S&W Amusements Inc.
Class B Master License, COAMs and Location Contracts

Online Auction Closing
February 26th, 2020 at 2:00 PM

Dear Bidders:

On behalf of the court appointed Receiver for S&W Amusements Inc., (“S&W”) in Bibb County Superior Court Civil Action File No. 2019-CV-070909 ( the “Receiver”) we will offer Class B Master License Number 15076 held by S&W ( the “ Master License”) , coin operated amusement machines ( COAMs), personal property and equipment owned by S&W and location contracts authorizing the placement of S&W COAMs in locations around the State of Georgia ( the “Location Contracts”) by online auction ending on February 26th, 2020 at 2PM.

Interested bidders will be required to pre-qualify prior to the auction date to participate. Included in this packet are the terms and conditions of the auction, requirements to bid and forms that must be completed and submitted to L.W. Benton Company at the address specified below. All documents and requirements to pre-qualify must be submitted for review no later than 2:00 PM on Wednesday, February 19th, 2020. Because pre-qualification is required to bid at this auction, no person or entity will be permitted to participate without having submitted all the required documents set forth in this packet.

The information in this packet as well as additional supporting information, links to The Georgia Lottery Corporation (GLC) websites and the Georgia COAM Laws and Rules can be found at www.coamauction.com. It is strongly encouraged that all prospective bidders review the COAM Laws and Rules before bidding at the auction.

All questions regarding the Auction should be directed to Bo Benton at bo@bidderone.com or 478-731-9200. All pre-qualification documents should delivered, mailed or emailed to:

John B. Wilkerson, Jr. Receiver for S&W Amusements Inc.
C/O L.W. Benton Company, Inc
107 Oak Valley Drive
Macon, GA 31217
478-744-0027 office

The auction is being conducted according to the terms and conditions set forth in that certain Consent Order dated January 13,2020 and filed on January 13, 2020 in the case of STATE OF GEORGIA ex rel K. DAVID COOKE, JR., District Attorney for the Macon Judicial Circuit, Plaintiff vs. S&W Amusements Inc. et al, Defendants in Bibb County Superior Court Civil Action File No. 2019-CV-070909.

Auction Information

Timeline
Description   Dates*
Auction Notices Posted   February 10th, 2020
Pre-Qualification Auction Participation Form(s), Proof of Fund Letter(s) & Registration Deposit Due    February 19th, 2020 by 2:00 PM
Online Bidding Opens   February 25th, 2020 at 2:00 PM
Online Auction Closes   February 26th, 2020 at 2:00 PM**
10% Down Payment & Signed Contract Due   February 28th, 2020 by 2:00 PM
Letter of Credit for Remaining Balance, GLC Application & GLC Fees Due   March 5th, 2020 by 2:00 PM

*The Receiver reserves the right to make changes to dates, terms, bidding process etc. at any time.
**Bidding begins closing at 2:00 PM with a 5-minute auto extend feature. See Exhibit E for details.
***All bids will be open to acceptance until March 2, 2020 at 2:00 PM.

Auction Process

The assets will be sold by online auction. Assets may be offered in combinations and as a complete package. The Receiver, in his sole discretion, reserves the right to accept the winning bid or bids. Only the Class B COAM Master License, location contracts and assets will be offered in this auction. No ownership interest in the S&W Amusements Inc. entity is being conveyed. Bid increments shall be determined by the auctioneer.

Minimum Qualifications

Pre-qualification is required to participate in the auction. To be considered for qualification as a bidder at the auction, a person or entity must submit the following documents by the specified deadline:

1.   Pre-Qualification Auction Participation Form (Exhibit A)
2.   Proof of Funds Letter (Exhibit B) or letter of credit acceptable to Receiver
3.   Bidder's Waiver attached as (Exhibit C)
4.   Registration Deposit of $25,000 (Twenty-Five Thousand Dollars) delivered to L.W. Benton Company by wire transfer

Pre-Qualification

Only those entities and/or individuals currently holding a Class B COAM Master License which is in good standing with the Georgia Lottery Corporation shall be pre-qualified to bid. Each owner or officer of a prospective entity must be listed on the Pre-Qualification Auction Participation Form. Please note that a winning bid is not transferable to any other bidder, group or entity.

