Document:

ex101.htm

ASSET PURCHASE AGREEMENT

 

LUXOR CAPITAL, LLC

And

SOURCE GOLD CORP.

 

This Asset Purchase Agreement (the "Agreement") is made as of the 22nd day of February 2016 by and between, Source Gold Corp. (“SRGL”), a Nevada corporation (“Buyer”), and Luxor Capital LLC, a Nevada Limited Liability Corporation (“Seller”).

 

PRELIMINARY STATEMENT

  

The Buyer desires to acquire, and the Seller desires to sell Intellectual Property, owned by the Seller, and the Seller desires to provide Know How regarding that Intellectual Property under the terms and conditions stated below.

The Buyer and the Seller acknowledge that upon consummation of the transaction contemplated hereunder, Seller will assign a certain asset, and provide “know how” that will enable SRGL to launch a Social Online Gaming Business, together valued at Two Million Eight Hundred Seventy Four Thousand Seven Hundred Twelve Dollars ($2,874,712.00). As consideration for the Gaming IP and the “know how”, the Buyer shall issue, or cause to be issued, two billion five hundred thousand (2,500,000,000) shares of a Source Gold Corp. Common Stock; par value $0.00001, valued at $0.0002 per share to Seller and/or its designated parties.

Additionally, Buyer shall issue, or cause to be issued, a Convertible Promissory Note to the benefit of the Seller and/or its designated parties, in the amount of Two Million Three Hundred Seventy Four Thousand Seven Hundred Twelve Dollars ($2,374,712.00) that will convert at 100% of the lowest trading price of SRGL Common Stock of the preceding seven days, or $0.0002 per share, whichever is highest.

Additionally, Buyer, or its designees, shall, in exchange for certain outstanding debts, exchange certain mining claims owned by Buyer (Schedule A) to the holders of the outstanding debt as set forth below in paragraph 1.04 of this Agreement.

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows:

	
     1.  

	
ACQUISITION OF THE ASSETS AND OTHER ACTIONS

     1.01   ACQUISITION OF THE SELLER’S ASSETS.

 

Subject to and upon the terms and conditions of this Agreement, at the closing of the transactions contemplated by this Agreement (the "Closing"), the Seller shall sell, assign and transfer all of its right, title and interest to its Gaming IP to the Buyer (collectively, the "Seller’s Assets").

 

	
1.02  

	
CONDITIONS PRECEDENT

The Asset Acquisition Agreement will only be of force and effect once the Conditions Precedent have been satisfied.

As a Condition Precedent, SRGL will have twenty working days from the signing of this agreement to meet the Conditions Precedent outlined in this document, failing which, this agreement will be Null and Void.

Parties will have the right to extend the fourteen-day period outlined above by mutual written consent.

  

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1.03  

	
CONSIDERATION FOR THE SELLER’S ASSETS.

 

In consideration for the sale and transfer of the Seller’s Assets, and subject to the terms and conditions of this Agreement, Buyer shall on the Closing Date:

(a)           Provide full set of accounts in order for Seller to perform due diligence on Buyer; and

(b)           As consideration for the Gaming IP and the “know how”, the Buyer shall issue, or cause to be issued, to Seller and/or its designated parties two billion five hundred thousand (2,500,000,000) shares of a Source Gold Corp. Common Stock; par value $0.00001, valued at $0.0002 per share.

Additionally, Buyer shall issue, or cause to be issued, a Convertible Promissory Note to the benefit of the Seller and/or its designated parties, in the amount of Two Million Three Hundred Seventy Four Thousand Seven Hundred Twelve Dollars ($2,374,712.00) that will convert at 100% of the lowest trading price of SRGL Common Stock of the preceding seven days, or $0.0002 per share, whichever is highest.

(c)           Seller shall not assign or convert the any portion of the Convertible Promissory Note until the first anniversary of the issuance.

	
1.04  

	
OUTSTANDING CONVERTIBLE DEBT EXCHANGE.

 

Certain Convertible Debt holders, Rider Capital Corp., Direct Capital Group, Inc., and Xploration, Inc. (collectively “Note Holders”) own several Convertible Promissory Notes in SRGL (“Notes”), and totaling Two Million Six Hundred Forty One Thousand Eight Hundred Ninety Seven Dollars ($2,641,897.00).  The Note Holders have agreed to sell back Two Million One Hundred Forty One Thousand Eight Hundred Ninety Seven Dollars ($2,141,897.00) of the debt to the Buyer, or its designee in exchange for the mining claims owned by the Buyer.  The Note Holders and Buyer have agreed to the following schedule of liquidation of the Note(s):

(a)           The Note Holders shall convert and liquidate up to Five Hundred Thousand Dollars ($500,000) of the $2,641,897.00 Notes within seven months, or when it has liquidated up to Three Hundred Fifty Thousand Dollars ($350,000), whichever comes first.  During the seven months the Note Holders are liquidating the $350,000, Note Holders shall have exclusive rights to be the only liquidators of said debt;

(b)           Note Holders may convert and liquidate up to 9.99% of the issued and outstanding shares of SRGL Common Stock at any one time;

(c)           Note Holders shall convert a minimum of Fifty Thousand Dollars ($50,000) of debt in any thirty-day period;

