Document:

AMENDMENT TO PROMISSORY NOTE

Exhibit

10.2

 

AMENDMENT TO EXECUTIVE

STOCK PLEDGE, SECURITY AND

RETENTION AGREEMENT

 

This agreement is to amend certain provisions of that

certain Executive Stock Pledge, Security and Retention Agreement dated

May 9, 2001 (the “Pledge Agreement”) from Brian Derr (“Executive”) and

payable to Apropos Technology, Inc., an Illinois corporation (the

“Company”).  Terms used herein but not

defined herein shall have the meanings ascribed to such terms as set forth in

the Pledge Agreement.

 

The reference in the second sentence of Section 2 of

the Pledge Agreement to one year from the date hereof is replaced with two

years from the date hereof.

 

Agreed and accepted to this 25th day of March, 2002.

 

	

  /s/ Brian Derr

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Apropos Technology, Inc.

  
	

  Executive

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  By:

  	

  /s/ Frank Leonard

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Its: Chief Financial Officer

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Title:Exhibit 10

Exhibit 10.1

 

EXCHANGE

AGREEMENT

 

BY

AND BETWEEN

 

TRANS

WORLD CORPORATION

 

AND

 

VALUE PARTNERS, LTD.,

 

ANASAZI PARTNERS LIMITED PARTNERSHIP,

 

NEW GENERATION LIMITED PARTNERSHIP,

 

LUCILLE FRIEDSON, CHRISTOPHER BAKER,

 

ADRIENNE BAKER,

 

THE BAKER VENTURE FUND I

 

 

 

i)                      TABLE OF

CONTENTS

 

	

  1.

  	

  Exchange of Bonds for

  Common.

  	

   

  
	

   

  	

   

  	

   

  
	

  2.

  	

  Conditions to

  Closing of the Exchange.

  	

   

  
	

   

  	

   

  	

   

  
	

  3.

  	

  Representations

  and Warranties of the Company.

  	

   

  
	

   

  	

   

  	

   

  
	

  4.

  	

  Representations

  and Warranties of the Bondholders.

  	

   

  
	

   

  	

   

  	

   

  
	

  5.

  	

  Covenants

  of the Company.

  	

   

  
	

   

  	

   

  	

   

  
	

  6.

  	

  Notices.

  	

   

  
	

   

  	

   

  	

   

  
	

  7.

  	

  Choice of Law/Jurisdiction.

  	

   

  
	

   

  	

   

  	

   

  
	

  8.

  	

  Survival of

  Representations.

  	

   

  
	

   

  	

   

  	

   

  
	

  9.

  	

  Assignment.

  	

   

  
	

   

  	

   

  	

   

  
	

  10.

  	

  Entire

  Agreement; Amendments and Waivers.

  	

   

  
	

   

  	

   

  	

   

  
	

  11.

  	

  Invalidity.

  	

   

  
	

   

  	

   

  	

   

  
	

  12.

  	

  Further

  Assurances.

  	

   

  
	

   

  	

   

  	

   

  
	

  13.

  	

  Counterparts.

  	

   

  
	

   

  	

   

  	

   

  
	

  14.

  	

  Indemnification.

  	

   

  
	

   

  	

   

  	

   

  
	

  15.

  	

  Counterparts;

  Facsimile; Amendments.

  	

   

  
	

   

  	

   

  	

   

  
	

  16.

  	

  Title

  and Subtitles.

  	

   

  
	

   

  	

   

  	

   

  
	

  17.

  	

  Replacement of

  Certificates.

  	

   

  
	

   

  	

   

  	

   

  
	

  18.

  	

  Restrictive Legend

  on Certificates

  	

   

  
	

   

  	

   

  	

   

  
	

  SCHEDULE A

  	

   

  
	

   

  	

   

  	

   

  
	

  SCHEDULE B

  	

   

  
				

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF

1933, AS AMENDED, OR ANY STATE SECURITIES ACT, AND MAY NOT BE TRANSFERRED

WITHOUT REGISTRATION UNDER SUCH ACTS OR PURSUANT TO AN OPINION OF COUNSEL

SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.

 

ii)                   EXCHANGE

AGREEMENT

 

This

Exchange Agreement (the “Agreement”) is made as of the 31st day of December,

2001, (the “Effective Date”) by and between Trans World Corporation, a Nevada

corporation (the “Company”) and Value Partners, Ltd., Anasazi 

 

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Partners Limited Partnership, New Generation Limited Partnership,

Lucille Friedson, Christopher Baker, Adrienne Baker and Baker Venture Fund I

(collectively the “Bondholders”).

