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EXHIBIT 10(5)
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), effective as of July 1st, 2001 is
entered into by and between Innovative Gaming Corporation of America, a
Minnesota Corporation (herein referred to as the "Company") and Medallion Media,
LLC, a California limited liability company (herein referred to as the
"Consultant").
RECITALS
WHEREAS, Company desires to engage the services of Consultant to represent the
Company in media communications and media and public relations to the public
through the use of print, television and airspace, and to consult with
management concerning such Company activities. Medallion is a full service Media
Consulting firm dedicated to assisting its clients reach their financial, social
and political goals by getting them positive media exposure.
NOW THEREFORE, in consideration of the promises and the mutual covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Term of Consultancy. Company hereby agrees to retain the
Consultant to act in a consulting capacity to the Company and
the Consultant hereby agrees to provide services to the
Company commencing July 1st, 2001 and ending on June 30th,
2002.
2. Duties of Consultant. The Consultant agrees that it will
generally provide the following specified consulting services
through its officers and employees during the term specified
in Section 1.
(a) Consult and assist the Company in developing and implementing
appropriate plans and means for presenting the Company's "message" to the public
community, establishing an image for the Company in the community, and creating
the foundation for subsequent public relations efforts; Managing Director,
Xxxxxxx X'Xxxxxx will work directly with the Company to develop their image,
determine what stories are best, and pursue getting those stories airtime and
press coverage.
(b) With the cooperation of the Company, maintain an awareness
during the term of this Agreement of the Company's plans, strategy and
personnel, as they may evolve during such period, and consult and assist the
Company in communicating appropriate information regarding such plans, strategy
and personnel to the public in order to effectively communicate the Company's
message.
(c) Otherwise perform as the Company's consultant for media
relations and relations with media professionals.
3. Allocation of Time and Energies. The Consultant hereby
promises to perform and discharge faithfully the
responsibilities which may be assigned to the Consultant from
time to time by the officers and duly authorized
representatives of the Company in connection with the conduct
of its media relations and communications activities, so long
as such activities are in compliance with applicable laws and
regulations. Consultant and staff shall diligently and
thoroughly provide the consulting services required hereunder.
Although no specific hours-per-day requirement will be
required, Consultant and the Company agree that Consultant
will perform the duties set forth herein above in a diligent
and professional manner. The parties acknowledge and agree
that a disproportionately large amount of the
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effort to be expended and the costs to be incurred by the Consultant
and the benefits to be received by the Company are expected to occur
within or shortly after the first two months of the effectiveness of
this Agreement. It is explicitly understood that Consultant's
performance of its duties hereunder will in no way be measured by the
amount of actual media placed on the airwaves, print or other mediums.
It is understood that the Company is entering into this Agreement with
Medallion Media, LLC, a limited liability company and not any
individual member of Medallion Media, and, as such, Consultant will not
be deemed to have breached this Agreement if any member, officer or
director of Medallion leaves the firm or dies or becomes physically
unable to perform any meaningful activities during the term of the
Agreement, provided the Consultant otherwise performs its obligations
under this Agreement. Notwithstanding the foregoing, in the event
Xxxxxxx X'Xxxxxx leaves the Consultant, the Company shall be entitled
to terminate this Agreement immediately.
4. Duties of the Company. IGCA's Chairman Xxxxxx Xxxxxx will work
directly with Medallion's Managing Director to accomplish
their goals. All IGCA officers and employees shall be open to
the advise of Xxxxxxx X'Xxxxxx in all areas where Medallion
provides its expertise.
5. Remuneration. As full and complete compensation for services
described in this Agreement, the Company shall compensate
Medallion Media, LLC as follows:
5.1 For undertaking this engagement and for other good and
valuable consideration, the Company agrees to issue to the Consultant a
"Commencement Bonus" consisting of 200,000 shares of the Company's common stock
fully paid and non-assessable and that the issuance and eventual transfer of
them to Consultant has been duly authorized by the Company. Company warrants
that all Securities issued to Consultant pursuant to this Agreement shall have
been validly issued, fully paid and non-assessable and that the issuance. Any
transfer of them to Consultant shall have been duly authorized by the Company's
board of directors. The said securities are to be delivered to Consultant within
ten (10) business days of the signing of this Agreement. Consultant shall have
"piggy back" rights to any registration statement the Company files. This
Commencement Bonus shall be issued to the Consultant immediately following
execution of this Agreement and shall, when issued and delivered to Consultant,
be fully paid and non-assessable. The Company understands and agrees that
Consultant has foregone significant opportunities to accept this engagement and
that the Company derives substantial benefit from the execution of this
Agreement and the ability to announce its relationship with Consultant. The
Commencement Bonus constitutes payment for Consultant's agreement to consult to
the Company and is a nonrefundable, non-apportionable, and non-ratable retainer.
