Exhibit 10.1

 

NOL PRESERVATION AGREEMENT

 

THIS NOL PRESERVATION AGREEMENT (this “Agreement”), dated as of July 31, 2015
(the “Effective Date”), is entered into by and between Golden Entertainment,
Inc., a Minnesota corporation (the “Company”), The Blake L. Sartini and
Delise F. Sartini Family Trust (including any successor or assign of any such
investor, the “Sartini Investor”), the several investor signatories listed on
Schedule A hereto (including any successor or assign of any such investor, each
a “Berman Trust and collectively the “Berman Trusts”) and the several investor
signatories listed on Schedule B hereto (including any successor or assign of
any such investor, each an “Other Berman Investor” and collectively the “Other
Berman Investors”). Collectively, the Berman Trusts and the Other Berman
Investors are hereinafter referred to as the “Berman Investors” and the Sartini
Investor and the Berman Investors are hereinafter referred to as the
“Investors”).

 

WHEREAS, the Company, LG Acquisition Corporation, a Nevada corporation and a
wholly owned subsidiary of the Company, Sartini Gaming, Inc., a Nevada
corporation (“Sartini Gaming”) and the Sartini Investor have entered into that
certain Agreement and Plan of Merger, dated as of January 25, 2015 (as the same
may be amended or supplemented from time to time, the “Merger Agreement”),
pursuant to which, on the date hereof, LG Acquisition Corporation merged with
and into Sartini Gaming and the outstanding shares of Sartini Gaming capital
stock held by the Sartini Investor were converted into the right to receive
shares of Company Common Stock, on the terms and conditions set forth in the
Merger Agreement; and

 

WHEREAS, the Company and each Investor deems it to be in the best interests of
the Company to enter into this Agreement to minimize the risk that the Company
will undergo an “ownership change” within the meaning of Section 382(g) of the
Code that would subject use of its Tax Benefits to limitation under Section
382(a) of the Code.

 

NOW, THEREFORE, in consideration of the premises and the mutual promises and
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

1.     Definitions. For the purposes of this Agreement, capitalized terms used
and not otherwise defined herein shall have the respective meanings ascribed to
them as set forth below:

 

“Acquire” or “Acquisition” means the acquisition of record, legal, beneficial or
any other ownership of Company Securities by any means, including, without
limitation, (a) a purchase of Company Securities from the owner thereof, whether
effected through a private sale, an open market transaction, or otherwise, (b)
the exercise of any rights under any option, warrant, convertible security,
pledge or other security interest or similar right to acquire Company
Securities, or (c) the entering into of any swap, hedge or other arrangement
that results in the acquisition of any of the economic consequences of ownership
of Company Securities, but shall not in the case of clauses (a)–(c) include any
acquisition unless, as a result thereof, the acquirer would be treated as the
owner of such Company Securities for U.S. federal income tax purposes.

 

 
 

--------------------------------------------------------------------------------

 

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Applicable Law” means, with respect to any person or entity, any domestic or
foreign, federal, state or local common law or duty, case law or ruling,
statute, law, ordinance, policy, guidance, rule, administrative interpretation,
regulation, code, order, writ, injunction, directive, judgment, decree or other
requirement of any Governmental Authority applicable to such person or entity or
any of its respective properties, assets, officers, directors, employees,
consultants or agents (in connection with such officer's, director's,
employee's, consultant's or agent's activities on behalf of such person or
entity).

 

“Berman Investors” has the meaning set forth in the preamble hereto.

 

“Berman Trusts” has the meaning set forth in the preamble hereto.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in Minneapolis, Minnesota are authorized or required by law to
close.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Company” has the meaning set forth in the preamble hereto.

 

“Company Common Stock” means the common stock, $0.01 par value per share, of the
Company.

 

“Company Insider Trading Policy” means any existing or future policy of the
Company which may restrict any Berman Investor, in the capacity as an officer or
director of the Company, from Margining of Shares in compliance with Section 4,
including, without limitation, the Second Amended and Restated Lakes
Entertainment, Inc. Policy on Avoidance of Insider Trading.

 

“Company Securities” means (a) shares of Company Common Stock, (b) shares of
preferred stock of the Company of any class or series, (c) any other interests
in the Company not already described in clauses (a) or (b) that constitute
“stock” of the Company for purposes of Section 382 of the Code (including
Treasury Regulations Section 1.382-2T(f)(18)), and (d) warrants, options or
other rights to purchase capital stock of the Company (including interests
described in Treasury Regulations Section 1.382-2T(h)(4)(v)).