(d)           Note Holders shall have the right to convert up to One Hundred Thousand Dollars ($100,000) worth of debt in any given thirty-day period; Note Holders must get mutual agreement from the Buyer to convert more than $100,000 of the debt in any given thirty-day period;

(e)           Note Holders and Buyer agree that Note Holders shall not convert and sell more than Two Hundred Fifty Thousand Dollars ($250,000) worth of debt in any given thirty-day period;

(f)           At the end of the seventh month period of liquidation, or when at least Three Hundred Fifty Thousand Dollars ($350,000) worth of the debt has been liquidated, Buyer, or its designee, may begin the liquidation of the Two Million One Hundred Forty One Thousand Eight Hundred Ninety Seven Dollars ($2,141,897.00) worth of debt;

(g)           At the end of the seven months liquidation period, or when at least Three Hundred Fifty Thousand Dollars ($350,000) worth of the debt has been liquidated by Note Holders, Mr. Edward Aruda will tender his resignation of his position as a member of the Board of Directors;

(h)           Buyer shall set aside 28% of the liquidation in the Note Holders account to cover taxable events for Note Holders; and

(i)           Buyer shall provide an additional 15% of any portion or all of the $2,141,897.00 debt sold, to the Note Holders in exchange for processing the paperwork, the liquidation process, and/or any other actions required to facilitate the liquidation of the debt.

	
1.05  

	
MUTUAL COOPERATION

 

All parties involved in this transaction, and under the terms and conditions of this Agreement, at all times, shall cooperate, one with the other, to facilitate the liquidation of the Note Holders debt and will each, one with the other, provide, to the best of its ability, any paperwork necessary to facilitate the liquidation, in a timely and efficient manner.

  

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1.06  

	
INABILITY TO LIQUIDATE

 

In the event seven months have passed and the Note Holders, through no fault of its own, but for reasons beyond its control, have been unable to liquidate the entire amount of $500,000, all parties will mutually agree to a best course of action solution to accommodate all parties so that the intent of this Agreement can be carried out, including, but not limited to, extending the amount of time Note Holders have to liquidate the remainder, if any, of the $500,000 amount.

	
1.07  

	
SERIES B PREFERRED VOTING SHARES

 

In further consideration of the purchase of the Gaming IP and the “know how” 1,000 issued and outstanding Series B Preferred Voting Shares, currently issued in Edward Aruda’s name and evidenced by Certificate Number PRB1, shall be sent to Sharon Mitchell of SD Mitchell & Associates, PLC to hold in escrow until the end of the seven months or when at least Three Hundred Fifty Thousand Dollars ($350,000) worth of the debt, described in paragraph 1.01 (a) of this Agreement, has been liquidated by Note Holders; at which time, Certificate Number PRB1 shall be sent to President Stock Transfer to be reissued to Luxor Capital, LLC, or its designated party.

      1.08   CLOSING.

 

The Closing shall take place at the offices of Source Gold Corp., at 17:00 hours on February 23, 2016, or at such other place, time or date as may be mutually agreed upon in writing by the parties, once the Conditions Precedent have been met (the "Closing Date").

      1.09   CONSENT TO ASSIGNMENT.

 

This Agreement may not be assigned, hypothecated, transferred or contracted to another party without the express written consent of both parties.

       1.10 ADDITIONAL UNDERSTANDINGS & COMMITMENTS

Additional to all other clauses and commitments in this Agreement, both parties acknowledge and agree to the following –

	
·

	
An MOU has been signed between Parties

 

	
·

	
The terms of the MOU will form the basis of this Asset Purchase Agreement

 

	
2. 

	
REPRESENTATIONS OF THE SELLER REGARDING THE SELLER’S ASSETS.

 

The Seller represents and warrants to the Buyer as follows:

 

(a) The Seller has good and marketable title to the Seller’s Assets, free and clear of any and all covenants, conditions, restrictions, voting trust arrangements, liens, charges, encumbrances, options and adverse claims or rights whatsoever.

(b) The Seller is not a party to, subject to or bound by any agreement or any judgment, order, writ, prohibition, injunction or decree of any court or other governmental body which would prevent the execution or delivery of this Agreement by the Seller, or the transfer, conveyance and sale of the Seller’s Assets to the Buyer pursuant to the terms hereof.

(c) No broker or finder has acted for the Seller in connection with this agreement or the transactions contemplated hereby, and no broker or finder is entitled to any brokerage or finder's fee or other commissions in respect of such transactions based upon agreements, arrangements or understandings made by or on behalf of the Seller.

(d) Seller is not in default under any of the Seller Contracts, and, to the Seller's knowledge, no third party is in default under any of the Seller’s Assets. The Seller’s Assets, together with the assets held by the Company, constitutes all of the assets necessary to operate the business of the Seller and the Company as currently conducted.

  

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3. 

	
REPRESENTATIONS OF THE SELLER REGARDING THE SELLER.

 

The Seller represents and warrants to the Buyer as follows:

	
3.01

	
ORGANIZATION.