 

Whereas

the Company and its wholly-owned subsidiary, Trans World Gaming of Louisiana,

Inc., a Louisiana corporation (collectively the “Company”), have issued the 12%

senior secured bonds due December 31, 2005 in the principal sum of $4.8 million

dollars (the “Bonds”) to the Bondholders in the principal amounts together with

unpaid interest due as indicated on Schedule A; and

 

Whereas the Bondholders now desire to surrender and exchange their

Bonds for 37,233,334 shares of common

stock, par value $.001 per share of the Company, in the aggregate, (the

“Common”);

 

NOW, THEREFORE, for good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged,

the parties hereto agree as follows:

 

1.   Exchange of Bonds for Common.

 

The Company and the Bondholders agree to

exchange the Bonds for the Common as set forth on Schedule A.  The exchange shall be deemed effective on

the Closing Date, as defined below. On the Closing Date, each outstanding Note

shall be deemed to represent the number of shares of Common into which it may

be exchanged and shall no longer represent debt of the Company.  Each Bondholder agrees to surrender its Note

to the Company not less than ten (10) Business Days following written

notification that all conditions (other than delivery of Notes) set forth in

Section 2 have been met.  The number of

shares of Common to be received shall be determined by dividing the sum of the

Bond Amount for each Bondholder and the Accrued Interest therefore as of December

31, 2001, as set forth on Schedule A hereto, by $.18 (the “Exchange Price”).

 

2.  Conditions to Closing of the Exchange.

 

Upon the terms and satisfaction of each of

the following conditions, and in reliance upon the representations and

warranties contained in this Agreement and the Schedules attached and made a

part of this Agreement, the Company and the Bondholders agree to exchange the

Bonds for the Common on the Business Day which is  the last day the conditions

set forth in this Section 2 are satisfied (the “Closing Date”). The Company may

waive the timely delivery of Notes as a condition to Closing. In the event the

Closing Date has not occurred by February 28, 2002, this Agreement shall be

deemed terminated at the written election of any Bondholder or the Company.  For purposes of this Agreement, a “Business

Day” shall be any day other than Saturday or Sunday or other day on which

commercial banks in the city of New York are authorized or required by law to

remain closed.

 

(a)           Acceptance

by the Company and all of the Bondholders of a satisfactory Agreement

(including the Schedules annexed hereto), due execution by all parties of this

Agreement  and the

delivery of each Note;

 

(b)           All representations and warranties of

the Company and the Bondholders contained herein and in all Exhibits annexed

hereto shall remain true and correct in all material respects as of the Closing

Date;

 

(c)           The Company shall have obtained all

permits and qualifications required by any applicable state law for the

issuance of the Common, or shall have the availability of exemptions

therefrom.  At the Closing Date, all

laws and regulations to which Bondholders and the Company are subject shall

legally permit the issuance of the Common and cancellation of the Bonds;

(d)           Delivery of any third party consents and

satisfactory evidence of the resolution of any conflicts as set forth on

Schedule B.

 

On

the Closing Date, the Bondholders will cease to have any right to payment of

principal and interest on the Bonds in whole or in part or any claim to the

security for the Bonds, and will become the holders of the Common with all

rights and preferences in connection therewith.

 

3.    Representations

and Warranties of the Company.

 

(a)           Organization

and Good Standing.  The Company is a

corporation duly incorporated and validly existing and in good standing under

the laws of the State of Nevada, with the full authority to issue the Common

and

 

3

 

complete the exchange as set forth herein and

to carry out the provisions hereof, and has all requisite corporate authority

to carry on its business as now being conducted. The Company is not in

violation of any material terms of its Articles of Incorporation, as amended or

its Bylaws.

 

(b)           Common.

The Common, when issued pursuant to the terms of this Agreement will be duly

authorized, and validly issued, fully paid and nonassessable and will be

subject to no lien or encumbrance.

 

(c)           Registration

Rights. The Common shall not be entitled to registration rights except as set

forth in Section 5 hereof.

 

(d)           Execution

of this Agreement. The Company has the full right, power and authority to enter

into, deliver and to perform its obligations under this Agreement and all other

agreements, certificates and documents executed and delivered, or to be executed

and delivered, by the Company in connection herewith and to issue the Common

and this Agreement has been duly authorized, executed and delivered by the

Company.  This Agreement has been duly

executed and delivered by the Company and constitutes the valid and binding

agreement of the Company enforceable against the Company in accordance with its

terms. Upon the Closing, the Common issuable in connection with the exchange of

the Bonds will be duly authorized and validly issued and outstanding, fully paid

and nonassessable and free from all taxes, liens and charges.

 

(e)           Contravention.  The execution, delivery and performance of

this Agreement and the consummation of the transactions contemplated hereby do

not contravene or constitute a default under or violate (i) any provision of

applicable law or regulation the violation of which would have a material

adverse effect on the Company or on the Common, (ii) the Articles of

Incorporation and Bylaws of the Company, or (iii) any agreements, judgment,

injunction, order, decree or other instrument binding upon the Company or any

of its assets or properties, the violation of which would have a Material

Adverse Effect on the Company or on the Common.  For purposes of this Agreement, a “Material Adverse Effect” means

a material adverse effect on (a) the business, operations, property or

condition (financial or otherwise) of the Company, (b) the ability of the

Company to perform its obligations under this Agreement, or any related

agreement, or (c) the validity or enforceability of this Agreement or the

Common.

 

(f)            Governmental

Regulations.  Except as required

pursuant to the Securities Act of 1933, as amended (the “Securities Act”), the

Securities Exchange Act of 1934, as amended (the “Exchange Act”) and State

securities laws, the Company is not subject to any Federal or state law or

regulation limiting its ability to enter into this Agreement to issue the

Common or to perform its obligations required thereby.

