Exhibit 10.1
COOPERATION AGREEMENT
This Cooperation Agreement, dated as of April 20, 2022 (this “Agreement”), is by and between Tice Brown and Galaxy Gaming, Inc., a Nevada corporation (the “Company”).
WHEREAS, on March 16, 2022, Mr. Brown submitted a letter to the Company (the “Notice”) proposing (a) Mr. Brown’s nomination to the Board of Directors (the “Board”) of the Company (the “Director Nomination”) and (b) a proposal requesting that the Board declassify the Board by electing each director on an annual basis (the “Stockholder Proposal”), for consideration at the 2022 annual meeting of stockholders of the Company (the “2022 Annual Meeting”); and
WHEREAS, the parties have determined that it is in their respective best interests to come to an agreement with respect to the withdrawal of the Director Nomination and the Stockholder Proposal from consideration at the 2022 Annual Meeting, and the composition of the Board and certain other matters, as provided in this Agreement.
NOW, THEREFORE, in consideration of and reliance upon the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
The Company and Mr. Brown agree as follows:
In no event shall a qualified candidate be (a) Mr. Brown, (b) a member of the Hiring Committee, or (b) an Affiliate (as defined below), family member or representative of a member of the Hiring Committee, the Company or Mr. Brown.
2. Withdrawal of Proxy Contest; Additional Agreements.
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3. Tice Brown Restrictions.
Except as otherwise provided in this Agreement, until the date that is two years after the 2022 Annual Meeting (the “Standstill Period”), Mr. Brown agrees that neither he nor any of his Affiliates, Associates and representatives, shall directly or indirectly, effect, seek or announce any intention to effect or cause or participate in, alone or in concert with others, in any manner:
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If to the Company:
Galaxy Gaming, Inc.
6480 Cameron Street, Suite 305
Las Vegas, Nevada 89118
Attention: Todd Cravens
Email: tcravens@GalaxyGaming.com
With copies to (which shall not constitute notice):
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626
Attention: Michael A. Treska
Email: Michael.Treska@lw.com
If to Mr. Brown:
Mr. Brown
PO Box 20907
NY, NY 10009
Email: tice@snyderbrown.com
With copies to (which shall not constitute notice):
Frost Brown Todd LLC
400 West Market Street, 32nd Floor
Louisville, KY 40202
Attention: James A. Giesel
Email: jgiesel@fbtlaw.com
15. Severability. If at any time subsequent to the date of this Agreement, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement.
16. Counterparts. This Agreement may be executed (including by PDF) in two or more counterparts which together shall constitute a single agreement.
17. Successors and Assigns. This Agreement shall not be assignable by any of the parties to this Agreement. This Agreement, however, shall be binding on successors of the parties hereto.
18. No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and is not enforceable by any other persons.
19. Fees and Expenses. The Company shall, within five business days of Mr. Brown’s presentation of any written request to the Company, reimburse Mr. Brown for his reasonable and documented with specificity out-of-pocket fees and expenses (including legal expenses) incurred in connection with (i) his withdrawn proxy contest for the 2022 Annual Meeting, including but not limited to the Director Nomination, the Stockholder Proposal, Schedule 13D filings and any proxy solicitation filings and (ii) the negotiation and execution of this Agreement. The parties
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agree and understand that the maximum total amount reimbursable by the Company for the fees and expenses described herein shall not exceed $100,000 in the aggregate, unless otherwise agreed to by the parties in writing and executed as an amendment to this Agreement.
20. Mr. Brown’s Gaming Licensing.
(i) Mr. Brown shall comply in timely manner will all gaming regulatory licensing requests of any gaming regulator in a jurisdiction with the Company is currently doing business or at any time files for licensing approval in the future (individually or collectively a “Gaming Agency”). Mr. Brown acknowledges that he shall retain and maintain independent gaming counsel to assist him with his gaming licensing obligations. Mr. Brown’s failure to meet any gaming regulatory obligation or any delay that causes the Company to reasonably and in good faith believe that any of its licenses or ability to be licensed by any Gaming Agency to be in jeopardy (a “Gaming Breach”), shall constitute a material breach of this Agreement; provided, that Mr. Brown fails to cure such Gaming Breach within two calendar days after written notice thereof by the Company. Mr. Brown acknowledges and agrees that any Gaming Agency may, in its discretion, require Mr. Brown to file and seek approval for his gaming application. Mr. Brown shall bear all expenses and fees related to his gaming licensing obligations. Time is of the essence with regard to Mr. Brown’s obligations to timely file and obtain any and all gaming licensing that is required by statute, regulation, requested by a gaming regulatory body or the Company and meet all requirements of any Gaming Agency.
(ii) The Company agrees to provide to Mr. Brown’s gaming counsel (as identified by Mr. Brown in writing) with notices that the Company receives from Gaming Agencies or regulators that relate to Mr. Brown’s obligations to file and seek approval of gaming licenses. The Company will notify Mr. Brown of any new jurisdictions in which it seeks licensing after the date hereof, to the extent it reasonably and in good faith believes that Mr. Brown must also be licensed. If, in an effort directed by Mr. Brown’s gaming counsel to alleviate his gaming licensing obligations, Mr. Brown obtains consent from a Gaming Agency to assign voting rights to all or a portion of his Voting Securities, Mr. Brown shall first offer such voting rights to the Company, in which case the Company will have the right (but not the obligation) to accept such voting rights. If the Company agrees to accept such voting rights, the Company will reasonably cooperate in such effort at no out-of-pocket cost to the Company. The Company shall have no obligations to Mr. Brown as it relates to Mr. Brown’s gaming licensing beyond those set forth in this Section 20(ii).
21. Interpretation and Construction. Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regards to events of drafting or preparation. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The term “including” shall be deemed to mean “including without limitation” in all instances. In all instances, the term “or” shall not be deemed to be exclusive.
22. Attorney’s Fees. If any lawsuit or other legal action proceeding is instituted in connection with any breach or default, or alleged breach or default, of this Agreement, the prevailing party shall be entitled to recover from the losing or defaulting party all reasonable fees, costs and expenses (including reasonable fees and expenses of attorneys and witnesses) incurred in connection with the prosecution or defense of such proceeding, whether or not the proceeding is prosecuted to a final judgment or determination.
23. Time is of the Essence. The parties hereby agree that time is of the essence with respect to performance of each of the parties’ obligations under this Agreement.
[Signature Page Follows]
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The Parties hereto have signed this Agreement as of the date indicated above.
| GALAXY GAMING, INC. |
By: | /s/ Todd P. Cravens |
Name: | Todd P. Cravens |
Title: | President and Chief Executive Officer |
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| TICE P. BROWN |
By: | /s/ Tice P. Brown |
Name: | Tice P. Brown |
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