 

The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and has all requisite power and authority (corporate and other) to own its properties, to carry on its business as now being conducted, to execute and deliver this Agreement and the agreements contemplated herein, and to consummate the transactions contemplated hereby and thereby.

	
3.02

	
THE COMPANY.

 

Schedule 3.02 attached hereto sets forth: (i) the name of the Company; (ii) the jurisdiction of incorporation of the Company; (iii) the names of the officers and directors of each Company; and (iv) the jurisdictions in which the Company is qualified or holds licenses to do business. The Company is an LLC duly organized and validly existing and in good standing under the laws of Nevada and has all requisite power and authority to own its properties and carry on its business as now being conducted.

 

	
3.03

	
AUTHORIZATION.

 

The execution and delivery by the Seller of this Agreement and the agreements provided for herein, and the consummation by the Seller of all transactions contemplated hereunder and thereunder by the Seller, have been duly authorized by all requisite corporate action. This Agreement has been duly executed by the Seller. This Agreement and all other agreements and obligations entered into and undertaken in connection with the transactions contemplated hereby to which the Seller is a party constitute the valid and legally binding obligations of the Seller, enforceable against it in accordance with their respective terms. The execution, delivery and performance by the Seller of this Agreement and the agreements provided for herein, and the consummation by the Seller of the transactions contemplated hereby and thereby, will not, with or without the giving of notice or the passage of time or both, (a) violate the provisions of any law, rule or regulation applicable to the Seller; (b) violate the provisions of the Certificate of Incorporation or Bylaws of the Seller; (c) violate any judgment, decree, order or award of any court, governmental body or arbitrator; or (d) conflict with or result in the breach or termination of any term or provision of, or constitute a default under, or cause any acceleration under, or cause the creation of any lien, charge or encumbrance upon the properties or assets of the Company pursuant to, any indenture, mortgage, deed of trust, security agreement or other instrument or agreement to which any of the Companies is a party or by which any of the Companies or any of its properties is or may be bound.

	
3.04

	
ABSENCE OF UNDISCLOSED LIABILITIES.

 

Except as and to the extent (a) reflected and reserved against in the Current Balance Sheets, or (b) incurred in the ordinary course of business after the date of the Current Balance Sheets and not material in amount, either individually or in the aggregate, none of the Company has any liability or obligation, secured or unsecured, whether accrued, absolute, contingent, unasserted or otherwise, which, either individually or in the aggregate, is material to the condition (financial or otherwise) of the assets, properties, business or prospects of such Company.

	
3.05

	
LITIGATION.

 

There is no action, suit or proceeding to which the Seller is a party (either as a plaintiff or defendant) pending or threatened before any court or governmental agency, authority, body or arbitrator and, to the best knowledge of the Seller, there is no basis for any such action, suit or proceeding; (b) the Seller, to the best of its knowledge, no officer, director or employee of the Seller, has been permanently or temporarily enjoined by any order, judgment or decree of any court or any governmental agency, authority or body from engaging in or continuing any conduct or practice in connection with the business, assets, or properties of the Seller; and (c) there is not in existence on the date hereof any order, judgment or decree of any court, tribunal or agency enjoining or requiring the Seller to take any action of any kind with respect to its business, assets or properties.

 

3.06          COMPLIANCE WITH AGREEMENTS AND LAWS.

 

The Seller has all requisite licenses, permits and certificates from all local authorities necessary to conduct its respective business and to own and operate its assets (collectively, the "Permits"). The Seller is not in violation in any material respect of any law, regulation or ordinance relating to its properties. The Seller has not violated, and on the date hereof will not violate any local or foreign laws, regulations or orders (including, but not limited to, any of the foregoing relating to employment discrimination, immigration, occupational safety, or corrupt practices), the enforcement of which would have a Material Adverse Effect.

 

 

  

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3.07 

	
FULL DISCLOSURE.

 

There are no materially misleading misstatements in any of the representations and warranties made by Seller in this Agreement, the Exhibits or Schedules to this Agreement, or any certificates delivered by Seller pursuant to this Agreement and Seller has not omitted to state any fact necessary to make statements made herein or therein not materially misleading.

	
4. 

	
REPRESENTATIONS OF THE BUYER REGARDING THE BUYER

 

The Buyer represents and warrants to the Seller that:

	
4.01

	
ORGANIZATION AND AUTHORITY.

 

The Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and has all requisite power and authority (corporate and other) to own its properties and to carry on its business as now being conducted.  The Buyer has full power to execute and deliver this Agreement and the agreements contemplated herein, and to consummate the transactions contemplated hereby and thereby.

	
4.02

	
CAPITALIZATION OF THE Buyer

 

On the date hereof, the Buyer's authorized capital stock consists of 8,000,000,000 shares of Common Stock, US $0.00001 par value, of which 201,556,400 shares are issued and outstanding, with 19,999,000 preferred A stock authorized. All of the outstanding shares of capital stock of the Buyer have been and on the Closing Date will be duly and validly issued and are fully paid and non-assessable.

	
4.03

	
AUTHORIZATION.

