Document:

AMENDMENT TO LOAN AGREEMENT AND NOTE

EXHIBIT 10.2

 

	

  For Bank use Only

  	

   

  	

  Reviewed by

  
	

  Due MAY 1, 2003

  	

   

  	

   

  
	

  Customer # 6608780924

  	

   

  	

  Loan #: 18

  

 

AMENDMENT TO LOAN AGREEMENT AND NOTE

 

This amendment (the

“Amendment”), dated as of the date specified below, is by and between the

borrower (the “Borrower”) and the bank (the “Bank”) identified below.

 

RECITALS

 

A.  The Borrower and the Bank have executed a Loan Agreement (the “Agreement”) dated MAY 14, 2001 and the

Borrower has executed a Note (the “Note”)

dated May 14, 2001, either or both which may have been amended from time to

time, and the Borrower (and if applicable certain third parties) have executed

the collateral documents which may or may not be identified in the Agreement

and certain other related documents (collectively the “Loan Documents”), setting forth the terms

and conditions upon which the Borrower may obtain loans from the Bank from time

to time in the original amount of $3, 500,000.00 as may be amended from time to

time.

 

B.  The Borrower has requested that the Bank permit certain modifications

to the Agreement and Note as described below.

 

C.  The Bank has agreed to such modifications, but only upon the

terms and conditions outlined in this Amendment.

 

TERMS OF AGREEMENT

 

In consideration of the

mutual covenants contained herein, and for other good and valuable

consideration, the Borrower and the Bank agree as follows:

 

ý  Extension of Maturity Date.  If checked here, any references in the

Agreement or Note to the maturity date or date of final payments are hereby

deleted and replaced with “MAY 1, 2003.”

 

o  Change in Maximum Loan Amount.  If checked here, all references to “$N/A” in

the Agreement and in the Note (whether or not numerically) as the maximum loan

amount which may be borrowed from time to time are hereby deleted and replaced with

“$ N/A”.

 

o  Change in Multiple Advance

Termination Date.  If checked

here, all references to “N/A” as the termination date for multiple advances are

hereby deleted and replaced with “N/A”.

 

Change in Financial Covenant(s).

 

                                                (i)     o If checked

here, all references to “$

                                      ”

in the Agreement as the minimum Net Working Capital amount are hereby deleted

and replaced with “$

                                      ”

for the period beginning

                                      

and thereafter.

 

                                                (ii)    o If checked here, all

references to “$

                                      ”

in the Agreement as the minimum Tangible Net Worth amount are hereby deleted

and replaced with “$

                                      ”

for the period beginning

                                      

and thereafter.

 

                                                (iii)   o If checked here, all

references to

“                                      ”

in the Agreement as the maximum Debt to Worth Ratio are hereby deleted and

replaced with “                                      ”

for the period beginning

                                      

and thereafter.

 

                                                (iv)   o If checked here, all

references to

“                                      ”

in the Agreement as the minimum Current Ratio 

are hereby deleted and replaced with

“                                      ”

for the period beginning

                                      

and thereafter.

 

                                                (v)    o If checked here, all

references to

“$                                      ”

in the Agreement as the minimum Capital Expenditures amount are hereby deleted

and replaced with “$

                                      ”

for the period beginning

                                      

and thereafter.

 

                                                (vi)   o If checked here, all

references to “                                      ”

in the Agreement as the minimum Cash Flow Coverage Ratio  are hereby deleted and replaced with

“                                      ”

for the period beginning

                                      

and thereafter.

 

                                                (vii)  o If checked here, all

references to “$

                                      ”

in the Agreement as the maximum Officers, Directors, Partners, and Management

Salaries and Other Compensation amount are hereby deleted and replaced with “$

                                      ”

for the period beginning

“                                      

and thereafter.

 

                                                o   Change in

Payment Schedule.  If checked

here, effective upon the date of this Amendment, any payment terms are amended

as follows.

 

 

o  Change in Late Payment Fee.  If checked here, subject to applicable law,

if any payment is not made on or before its due date, the Bank may collect a

delinquency charge of

                                      %

of the unpaid amount.  Collection of the

late payment fee shall not be deemed to be a waiver of the Bank’s right to

declare a default hereunder.

 

Default Interest Rate.  Notwithstanding any provision of this Note to the contrary, upon

any default or at any time during the continuation thereof (including failure

to pay upon maturity), the Bank may, at its option and subject to applicable

law, increase the interest rate on this Note to a rate of 5% per annum plus the

interest rate otherwise payable hereunder. 

Notwithstanding the foregoing and subject to applicable law, upon the

occurrence of a default by the Borrower or any guarantor involving bankruptcy,

insolvency, receivership proceedings or an assignment for the benefit of

creditors, the interest rate on this Note shall automatically increase to a rate

of 5% per annum plus the rate otherwise payable hereunder.

 

Effectiveness of Prior Documents.  Except as specifically amended hereby, the

Agreement, the Note and the other Loan Documents shall remain in full force and

effect in accordance with their respective terms.  All warranties and representations contained in the Agreement and

the other Loan Documents are hereby reconfirmed as of the date hereof.  As collateral previously provided to secure

the Agreement and/or Note continues as security, and all guaranties

guaranteeing obligations under the Loan Documents remain in full force and

effect.  This is an amendment, not a

novation.