If the Company decides to terminate this Agreement prior to April 1, 2002 for
any reason whatsoever, it is agreed and understood that Consultant will not be
requested or demanded by the Company to return any of the Commencement Bonus
paid to it hereunder. Further, if and in the event the Company is acquired in
whole or in part, during the term of this agreement, it is agreed and understood
Consultant will not be requested or demanded by the Company to return any of the
Commencement Bonus paid to it hereunder. It is further agreed that if at any
time during the term of this agreement, the Company or substantially all of the
Company's assets are merged with or acquired by another entity, or some other
change occurs in the legal entity that constitutes the Company, the Consultant
shall retain and will not be requested by the Company to return any of the
Commencement Bonus.
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5.2 The Commencement Bonus shares issued pursuant to this agreement
shall be issued in the names of Xxxxxxx X'Xxxxxx, 200,000 shares.
5.3 With each transfer of shares of Common Stock to be issued pursuant
to this Agreement (collectively, the "Shares"), Company shall cause to be issued
a certificate representing the Common Stock and a written opinion of counsel for
the Company stating that said shares are validly issued, fully paid and
non-assessable and that the issuance and eventual transfer of them to Consultant
has been duly authorized by the Company. Company warrants that all Securities
issued to Consultant pursuant to this Agreement shall have been validly issued,
fully paid and non-assessable. The issuance and any transfer of them to
Consultant shall have been duly authorized by the Company's board of directors.
5.4 Consultant acknowledges that the shares of Common Stock to be
issued pursuant to this Agreement (collectively, the "Shares") have not been
registered under the Securities Act of 1933, and accordingly are "restricted
securities" within the meaning of Rule 144 of the Act. As such, the Shares may
not be resold or transferred unless the Company has received an opinion of
counsel reasonably satisfactory to the Company that such resale or transfer is
exempt from the registration requirements of that Act.
5.5 In connection with the acquisition of Shares hereunder, the
Consultant represents and warrants to the Company, to the best of its/his
knowledge, as follows:
(a) Consultant acknowledges that the Consultant has been afforded
the opportunity to ask questions of and receive answers from
duly authorized officers or other representatives of the
Company concerning an investment in the Shares, and any
additional information which the Consultant has requested.
(b) Consultant's investment in restricted securities is reasonable
in relation to the Consultant's net worth, which is in excess
of ten (10) times the Consultant's cost basis in the Shares.
Consultant acknowledges that an investment in the Shares is
speculative and involves the risk of loss. Consultant has the
requisite knowledge to assess the relative merits and risks of
this investment without the necessity of relying upon other
advisors, and Consultant can afford the risk of loss of his
entire investment in the Shares. Consultant is (i) an
accredited investor, as that term is defined in Regulation D
promulgated under the Securities Act of 1933, and (ii) a
purchaser described in Section 25102 (f) (2) of the California
Corporate Securities Law of 1968, as amended.
(c) Consultant is acquiring the Shares for the Consultant's own
account for long-term investment and not with a view toward
resale or distribution thereof except in accordance with
applicable securities laws.
5.6 In addition, Company shall pay Consultant a monthly retainer of
five thousand dollars ($5,000) per month, payable on the first day of each month
during the tenure of this agreement. Payment should be mailed to: Medallion
Media 000 Xxx Xxx Xxxxxx Xxxxxx, Xx. 00000.
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6. Non-Assignability of Services. Consultant's services under this
contract are offered to Company only and may not be assigned by Company to any
entity with which Company merges or which acquires the Company or substantially
all of its assets. In the event of such merger or acquisition, all compensation
to Consultant herein under the schedules set forth herein shall remain due and
payable, and any compensation received by the Consultant may be retained in the
entirety by Consultant, all without any reduction or pro-rating and shall be
considered and remain fully paid and non-assessable. Notwithstanding the
non-assignability of Consultant's services, Company shall assure that in the
event of any merger, acquisition, or similar change of form of entity, that its
successor entity shall agree to complete all obligations to Consultant,
including the provision and transfer of all compensation herein, and the
preservation of the value thereof consistent with the rights granted to
Consultant by the Company herein, and to Shareholders.