 

(g)           Capitalization.

As of January 15, 2002, the authorized capital stock of the Company consists of

50,000,000 shares of common stock, of which 11,022,902 shares are outstanding,

and 2,000,000 shares of preferred stock, of which none are outstanding.  All of the outstanding shares of the

Company’s capital stock have been duly and validly authorized and issued and

are fully paid and nonassessable.

 

(h)           The

Company.  The Company has registered its

Common pursuant to Section12(g) of the Exchange Act and is in full compliance

with all reporting requirements of the Exchange Act, and such Common is

currently listed or quoted, and trades, on the NASD OTC Bulletin Board.

 

(i)            No

General Solicitation or Advertising in Regard to this Transaction. Neither the

Company nor any of its affiliates, nor any distributor or any person acting on

its or their behalf (i) has conducted or will conduct any general solicitation

(as that term is used in Rule 502(c) of Regulation D) or general advertising in

connection with the issuance of the Common, or (ii) has made any offers or

sales of any security or solicited any offers to buy any security under any

circumstances that would require registration of the Common under the

Securities Act, except as contemplated by this Agreement.

 

(j)            No

Material Adverse Change.  No Material

Adverse Effect has occurred or exists with respect to the Company, except as

disclosed in filings with the SEC or as publicly announced as of or since

January 15, 2001.

 

(k)           Board

Approval. The Board of Directors of the Company has concluded, in its good

faith business

 

4

 

judgment that the issuance of the securities

of the Company in connection with this Agreement are in the best interests of

the Company and its stockholders.

 

(l)                                     Information True and Correct.  All the information that is set forth in

this Agreement with respect to the Company is correct and complete as of the

date of this Agreement.

 

4.              REPRESENTATIONS

AND WARRANTIES OF THE BONDHOLDERS.

 

(a)           Title.

Each Bondholder is the owner, beneficially and of record, of all the bonds set

forth beside each such Bondholder’s name on Schedule A, to be exchanged hereby,

free and clear of all liens, encumbrances, security agreements, equities,

options, claims, charges and restrictions except as set forth on such Schedule B.  Any encumbrance shall be released on or

before the Exchange Date.  Each

Bondholder has full power to transfer the Bonds exchanged hereby with the

Company without obtaining the consent or approval of any other person, entity

or governmental authority. The Bonds being exchanged hereby constitute all of

the Bonds owned by the Bondholder in this series.

 

(b)           Information

True and Correct. All the information that is set forth in this Agreement with

respect to each Bondholder is correct and complete as of the date of this

Agreement.

 

(c)           Knowledge

and Experience. Each Bondholder has such knowledge and experience in financial

and business matters that each such Bondholder, together with each such

Bondholder’s representatives and advisors, if any, is capable of evaluating the

merits and risks of an investment in the Common.

 

(d)           Execution

of this Agreement. Each Bondholder has the full right, power and authority to

enter into and to perform this Agreement and all other agreements, certificates

and documents executed and delivered, or to be executed and delivered, by each

Bondholder in connection herewith (collectively, with this Agreement, the

“Bondholder Documents”). This Agreement has been duly authorized, executed and

delivered by each Bondholder, and the Bondholder Documents are (or when

executed and delivered will be) legal, valid and binding obligations of each

Bondholder, enforceable against such bondholder in accordance with their

respective terms.

 

(e)           Intent.

Without limiting the ability to resell the Common pursuant to an effective

registration statement or an exemption from registration, each Bondholder has

no present arrangement (whether or not legally binding) at any time to sell the

Common to or through any person or entity; provided, however, that by making

the representations herein, each Bondholder does not agree to hold the

securities for any minimum or other specific term and reserves the right to

dispose of the securities at any time in accordance with federal and state

securities laws applicable to such disposition. Without limiting its ability to

resell the securities, each Bondholder represents that the Common are acquired

for each Bondholder’s own account, for investment purposes only and not for

distribution or resale to others.  Each

Bondholder agrees not to sell the securities unless they are registered under

the Securities Act or unless an exemption from such registration is available.

 

(f)            Accredited

Investor/Investment Experience. Each Bondholder is an accredited investor (as

defined in Rule 501 of Regulation D), and has such experience in business and

financial matters that it is capable of evaluating the merits and risks of an

investment in the Common.  As of the

Closing Date, each Bondholder (i) has adequate means of providing for current

needs and possible personal contingencies, (ii) has no need for liquidity in

this investment, (iii) is able to bear the substantial economic risk of an

investment in the Common for an indefinite period, and (iv) can afford the

complete loss of its investment. Each Bondholder recognizes the highly

speculative nature of this investment.

 

(g)           Not

an Affiliate. Except for Value Partners, Ltd., none of the Bondholders are

either an officer, director or “affiliate” (as that term is defined in Rule 405

of the Securities Act) of the Company.