 

“Effective Date” has the meaning set forth in the preamble hereto.

 

“Entity” means an entity within the meaning of Treasury Regulations
Section 1.382-3(a)(1).

 

 
2 

--------------------------------------------------------------------------------

 

 

“Governmental Authority” means any foreign, domestic, federal, territorial,
state or local governmental or regulatory authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.

 

“Investors” has the meaning set forth in the preamble hereto.

 

“Margining of Shares” means the pledge of Company Securities as collateral for
indebtedness but not the subsequent exercise of rights with respect to such
collateral following a call of such indebtedness.

 

“Merger Agreement” has the meaning set forth in the recitals hereto.

 

“Other Berman Investors” has the meaning set forth in the preamble hereto.

 

“Restriction Release Date” means the earlier of (i) the third anniversary of the
date of this Agreement, (ii) such date as all Investors shall agree in writing
to terminate this Agreement, (iii) such date on which the Company in its sole
judgment determines the restrictions contained in this Agreement are no longer
needed and thereupon notifies the Investors in writing that the restrictions set
forth in this Agreement shall terminate, or (iv) such date as the Company issues
additional shares of Company Common Stock other than (A) as contemplated by the
Merger Agreement, (B) in connection with the redemption or purchase of any
Golden Gaming Warrants (as defined in the Merger Agreement) or (C) in connection
with the exercise of such options or warrants as are outstanding as of the date
of this Agreement.

 

“Restricted Activity” means (i) the Acquisition of additional Company Securities
by any Investor (but excluding any Acquisition of shares of Company Common Stock
(A) by the Sartini Investor pursuant to the Merger Agreement, or (B) by a Berman
Investor in connection with such Berman Investor’s exercise of any option or
warrant as is outstanding as of the date of this Agreement), and (ii) with
respect to the Berman Investors only, the Transfer of any Company Securities
currently owned by a Berman Investor, entering into any agreements for or
consenting to such Transfer (other than with respect to Margining of Shares in
compliance with Section 4), or the distribution of any Company Securities held
by a Berman Investor that is an Entity to such Berman Investor’s owners.

 

“Sartini Investor” has the meaning set forth in the preamble hereto.

 

“Shareholders’ Agreement” means that certain Shareholders’ Agreement, dated as
of even date herewith, by and among the Company and the Investors, as the same
may be amended or supplemented from time to time.

 

“Subsidiary” means each corporation or other legal entity as to which more than
50% of the outstanding equity securities having ordinary voting rights or power
at the time of determination is being made is owned or controlled, directly or
indirectly, by the Company.

 

“Tax Benefits” means the net operating loss carryovers, capital loss carryovers,
general business credit carryovers, alternative minimum tax credit carryovers,
foreign tax credit carryovers, research and development credit carryovers and
any loss or deduction attributable to a “net unrealized built-in loss” within
the meaning of Section 382 of the Code and the Treasury Regulations promulgated
thereunder, of the Company, any direct or indirect subsidiary thereof, or any
consolidated or combined tax filing group of which the Company is a member.

 

 
3 

--------------------------------------------------------------------------------

 

 

“Transfer” means any direct or indirect, sale, transfer, gift, assignment,
conveyance, pledge or other disposition of Company Securities in any manner
whatsoever (other than with respect to the Margining of Shares in compliance
with Section 4), whether voluntary or involuntary, by operation of law or
otherwise, or any attempt to do any of the foregoing. A Transfer shall also
include the creation or grant of an option or an interest similar to an option
(within the meaning of Treasury Regulations Section 1.382-2T(h)(4)(v)).

 

“Treasury Regulation” means a Treasury regulation promulgated under the Code.

 

2.     Restricted Activities. From and after the Effective Date through the
Restriction Release Date, (a) the Sartini Investor will not engage in any
Restricted Activity, and any such purported Acquisition of additional Company
Securities made in violation of this clause (a) shall be null and void, and (b)
no Berman Investor will engage in any Restricted Activity that would, singly or
in the aggregate, result in an “ownership change” (within the meaning of Section
382 of the Code) with respect to the Company that may limit the Company’s
ability to utilize its Tax Benefits to reduce its potential future U.S. federal
income tax liabilities.