For more information about the COAM Laws, Rules and Regulations visit the Georgia COAM website at www.gacoam.com. It is strongly encouraged that all prospective bidders review the COAM Laws, Rules and Regulations on the Georgia Lottery Corporation website before bidding as the auction and the transfer of assets contemplated herein are subject to those laws, rules and regulations.

Each bidder will be required to represent and warrant that bidder has sufficient funds to close the transaction contemplated by this auction. Bidder will also be required to represent and warrant that bidder holds a Class B Master License and that to the best of bidder’s knowledge, information and belief there is no reason known to bidder that would cause the Georgia Lottery Corporation to deny bidder’s application to have the Master License transferred to bidder or to deny bidder’s application to have any Location Contract transferred to bidder.

Proof of Funds

A Proof of Funds Letter in the form attached as Exhibit “B” must be completed by each prospective bidder to demonstrate its maximum bid capacity. If a prospective bidder has more than one (1) account that it wishes to reference, the prospective bidder must submit more than one (1) Proof of Funds Letter.

Registration Deposit

A registration deposit in the amount of $25,000.00 will be required to participate in the Auction and will be due at the time the Pre-Qualification documents and Proof of Funds Letter(s) are submitted to the Receiver for review. If pre-qualification is denied, the registration deposit will be refunded to the bidder. If a bidder is qualified to bid in the auction but is not the winning bidder, as determined by the Receiver, the registration deposit will be refunded to the bidder. For the winning bidder(s), the registration deposit will be applied to the purchase price at closing.

Disqualification of a Prospective Bidder

Any incorrect or false information submitted may result in a denial of a prospective bidder to participate in the auction. Any incomplete or untimely information submitted may result in a denial of a prospective bidder to participate in the auction. The Receiver in his sole discretion will determine whether a prospective bidder meets the pre-qualification requirements for this auction.

After the Auction
At the conclusion of the auction, the winning bidder(s) will be e-mailed a contract in the amount of the final sales price for the assets purchased. A fully executed contract and the 10% deposit must be wired to the Receiver by February 28th 2020 at 2:00 PM.

Payment
The winning bidder(s) will be required to pay the Receiver 10% of the total sales price by 2:00 PM on February 28, 2020. Payment shall be in the form of a wire transfer to the Receiver’s account. Time being of the essence, winning bidder(s) by 2:00 PM on March 5th, 2020 must provide the Receiver letter of credit demonstrating bidder’s ability to pay the final balance by 2:00 PM on March 5th, 2020. The letter of credit must be acceptable to Receiver in his sole discretion.

Buyer’s Premium
A buyer’s premium in the amount of $5,000 will be added to the final bid price for each lot if sold individually or a buyer’s premium in the amount of $25,000 will be added to the final bid price if all lots are sold as a package.

Application for Transfer
The winning bidder shall apply to the Georgia Lottery Corporation for the transfer of the Class B COAM Master License, pay any fees required for the transfer of the license no later than March 5, 2020 and provide the Receiver proof of the application by 2:00 PM on March 5, 2020. In the event of the sale of Location Contracts apart from the master license, the winning bidder shall provide the Receiver proof of application for the transfer of the location agreements by 2:00 PM on March 5, 2020.

Contract Documents
After the successful bidder is determined, contract documents will be sent by e-mail to the successful bidder, who must execute and fax or email back to the Receiver by February 28, 2020 at 2:00 PM EST. No conditions may be added to the agreement by the purchaser. Successful bidders (also referred to as the “Purchaser”) will deliver a deposit in the amount of 10% of the total sales price in the form of a wire transfer to the Receiver by February 28, 2020 at 2:00 PM EST. The remaining balance is due in cash at closing. Purchaser shall be responsible for all wire transfer fees. Successful bidders not executing and returning their contract with the 10 % deposit by February 28, 2020 at 2:00 PM EST will be considered in default and shall forfeit the $25,000.00 registration deposit as a result of the default.