 

The execution and delivery of this Agreement by the Buyer, and the agreements provided for herein, as well as the transactions contemplated herein, have been duly authorized by all requisite corporate action. This Agreement and all such other agreements and written obligations entered into and undertaken in connection with the transactions contemplated hereby constitute the valid and legally binding obligations of the Buyer, enforceable against the Buyer in accordance with their respective terms. The execution, delivery and performance of this Agreement and the agreements provided for herein, and the consummation by the Buyer of the transactions contemplated hereby and thereby, will not, with or without the giving of notice or the passage of time or both, (a) violate the provisions of any law, rule or regulation applicable to the Buyer; (b) violate the provisions of the Buyer’s Certificate of Incorporation or Bylaws; (c) violate any judgment, decree, order or award of any court, governmental body or arbitrator; or (d) conflict with or result in the breach or termination of any term or provision of, or constitute a default under, or cause any acceleration under, or cause the creation of any lien, charge or encumbrance upon the properties or assets of the Buyer pursuant to, any indenture, mortgage, deed of trust or other agreement or instrument to which the Buyer is a party or by which the Buyer is or may be bound.

 

	
4.04

	
LITIGATION.

 

There is no judgment, suit, proceeding, action, or legal administrative, arbitration or order,  or governmental  investigation  pending or, to the knowledge of the Buyer,  threatened, to which the Buyer is a party which, considered individually or in the aggregate, would reasonably be expected to materially  impair the Buyer's  ability to perform its obligations under this Agreement.

	
4.05

	
BROKER'S FEE.

 

No broker or finder has acted for the Buyer in connection with this Agreement or the transactions contemplated hereby, and no broker or finder is entitled to any brokerage or finder's fee or other commissions in respect of such transactions based upon agreements, arrangements or understandings made by or on behalf of the Buyer.

 

	
5.

	
CONFIDENTIALITY.

 

The Seller recognizes and acknowledges that by reason of the terms contemplated in this Agreement, has had access to confidential information relating to the Buyer’s business, including, without limitation, information and knowledge pertaining to products and services offered, innovations, ideas, plans, trade secrets, proprietary information, advertising, sales methods and systems, sales and profit figures, customer and client lists, and relationships with dealers, customers, clients, suppliers and others who have business dealings with the Business ("Confidential Information"). The Seller acknowledges that such Confidential Information is a valuable and unique asset and covenants that it will not disclose any such Confidential Information after Closing to any person for any reason whatsoever, unless such information is (a) within the public domain through no wrongful act of the Seller, (b) has been rightfully received from a third party without restriction and without breach of this Agreement, (c) is required by law to be disclosed or is disclosed for purposes of defending claims related to the Seller in a manner designed to protect the confidentiality of the Confidential Information; or (d) represents historical information reasonably required by a prospective purchaser of the Seller.

 

  

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6. 

	
NOTICES.

 

Any notices or other communications required or permitted hereunder shall be sufficiently given if delivered personally or sent by telex, federal express, registered or certified mail, postage prepaid, addressed as follows or to such other address of which the parties may have given notice:

To the Buyer:                        

SOURCE GOLD CORP.

4264 Lady Burton Street,

Las Vegas, NV 89129

432-242-1325

 

To the Seller:

LUXOR CAPITAL LLC

3651 Lindell Road, Suite D

Las Vegas, NV 89103

Unless otherwise specified herein, such notices or other communications shall be deemed received (a) on the date delivered, if delivered personally, or (b) three business days after being sent, if sent by registered or certified mail.

	
7. 

	
SUCCESSORS AND ASSIGNS.

 

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Buyer, on the one hand, and the Seller, on the other hand, may not assign their respective obligations hereunder without the prior written consent of the other party; provided, however, that the Buyer may assign this Agreement, and its rights and obligations hereunder, to a subsidiary or Affiliate of the Buyer. Any assignment in contravention of this provision shall be void. No assignment shall release the Buyer or the Seller from any obligation or liability under this Agreement.

 

	
8. 

	
ENTIRE AGREEMENT; AMENDMENTS; ATTACHMENTS

(a)           This Agreement, all Schedules and Exhibits hereto, and all agreements and instruments to be delivered by the parties pursuant hereto represent the entire understanding and agreement between the parties with respect to the subject matter hereof and supersede all prior oral and written and all contemporaneous oral negotiations, commitments and understandings between such parties. The Buyer, by the consent of its Directors or officers, and the Seller may amend or modify this Agreement, in such manner as may be agreed upon, by a written instrument executed by the Buyer and the Seller.

(b)           If the provisions of any Schedule or Exhibit to this Agreement are inconsistent with the provisions of this Agreement, the provisions of the Agreement shall prevail.  The Exhibits and Schedules attached hereto or to be attached hereafter are hereby incorporated as integral parts of this Agreement.

	
9. 

	
SEVERABILITY.

 

Any provision of this Agreement which is invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement invalid, illegal or unenforceable in any other jurisdiction.

 

 

 

  

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10. 

	
INVESTIGATION OF THE PARTIES.

 

All representations and warranties contained herein which are made to the best knowledge of a party shall require that such party make reasonable investigation and inquiry with respect thereto to ascertain the correctness and validity thereof.

	
11.

	
EXPENSES.