 

3.     Agreement to Resign. In the event of any breach of Section 2 by any
Berman Investor: (a) Lyle Berman hereby agrees to immediately resign as a
director of the Company and from any and all other positions, titles and
directorships then held by Mr. Berman with the Company or any of its
Subsidiaries, (b) Mr. Berman shall not be permitted to nominate himself as a
candidate for election to the Board of Directors pursuant to Section 2(c) of the
Shareholders’ Agreement, (c) the provisions of Section 1.10 of the Merger
Agreement shall cease to apply to Mr. Berman, and (d) the restrictions on
removal of a director from the Board of Directors set forth in Section 3 of the
Shareholders’ Agreement shall cease to apply to Mr. Berman. Mr. Berman further
acknowledges and agrees that any breach of Section 2 by any Berman Investor
shall constitute “Cause” for purposes of that certain Independent Contractor
Consulting Agreement, dated as of even date herewith, by and between the Company
and Mr. Berman. Mr. Berman acknowledges and agrees that irreparable damage would
occur in the event that any of the provisions of this Section 3 were not
performed in accordance with its specified terms or were otherwise breached, and
that the Company would not have an adequate remedy at law for money damages in
such event. Accordingly, the Company, without posting any bond or other
undertaking, shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Section 3 and to enforce specifically the
terms and provisions hereof in any court having jurisdiction, such remedy being
in addition to any other remedy to which the Company may be entitled at law or
equity.

 

4.     Restrictions on Pledging and Margin Accounts. Each of the Berman
Investors hereby agrees that it shall not implement any Margining of Shares
other than the pledge of up to 25% of the total value as of the time of such
pledge of any shares of Company Common Stock held by it as of record, subject to
compliance with the Company Insider Trading Policy.

 

 
4 

--------------------------------------------------------------------------------

 

 

5.     Insider Trading Policy. The Company agrees that, prior to the third
anniversary of the Effective Date, it will not adopt or amend any Company
Insider Trading Policy, unless amendment thereof is required by Applicable Law
or the rules and regulations of The NASDAQ Stock Market LLC (but subject in all
cases to compliance by the Berman Investors with Section 4), in any way that
would prohibit or prevent any of the Berman Investors from the Margining of
Shares in compliance with Section 4.

 

6.     Miscellaneous.

 

6.1     Powers of the Board of Directors. Subject to Section 5, nothing
contained in this Agreement shall limit the authority of the Board of Directors
to take such other action to the extent permitted by law as it deems necessary
or advisable to preserve the Company’s Tax Benefits. The Board of Directors
shall have the power to determine all matters necessary for determining
compliance with this Agreement. In the case of an ambiguity in the application
of any of the provisions of this Agreement, including any definition used
herein, the Board of Directors shall have the power to determine the application
of such provisions with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances. In the event that this
Agreement requires an action by the Board of Directors but fails to provide
specific guidance with respect to such action, the Board of Directors shall have
the power to determine the action to be taken so long as such action is not
contrary to the provisions of this Agreement. All such actions, calculations,
interpretations and determinations that are done or made by the Board of
Directors in good faith shall be final, conclusive and binding on the Company,
and each Investor; provided, however, that the Board of Directors may delegate
all or any portion of its duties and powers under this Agreement to a committee
of the Board of Directors as it deems advisable or necessary.

 

6.2     Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter contained herein, and it
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties, express or implied, oral or written with respect
to the subject matter hereof.

 

6.3     Amendments; Waivers; Remedies. No provision of this Agreement may be
waived or amended except in a written instrument signed by each of the Company
and each Investor. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.

 

6.4     Severability. The parties agree that if any part, term or provision of
this Agreement shall be found invalid, illegal or unenforceable in any respect
by any court of law of competent jurisdiction, the remaining provisions shall be
severable, valid and enforceable in accordance with their terms, and any such
invalidity, illegality or unenforceability in any jurisdiction shall not
invalidate or render illegal or unenforceable such provision in any other
jurisdiction.

 

 
5 

--------------------------------------------------------------------------------

 

 

6.5     Governing Law. This Agreement and any dispute, controversy or claim,
whether sounding in contract or tort, arising out of or relating to this
Agreement, shall be governed by and construed in accordance with the Laws of the
State of Minnesota without regard to its principles of conflict of laws that
could mandate the application of the laws of another jurisdiction.

