Exhibit 10.2

 

Machines Disposal Agreement

 

This Machines Disposal Agreement is made as of this November 6, 2008 by and
between:

 

Elixir Gaming Technologies, Inc., a Nevada corporation with registered office
situated at 6650 Via Austi Parkway, Suite 170, Las Vegas, NV  89119 and
correspondence address at Units 2B & 3A, 29th  Floor, The Centrium, 60 Wyndham
Street, Central, Hong Kong ( “EGT Nevada”);

 

and

 

Elixir Gaming Technologies (Philippines), Inc., a Philippines corporation with
registered office situated at 3rd Floor, 32nd and 5th Avenues, Bonifacio Global
City, Taguig, the Republic of Philippines and correspondence address at Units
2B & 3A, 29th Floor, The Centrium, 60 Wyndham Street, Central, Hong Kong (“EGT
Philippines”);

 

and

 

Elixir International Limited, a Macau company with registered office situated at
19th Floor, Zhu Kuan Building, Avenida Xian Xing Hai, Macau and correspondence
address at 38th Floor, The Centrium, 60 Wyndham Street, Central, Hong Kong
(“ELI”).

 

(EGT Nevada and EGT Philippines are collectively referred to as “EGT Group” and
together with ELI are collectively referred to as the “Parties”, and
individually, a “Party”)

 

RECITALS

 

(A)     EGT Group has previously ordered and/or purchased 715 electronic gaming
machines (collectively the “Machines”) from ELI. Particulars of the Machines are
set out in the attached Schedule A hereto.

 

(B)     As at the date hereof, all the Machines are in the possession of EGT
Group notwithstanding the fact that the consideration of part but not all of the
Machines have been fully paid by EGT Group.

 

(C)     In relation to those Machines which have been fully paid by EGT Group
(the “Fully Paid Machines”) and all those Machines which have not been fully
paid by EGT Group (the “Non-Fully Paid Machines”) which are the subject matter
of the Note (as defined below), it is agreed that EGT Group shall sell and ELI
shall purchase back the Fully-Paid Machines and such Non-Fully Paid Machines
which are the subject matter of the Note (as defined below) in accordance with
the terms of this Agreement (the “Sale”); and in relation to all those Non-Fully
Paid Machines which are not the subject matter of the Note, it is agreed that
EGT Group shall return and ELI shall take back the possession of such Non-Fully
Paid Machines in accordance with the terms of this Agreement (the “Return of
Possession”). The terms “Disposal” and “dispose of” used in this Agreement
shall, as the context may require (depending on whether the

 

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relevant Machine in issue is fully-paid or not or the subject matter of the
Note), refer to either the Sale or the Return of Possession.

 

(D)     As at the date hereof, the following amounts were outstanding and owed
by EGT Group to ELI : (i) approximately US$14 million being the existing current
trade payables (the “Existing Current Trade Payables”); (ii) approximately
US$7.4 million being the current portion of the total amount of US$12.1 million
due to ELI drawn on a US$15 million trade note dated 21 April 2008 (the “Note”);
and (iii) approximately US$4.6 million being the long-term portion of the Note.

 

(E)      The Parties wish to record in this Agreement the terms and conditions
of the Disposal of the Machines.

 

NOW IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES as follows:

 

1.     Disposal of Machines

 

Subject to the terms and conditions of this Agreement :

 

(a)   EGT Group hereby agrees to sell to ELI, who agrees to purchase back, the
Fully Paid Machines and all those Non-Fully Paid Machines which are the subject
matter of the Note (as defined in Recital D above); and

 

(b)   EGT Group hereby agrees to return to ELI, who agrees to take back the
possession of all those Non-Fully Paid Machines not being the subject matter of
the Note.

 

2.     Price and Payment

 

2.1   In consideration for the Disposal of the Machines by EGT Group, ELI shall
pay (subject to Clause 2.2 below) to EGT Group the total amount of
US$13,920,660.47 (United States Dollars thirteen million, nine hundred and
twenty thousand and six hundred and sixty and Cents forty-seven only) which
represents the net book value of the Machines as at 30 September 2008 (the
“Disposal Price”).

 

2.2   Payment of the Disposal Price shall be made by way of set-off of an amount
equal to the Disposal Price against the Existing Current Trade Payables (as
defined in Recital (D) above) (the “Set-Off”). The Parties agree that the
Set-Off shall be effected upon the Completion Date (as defined in Clause 4.1
below).