 

Preconditions to Effectiveness.  This Amendment shall only become effective

upon execution by the Borrower and the Bank, and approval by any other third

party required by the bank.

 

No Waiver of Defaults: Warranties.  This Amendment shall not be construed as or

be deemed to be a waiver by the Bank of existing defaults by the Borrower,

whether known or undiscovered.  All

agreements, representations and warranties made herein shall survive the

execution of this Amendment.

 

Counterparts.  This Amendment may be signed in any number of counterparts, each

of which shall be considered an original, but when taken together shall constitute

one document.

 

Authorization.  The Borrower represents and warrants that the execution, delivery

and performance of this Amendment and the documents referenced herein are

within the authority of the Borrower and have been duly authorized by all

necessary action.

 

Attachments.  All

documents attached hereto, including any appendices, scheduled, riders and

exhibits to this Amendment, are hereby expressly incorporated herein by

reference.

 

Dated as of : MAY 3, 2002

 

	

   

  	

   

  	

   

  	

  PDS GAMING CORPORATION

  
	

  (Individual Borrower)

  	

   

  	

  Borrower Name

  (Organization)

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  a 

  	

  MINNESOTA Corporation

  
	

  Borrower Name

  	

  N/A

  	

   

  	

  By :

  	

   /s/ Martie Vlcek

  
	

   

  	

   

  	

   

  	

  Name and Title :

  	

   MARTIE VLCEK, CFO

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By : 

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Borrower Name

  	

  N/A

  	

   

  	

  Name and Title : 

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  SEE ATTACHED SIGNATURE

  ADDENDUM FOR  CO-BORROWER SIGNATURE(S)

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Agreed to :

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  U.S. BANK N.A.,

  	

   

  	

   

  	

   

  
	

  (Bank)

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  By :

  	

   

  	

  /s/ Susan Lydon

  	

   

  	

   

  
	

   

  	

   

  	

  SUSAN LYDON

  	

   

  	

   

  
	

  Name and Title : 

  	

  VICE PRESIDENT

  	

   

  	

   

  	

   

  
												

 

FOR

ADDITIONAL TERMS.  SEE ATTACHED ADDENDUM

 

2GENERAL CONTRACT TERMS AND CONDITIONS

EXHIBIT

10.3

 

"CONFIDENTIAL

TREATMENT REQUESTED.  CONFIDENTIAL

PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.”

 

AMENDMENT

AND TERMINATION AGREEMENT

 

THIS AMENDMENT AND TERMINATION AGREEMENT (“Termination Agreement”)

is made on May 3, 2002 (“Effective

Date”), by and between PDS GAMING CORPORATION formerly

PDS Financial Corporation, a

Minnesota corporation, its successors and assigns (“PDS”), whose address

is 6171 McLeod Drive, Las Vegas, NV 89120-4048, and DIGIDEAL CORPORATION, a

Nevada corporation (“DigiDeal”),

whose address is East 5207 Third Avenue, Spokane, WA 99212 (each a “Party” and

collectively the “Parties”).

 

RECITALS

 

WHEREAS, PDS and DigiDeal entered into that (i) CONSULTING

AGREEMENT dated August 3, 2001, as extended by agreement on November

26, 2001 (“Consulting

Agreement”); (ii) AMENDED AND

RESTATED AGREEMENT FOR TECHNOLOGY TRANSFER, MANUFACTURE, DISTRIBUTION AND

AFFECTING PATENT, TRADEMARK AND COPYRIGHTS dated September 7, 2001,

as modified in that FIRST MODIFICATION OF

AGREEMENT FOR TECHNOLOGY TRANSFER,

MANUFACTURE, DISTRIBUTION AND AFFECTING PATENT, TRADEMARK AND COPYRIGHTS

dated November 26, 2001 (collectively, the “Domestic Agreement”); (iii) AMENDED AND RESTATED AGREEMENT FOR TECHNOLOGY

TRANSFER, MANUFACTURE, DISTRIBUTION AND AFFECTING PATENT, TRADEMARK AND

COPYRIGHTS  (Sovereign Nations)

dated March 3, 2001, as modified in that FIRST

MODIFICATION OF  AGREEMENT FOR

TECHNOLOGY TRANSFER, MANUFACTURE, DISTRIBUTION AND AFFECTING PATENT, TRADEMARK

AND COPYRIGHTS dated November 26, 2001 (collectively, the “Tribal Agreement”);

(iv) CONFIDENTIAL SOFTWARE LICENSE AGREEMENT

dated August 31, 2000 (“Software

License Agreement”); (v) CONFIDENTIAL

SOFTWARE TRANSFER AGREEMENT dated August 31, 2000 (“Software Transfer Agreement”)

(all such agreements, collectively, the “Agreements”); and (vi) SUBSCRIPTION AGREEMENT dated November 21,

2001 (“Subscription

Agreement”) ; and

 

WHEREAS, differences have arisen between

the Parties regarding the Agreements and the Subscription Agreement; and

 

WHEREAS, the parties have agreed that the

Domestic Agreement and the Tribal Agreement shall be amended and then

terminated pursuant to the terms hereof; and

 

WHEREAS, the parties have agreed that the

Subscription Agreement shall be amended pursuant to the terms hereof; and

 

WHEREAS, the parties have agreed that the

remaining Agreements shall be terminated pursuant to the terms hereof; and

 

WHEREAS,

the Parties desire to amicably resolve the pending differences under the terms

and conditions set forth in this Termination Agreement and those other documents and instruments referenced herein.