Example 1: If Sold as a Package (all 5 Lots together)

Final Bid Price:                   $ 5,000,000
+ Purchasers Fee:                   $ 25,000
Total Sales Price:                   $ 5,025,000

10% Deposit Due February 28th by 2:00 PM   $ 502,500

Letter of Credit Due March 5th by 2:00 PM: $ 5,025,000
- $ 25,000 Credit for Registration Deposit
- $ 502,500 Credit for Deposit Paid
$ 4,497,500

___________________________________________________

Example 2: If Sold as individual lots without Master License, each lot

Final Bid Price:                   $ 1,000,000
+ Purchasers Fee:                   $ 5,000
Total Sales Price:                   $ 1,005,000

10% Deposit Due February 28th by 4:00 PM   $ 100,500

Letter of Credit Due March 4th by 4:00 PM: $ 1,005,000
- $ 25,000 Credit for Registration Deposit
- $ 100,500 Credit for Deposit Paid
$ 879,500

Receiver Reserved Authority

In addition to any authority stated elsewhere in this Packet, the Receiver reserves the right to, in his sole discretion:
•   Waive any informality or technical defect if, in the Receiver’s judgment, the best interest of the Receivership Estate will be so served;
•   Eliminate any non-material specification that cannot be complied with by any of the prospective bidders;
•   Amend any requirements and/or terms to allow prospective bidders to submit pre-qualification information modifications accordingly;
•   Change any of the scheduled dates herein;
•   Reject any or all pre-qualification information received for this auction and require amended pre-qualification to be resubmitted;
•   Add or delete property, reject any bid, advance any bid or cancel the sale;
•   Require clarifications and revisions to any pre-qualification information;
•   Require additional information from a prospective bidder in order to evaluate the bidder’s ability to consummate a transaction and to fulfill its obligations in connection therewith
•   Disqualify any prospective bidder or bidder for any reason at the sole discretion of the Receiver or representatives of the Receiver;
•   Award the assets to a backup bidder at any time, should the winning bidder: default, fail to meet the requirements of the sale, not perform in reasonable time frame as determined by the Receiver or any other reason at the sole discretion of the Receiver.
•   Modify the date, time, order, terms and details of the auction for any reason at any time.

Inspection
Locations are not under the control of the Receiver. There will be no physical inspections of any locations to inspect the COAM’s.

Condition of Assets

The Assets to be sold at the Auction are on an “as-is and where-is basis” with all faults, without recourse and the Receiver specifically disclaims any and all warranties or representations of whatever nature, express or implied, including but not limited to, warranties of merchantability and fitness for a particular use or purpose, compliance of the assets with the requirements of any laws, rules, specifications or contracts pertaining thereto, latent defects, the quality of the material or workmanship of the assets, or the operation, use, or performance of the assets, and any qualified bidder agrees to take the assets on that basis; there are no warranty or representations whatsoever, including without limitation, value or quality of the assets, possession, quiet enjoyment or the like in this auction.

Auction Bid Default
Bids are a binding offer to enter a contract to purchase assets and the bidder is responsible for honoring its bid. Every legal remedy available will be used to ensure bidder’s performance. In the event the balance of the contract selling price is not paid in full by a winning bidder when due, the $25,000.00 registration deposit and the 10 % deposit will be forfeited to the Receiver who shall retain any other rights or remedies by law or equity provided as a result of the breach.

Bid Retraction

By placing a bid, bidder acknowledges all terms of the auction and agrees not to retract any bids or offers. If a bidder cannot satisfy the terms of the auction, after qualifying to bid the bidder shall forfeit the registration deposit submitted in order to qualify for the auction.