 

Except as otherwise expressly provided herein, the Buyer, on the one hand, and the Seller, on the other hand, will pay all fees and expenses (including, without limitation, legal and accounting fees and expenses) incurred by them in connection with the transactions contemplated hereby. All fees or expenses incurred in connection with this transaction by the Seller shall be allocated to and borne by the Seller.

	
12. 

	
GOVERNING LAW.

 

This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada.

 

	
 

13.             SECTION HEADINGS.

	  

 

The section headings are for the convenience of the parties and in no way alter, modify, amend, limit, or restrict the contractual obligations of the parties.

	
14. 

	
MODIFICATIONS.

 

This Agreement can be modified only by a written agreement duly signed by each party.

	
 

15. 

	
 

COUNTERPARTS.

 

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall be one and the same document.

 

16.               DEFAULT

 

In the event that either Party(s) defaults on this Agreement, defaulting Party shall have 15 days to cure the default.  In the event that the default is not cured in 15 days, or if it is found to be incurable, the transaction contemplated under this Agreement shall “unwind” in accordance with the Unwind Agreement entered into and executed by all Parties.

  

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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of and on the date first above written.

	
BUYER:

	
    SOURCE GOLD CORP.

 

	  	  
	  	
By:

	
 /s/Edward Aruda

	  	  	
Edward Aruda, Chief Executive Officer

	  	  
	  	  
	
SELLER:

	
    LUXOR CAPITAL, LLC.

 

	  	  
	  	
By:

	
/s/Anthony B Goodman

	  	  	
Anthony B Goodman, Managing Member

 

 

	  	  

 

NOTE HOLDER:      DIRECT CAPITAL GROUP, INC.

 

 

      By: _/s/Jon Fullenkamp______________

Jon Fullenkamp, President

NOTE HOLDER:      RIDER CAPITAL CORP.

     By:  __/s/Jon Fullenkamp_______________

  Jon Fullenkamp, President

NOTE HOLDER:      XPLORATION, INC.

     By: _/s/Jon Fullenkamp_______________

Jon Fullenkamp, President

 

  

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SCHEDULE A – MINING CLAIMS

Vulture Gold Mine

Thunder Bay Mine

KRK West Mine

  

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SCHEDULE 3.02

SOURCE GOLD CORP

Established in the State of Nevada June 4th, 2008

Active and in Good Standing with the State of Nevada

Chairman – Anthony B Goodman

CEO – Anthony B Goodman

President – Anthony B Goodman

Secretary – Anthony B Goodman

Treasurer – Anthony B Goodman

CFO – Ms. Weiting (Cathy) Feng

Directors

Anthony B Goodman

Ms. Weiting (Cathy) Goodman

Edward J Aruda

  

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GAMING IP

Luxor has developed and owns a proprietary advanced software platform and support backend for the online social gambling industry, targeting existing online gaming operators.

The proprietary gaming software platform and support backend allows operators to utilize a diverse selection of social gaming content from leading providers via one software platform and incorporates state of the art loyalty and monetization solutions. The software creates a social collaborative environment and leverages off the rapidly growing social media networks.

 

 

With Luxor’s long standing relationships with Licensed Junket Operators in Asia, they have an intimate knowledge of the Junket Operations that account for over 70% of the casino revenues in Macau which currently dominates the worlds gaming market. These relationships will ensure rapid and extensive distribution and utilization.

The Luxor management and operations are located in Sydney, Australia, Manila, Philippines and Las Vegas Nevada with additional offices strategically located to support and market the Social Gaming Business. Further, Luxor owns the distribution rights for the world’s leading gaming content that will allow it to build a solid Social Gaming business with an experienced team of online gaming operators and has been setup with the sole intention of focusing on the rapidly evolving Asian and US Social Gaming Market.

  

11Exhibit

Exhibit 10.1

FIFTEENTH AMENDMENT TO NINTH AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER 

This FIFTEENTH AMENDMENT AND WAIVER dated as of February 29, 2016 (this "Amendment"), to that certain NINTH AMENDED AND RESTATED CREDIT AGREEMENT, as amended (as so amended, the "Credit Agreement"), dated as of December 31, 2003, is among GULF ISLAND FABRICATION, INC., a Louisiana corporation ("Borrower"), GULF ISLAND, L.L.C., a Louisiana limited liability company, DOLPHIN SERVICES, L.L.C., a Louisiana limited liability company and successor by merger to Dolphin Services, Inc., SOUTHPORT, L.L.C., a Louisiana limited liability company and successor by merger to Southport, Inc., GULF ISLAND MINDOC COMPANY, L.L.C. (formerly Vanguard Ocean Services, L.L.C.), a Louisiana limited liability company, GULF MARINE FABRICATORS, L.P. (formerly G.M. FABRICATORS, L.P. and NEW VISION L.P.), a Texas limited partnership, GULF MARINE FABRICATORS GENERAL PARTNER, L.L.C., (formerly NEW VISION GENERAL PARTNER, L.L.C.), a Louisiana limited liability company, GULF MARINE FABRICATORS LIMITED PARTNER, L.L.C. (formerly NEW VISION LIMITED PARTNER, L.L.C.), a Louisiana limited liability company, GULF ISLAND MARINE FABRICATORS, L.L.C., a Louisiana limited liability company, DOLPHIN STEEL SALES, L.L.C., a Louisiana limited liability company, and GULF ISLAND SHIPYARDS, L.L.C., a Louisiana limited liability company, as Guarantors, WHITNEY BANK, a Louisiana state chartered bank (formerly known as Hancock Bank of Louisiana, successor by merger to Whitney National Bank) ("Whitney"), and JPMORGAN CHASE BANK, N.A. (successor by merger to BANK ONE, N.A., Chicago) in its individual capacity ("JPMorgan") (Whitney and JPMorgan, each a "Lender" and collectively the "Lenders") and JPMorgan, as Agent and LC Issuer. 
WHEREAS, the Borrower desires to amend the Credit Agreement to, among other things, extend the Facility Termination Date under the Credit Agreement, and the Lenders are so willing, upon and subject to the terms and conditions hereof;