 

NOW, THEREFORE,

IN CONSIDERATION of the

mutual covenants and conditions set forth herein and other good and valuable

consideration, the sufficiency and adequacy of which is hereby acknowledged by

the Parties, it is agreed as follows:

 

 

1.             Recitals Incorporation.  The recitals set forth

above are hereby incorporated into this Termination Agreement as material parts

thereof and not simply as mere recitals.

 

2.             Stock Purchase.  As part of the overall termination of the

Agreements, PDS hereby agrees that upon execution of this Termination Agreement

it shall immediately execute the amended Subscription Agreement attached hereto

as Exhibit “1.” and

purchase One Hundred Eight Thousand One Hundred Eight (108,108) shares of

common stock of DigiDeal (the “Shares”) at a price of $1.85 per share for a total cost

of Two Hundred Thousand Dollars ($200,000.00) by transferring readily available

U.S. funds by wire transfer to an account designated by DigiDeal.  All of the terms and conditions of the

amended Subscription Agreement shall be applicable to PDS’s purchase of the

Shares and shall survive the termination of the Agreements.

 

3.             Non-Exclusive License Agreement; Buyout;

Purchase of Intellectual Property.

 

a.             Non-Exclusive

License Agreement.  As part of the

overall termination of the Agreements, the Parties hereby enter into a

Non-Exclusive License Agreement (“License Agreement”).  Pursuant to this License Agreement in this

subsection 3-a, DigiDeal hereby grants PDS a non-exclusive license to manufacture, assemble, produce, program,

reprogram, market, promote, lease, use, sell, service, repair, recover

(repossess), and remanufacture up to Seventy-Four (74) Digital Card System (“DCS”) products (“DCS Products”) that

are currently in the possession of PDS on May 3, 2002 (the “Maximum DCS Products”).  DigiDeal also hereby grants PDS the

non-exclusive right to practice or otherwise use any methods or processes,

which are necessary to distribute and operate the Maximum DCS Products.  The geographic scope of the License

Agreement shall be limited to the states and Sovereign Nations of Colorado,

Mississippi, Nevada, North Carolina, Florida (including cruises-to-nowhere),

California, and Minnesota (collectively, the “License Jurisdictions”).  This License Agreement is restricted

to the Maximum DCS Products, is not subject to a minimum distribution

requirement and is for an indefinite term, subject to termination pursuant to

subsection 3-b hereof.  This License

Agreement shall not be sold, transferred, pledged, assigned, hypothecated or

made subject to a negative pledge by PDS without the prior written consent of

DigiDeal, which shall not be unreasonably withheld.

 

b.             Buyout.

The License Agreement may be terminated by DigiDeal, at anytime, upon DigiDeal

paying to PDS consideration equal to (i) the actual and direct costs of

production of the existing inventory of the Maximum DCS Products parts and

supplies and the DCS tables located

in the License Jurisdictions after deducting those amounts recouped by PDS for

its costs of the units pursuant to Section 27 and 28 of the Domestic Agreement

and Tribal Agreement (which Sections 27 and 28 are incorporated by reference herein

as if fully set forth), plus  (ii) an

amount equal to five (5) times annualized PDS’s share of the revenues generated

from the DCS tables out under lease as calculated pursuant to Section 27 and 28

of the Domestic Agreement and the Tribal Agreement  (the “Lease

Revenues”) (the “Buyout”). Within five (5) days of a written request by

DigiDeal, PDS shall provide DigiDeal with a written accounting of the Lease

Revenues as required by Sections 30 and 31 of the Domestic Agreement and the

Tribal Agreement (which Sections 30 and 31 are incorporated by reference herein

as if fully set forth).  Upon DigiDeal

or the Third-Party’s (defined below) exercise of the Buyout and payment to PDS

or its permitted assignees of all sums due under this subsection 3-b, PDS shall

at its sole expense transfer, assign and deliver all of its right, title and

interest in and to (i) its existing inventory of DCS parts and supplies, and

(ii) the DCS tables located in the License Jurisdictions. PDS shall also grant

a thirty (30) day license to Digideal or its assignee to use the PDS Software

(as defined

 

2

"CONFIDENTIAL

MATERIAL REDACTED AND FILED SEPARATELY WITH 

THE SECURITIES AND EXCHANGE COMMISSION."

 

in subsection 3-c) for the DCS tables, subject to applicable gaming

laws.  All PDS Software (as defined in

subsection 3-c below) shall remain the exclusive property of PDS, subject to

subsection 3-d.  DigiDeal’s right to

exercise the Buyout may be assigned to a Third-Party (see Section 5-a

below) subject to applicable gaming laws.