 

(h)           Absence of

Conflicts.  Except as disclosed on

Schedule B, the execution and delivery of this Agreement and any other document

or instrument executed in connection herewith, and the consummation of the

transactions contemplated hereby and thereby, and compliance with the

requirements thereof, will not (a) violate the organizational documents of any

of the Bondholders; (b) violate any law, rule, regulation, order, writ,

judgment, injunction, decree or award binding on each Bondholder, or, to the

knowledge of each Bondholder; (c) violate any

 

5

 

provision of any indenture, instrument or agreement to which each

Bondholder is a party or is subject, or by which any Bondholder or any of its

assets is bound which violations have not been waived hereby; (d) conflict with

or constitute a material default thereunder; (e) result in the creation or

imposition of any lien pursuant to the terms of any such indenture, instrument

or agreement, or constitute a breach of any fiduciary duty owed by any

Bondholder to any third party; or (f) require the approval of any third-party

(which has not been obtained) pursuant to any material contract, agreement,

instrument, relationship or legal obligation to which each Bondholder is

subject or to which any of its assets, operations or management may be

subject.  With respect to this

subsection (h), the terms “indenture, instrument and agreement” or allusion

thereto shall specifically exclude any such indenture, agreement or instrument

between or among the Company and/or any of its affiliates on the one hand and

any Bondholder on the other hand.   The

consummation of this Agreement shall constitute a waiver by the Bondholders and

the Company (or any affiliate thereof )  of any and all violations or breaches by

the other under the Bonds resulting from this Agreement or any other indenture,

instrument or agreement.

 

(i)            Disclosure;

Access to Information. Each Bondholder has received all documents, records,

books and other information pertaining to Bondholder’s investment in the

Company that have been requested by each Bondholder. Each Bondholder has had

the opportunity to ask questions of, and receive answers from, the Company and

its management.

 

(j)            Manner

of Sale. At no time was any Bondholder presented with or solicited by or

through any leaflet, public promotional meeting, television advertisement or

any other form of general solicitation or advertising in connection with the

exchange or offer of the Common.

 

(k)           Exemption

from Registration. Each Bondholder acknowledges and understands that the Common

has not been registered under the Securities Act due to an exemption under the

provisions of the Securities Act.

 

(l)            No Legal, Tax or Investment Advice. Each Bondholder

understands that nothing in this Agreement or any other materials presented by

the Company to each Bondholder in connection with the Exchange constitutes

legal, tax or investment advice. Each Bondholder has relied on, and has

consulted with, such legal, tax and investment advisors as any Bondholder, in

its sole discretion, has deemed necessary or appropriate in connection with its

exchange of the Bonds for the Common.

 

(m)          Bondholder Responsibility. 

The Company acknowledges that (i) all of the obligations of each

Bondholder are several and not joint (it being the parties’ intent that each

Bondholder will be responsible only for its own obligations), and (ii) each

representation and warranty made herein by or as to each Bondholder relates

only to such Bondholder, and that no Bondholder is liable for breach of any

representation or warranty made by or as to any other Bondholder.

 

5.              COVENANTS OF THE COMPANY.

 

The Company hereby covenants as follows:

 

(a)           Registration

Rights.

(1)           Demand Registration

The

holder shall have the right to have the shares of Common registered as part of

the next public offering of the Common. 

If no such public offering has occurred by January 1, 2003, then upon

the written request of any combination of the holders of not less than 100,000

shares of Common, and on a one-time basis, the Company shall file, within

ninety (90) days after written request for such registration, and use its best

efforts to cause to be declared effective ninety (90) days thereafter, by the

Securities and Exchange Commission, a registration statement or post-effective

amendment thereto as permitted under the Securities Act of 1933, as amended

(the “1933 Act”), covering the sale by the holder of the Common to be issued as

a result of the exchange of the Bonds (the “Registerable Securities”).  The Company shall supply prospectuses in

order to facilitate the public sale or other disposition of the Registerable

Securities, use its best efforts to register and qualify any of the

Registerable Securities for sale in such states as such holder reasonably

designates and do any and all other acts and things which may be necessary to

enable such holder to consummate the public sale of the Registerable

Securities, and furnish indemnification in the manner provided in Section 14

hereto.  The holder shall furnish

information reasonably requested by the Company in accordance with such

post-effective amendments or registration statements, including its intentions

with respect thereto, and shall furnish indemnification as set forth in Section

14.

 

6

 

(2)           Termination, Fees and Expenses

The

Company will maintain such registration statement or post-effective amendment

current and effective under the 1933 Act for two years, or until the

Registerable Securities would otherwise be eligible for sale without

restriction under Rule 144 promulgated pursuant to the 1933 Act.

The

Company shall bear the entire cost and expense of any registration of

securities under this Section 5(a) hereof. 

Notwithstanding the foregoing, any holder whose Registerable Securities

are included in any such registration statement pursuant to this Section 5(a)

shall, however, bear the fees of any counsel maintained by him and any transfer

taxes or underwriting discounts or commissions applicable to the Registerable

Securities sold by him pursuant thereto.

 

In

addition the Company shall:

(A)  furnish

to the holder such numbers of copies of a summary prospectus or other

prospectus, including a preliminary prospectus or any amendment or supplement

to any prospectus, in conformity with the requirements of the 1933 Act, and

such other documents, as the holder may reasonably request in order to

facilitate the public sale or other disposition of the securities owned by the

holder.