 

6.6     Counterparts. This Agreement may be executed in one or more counterparts
(including by facsimile and electronic transmission), all of which shall be
considered one and the same agreement, and shall become effective when such
counterparts have been signed by each of the parties to this Agreement.
Electronic or facsimile signatures shall be deemed to be original signatures.

 

     6.7     Representations of the Parties. Each party hereto represents and
warrants that the execution, delivery and performance by such party of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate or, if such party is not a corporation, such partnership,
limited liability company or other applicable like action, on the part of such
party. This Agreement has been duly executed by such party, and when delivered
by such party in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such party, enforceable against it in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors’ rights and
remedies or by other equitable principles of general application.     

 

6.8     Nature of Investor Obligations. The obligations of either the Sartini
Investor or any of the Berman Trusts under this Agreement are several and not
joint with the obligations of any other Investor, and neither the Sartini
Investor nor the Berman Trusts shall be responsible in any way for the
performance of the obligations of any other Investor under this Agreement. The
obligations of each Other Berman Investor under this Agreement are joint and
several with the obligations of all Other Berman Investors. Notwithstanding the
foregoing, each Other Berman Investor shall be liable and responsible for the
performance of the obligations of each and all Berman Investors (including the
Berman Trusts) under this Agreement, but shall not be responsible in any way for
the performance of the obligations of the Sartini Investor under this Agreement.

 

6.9     Captions. Titles or captions of paragraphs contained in this Agreement
are inserted only as a matter of convenience and for reference, and in no way
define, limit, extend, or describe the scope of this Agreement or the intent of
any provision hereof.

 

6.10     Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile (with confirmation of
successful transmission and followed by regular mail or overnight courier
service delivery of a copy thereof), (b) the Business Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service with
next day delivery specified, (c) the third Business Day following the date of
mailing, if sent by registered or certified mail, postage prepaid, with return
receipt requested, or (d) upon receipt if hand delivered. The address for such
notices and communications shall be as follows (or to such other address or
facsimile number as the person to whom notice is given may have previously
furnished to the other parties hereto in writing in the manner set forth above):

 

 
6 

--------------------------------------------------------------------------------

 

 

If to the Company:

 

Golden Entertainment, Inc.

6595 S Jones Blvd
Las Vegas, NV 89118
Attn: Matthew Flandermeyer
Fax: (702) 891-4201

 

With a copy to (which shall not constitute notice):

 

Barry M. Clarkson

Latham & Watkins LLP

12670 High Bluff Drive

San Diego, CA 92130

Fax: (858) 523-5450

 

If to the Sartini Investor:

 

The Blake L. Sartini and Delise F. Sartini Family Trust

6595 S Jones Blvd
Las Vegas, NV 89118
Attn: Joe Stone
Fax: (702) 891-4289

 

If to a Berman Investor: At the address and facsimile number set forth against
such Berman Investor’s name on Schedule A hereto.

 

[Signature Pages Follow]

 

 
7 

--------------------------------------------------------------------------------

 

 

 

IN WITNESS WHEREOF, the parties have caused this NOL Preservation Agreement to
be duly executed as of the date first written above.

 

 

THE COMPANY:

GOLDEN ENTERTAINMENT, INC.

 

 

By: /s/ Matthew W. Flandermeyer                                   
Name: Matthew W. Flandermeyer
Title: Chief Financial Officer

 

 

 

SARTINI INVESTOR:

 

THE BLAKE L. SARTINI AND DELISE F. SARTINI FAMILY TRUST

 

 

Signature: /s/ Blake L. Sartini                                         

Blake L. Sartini

Trustee

 

 

Signature: /s/ Delise F. Sartini                                        

Delise F. Sartini

Trustee 

 

 
 

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the parties have caused this NOL Preservation Agreement to
be duly executed as of the date first written above.

 

 

 

BERMAN INVESTORS:

 

LYLE A. BERMAN

 

 

 

/s/ Lyle A.
Berman                                                               

 

 

 

BERMAN CONSULTING CORPORATION

 

 

By: /s/ Lyle A. Berman                                                          
Name:  Lyle A. Berman
Title: President

 

 

BERMAN CONSULTING CORPORATION PROFIT SHARING PLAN

 

 

 

By: /s/ Lyle A. Berman                                                          
Name:  Lyle A. Berman
Title: President

 

 

 

LYLE A. BERMAN REVOCABLE TRUST

 

 

 

By: /s/ Lyle A. Berman                                                          
Name:  Lyle A. Berman
Title: Trustee

 

 

 
 

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the parties have caused this NOL Preservation Agreement to
be duly executed as of the date first written above.