7. Expenses. Consultant agrees to pay for all its expenses
(phone, labor, etc.), other than extraordinary items. These
extraordinary items include but are not limited to travel
required or requested by the Company, luncheons or dinners to
large groups of media professionals, print advertisements in
publications, etc. These items will be approved in advance by
the Company.
8. Indemnification. The Company warrants and represents that
all oral communications, written documents or materials
furnished to Consultant by the Company with respect to
affairs, operations, profitability and strategic planning of
the Company are accurate and Consultant may rely upon the
accuracy thereof without independent investigation. The
Company will protect, indemnify and hold Consultant harmless
against any claims or litigation including any damages,
liability, cost and reasonable attorney's fees as incurred
with respect thereto resulting from Consultant's communication
or dissemination of any said information, documents or
materials excluding any such claims or litigation resulting
from Consultant's communication or dissemination of
information not provided by the Company. The Consultant hereby
agrees to protect, indemnify and hold harmless Company against
any claims or litigation including any damages, liability,
cost and reasonable attorney's fees and costs as incurred with
respect thereto resulting from Consultant's communication or
dissemination of information not provided or authorized by the
Company.
9. Legal Representation. The Company acknowledges that it has been
represented by independent legal counsel in the preparation of this Agreement.
Consultant represents that it has consulted with independent legal counsel
and/or tax, financial and business advisors, to the extent the Consultant deemed
necessary.
10. Status as Independent Contractor. Consultant's engagement pursuant
to this Agreement shall be as independent contractor, and not as an employee,
officer or other agent of the Company. Neither party to this Agreement shall
represent or hold itself out to be the employer or employee of the other.
Consultant further acknowledges the consideration provided hereinabove is a
gross amount of consideration and that the Company will not withhold from such
consideration any amounts as to income taxes, social security payments or any
other payroll taxes. All such income taxes and other
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such payment shall be made or provided for by Consultant and the Company shall
have no responsibility or duties regarding such matters. Neither the Company or
the Consultant possess the authority to bind each other in any agreements
without the express written consent of the entity to be bound.
11. Attorney's Fee. If any legal action or any arbitration or other proceeding
is brought for the enforcement or interpretation of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection with
or related to this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs in connection
with that action or proceeding, in addition to any other relief to which it or
they may be entitled.
12. Waiver. The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by such other party.
13. Notices. All notices, requests, and other communications hereunder shall be
deemed to be duly given if sent by U.S. mail, postage prepaid, addressed to the
other party at the address as set forth herein below:
To the Company
Innovative Gaming Corporation of America
Xxxxxx X. Xxxxxx
Chairman/CEO
000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx , XX 00000
With a copy to: Xxxxx X. Xxxx, Esq.
General Counsel
Innovative Gaming Corporation of America
000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
To the Consultant:
Xxxxxxx X'Xxxxxx
Medallion Media
000 Xxx Xxx Xxxxxx
Xxxxxx XX 00000
It is understood that either party may change the address to which
notices for it shall be addressed by providing notice of such change to the
other party in the manner set forth in this paragraph.
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13. Choice of Law, Jurisdiction and Venue. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of California.
The parties agree that San Francisco County, CA. will be the venue of any
dispute and will have jurisdiction over all parties.
14. Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the alleged breach thereof, or relating to Consultant's activities
or remuneration under this Agreement, shall be settled by binding arbitration in
California, in accordance with the applicable rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrator(s) shall be
binding on the parties and may be entered in any court having jurisdiction as
provided by Paragraph 14 herein. The provisions of Title 9 of Part 3 of the
California Code of Civil Procedure, including section 1283.05, and successor
statutes, permitting expanded discovery proceedings shall be applicable to all
disputes that are arbitrated under this paragraph.
15. Neither party to this Agreement shall be deemed to be granted under the
terms of this Agreement any right, title or interest in or to the trademarks,
trade names, service marks, copyrights, patents or other intellectual property
of the other party. The Consultant and Company expressly acknowledge and agree
that neither party is granted under this Agreement the right to use or
incorporate in any materials, including without limitation marketing materials,
the name, logos, trademarks, or copyrights of the other party without the
advance approval of such party.
16. The parties shall perform all of their respective obligations under this
Agreement in compliance with all applicable federal, state and local laws,
ordinances, rules, regulations, codes or orders.