(B)   use

its best efforts to register and qualify the securities covered by such

registration statement under such other securities or blue sky laws of such

jurisdictions as the holder shall reasonably request, and do any and all other

acts and things which may be necessary or advisable to enable such holder to

consummate the public sale or other disposition in such jurisdictions of the

securities owned by such holder, except that the Company shall not for any such

purpose be required to qualify to do business as a foreign corporation in any

jurisdiction wherein it is not so qualified or to file therein any general

consent to service of process;

(C)   use its best efforts to list such securities

on any securities exchange on which any securities of the Company is then

listed, if the listing of such securities is then permitted under the rules of

such exchange;

(D)  enter

into and perform its obligations under an underwriting agreement, if the

offering is an underwritten offering, in usual and customary form, with the

managing underwriter or underwriters of such underwritten offering;

(E)   notify

the holder of Registerable Securities covered by such registration statement,

at any time when a prospectus relating thereto covered by such registration

statement is required to be delivered under the 1933 Act, of the happening of

any event of which it has knowledge as a result of which the prospectus

included in such registration statement, as then in effect, includes an untrue

statement of a material fact or omits to state a material fact required to be

stated therein or necessary to make the statements therein not misleading in

the light of the circumstances then existing; and

(F)   furnish,

at the request of the holder on the date such Registerable Securities are

delivered to the underwriters for sale pursuant to such registration or, if

such Registerable Securities are not being sold through underwriters, on the

date the registration statement with respect to such Registerable Securities

becomes effective, (i) an opinion, dated such date, of the counsel representing

the Company for the purpose of such registration, addressed to the

underwriters, if any, and to the holder making such request, covering such

legal matters with respect to the registration in respect of which such opinion

is being given as the holder of such Registerable Securities may reasonably

request and are customarily included in such an opinion and (ii) letters,

dated, respectively, (1) the effective date of the registration statement and

(2) the date such Registerable Securities are delivered to the underwriters, if

any, for sale pursuant to such registration, from a firm of independent

certified public accountants of recognized standing selected by the Company,

addressed to the underwriters, if any, and to the holder making such request,

covering such financial, statistical and accounting matters with respect to the

registration in respect of which such letters are being given as the holder of

such Registerable Securities may reasonably request and are customarily

included in such letters; and

(G)   take

such other actions as shall be reasonably requested by any holder to facilitate

the registration and sale of the Registerable Securities.

 

(b)           Reservation

of Common Stock. As of the Closing Date, the Company will have reserved free of

preemptive rights, the Common to be exchanged for the Bonds.  Such number of shares of Common to be

reserved shall be calculated based upon the aggregate Exchange Price set forth

in Section 1 of this Agreement and on Schedule A hereto.

 

(c)           Notice

of Breaches. The Company on the one hand, and each Bondholder on the other,

shall give prompt written notice to the other of any breach by it of any

representation, covenant, warranty or other agreement

 

7

 

contained in this Agreement or any Exhibit

annexed hereto, as well as any events or occurrences arising after the date

hereof, which would reasonably be likely to cause any representation, covenant,

or warranty or other agreement of such party, as the case may be, contained in

this Agreement or any Exhibit annexed hereto, to be incorrect or breached as of

such Closing Date. However, no disclosure by either party pursuant to this

Section shall be deemed to cure any breach of any representation, warranty or

other agreement contained in this Agreement or any Exhibit annexed hereto.

 

(d)           Rule

144 Compliance. The Company covenants and agrees that for so long as any of the

Common remain outstanding and continue to be “restricted securities” within the

meaning of Rule 144 under the Securities Act (“Rule 144”), the Company shall

cooperate in order to permit resales of the Underlying Common pursuant to Rule

144. The Company shall provide its transfer agent any and all papers necessary

to complete the transfer under Rule 144, including, but not limited to, letters

of counsel to its transfer agent, and the Company shall continue to file all

material required to be filed pursuant to Sections 13(a) or 15(d) of the

Exchange Act.

 

6.              NOTICES.

 

All notices, demands, requests, consents,

approvals, and other communications required or permitted hereunder shall be in

writing and, unless otherwise specified herein, shall be (i) personally served,

(ii) deposited in the mail, registered or certified, return receipt requested,

postage prepaid, (iii) delivered by reputable overnight courier service with

charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile,

addressed as set forth below or to such other address as such party shall have

specified most recently by written notice. Any notice or other communication

required or permitted to be given hereunder shall be deemed effective (a) upon

hand delivery or delivery by facsimile, with accurate confirmation generated by

the transmitting facsimile machine, at the address or number designated below

(if delivered on a Business Day between the hours of 9:00 a.m. and 5:00 p.m.

where such notice is to be received), or the first Business Day following such

delivery (if delivered other than on a Business Day between the hours of 9:00

a.m. and 5:00 p.m. where such notice is to be received), (b) on the second

Business Day following the date of mailing by reputable courier service, fully

prepaid, addressed to such address, or upon actual receipt of such mailing,

whichever shall first occur, or (c) five calendar days after sent by regular

mail. The addresses for such communications shall be:

 

	

  If to the Company:

  	

   

  	

  Address

  
	

  Trans World Gaming

  	

   

  	

  Rami Ramadan, President, Trans World

  Corporation, 545 Fifth Avenue, Suite 940, New York, NY 10017 

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  With a copy (which shall not constitute

  notice) to: Jeffrey A. Koeppel or Sheryl Jones Alu, Elias, Matz Tiernan &

  Herrick, 12th Floor, 734 15th Street, NW, Washington,

  DC 20005

  

 

	

  If to the Bondholders:

  	

   

  	

  Address

  
	

  Value Partners, Ltd.