 

 

 

BERMAN INVESTORS (cont’d):

 

BRADLEY BERMAN IRREVOCABLE TRUST

 

 

By:  /s/ Neil I. Sell, Trustee                                                
Name:  Neil I. Sell
Title: Trustee

 

 

JULIE BERMAN IRREVOCABLE TRUST

 

 

By:  /s/ Neil I. Sell, Trustee                                                
Name:  Neil I. Sell
Title: Trustee 

 

 

AMY BERMAN IRREVOCABLE TRUST

 

 

By:  /s/ Neil I. Sell, Trustee                                                
Name:  Neil I. Sell
Title: Trustee 

 

 

JESSIE LYNN BERMAN IRREVOCABLE TRUST

 

 

By:  /s/ Neil I. Sell, Trustee                                                
Name:  Neil I. Sell
Title: Trustee 

 

 
 

--------------------------------------------------------------------------------

 

 

SCHEDULE A

 

BERMAN TRUSTS

 

Name and Contact Information for Shareholder

 

Number of Shares of

Parent Common Stock

Beneficially Owned as of

the Date Hereof

 

Bradley Berman Irrevocable Trust

 

Maslon Edelman Borman & Brand, LLP

3300 Wells Fargo Center

90 South Seventh Street

Minneapolis, MN 55402

Attention: Neil I. Sell, Trustee

Email: Neil.Sell@maslon.com

Fax: (612) 642-8337

 

and/or

 

554 Canosa Ave.

Las Vegas NV 89104

Attn: Douglas Dalton, Trustee

Email: dldpoker702@gmail.com

 

 

334,425

 

 

Julie Berman Irrevocable Trust

 

Maslon Edelman Borman & Brand, LLP

3300 Wells Fargo Center

90 South Seventh Street

Minneapolis, MN 55402

Attention: Neil I. Sell, Trustee

Email: Neil.Sell@maslon.com

Fax: (612) 642-8337

 

and/or

 

554 Canosa Ave.

Las Vegas NV 89104

Attn: Douglas Dalton, Trustee

Email: dldpoker702@gmail.com

 

 

 

334,425

 

 
 

--------------------------------------------------------------------------------

 

 

 

Amy Berman Irrevocable Trust

 

Maslon Edelman Borman & Brand, LLP

3300 Wells Fargo Center

90 South Seventh Street

Minneapolis, MN 55402

Attention: Neil I. Sell, Trustee

Email: Neil.Sell@maslon.com

(612) 642-8337

 

and/or

 

554 Canosa Ave.

Las Vegas NV 89104

Attn: Douglas Dalton, Trustee

Email: dldpoker702@gmail.com

 

 

293,172

     

 

Jessie Lynn Berman Irrevocable Trust

 

Maslon Edelman Borman & Brand, LLP

3300 Wells Fargo Center

90 South Seventh Street

Minneapolis, MN 55402

Attention: Neil I. Sell, Trustee

Email: Neil.Sell@maslon.com

Fax: (612) 642-8337

 

and/or

 

554 Canosa Ave.

Las Vegas NV 89104

Attn: Douglas Dalton, Trustee

Email: dldpoker702@gmail.com

 

 

293,172

 

 
 

--------------------------------------------------------------------------------

 

 

SCHEDULE B

 

OTHER BERMAN INVESTORS

 

Name and Contact Information for Shareholder

 

Number of Shares of

Parent Common Stock

Beneficially Owned as of

the Date Hereof

           

 

Lyle A. Berman

One Hughes Center Drive, Unit 606

Las Vegas, NV 89169

Fax: (702) 650-2474

 

 

211,739

     

 

Berman Consulting Corporation

One Hughes Center Drive, Unit 606

Las Vegas, NV 89169

Attention: Lyle Berman, President

Fax: (702) 650-2474

 

 

211,403

     

 

Berman Consulting Corporation Profit Sharing Plan

One Hughes Center Drive, Unit 606

Las Vegas, NV 89169

Attention: Lyle Berman

Fax: (702) 650-2474

 

 

161,500

     

 

Lyle A. Berman Revocable Trust

One Hughes Center Drive, Unit 606

Las Vegas, NV 89169

Attention: Lyle Berman, Trustee

Fax: (702) 650-2474

 

 

1,830,833