WHEREAS, the Borrower also has requested and Lenders have agreed to certain waivers concerning financial covenant compliance;

WHEREAS, capitalized terms used herein without definition shall have the respective meanings given them in the Credit Agreement;

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders, the Agent and the LC Issuer hereby agree as follows: 

I. WAIVERS

1.    To the extent there are any Default(s) pursuant to Section 6.22 of the Credit Agreement for the quarter ending December 31, 2015, the Lenders hereby grant a one-time waiver of such Default(s).  Such waiver shall not constitute either an amendment to the Credit Agreement 

or a precedent for any subsequent requested waiver of these or any other covenants or other provisions of the Credit Agreement.

II. AMENDMENTS

After giving effect to the waiver set forth above: 

1.    Concerning Definitions.  Article I of the Credit Agreement is hereby amended as follows:

(a)    The definition of “Applicable Margin” is hereby deleted in its entirety and replaced with the following: 

“Applicable Margin” means, with respect to Eurodollar Advances, 2.00% per annum. 

(b)    The definition of “Facility Termination Date” is amended by deleting “February 29, 2016” and replacing it with “January 2, 2017”.

(c)    The following definitions are added as alphabetically appropriate:

“Capital Expenditures” means, without duplication, any expenditure or commitment to expend money for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP. 
 
“Chevron Letters of Credit” means the following Facility LCs, as each may be amended, renewed or extended from time to time: (i) CPCS-795174 issued in favor of Chevron USA, Inc. in the amount of $2,877,390, and (ii) CPCS-812643 issued in favor of Chevron North America E&P in the amount of $16,035,664.

 “EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for such period, (ii) income tax expense for such period, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary charges for such period and (v) any other non-cash charges for such period (but excluding any non-cash charge in respect of an item that was included in Net Income in a prior period), minus (b) without duplication and to the extent included in Net Income, any extraordinary gains and any non-cash items of income for such period, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

“Funded Indebtedness” means, at any date, the aggregate principal amount of all Indebtedness (including, for the avoidance of doubt, obligations, contingent or otherwise, as an account party in respect of letters of credit and letters of guaranty), 

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minus the sum of (a) accounts payable arising from the purchase of goods and services in the ordinary course of business, (b) accrued expenses or losses, and (c) deferred revenues or gains, determined for the Borrower and its Subsidiaries on a consolidated basis at such date, in accordance with GAAP.  

“Funded Indebtedness to EBITDA Ratio” means, at any date, the ratio of (a) (i) Funded Indebtedness for such date plus (ii) LC Exposure for such date to (b) EBITDA for the most recent 4 fiscal quarters ending on such date; provided, that at March 31, 2016, June 30, 2016 and September 30, 2016, the period of calculation shall begin on January 1, 2016 and end on such date and the calculation then shall be annualized.

“Interest Coverage Ratio” means, for any period, the ratio of (a) (i) EBITDA for such period minus (ii) Capital Expenditures for such period minus minus (iii) dividends or distributions for such period, to (b) cash Interest Expense for such period, all calculated for the Borrower and its Subsidiaries on a consolidated basis for such period in accordance with GAAP.
 “Interest Expense” means, with reference to any period, total interest expense (including that attributable to Capital Lease Obligations) of the Borrower and its Subsidiaries for such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptances and net costs under Rate Management Transactions in respect of interest rates, to the extent such net costs are allocable to such period in accordance with GAAP), calculated for the Borrower and its Subsidiaries on a consolidated basis for such period in accordance with GAAP.
“LC Disbursement” means any payment made by the LC Issuer pursuant to a Facility LC.
 
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all Facility LCs outstanding at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time.     

“Net Income” means, for any period, the consolidated net income (or loss) determined for the Borrower and its Subsidiaries, on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary, and (b) the income (or deficit) of any Person (other than a Subsidiary) in which the Borrower or any Subsidiary has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary in the form of dividends or similar distributions. 

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2.    Concerning Article II – The Credits.

(a)    Section 2.5 of the Credit Agreement is hereby amended by deleting the reference “0.25% per annum” in the first sentence thereof and replacing it with “0.50% per annum”.

(b)    Section 2.5 of the Credit Agreement is hereby further amended by adding the following sentence thereto: 

Notwithstanding anything herein or otherwise to the contrary, with respect to the commitment fee due on March 31, 2016, such fee shall be calculated as follows: (i) from January 1, 2016 through February 28, 2016, at 0.25% per annum, and (ii) from February 29, 2016 through March 31, 2016, at 0.50% per annum.
 