 

c.             Purchase of

Intellectual Property.  PDS hereby

irrevocably sells to DigiDeal, and DigiDeal hereby purchases from PDS, all of

PDS’s Intellectual Property related to DCS free and clear of all liens, encumbrances

and charges (collectively, “Liens”) for the total sum of One Thousand Dollars

($1,000.00) in hand delivered.  PDS

hereby irrevocably assigns the Intellectual Property rights being purchased by

DigiDeal, free and clear of all Liens. 

For the purposes of this subsection and subsection 3-d, the term “Intellectual Property”

shall mean the “Transferred Assets”

as that term is defined in Section 3.17 of the Domestic Agreement, and “The Patents”, “The Patent Rights”, the “Designated

Technology”, the “Designated

Technology Rights”, “The

Copyright Works”, “The Copyrights”,

the “Designated Trademarks”, and

the “Designated Trademark Rights”,

as those terms are defined in Sections 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13,

and 3.14 respectively of the Tribal Agreement, and the “Software”, as that term is defined in

Section 2(a) of the Software License Agreement and Software Transfer Agreement,

and that U.S. Provisional Patent Application Serial No. 60/347,364 entitled

“Flat Felted Gaming Table And Method of Manufacture” filed January 10, 2002 by

Wilfred Apostal and assigned to PDS, and shall also include all trademarks,

patents, know-how, developments, designs, trade secrets, processes and other

confidential information, intellectual and similar intangible property rights,

whether or not patentable or copyrightable (or otherwise subject to legally

enforceable restrictions or protections against unauthorized third party

usage), and any and all applications for, registrations of and extensions,

divisions, renewals and reissuances of, and all improvements and developments

of any of the foregoing, but specifically excludes the software developed by

PDS for use or play in Nevada and other jurisdictions as specified in Exhibit “2.” (the “PDS Software”).  PDS retains no rights to the Intellectual

Property, or any other Intellectual Property related to or associated with the

DCS, other than the PDS Software.  PDS

shall not sell, transfer, pledge, assign or hypothecate the PDS Software, or make

the PDS Software subject to a negative pledge, without the prior written

consent of Digideal.

 

d.             Option to

Purchase the PDS Software.  PDS

hereby grants Digideal the option to purchase the PDS Software for a sum of not

more than *** or such lesser amount as agreed upon by the parties (the “Option Price”).  This option to purchase shall be exercised

by notifying PDS in writing that DigiDeal or its assignee has elected to

exercise this option.  DigiDeal or its

assignee shall tender payment of the Option Price along with the notification

that it is exercising this option.  PDS

shall then execute an assignment of all Intellectual Property rights covering

the PDS Software.  DigiDeal may assign

this option to a third party in its sole and absolute discretion and shall

provide PDS with a copy of any such assignment.

 

4.             Termination of Agreements.

 

a.             Section 62 of the Domestic

Agreement and the Tribal Agreement are hereby incorporated by reference herein

as if fully set forth and amended as follows: 

Upon termination as provided in this Termination Agreement, all rights

and obligations of DigiDeal and PDS under the Agreements, except for those

specifically set forth in this Termination Agreement, shall terminate.  Termination shall not diminish PDS’s

obligation to make payments as required in this Termination Agreement.  PDS shall continue to treat revenue in the

same manner after termination as prior to termination as set forth in Section

28 of the Domestic Agreement and the 

 

3

 

Tribal Agreement, except that PDS shall have no right to any revenue if

PDS fails to provide general customer support, maintenance or repair services.

 

b.             Consulting Agreement.  As part of the overall termination of the

Agreements, the Parties agree that upon execution of this Termination Agreement

and upon PDS completing its purchase of the Shares pursuant to Section 2

hereof, the Parties will simultaneously execute a Mutual Release and Termination of the Consulting Agreement,

which shall be in a form and substance mutually agreeable to both Parties.

 

c.             Domestic Agreement, Tribal

Agreement, Software Transfer Agreement and Software License Agreement.  As part of the overall termination of the

Agreements, the Parties shall simultaneously execute a Mutual Release and Termination of the

Domestic Agreement, Tribal Agreement, Software Transfer Agreement and Software

License Agreement, all of which shall be in a form and substance mutually

agreeable to both Parties.  All sections

of the Domestic Agreement and the Tribal Agreement incorporated by reference

herein shall survive the termination of the Agreements and remain in full force

and effect as provided herein.

 

5.             Additional Assurances of PDS.

 

a.             Up

to and until the date of the Buyout, PDS shall use its best efforts to assist

DigiDeal in facilitating a transition of the DCS Products and DCS technology

and Intellectual Property to a third party (the “Third-Party”), including assisting in

identifying the Third Party and assisting in structuring terms acceptable to

DigiDeal.

 

b.             Up

to and until the date of the Buyout, PDS shall apply any revenues due and owing

to DigiDeal under the License Agreement against receivables due to PDS from

DigiDeal.

 

c.             PDS

shall timely provide all required notices and filings relating to this

Termination Agreement to the Nevada State Gaming Control Board and any other

applicable gaming regulatory authority. 