  	

   

  	

  Ewing & Partners, c/o Timothy Ewing

  

  4514 Cole Avenue, Suite 808, Dallas, TX

  75205

  
	

   

  	

   

  	

   

  
	

  Anasazi Partners Limited Partnership

  	

   

  	

  CP Baker Co., Ltd., c/o Christopher Baker

  

  303 Congress Street, Suite 301, Boston,

  MA 02210

  
	

   

  	

   

  	

   

  
	

  New Generation Limited Partnership

  	

   

  	

  New Generation Ltd. Partnership

  

  c/o George Putnam, 225 Friend Street,

  Suite 801, Boston, MA 02114

  
	

   

  	

   

  	

   

  
	

  Lucille Friedson

  	

   

  	

  9125 SW 56 Court  

  Miami, FL 33156

  
	

   

  	

   

  	

   

  
	

  Christopher Baker

  	

   

  	

  CP Baker Co., Ltd., c/o Christopher Baker

  

  303 Congress Street, Suite 301, Boston,

  MA 02210

  
	

   

  	

   

  	

   

  
	

  Adrienne Baker

  	

   

  	

  CP Baker Co., Ltd., c/o Christopher Baker

  

  303 Congress Street, Suite 301, Boston,

  MA 02210

  
	

   

  	

   

  	

   

  
	

  Baker Venture Fund I

  	

   

  	

  CP Baker Co., Ltd., c/o Christopher Baker

  

  303 Congress Street, Suite 301, Boston,

  MA 02210

  

 

8

 

7.              CHOICE OF LAW/JURISDICTION.

 

This

Agreement and all transactions contemplated by this Agreement shall be

exclusively governed by, and construed and enforced in accordance with, the internal

laws of the State of New York without regard to principles of conflicts of

laws. Each party consents to the exclusive jurisdiction of the United States

District Court of the Southern District of New York in connection with any

dispute arising under this Agreement and hereby waive, to the maximum extent

permitted by law, any objection, including any objection based on forum non

conveniens, to the bringing of any such proceeding in such jurisdictions.  EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT

MAY HAVE TO REQUEST A TRIAL BY JURY FOR ANY MATTER LITIGATED ARISING FROM OR IN

CONNECTION WITH THIS AGREEMENT.

 

8.              SURVIVAL OF REPRESENTATIONS.

 

All statements contained in any certificate

or instrument or conveyance delivered by or on behalf of the parties pursuant

to this Agreement or in connection with the transactions contemplated hereby

shall be deemed to be additional representations and warranties of the parties

making such disclosure. All representations and warranties shall survive the

Exchange as contemplated herein.

 

9.              ASSIGNMENT.

 

This Agreement shall be binding upon and

inure to the benefit of the parties hereto and their respective successors and

assigns, and no other person shall have any right, benefit or obligation

hereunder.

 

10.       ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS.

 

This Agreement, together with all exhibits,

attachments and schedules hereto, constitutes the entire agreement among the

parties pertaining to the subject matter hereof and supersedes all prior

agreements, understandings, negotiations and discussions, whether oral or

written, of the parties. No supplement, amendment, modification or waiver of

this Agreement shall be binding unless executed in writing by the party to be

bound thereby. No waiver of any of the provisions of this Agreement shall be

deemed or shall constitute a waiver of any other provisions hereof (whether or

not similar), nor shall such waiver constitute a continuing waiver unless

otherwise expressly provided.

 

11.       INVALIDITY.

 

In the event that any one or more of the

provisions contained in this Agreement or in any other instrument referred to

herein shall for any reason be held invalid, illegal or unenforceable in any

respect, then such invalidity, illegality or unenforceability shall not affect

any other provision of this Agreement or any other instrument.

 

12.       FURTHER ASSURANCES.

 

The parties shall cooperate and take such

actions, and execute such other documents, in connection with the transactions

contemplated herein, as either may reasonably request in order to carry out the

provisions or purpose of this Agreement.

 

13.       COUNTERPARTS.

 

This Agreement may be executed in one or more

counterparts, each of which shall be deemed an original, but all of which

together shall constitute one and the same instrument.

 

9

 

14.       INDEMNIFICATION.

 

The Company agrees to indemnify and hold

harmless each Bondholder and each agent and affiliate of each Bondholder

against any losses, claims, damages or liabilities, joint or several (which

shall, for all purposes of this Agreement, include, but not be limited to, all

reasonable and documented costs of defense and investigation and all reasonable

and documented attorneys’ fees), to which any of the Bondholder may become

subject, under the Securities Act or otherwise, insofar as such losses, claims,

damages or liabilities (or actions in respect thereof) arise out of or are

based upon the breach by the Company of any term of this Agreement. Each

Bondholder agrees that it will indemnify and hold harmless the Company, and

each officer, director of the Company or person, if any, who controls the

Company within the meaning of the Securities Act, against any losses, claims,

damages or liabilities (which shall, for all purposes of this Agreement,

include, but not be limited to, all reasonable and documented costs of defense

and investigation and all reasonable and documented attorneys’ fees) to which

the Company or any such officer, director or controlling person may become

subject under the Securities Act or otherwise, insofar as such losses claims,

damages or liabilities (or actions in respect thereof) arise out of or are

based upon the breach by such person of any term of this Agreement.