(c)    Section 2.19.4 of the Credit Agreement is hereby amended by deleting the first sentence thereof in its entirety and replacing it with the following: 

The Borrower shall pay to the Agent, for the account of the Lenders ratably in accordance with their respective Pro Rata Shares, with respect to each Facility LC, a letter of credit fee (the “LC Fee”) at the rate of 2.00% per annum on the average daily undrawn stated amount under such Facility LC, such fee to be payable in arrears on the last day of each quarter, beginning with the first quarter after such Facility LC is issued and ending on the expiry date of such Facility LC; provided, that the LC Fee for the Chevron Letters of Credit shall be 1.50% per annum instead of 2.00% per annum.  Notwithstanding anything herein or otherwise to the contrary, with respect to the LC Fee due on March 31, 2016, such fee shall be calculated as follows: (i) from January 1, 2016 through February 28, 2016, at the LC Fee rate applicable prior to giving effect to the Fifteenth Amendment to this Agreement, and (ii) from February 29, 2016 through March 31, 2016, at the rate set forth in the preceding sentence. 

3.    Concerning Article VI – Covenants.

(a)    Section 6.2 of the Credit Agreement is hereby amended by adding the following sentence thereto:

Notwithstanding anything herein to the contrary, the aggregate maximum of Loans outstanding at any time for general corporate purposes (as opposed to the aggregate amount of Facility LCs issued) shall not exceed $20,000,000.  

(b)    Section 6.22 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

6.22.  Financial Covenants.

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6.22.1  Minimum Tangible Net Worth.  The Borrower will at all times maintain a Consolidated Net Worth of not less than the sum of (i) $250,000,000, plus (ii) 50% of Consolidated Net Income earned in each fiscal quarter beginning with the fiscal quarter ending December 31, 2015 (without deduction for losses), plus (iii) 100% of all net proceeds of any issuance of any stock or other equity after deducting of any fees, commissions, expenses and other costs incurred in such offering.  
6.22.2  Funded Indebtedness to EBITDA Ratio.  Beginning March 31, 2016 and continuing thereafter on the last day of each quarter, the Borrower will not permit the Funded Indebtedness to EBITDA Ratio to be greater than 3.00 to 1.00.  
6.22.3    Interest Coverage Ratio.  Beginning March 31, 2016 and continuing thereafter on the last day of each quarter, the Borrower will not permit the Interest Coverage Ratio for the most recent 4 fiscal quarters ending on such date to be less than 2.00 to 1.00; provided, that at March 31, 2016, June 30, 2016 and September 30, 2016, the period of calculation shall be for the most recent 1, 2 and 3 fiscal quarters ending on such dates, respectively.
4.    Except to the extent its provisions are specifically amended, modified or superseded by this Amendment, the representations, warranties and affirmative and negative covenants of the Borrower and the Guarantors contained in the Credit Agreement are incorporated herein by reference for all purposes as if copied herein in full. The Borrower and the Guarantors hereby restate and reaffirm each and every term and provision of the Credit Agreement, as amended, including, without limitation, all representations, warranties and affirmative and negative covenants. Except to the extent its provisions are specifically amended, modified or superseded by this Amendment, the Credit Agreement, as amended, and all terms and provisions thereof shall remain in full force and effect, and the same in all respects are confirmed and approved by the parties hereto.
5.    Borrower and each Guarantor acknowledge and agree that this Amendment shall not be considered a novation or a new contract. Borrower and each Guarantor acknowledge that all existing rights, titles, powers, Liens, security interests and estates in favor of the Agent for the benefit of the Lenders constitute valid and existing obligations and Liens and security interests as against the Collateral in favor of the Agent for the benefit of the Lenders. Borrower and each Guarantor confirm and agree that (a) neither the execution of this Amendment nor the consummation of the transactions described herein shall in any way effect, impair or limit the covenants, liabilities, obligations and duties of the Borrower and each Guarantor under the Loan Documents, and (b) the obligations evidenced and secured by the Loan Documents continue in full force and effect.  Each Guarantor hereby further confirms that it unconditionally guarantees to the extent set forth in the Guaranty the due and punctual payment and performance of any and all amounts and obligations owed the Borrower under the Credit Agreement or the other Loan Documents.
6.    Borrower and each Guarantor that has executed or is executing any mortgage, security agreement, pledge, or other security device as security for the obligations under the Credit 