17. Complete Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof. This Agreement and its terms may
not be changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
18. Regulatory Matters.
18.1 PROHIBITED CONTRACTS. Consultant acknowledges that the Company,
together with its parent and affiliated corporations, partnerships and companies
(collectively, "INNOVATIVE"), is subject to the provisions of the gaming laws,
rules and regulations of each jurisdiction in which Company is licensed to
conduct business including, without limitation, the following acts and any
rules, regulations or orders promulgated thereunder: (i) the Nevada Gaming
Control Act, (ii) the Mississippi Gaming Control Act, (iii) the New Jersey
Casino Control Act, and (iv) any other act, laws, statutes, ordinances, rules,
regulations or tribal compact governing any casino operation (collectively, the
"ACTS"), which prohibit a gaming licensee from entering into any contract or
agreement with (a) a person who is found unsuitable, who is denied a license, or
whose license was revoked by the gaming authorities of any state, nation, tribe
or any other gaming regulatory board, agency or commission (each a
"COMMISSION"), or (b) any business enterprise under control of such person
without the prior approval of the appropriate Commission.
18.2 LICENSING AND REGULATORY REQUIREMENTS. Consultant hereby covenants
and agrees to use its best efforts to comply and to cause each of its directors,
officers, partners, members and employees (each an "AFFILIATE") to comply with
the requirements of all Acts to the extent the Acts apply. Consultant shall
complete and submit to the Company, and shall cause its Affiliates to
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complete and submit to the Company, background investigation consent forms and
shall supply such further information as may be reasonably necessary for Company
to meet its obligations under Company's Compliance Plan. If any Commission
requests that Consultant or any Affiliate (i) provide information to, (ii) file
an application with, (iii) respond to written or oral questions, (iv) cooperate
in a background investigation, (v) appear before such Commission, or (vi) comply
with any other request, Consultant agrees to use its best efforts to comply
fully, and to cause each Affiliate to comply fully, with such request.
Consultant hereby agrees to promptly provide the Company with written notice of
any Commission request and to keep the Company informed of the status of all
such requests and actions taken in response thereto. By entering the Agreement,
Consultant hereby represents and warrants that neither Consultant nor any
Affiliate has been found unsuitable or denied any license or approval by any
Commission. In the event that Consultant has been found unsuitable or has been
denied any license or approval, prior approval of each Commission is required
before the Agreement can be effective. If there has been a finding of
unsuitability or a denial of any license or approval, immediately contact the
Company's General Counsel either via telephone at 000-000-0000 or via letter to
Innovative Gaming Corporation of America, 000 Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxxx,
Xxxxxx 00000 Attention: General Counsel.
18.3 TERMINATION OF AGREEMENT. In the event (i) Consultant or any
Affiliate fails to abide by the requirements of this Section 18, or (ii)
Consultant or any Affiliate is found unsuitable or unqualified for any license,
registration, approval or finding of suitability, or otherwise to be associated
with a gaming licensee by any Commission, or (iii) Company determines in the
exercise of its sole and absolute discretion that Consultant's or any
Affiliate's continued association with Company may result in (a) the
disapproval, modification or non-renewal of any contract under which Company has
sole or shared authority to manage any gaming operations, or (b) the loss,
non-renewal or non-reinstatement of any license, registration, approval, finding
of suitability or franchise held by Company to conduct any portion of Company's
business, or (c) the imposition of any fine or the taking of any disciplinary
action by any Commission, Company shall be entitled immediately to terminate the
Agreement and any unexercised Options or unconverted Convertible and Company
shall thereafter have no liability to Consultant or any Affiliate for any loss,
costs, expense, loss of anticipated profits, direct damages, indirect damages,
consequential damages, punitive damages, or other damages or liability of any
nature whatsoever whether based on contract, tort or any other theories of
liability.
19. Neither party to this Agreement shall be deemed to be granted under the
terms of this Agreement any right, title or interest in or to the trademarks,
trade names, service marks, copyrights, patents or other intellectual property
of the other party. The Consultant and Company expressly acknowledge and agree
that neither party is granted under this Agreement the right to use or
incorporate in any materials, including without limitation marketing materials,
the name, logos, trademarks, or copyrights of the other party without the
advance approval of such party.
20. This Agreement is effective on the date of execution or, upon approval of
the Nevada Gaming Control Board or Nevada Gaming Commission (or any other gaming
authority with jurisdiction over the Company or its operations) if such approval
is required, whichever is later. Should any such prior approval be required, but
not obtained, then this Agreement shall be null and void.
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AGREED TO:
"Company"
INNOVATIVE GAMING CORPORATION OF AMERICA
Date: By: ______________________________
Xxxxxx X. Xxxxxx, Chairman/CEO
"Consultant"
MEDALLION MEDIA , LLC
Date: By:_________________________________
Xxxxxxx X'Xxxxxx, Managing Director
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