PDS shall provide DigiDeal and its counsel with a copy of all such

notices and filings at least two (2) days prior to filing them, and DigiDeal

shall have one (1) day to suggest any revisions.  PDS shall not issue any press release or other public notice

relating to this Termination Agreement or the DCS Products without DigiDeal’s

consent, which consent shall not be unreasonably withheld.

 

d.             PDS

agrees that it shall not sell the PDS Software to any person or entity other

than DigiDeal or the Third-Party.

 

e.             PDS

represents that it has not violated the Mortgages

of Patent Rights, which was attached to, and made a part of, the

Domestic Agreement and/or the Tribal Agreement as Section 82, Appendix B.

 

6.             Non-Compete.

 

a.             In

order to induce DigiDeal to enter into this Termination Agreement and to

consummate the transactions contemplated by this Termination Agreement, and as

additional consideration for the Consideration of Buyer, for a period

commencing on the Effective Date and ending on the fifth anniversary of the

Effective Date (the “Non-Compete

Period”), PDS agrees that it will

not, except as permitted herein in Section 3, directly engage or

participate in any business or activity involving the manufacture, sale,

distribution or operation of the DCS; provided that nothing in this

Section shall prevent PDS from (i) engaging or participating in such

 

4

 

business or activity at the request of and on behalf of DigiDeal,

(ii) owning beneficially, as an investment, up to forty-nine percent (49%)

of any company that competes with DigiDeal, or (iii) engaging in financing

activities on behalf of third parties whether related to the DCS or not.

 

b.             PDS

represents to DigiDeal that the enforcement of the non-competition covenants

set forth in this Section (collectively, the “Covenants”) contained in this

Section would not be unduly burdensome to it.  PDS agrees that a breach or violation of the this Section shall

entitle DigiDeal, as a matter of right, to an injunction issued by any court of

competent jurisdiction, restraining any further or continued breach or violation

of this Section.  Such right to an

injunction shall be cumulative and in addition to, and not in lieu of, any

other remedies to which DigiDeal may show itself justly entitled.  Further, during any period in which PDS is

in breach of this Section, the time period of this Section shall be extended

for an amount of time that PDS is in breach hereof, with the effect that the

total duration of this Section shall be the original period plus the actual

amount of time that PDS is in breach.

 

c.             The

representations and Covenants contained in this Section on the part of PDS will

be construed as ancillary to and independent of any other provisions of this

Termination Agreement, and the existence of any claim or cause of action of PDS

against DigiDeal or any officer, director, or stockholder of DigiDeal, whether

predicated on this Termination Agreement or otherwise, shall not constitute a

defense to the enforcement by DigiDeal of this Section.

 

d.             Further,

PDS agrees that the Covenants set forth herein are appropriate and reasonable

when considered in light of the nature and extent of the business conducted by

DigiDeal.  PDS acknowledges and agrees

that (i) DigiDeal would not enter into this Termination Agreement unless Seller

agreed to the Covenants; (ii) it has read and understands the terms of

this Termination Agreement including, without limitation, the Covenants and has

been provided the opportunity to discuss this Termination Agreement and the

Covenants with DigiDeal and counsel of its choice and has carefully considered

the nature and extent of the restrictions upon it and the rights and remedies

conferred upon DigiDeal hereunder; and (iii) it will receive consideration for

agreeing to the Covenants.  PDS hereby

acknowledges and agrees that DigiDeal has a legitimate interest in protecting

its business and that the Covenants are reasonable in limitations as to time,

scope, geographical area and activity, and are fully required and are no

greater than necessary to protect the legitimate business interests of DigiDeal.  PDS further agrees that the Covenants are

not unduly harsh or oppressive to PDS in curtailing its legitimate efforts to

earn a livelihood and do not stifle the inherent skill and experience of PDS,

or confer a benefit upon DigiDeal disproportionate to the detriment to

DigiDeal, or harm in any manner whatsoever the public interest or operate as a

bar to the PDS’s sole means of support.

 

e.             PDS

agrees that if the Covenants should be held by any court or other constituted

legal authority to be void or unenforceable in any particular area or

jurisdiction, then PDS and DigiDeal shall consider this Termination Agreement

to be modified so as to eliminate that particular area or jurisdiction or scope

as to which the Covenants are held to be void or otherwise unenforceable, and

as to all other areas and jurisdictions covered by this Termination Agreement,

the terms hereof shall remain in full force and effect as originally

written.  Further, if the Covenants

should be held by any court or other constituted legal authority to be

effective in any particular area or jurisdiction or scope only if said

Covenants are modified to limit their duration or scope, then PDS and DigiDeal

shall consider such Covenants to be amended and modified with respect to that

particular area or jurisdiction so as to comply with the order of any court or

other constituted legal authority, and as to all other political subdivisions

of the United States, the Covenants shall remain in full force and effect as

originally written.

 

5

 

7.             Miscellaneous Provisions.

 

a.             Binding

Effect.  This

Settlement Agreement shall be binding upon and inure to the benefit of the

Parties and their respective, permitted successors, heirs, executors,

administrators, assigns, and all persons claiming by, through or under them.