 

2.3   Subject to Clause 7 below, the Disposal Price shall not be inclusive of
any taxes, including but not limited to stamp duty, nor any costs or expenses
related to the execution of this Agreement and/or the performance of the
transactions as contemplated hereunder.

 

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3      Transfer of Property and Risks

 

3.1   To the extent not previously passed to or retained by ELI, all property
and title of the Machines shall pass to ELI upon the Completion Date (as defined
in Clause 4.1 below).

 

3.2   To the extent not previously passed to or retained by ELI, the risk of the
Machines shall pass to ELI upon the Completion Date.

 

3.3   EGT Group hereby warrants and represents to ELI that it has not granted in
favour of any other persons any interest in or any option or other rights in
respect of the Machines or any part thereof and that all the Machines are
disposed of free of any third parties’ claims, charges or encumbrances (save and
except for any vendor’s lien or other claims or encumbrances entitled by the
relevant manufacturer(s) or supplier(s) of the relevant Machine(s) by reason of
any outstanding amount owed by ELI to such manufacturer(s) or supplier(s)).

 

3.4 Notwithstanding anything to the contrary contained in this Agreement, EGT
Group makes no representation or warranty as to the merchantability of the
Machines and ELI agrees to purchase the Fully Paid Machines and to take back the
possession of the Non-Fully Paid Machines on an ‘as-is’ basis.

 

3.5   EGT Group shall deliver to ELI all transfers, assignments and novations
(if necessary) of the Machines together with the relevant documents necessary to
give effect to this Agreement.

 

4      Delivery

 

4.1   Subject to the terms and conditions of this Agreement, the Machines shall
be delivered or deemed delivered to ELI in accordance with Clauses 4.2 and 4.3
below, on or before 8 December 2008 (or such later date as may be agreed by the
Parties in writing)(the “Completion Date”).

 

4.2   On or before the Completion Date, ELI shall notify EGT Group in writing in
accordance with Clause 9 as to the manner of delivery of the Machines by EGT
Group and the related logistics and charges (the “Delivery Notice”). Upon
receipt of the Delivery Notice from ELI, EGT Group shall discuss the relevant
delivery logistics and charges as set out in the Delivery Notice with ELI in
good faith provided that if no Delivery Notice is given by ELI on or prior to
the Completion Date or if no agreement is reached by the Parties regarding the
matters set out in the Delivery Notice on or prior to the Completion Date, the
Disposal of the Machines shall nevertheless be deemed completed and the delivery
of the Machines shall be deemed occurred (“Deemed Delivery”) on the Completion
Date and in such case, all the property, title and risks of the Machines (to the

 

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extent not previously passed or retained by ELI) will be passed to ELI and the
Set-Off will be effected, on the Completion Date without further notice.

 

4.3   In the event of Deemed Delivery, and at any time after the Completion
Date, ELI shall, at its own costs and expenses, be responsible for taking
physical delivery of the Machines from the relevant warehouse(s) of EGT in the
countries, namely, either the Philippines or Cambodia, at which the relevant
Machines are currently stored by EGT Group and arranging for the transportation
(including but not limited to the selection of the common carrier) and insurance
during transit, from the relevant warehouse(s) of EGT Group to ELI’s own
warehouse(s) or such other premises as designated by it either outside or within
the relevant countries in issue.

 

4.4   For the avoidance of doubt, ELI may give Delivery Notice and the Parties
may agree on the relevant matters as set out in such Delivery Notice in relation
to part but not all of the Machines on or before the Completion Date subject
however to the overriding provisions in Clause 4.2 above.

 

5 Assignments

 

Each Party shall not assign any of its rights, interest, benefits and/or
obligations under this Agreement without the prior express written consent of
the other Party.

 

6 Force Majeure

 

The non-performance by one of the Parties of any of the obligations assumed
hereunder shall not be considered a breach of this Agreement if the cause of
non-performance qualifies as Force Majeure. For this purpose, Force Majeure is
generally defined as circumstances beyond the control of the Parties or any of
them which were unpredictable at the time of signing of this Agreement and which
render compliance with the obligations of the parties or parts thereof entirely
or partially impossible. Such circumstances shall include, but shall not be
limited to, war, insurrection, general strikes, governmental actions,
earthquakes, floods or fires. The Party wishing to invoke Force Majeure shall
notify the other Party, as soon as feasible, that such an event has occurred and
shall use all possible efforts (to the extent within its ability and control) to
resume performance of its obligations hereunder as soon as possible and in any
event immediately after the Force Majeure event has ceased.