 

Promptly after receipt by an indemnified

party under this section of notice of the commencement of any action, such

indemnified party will, if a claim in respect thereof is to be made against the

indemnifying party under this section, notify the indemnifying party of the

commencement thereof; but the omission so to notify the indemnifying party will

not relieve the indemnifying party from any liability which it may have to any

indemnified party unless the indemnifying party is prejudiced thereby. In case

any such action is brought against any indemnified party, and it notifies the

indemnifying party of the commencement thereof, the indemnifying party will be

entitled to participate in, and, to the extent that it may wish, jointly with

any other indemnifying party similarly notified, assume the defense thereof, subject

to the provisions herein stated and after notice from the indemnifying party to

such indemnified party of its election so to assume the defense thereof, the

indemnifying party will not be liable to such indemnified party under this

section for any legal or other expenses subsequently incurred by such

indemnified party in connection with the defense thereof other than reasonable

costs of investigation, unless the indemnifying party shall not pursue the

action to its final conclusion. The indemnified party shall have the right to

employ separate counsel in any such action and to participate in the defense

thereof, but the fees and expenses of such counsel shall not be at the expense

of the indemnifying party if the indemnifying party has assumed the defense of

the action with counsel reasonably satisfactory to the indemnified party;

provided that the fees and expenses of such counsel shall be at the expense of

the indemnifying party if (i) the employment of such counsel has been

specifically authorized in writing by the indemnifying party, or (ii) the named

parties to any such action (including any impleaded parties) include both the

indemnified party and the indemnifying party and the indemnified party shall

have been advised by such counsel that there may be one or more legal defenses

available to the indemnifying party different from or in conflict with any

legal defenses which may be available to the indemnified party (in which case

the indemnifying party shall not have the right to assume the defense of such

action on behalf of the indemnified party, it being understood, however, that

the indemnifying party shall, in connection with any one such action or

separate but substantially similar or related actions in the same jurisdiction

arising out of the same general allegations or circumstances, be liable only

for the reasonable fees and expenses of one separate firm of attorneys for all

of the indemnified parties, which firm shall be designated in writing by the

indemnified parties).  No settlement of

any action against an indemnified party shall be made without the prior written

consent of such indemnified party, which consent shall not be unreasonably

withheld.

 

Each party hereby agrees that if another

party to this Agreement obtains a judgment against it in such a proceeding, the

party which obtained such judgment may enforce same by summary judgment in any

courts having jurisdiction over the party against whom such judgment was

obtained, and each party hereby waives any defenses available to it under local

law and agrees to the enforcement of such a judgment. Each party to this

Agreement irrevocably consents to the service of process in any such proceeding

by the mailing of copies thereof by registered or certified mail, postage

prepaid, to such party at its address set forth herein. Nothing herein shall

affect the right of any party to serve process in any other manner permitted by

law.

 

15.       COUNTERPARTS; FACSIMILE; AMENDMENTS.

 

This Agreement may be executed in multiple

counterparts, each of which may be executed by less than all of the parties and

shall be deemed to be an original instrument which shall be enforceable against

the parties actually executing such counterparts and all of which together

shall constitute one and the same instrument. Except as otherwise stated

herein, in lieu of the original documents, a facsimile transmission or copy of

the original documents

 

10

 

shall be as effective and enforceable as the

original.  This Agreement may be amended

only by a writing executed by the Company on the one hand, and all of the

Bondholders on the other hand.

 

16.       TITLE AND SUBTITLES.

 

The titles and subtitles used in this

Agreement are used for convenience only and are not to be considered in

construing or interpreting this Agreement.

 

17.       REPLACEMENT OF CERTIFICATES.

 

Upon (i) receipt of evidence reasonably

satisfactory to the Company of the loss, theft, destruction or mutilation of

any of the Common and (ii) in the case of any such loss, theft or destruction

of such certificate, upon delivery of an indemnity agreement and security or a

bond reasonably satisfactory in form and amount to the Company, and to the

Company’s transfer agent, or (iii) in the case of any such mutilation, on

surrender and cancellation of such certificate, the Company at its expense will

execute and deliver, in lieu thereof, a new certificate of like tenor.