 

b.             Execution.  The Parties hereto agree that execution of a facsimile of this

Termination Agreement shall have

the same force and effect as an

executed original and shall be binding upon the Parties.  The Parties also agree that facsimile

signatures shall be sufficient unless a third-party requires originals.

 

c.             Governing

Law. The substantive and

procedural laws of the State of Nevada shall govern the validity, construction,

interpretation, performance and

enforcement of this Settlement Agreement

and the Parties agree to jurisdiction

in Nevada without reference to its

conflict of laws provisions.

 

d.             Arbitration.  The

arbitration provisions of Section 78 of the Domestic Agreement and the Tribal

Agreement are incorporated by reference herein as if fully set forth.

 

e.             Due

Authorization.  The Parties represent and warrant to each

other that all necessary corporate action required to execute and perform this Termination Agreement has been taken,

that the person signing this Termination Agreement on behalf of each Party is

duly authorized and that this Termination Agreement is binding on each Party.

 

f.              Confidentiality

and Disclosure.  The Parties

shall keep the terms and conditions of this Termination Agreement in the

strictest confidence.  Both Parties

agree not to divulge the terms and conditions of this Termination Agreement to

any other person, without the prior written consent of other, gaming regulatory

authorities excluded.  Notwithstanding

the above, DigiDeal may provide the information and this Termination Agreement

to the Third-Party or a prospective Third-Party without the prior consent of

PDS.

 

IN WITNESS WHEREOF, the Parties have caused

this Agreement to be duly executed as of the date set forth above.

 

	

  “PDS”

  	

  “DigiDeal”

  	

   

  
	

   

  	

   

  	

   

  
	

  PDS

  GAMING CORPORATION

  	

  DIGIDEAL

  CORPORATION

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By: 

  	

  /s/ Johan P. Finley

  	

   

  	

  By: 

  	

  /s/ Michael J. Kuhn

  	

   

  	

   

  
	

  Johan P. Finley

  	

  Michael J. Kuhn

  	

   

  
	

  Chief Executive

  Officer

  	

  President

  	

   

  
							

 

6

 

Exhibit “1.”

 

Amended Subscription Agreement

 

AMENDED

AND RESTATED

DIGIDEAL

CORPORATION

SUBSCRIPTION

AGREEMENT FOR PURCHASE OF SHARES

 

DigiDeal Corporation

5207 East Third Avenue

Spokane, WA 99212

 

Gentlemen/Madam:

 

1.             Amendment

and Restatement.  This

Amended and Restated Subscription Agreement amends,

restates and replaces in its entirety that Subscription Agreement by and

between the Company and PDS dated November 21, 2001.

 

2.             Definitions.  Terms not otherwise

defined in this Agreement shall have the meanings attributed to such terms as

follows:

 

2.1.  “Company” shall mean

DigiDeal Corporation, a closely held Nevada corporation.

 

2.2. “PDS” shall mean PDS

Gaming Corporation, a publicly traded Minnesota corporation.

 

2.3. “Share” or “Shares” shall mean

shares of common stock of the Company.

 

2.4. “Subscription Agreement”

or “Agreement”

shall mean this Amended and Restated Subscription Agreement for Purchase of

Shares and includes all oral agreements between the parties hereto relating to

the subject matter of this Agreement.

 

3.             Subscription.  PDS hereby irrevocable agrees to purchase

Shares of the Company in the total amount described in section 4 below, subject

to the terms and conditions set forth herein.

 

4.             Number of Shares.  Upon execution of this Agreement, PDS will purchase 108,108

Shares of the Company at $1.85 per /share for a total cost of $200,000.00.

 

5.             Representations and Warranties.  PDS

represents and warrants to the Company as follows:

 

5.1. The

Shares are being purchased by PDS for its own account, and not with a view to

distribute or resell the same in any manner. 

PDS does not have any present intention of disposing of any or all of

the Shares at any particular future in time or upon the occurrence of any particular event.

 

7

 

5.2. PDS

confirms that, in making the decision to purchase the Shares, it has relied

solely upon its own independent investigation of the Company and/or the

investigation made by its corporate tax or other advisors.  PDS fully understands the Offering

Memorandum, which has been presented to PDS by the Company.  PDS’s advisors have had an opportunity to

ask questions of, and receive answers from, persons acting on behalf of the

Company.  PDS has relied solely upon the

information provided in writing on behalf of the Company, or information from

books and records furnished on behalf of the Company. PDS understands that all

documents, books, and records of the Company will be available for inspection

by PDS at any time prior to the closing of the purchase evidenced hereby.  No oral representations have been made and

no information has been furnished to PDS or any officer of PDS in connection

with the offer of the Shares, which have been in any way inconsistent with the

foregoing specified information.

 

5.3. PDS

is aware that the Shares are subject to substantial risks.  PDS is capable of bearing the economic risk

of its purchase of the Shares.  PDS has

adequate net worth and means of providing for its current needs and corporate

contingencies to sustain a complete loss of its interest in the Company and has

no need for liquidity of its Shares.  In

addition, PDS’s present financial condition is such that it is under no present

need, nor does it contemplate any future need to dispose of any portion of the

Shares to satisfy any existing or contemplated undertaking, need, or

indebtedness.

