payment of the Outstanding
Balance is made, to account for the continued accrual of
interest.
5. Certain
Deliveries . The Company has delivered to the Holder the
following on the Effective Date:
(a) an opinion of its
legal counsel in form and substance satisfactory to Holder,
addressed to the Holder and the Company’s transfer agent,
which opinion provides that all securities currently held by the
Holder, other than the Warrants and the shares of Common Stock,
issuable upon exercise of the Warrants (the “ Shares
”), are freely tradable under Rule 144 (“ Rule
144 ”) promulgated under the Securities Act of 1933, as
amended; and
(b) an opinion of its
legal counsel in form and substance satisfactory to Holder,
addressed to the Holder and the Company’s transfer agent,
which opinion provides that, assuming the Holder exercises the
Warrants pursuant to the cashless exercise provisions contained
therein, the Shares shall be freely tradable under Rule
144.
6. Representations
and Warranties of the Company, IGI and LVKI . The
Company, IGI and LVKI, jointly and severally, represent and warrant
as of the date hereof to the Holder, as follows:
(a) Authorization;
Enforcement . Each of the Company, IGI and LVKI has
the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder. The
execution and delivery of this Agreement by each of the Company,
IGI and LVKI and the consummation by each of them of the
transactions contemplated hereby have been duly authorized by all
necessary action on the part of the Company, IGI and LVKI,
respectively, and no further corporate action is required by the
Company, IGI or LVKI, or any of their respective boards of
directors or stockholders in connection therewith. This
Agreement has been duly executed by each of the Company, IGI and
LVKI and constitutes the valid and binding obligation of each of
the Company, IGI and LVKI enforceable against each of them in
accordance with its terms except (i) as limited by general
equitable principles and applicable bankr