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Agreement hereby acknowledges and affirms that such security remains in effect for the Obligations. Further, Borrower and each Guarantor agree to execute such amendments, modifications, and additions as may be requested by Agent from time to time.  Without limiting the generality of the foregoing:
(i)    Reference is hereby made to the security agreements that the Borrower and each Guarantor have executed in connection with the Credit Agreement.  Borrower and each Guarantor hereby acknowledge and affirm that “Obligations” as defined in each security agreement shall and does include, without limitation, Banking Services Obligations and therefore the indebtedness secured by liens granted thereby includes Banking Services Obligations.  
(ii)    Reference is hereby made to the guaranties provided by each of the Borrower and the Guarantors in connection with the Credit Agreement.  Borrower and each Guarantor hereby acknowledge and affirm that each has guaranteed the payment and performance of all of the Obligations, including without limitation Banking Services Obligations.
7.    Borrower agrees to pay within ten (10) days of receipt of invoices therefor, in immediately available funds, all of the internal and external costs and expenses incurred by Agent in connection with this Amendment, including, without limitation, inside and outside attorneys, processing, documentation, title, filing, recording costs, expenses (including but not limited to, appraisal expenses), and fees.
8.    From and after the effective date of this Amendment, the Borrower shall indemnify the Agent, and hold it harmless from, any and all losses, claims, damages, liabilities and related expenses, including Taxes and the fees, charges and disbursements of any counsel for any of the foregoing, arising in connection with the Agent’s treating, for purposes of determining withholding Taxes imposed under FATCA, the Credit Agreement as qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).
9.    This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
10.     THIS AMENDMENT AND THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF LOUISIANA, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

[The remainder of this page is intentionally blank.]

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IN WITNESS WHEREOF, the Borrower, the Guarantors, the Lenders, the LC Issuer and the Agent have executed this Amendment as of the date first above written.
BORROWER:

GULF ISLAND FABRICATION, INC.

By:    /s/ Jeffrey Favret            
      Name:    Jeffrey Favret
      Title:    Executive Vice President, CFO,  
    Secretary and Treasurer

GUARANTORS:

GULF ISLAND, L.L.C.

By Gulf Island Fabrication, Inc., its sole member

By:       /s/ Jeffrey Favret            
        Name:    Jeffrey Favret
Title:    Executive Vice President, CFO,  
    Secretary and Treasurer

DOLPHIN SERVICES, L.L.C.,
successor by merger to Dolphin Services, Inc.

By Gulf Island Fabrication, Inc., its Manager

By:       /s/ Jeffrey Favret            
        Name:    Jeffrey Favret
Title:    Executive Vice President, CFO,  
        Secretary and Treasurer

[Signatures continue on following page.]

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GUARANTORS:  (cont’d)

SOUTHPORT, L.L.C.

By Gulf Island, L.L.C., its sole member

By Gulf Island Fabrication, Inc., its sole 
member

By:    /s/ Jeffrey Favret            
     Name:    Jeffrey Favret
     Title:    Executive Vice President, CFO,  
    Secretary and Treasurer

GULF ISLAND MINDOC COMPANY, L.L.C.

By Gulf Island Fabrication, Inc., its Manager

By:          /s/ Jeffrey Favret            
        Name:    Jeffrey Favret
Title:    Executive Vice President, CFO,  
        Secretary and Treasurer 

GULF MARINE FABRICATORS, L.P.
(formerly G.M. FABRICATORS, L.P. and NEW VISION, L.P.)

By Gulf Marine Fabricators General Partner,
      L.L.C., its General Partner

By:         /s/ Jeffrey Favret            
Name:  Jeffrey Favret
Title:    Manager

[Signatures continue on following page.]

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GUARANTORS:  (cont’d)

GULF MARINE FABRICATORS GENERAL 
PARTNER, L.L.C.
(Formerly NEW VISION GENERAL PARTNER, L.L.C.)

By:    /s/ Jeffrey Favret            
      Name:  Jeffrey Favret
      Title:    Manager

GULF MARINE FABRICATORS LIMITED PARTNER, L.L.C.
(Formerly NEW VISION LIMITED PARTNER, L.L.C.)

By Gulf Island Fabrication, Inc., its Manager

By:        /s/ Jeffrey Favret            
        Name:    Jeffrey Favret
Title:    Executive Vice President, CFO,  
        Secretary and Treasurer

GULF ISLAND MARINE FABRICATORS,  L.L.C.

By Gulf Island Fabrication, Inc., its sole member

By:         /s/ Jeffrey Favret            
        Name:    Jeffrey Favret
Title:    Executive Vice President, CFO,  
        Secretary and Treasurer

[Signatures continue on following page.]

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GUARANTORS:  (cont’d)

DOLPHIN STEEL SALES, L.L.C.

By Gulf Island Fabrication, Inc., its Manager

By:         /s/ Jeffrey Favret            
        Name:    Jeffrey Favret
Title:    Executive Vice President, CFO,  
        Secretary and Treasurer

GULF ISLAND SHIPYARDS, LLC

By Gulf Island Fabrication, Inc., its sole member

By:         /s/ Jeffrey Favret            
        Name:    Jeffrey Favret
Title:    Executive Vice President, CFO,  
    Secretary and Treasurer

[Signatures continue on following page.]

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LENDERS:

Commitment: $40,000,000.00        JPMORGAN CHASE BANK, N.A.,
Successor by merger to Bank One, NA, Chicago, Individually, as LC Issuer, and as Agent

By:    /s/ Donald Hunt            
      Donald Hunt, Officer

[Signatures continue on following page.]

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LENDERS: (cont'd)

Commitment:  $40,000,000.00        WHITNEY BANK

By:    /s/ Josh J. Jones            
      Josh J. Jones
      Area President South Central Region

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