 

5.4. PDS has such knowledge and

experience in financial and business matters that it is capable of evaluating

the merits and risks of the purchase of the Shares.

 

5.5. PDS understands that no

federal or state agency has passed on or made any recommendation pertaining to

the Shares.  The information set forth

in PDS’s Investor Questionnaire (the “Questionnaire”) is true and correct.  PDS understands that the Company is relying

upon the truth and accuracy of the information contained in the Questionnaire

and the representations and warranties contained this Subscription Agreement in

the offering of the Shares for sale without registration under the securities

laws.

 

6.             Restrictions

on Transferability of Shares.  PDS understands that the Shares may be considered to be

securities and the Shares are not, and will not be, registered under the

securities laws, in reliance upon exemptions from registration for nonpublic

offerings.  Therefore, Shares may only

be sold, pledged, hypothecated, or otherwise transferred (with or without

consideration) upon the conditions specified in this paragraph, or as otherwise

agreed to by the Company.  No assignment

of any Shares shall be effective if the assignment would violate the provisions

of the securities laws.  If the Company

so requires, no assignment shall be effective unless PDS, as transferor,

deliver an opinion of counsel to the Company, which opinion must be

satisfactory to the Company in all respects, to the effect that such transfer

will not violate the securities laws.

 

7.             Notices. 

Any notices or other communications required or permitted hereby shall

be sufficient if sent by registered or certified mail, postage prepaid, return

receipt requested, and, if to the Company, at the address to which this letter

is addressed at the head of this Subscription Agreement, and if to the

undersigned, at the address set forth at my 

 

8

 

signature hereto, or such other address as either the Company or I

shall designate to the other by notice in writing.

 

8.             Successors

and Assigns.  This

Subscription Agreement shall be binding upon and shall inure to the benefit of

the parties hereto and to the successors and assigns of the Company and to the

successors, and permitted assignees of the undersigned.

 

9.             

Applicable Law. 

This Subscription Agreement shall be governed by and construed in

accordance with the laws of the State of Washington, and, to the extent it

involves any United States statue, in accordance with the laws of the United

States.

 

10.          Attorney’s

Fees and Costs. 

In any action at law or equity to enforce or interpret any of the

provisions or rights under this Subscription Agreement, the prevailing party

shall be entitled to costs, expenses, and reasonable attorney’s fees incurred

therein, including without limitation, such costs, expenses, and fees on any

appeal.

 

11.          Execution.  The

Parties hereto agree that execution of a facsimile of this Subscription Agreement shall have the same force and

effect as an executed original and shall be binding upon the parties.  The parties also agree that facsimile

signatures shall be sufficient unless a third-party requires originals.

 

IN WITNESS WHEREOF,

the undersigned agrees to all the terms of this Amended Subscription Agreement,

and has executed this Agreement this 3rd day of May 2002.

 

	

   

  	

  PDS GAMING CORPORATION

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Johan P. Finley,

  CEO

  
	

   

  	

   

  
	

   

  	

  Federal Tax Id Number: 41-1605970

  
	

   

  	

   

  
	

   

  	

  6171 McLeod Drive

  
	

   

  	

  Las Vegas, NV 89120-4048

  
	

   

  	

   

  
	

   

  	

   

  

Total # of Shares Purchased: 108,108  / Total Purchase Price $200,000.00

 

Accepted this 3rd day of May 2001.

 

	

  DIGIDEAL CORPORATION

  
	

   

  
	

  By:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  

 

9

 

Upon acceptance of this Subscription Agreement by the Company, the

Company will be bound by the following terms and conditions:

 

1.             General.

 

1.1  Upon

the terms and conditions stated herein, the Company agrees that persons

purchasing Shares in this offering (“1999 Shareholders”) shall be entitled for a

period of three (3) years, from the date the Subscription Agreement of a 1999

Shareholder is accepted, to receive additional shares of common stock if the

Company should issue any shares of its voting or nonvoting common (“New Issuance”) stock

at a price less than offering price of $1.35 per share (“Offering Price”).  Also, this right will terminate in the event

the Company signs a letter of intent with an underwriter for the public offering

of any of the Company’s common stock and such letter of intent provides that,

following the public offering, the common stock shall be traded on a national

securities exchange or market.

 

1.2  The

number of shares to be issued shall be determined as follows:

 

First, the number of “fully paid” shares is determined

by dividing (a) the product of the number of shares sold for less that than the

Offering Price times the per share consideration actually received by the

Company for shares; by (b) the Offering Price. 

This amount is then subtracted from the total number of shares sold for

less that than the Offering Price to determine the number of shares of  “cheap stock”.  For instance, assume that the Company sold 135,000 shares for

$1.00 per share.  The number of fully

paid shares would be determined by dividing $135,000 by $1.35 or $100,000.

Therefore, the total number of shares of cheap stock issued would be 35,000.

 

1.3  The

number of shares to be issued to a 1999 Shareholder is determined as follows:

 

The product of (a) the

sum of the total outstanding stock of the Company prior to New Issuance and the

total number of cheap shares; divided by (b) the difference between 100% and

the percentage of stock owned by a 1999 Shareholder prior to the issuance of the

shares.