 

7      Stamp Duty and Legal Cost

 

EGT shall be solely responsible for all stamp duties and other levies, if any,
in relation to the execution of this Agreement. Each Party shall bear its own
legal costs and expenses for the preparation and execution of this Agreement.

 

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8 Termination

 

8.1   Each Party shall be entitled to terminate this Agreement upon written
notice served to the other Party if:

 

(a)   the other Party is in breach of any terms and conditions stated herein and
where the breach is capable of remedy, failed to rectify and remedy the breach
within 10 days upon the issuance of a written request for remedy from the
non-defaulting Party; or

 

(b)  the other Party goes into liquidation or bankruptcy or insolvent or enters
into any scheme of arrangement of debts with its creditors.

 

8.2   Any termination of this Agreement shall be without prejudice to any rights
or liabilities of either Party accrued under this Agreement at the date of
termination or in respect of any antecedent breach of the terms hereof prior to
termination or any amount owing, due or payable under this Agreement. For the
avoidance of doubt, any termination of this Agreement shall not have the effect
of invalidating any Disposal of Machine(s) that has been completed or deemed
completed pursuant to Clause 4.2 on or before the date of termination.

 

9      Notices:

 

9.1   Any notice to be given or served under or arising out of a provision of
this Agreement must be in writing and delivered by hand or sent by pre-paid post
or facsimile or email as the case may be, to the relevant correspondence address
or facsimile number or email address mentioned hereunder for the Party to whom
or upon which the notice is to be given or served.

 

9.2   A notice delivered or sent in accordance with this clause will be deemed
to have been given and received:

 

(a)   if delivered by hand, upon receipt;

(b)   if posted within Hong Kong, 3 days after posting or if posted overseas, 7
days after posting;

(c)   if sent by facsimile transmission, upon confirmation of correct
transmission of the facsimile and

(d)   if sent by email, the said email has to be sent to at least two contact
persons of the receiving Party and 24 hours after sending.

 

Facsimile number and contact persons and the email addresses of such contact
persons :

 

EGT Group:

Fax number : (853)-2875 7897

Contact Persons : Tony Lam and Andy Tsui

Email Addresses : tonylam@elixirgaming.com  and andytsui@elixirgaming.com

 

ELI:

 

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Fax number : (853)-2875 5165

Contact Persons : Danny Liu and Albert Leong

Email Addresses : dannyliu@elixir.com.hk and albertleong@elixir.com.hk

 

10   Governing law and Jurisdiction:

 

10.1  This Agreement shall be governed by and construed in accordance with the
laws of Hong Kong.

 

10.2 The Parties agree to submit to the exclusive jurisdiction of the courts of
Hong Kong for the purpose of resolving any dispute or claim arising out of or in
connection with this Agreement.

 

11   Miscellaneous :

 

11.1    This Agreement embodies the entire understanding between the Parties
respecting the subject matter of this Agreement and supersedes any and all prior
negotiations, correspondence, understandings and agreements between the Parties
in respect of the subject matter hereof.  Any amendments or changes to the
present Agreement shall only be valid if in writing and signed by a
representative of each of the Parties.

 

11.2    All headings to clauses herein are inserted for convenience only and
shall not affect the construction of this Agreement. Words importing the
singular number shall include the plural and vice versa and a gender shall
include all genders and the neuter.

 

11.3    If any one or more of the provisions of this Agreement shall be held to
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

 

11.4    Any failure by either Party to enforce at any time or for any period of
time any of the provisions under this Agreement will not be construed as a
waiver of such provisions or of the right of such Party thereafter to enforce
each and every provision under this Agreement

 

The Parties have caused this Agreement to be duly executed the day and year
first above written. This Agreement contains three sets and each Party will hold
one copy.

 

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For and on behalf of

 

Elixir Gaming Technologies, Inc.

 

 

 

 

 

Name:

Joseph Pisano

 

Title

Director

 

 

 

 

 

For and on behalf of

 

Elixir Gaming Technologies (Philippines) Inc.

 

 

 

 

 

 

 

Name:

Joseph Pisano

 

Title

Director

 

 

 

 

 

For and on behalf of

 

Elixir International Limited

 

 

 

 

 

 

 

Name:

John Wang

 

Title

Director

 

 

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Schedule A

 

Particulars of the Machines

 

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