 

18.       RESTRICTIVE LEGEND ON CERTIFICATES

 

The Common

share certificates shall bear the following restrictive legend:  “These shares have not been registered under

the Securities Act of 1933, as amended (the “Securities Act”) or any state

securities laws or any other applicable securities law.  These shares may not be reoffered, sold,

assigned, transferred, or otherwise disposed of in the absence of such

registration or unless such transaction is exempt from, or not subject to such

registration.” The holder of these shares by its acceptance hereof agrees to

offer, sell or otherwise transfer these shares, only (a) to the Company, (b)

pursuant to a registration statement which has been declared effective under

the Securities Act, (c) so long as these shares are eligible for resale

pursuant to Rule 144a under the Securities Act (“Rule 144a”), to a person it

reasonably believes is a “qualified institutional buyer” (as defined in Rule

144a) that purchases for its own account or for the account of a qualified

institutional buyer to whom notice is given that the transfer is being made in

reliance on Rule 144a, (d) to an “accredited investor” within the meaning of

subparagraph (a) of Rule 501 under the Securities Act that is acquiring these

shares for its own account, or for the account of such an accredited investor,

for investment purposes and not with a view to, or for offer or sale in connection

with, any distribution in violation of the Securities Act, or (e) pursuant to

any other available exemption from the registration requirements under the

Securities Act, subject to the right of the Company prior to any such offer,

sale or transfer pursuant to clause (c), (d) or (e) to require the delivery of

an opinion of counsel, certifications and/or other information reasonably

satisfactory to it.  Such holder further

agrees that it will deliver to each person to whom these shares are transferred

a notice substantially to the effect of this legend.  Additional restrictions may be applicable to these shares as

provided in the Certificate.

 

11

 

IN

WITNESS WHEREOF, the

parties hereto have caused this Exchange Agreement to be duly executed, on the

day and year first above written.

 

	

   

  	

   

  	

  Signature

  	

   

  	

  Date

  
	

  Value Partners, Ltd.

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Anasazi Partners Limited Partnership

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  New Generation Limited Partnership

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Lucille Friedson

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Christopher Baker

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Adrienne Baker

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Baker Venture Fund I

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Trans World Corporation

  	

   

  	

   

  	

   

  	

   

  

 

12

 

19.       SCHEDULE A

 

Trans World Corporation

Summary of $4.8 million bond issue (“Bonds”)

 

	

  Bondholder

  Name

  	

   

  	

  Contact

  	

   

  	

  Address

  	

   

  	

  Bond
Amount

  	

   

  	

  Accrued

  Interest
As of December 31, 2001

  	

   

  	

  Total

  	

   

  	

  Amount of
Common

  	

   

  
	

  Value Partners Ltd

  	

   

  	

  Tim Ewing

  	

   

  	

  Ewing

  & Partners

  4514 Cole Avenue, Suite 808

  Dallas, TX  75205

  	

   

  	

  3,000,000

  	

  62.5

  	

  %

  	

  1,188,750

  	

   

  	

  4,188,750

  	

   

  	

  23,270,833

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Anasazi Partners

  	

   

  	

  Chris

  Baker

  	

   

  	

  Anasazi

  Partners LP

  303 Congress Street, Suite 301

  Boston, MA  02210

  	

   

  	

  1,250,000

  	

  26.0

  	

  %

  	

  495,350

  	

   

  	

  1,745,350

  	

   

  	

  9,696,389

  	

   

   

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  New Generation LP

  	

   

  	

  George

  Putnam

  	

   

  	

  New

  Generation Ltd. Partnership

  225 Friend St., Suite 801

  Boston, MA  02114

  	

   

  	

  250,000

  	

  5.2

  	

  %

   

  	

  99,070

  	

   

  	

  349,070

  	

   

  	

  1,939,278

  	

   

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Friedson

  	

   

  	

  Lucille

  Friedson

  	

   

  	

  Lucille

  Friedson

  9125 SW 56 Court

  Miami, FL  33156

  	

   

  	

  100,000

  	

  2.1

  	

  %

   

  	

  39,610

  	

   

  	

  139,610

  	

   

  	

  775,611

  	

   

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Chris Baker

  	

   

  	

  Chris

  Baker

  	

   

  	

  CP Baker

  Co., Ltd.

  303 Congress Street, Suite 301

  Boston, MA  02210

  	

   

  	

  50,000

  	

  1.0 

  	

  %

   

  	

  19,805

  	

   

  	

  69,805

  	

   

   

  	

  387,806

  	

   

  
	

   

  
	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Adrienne Baker

  	

   

  	

  Chris

  Baker

  	

   

  	

  CP Baker

  Co., Ltd.

  303 Congress Street, Suite 301

  Boston, MA  02210

  	

   

  	

  50,000

  	

  1.0

  	

  %

   

  	

  19,805

  	

   

  	

  69,805

  	

   

  	

  387,806

  	

   

   

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  CP Baker Venture Fund I

  	

   

  	

  Chris

  Baker

  	

   

  	

  CP Baker

  Co., Ltd.

  303 Congress Street, Suite 301

  Boston, MA  02210

  	

   

  	

  100,000

  	

  2.1

  	

  %

   

  	

  39,610

  	

   

  	

  139,610

  	

   

  	

  775,611

  	

   

   

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Total

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  4,800,000

  	

  100

  	

  %

  	

  1,902,000

  	

   

  	

  6,702,000

  	

   

  	

  37,233,334

  	

   

  
	

  Total

  Converted Shares

  	

   

  	

   

  	

   

  	

  26,666,667

  	

   

  	

   

  	

  10,566,667

  	

   

  	

  37,233,334

  	

   

  	

   

  	

   

  

 

13

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