 

The following amounts are

then subtracted from the product determined above: The total number of shares

outstanding prior to the New Issuance, total amount of cheap stock and the

total number of shares owned by a 1999 Shareholder prior to the New Issuance.

 

For Example, assume that

prior to the issuance of the 135,000 shares at $1.00 a share, the Company had

1,000,000 shares outstanding and a 1999 Shareholder owned 50,000 or 5% of the

Company.  The total number of new shares

issued to the Shareholder would be 4,473. 

This amount was determined as follows:

 

                                                Product

of (a) total number of outstanding shares (1,000,000) plus the total number of

cheap stock (35,000) divided by (b) 95% (100% minus 5%).  This amount equals 1,089,473.

 

10

 

                                                The

following amounts are then subtracted from 1,089,473: total number of

outstanding shares (1,000,000), total amount of cheap stock (35,000) and the

total number of shares owned by 1999 Shareholder (50,000).  The amount remaining is the number of shares

to be issued to 1999 Shareholder- 4,473.

 

2.             Adjustments.  

 

2.1  In

the event the Company shall, at any time or from time to time (a) subdivide the

outstanding shares of voting or nonvoting common stock, or declare or pay a

dividend on the voting common stock payable in shares of voting or nonvoting

common stock or securities convertible into or exchangeable for shares of

voting common stock; or (b) combine the outstanding shares of voting or

nonvoting common stock, or securities convertible or exchangeable into shares

of voting or nonvoting common stock into a smaller number of shares, in each

case whether by reclassification of shares, recapitalization of the Company

(including a recapitalization effected by a merger or consolidation) or

otherwise, the Offering Price in effect immediately prior to such action shall

be adjusted by multiplying such Offering Price by a fraction, the numerator of

which is the number of shares of voting common stock outstanding immediately before

such event and the denominator of which is the number of shares of voting

common stock outstanding immediately after such event.

 

2.2  The

following provisions will be applicable:

 

(1)           In

the case of an issue or sale for cash of shares, the “consideration actually received”

by the Company therefore shall be deemed to be the amount of cash received,

before deducting therefrom any commissions or expenses paid by the Company.

 

(2)           In

the case of the issuance of additional shares of voting common stock for a

consideration other than cash or a consideration partly other than cash, the

amount of the “consideration actually received” by the Company for such shares

shall be deemed to be fair market value of such consideration as determined in

good faith by the Board of Directors.

 

3.             De

Minimis Adjustments.

 

Notwithstanding any other provisions of this Section, the Company shall

not be required to make any adjustment of the Offering Price unless such

adjustment would require an increase or decrease of at least 1% in the Offering

Price.  Any lesser adjustment shall be

carried forward and shall be made no later than the time of, and together with,

the next subsequent adjustment, which, together with any adjustment or adjustments

so carried forward, shall amount to an increase or decrease of at least 1% in

the Offering Price.

 

4.             Excluded

Shares.

 

4.1  Anything

herein to the contrary notwithstanding, 1999 Shareholders will not be issued

any additional shares nor shall there be any adjustment of the Offering Price

in the case of:

 

(1)   Securities

issued pursuant to the acquisition of all or part of another company by the

Company by merger or other reorganization, or by the purchase of or part of the

assets of 

 

11

 

another company, pursuant to a plan, arrangement or agreement approved

by the Board of Directors;

 

(2)   Securities

issued pursuant to existing options or warrants or securities issued or

issuable to officers, directors, employees or consultants of the Company pursuant

to stock grant, stock purchase and/or stock option plans or any other stock

incentive program, arrangement

or agreement approved by the Board of Directors;

 

(3)   Shares

of voting or nonvoting common stock received by the Company following

repurchase of such shares pursuant to any restricted stock purchase agreement.

 

5.             Fractional

Shares.

 

The Company shall not be obligated to deliver to 1999 Shareholders any

fractional share or shares of common stock, but in lieu thereof may make a cash

payment in respect thereof in any manner permitted by law.

 

6.             Reservation

of Shares.

 

The Company shall at all times reserve the keep available out if its

authorized and uninsured voting common stock as shall from time to time be

needed to fulfill Company’s obligations hereunder.

 

12

 

Exhibit “2.”

 

PDS

Software/Copyrights

 

Copyright Registrations

 

	

  Application to register copyright

  on

  Digital 21 Software, Version 1302

  	

   

  	

  Filed 9/27/01 by PDS

  	

   

  	

  Pending

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Application to register copyright

  on

  Bonanza Blackjack Software,

  Version 0102

  	

   

  	

  Filed 9/27/01 by PDS

  	

   

  	

  Pending

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Digital 21 Software

  Version

  1303

  	

   

  	

  Derivative of v.1302

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Digital 21 Software

  Version 1401

  	

   

  	

  Derivative of v.1302

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Digital 21 Software

  Version 1402

  	

   

  	

  Derivative of v.1302

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Bonanza

  Blackjack Software

  Version 0103

  	

   

  	

  Derivative

  of v.0102

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Bonanza

  Blackjack Software

  Version 0201

  	

   

  	

  Derivative

  of v.0102

  	

   

  	

   

  

 

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}]]