Disclaimers
a) The Assets are being sold in an "as is" condition "with all faults,", specifically and expressly without any warranties, representations or guarantees, either express or implied, of any kind, nature, or type whatsoever from or on behalf of the Receiver. Bidders acknowledges that Receiver acquired the Assets as Receiver in the case of State of Georgia, ex rel K. David Cooke Jr., Plaintiff v. S&W Entertainment, Inc, et al Defendants, Bibb County Superior Court Civil Action File No. 2019-CV-070909 and consequently has little or no direct knowledge concerning the physical or economic characteristics of the assets being sold. Bidder acknowledges that Bidder has not relied, and is not relying, upon any information, document or other literature, projection, proforma, statement, representation, guarantee or warranty (whether express or implied, oral or written, material or immaterial) that may have been given by or made by or on behalf of the Receiver and that Bidder is relying solely on its own investigation and due diligence in entering any bid.

b) Bidder hereby acknowledges that it shall not be entitled to rely on the Receiver or its agents as to (i) the quality, nature, adequacy or physical condition of the assets being sold; (ii) the enforceability or liability of the S&W Amusements Inc. under any of the location contracts ; (iii) the transferability of the Master License or (iv) S&W’s compliance with any applicable codes, laws, regulations, statutes, ordinances, covenants, conditions or restrictions of any governmental or quasi governmental entity, or of any other person or entity specifically including but not limited to the rules and regulations of the Georgia Lottery Commission (vi) the number or status of Location Contracts on the date of closing.

c) Purchaser acknowledges that the COAMs are being sold in “as is” condition and that Receiver shall not be required to make any repairs in connection with the sale of the COAMs.

d) Without in any way limiting the generality of the preceding subparagraphs, bidder specifically acknowledges and agrees that upon closing any transaction it will be required to waive, release and discharge any claim it has, might have had or may have against the Receiver with respect to the assets being sold , either patent or latent; its ability or inability to maintain Location Contracts, its ability or inability to transfer the Master License, the condition of the assets, the actual or potential income or profits to be derived from the assets; taxes or assessments now or hereafter payable on the assets ; the compliance with any laws, rules, regulations or requirements; and any other state of facts which exist with respect to the assets.

e) In all transactions, L.W. Benton Company, Inc. is acting as agent for the Receiver, not as a purchaser’s agent. The auctioneer and/or seller reserves the right to advance the bidding at any time up to the reserve amount. The decision of the auctioneer is final.

f) All information furnished by the Receiver to bidders is provided as a courtesy only and is derived from information provided by third-parties to the Receiver. The Receiver and his representatives shall not be liable for inaccuracies, errors, or omissions of any kind or nature. The Receiver makes no representations, warranties, assurances as to the accuracy of any information provided by the Receiver. Information provided is retrospective and not necessarily indicative of future performance, is not a projection and does not constitute a representation by the Receive regarding future performance. Any reliance on such information shall be solely at the risk of the recipient.

g) Purchaser acknowledges that representations by the Receiver regarding the placement of COAM equipment in specific locations does not guarantee future placement. Purchasers acknowledge and understand that, in the ordinary course of S&W’s business, the movement, replacement and repair of COAM equipment is a common occurrence and that the continued operation of S&W’s business may require such changes to be made. Purchaser expressly assumes the risk that such regular business activity may result in changes to equipment located at various contract locations.

h) Each prospective bidder will be required to represent and warrant that neither the prospective bidder nor any officer, director, general partner or principal of prospective bidder, nor any person in control of or under common control with prospective bidder has ever had an ownership interest in S&W is not now nor has ever been an employee, officer, director, attorney, agent or been engaged in business with any of the Defendants in the case of STATE OF GEORGIA ex rel K. DAVID COOKE, JR., District Attorney for the Macon Judicial Circuit, Plaintiff vs. S&W Amusements Inc. et al, Defendants in Bibb County Superior Court Civil Action File No. 2019-CV-070909 nor is prospective bidder acting on behalf or in concert with any of the Defendants in the case of STATE OF GEORGIA ex rel K. DAVID COOKE, JR., District Attorney for the Macon Judicial Circuit, Plaintiff vs. S&W Amusements Inc. et al, , Defendants in Bibb County Superior Court Civil Action File No. 2019-CV-070909 as to the purchase of the assets nor has prospective bidder participated in any manner whatsoever in the case of STATE OF GEORGIA ex rel K. DAVID COOKE, JR., District Attorney for the Macon Judicial Circuit, Plaintiff vs. S&W Amusements Inc. et al, Defendants in Bibb County Superior Court Civil Action File No. 2019-CV-070909. Any successful bidder will be required to sign an affidavit at closing containing these representations.
Server & Software Technical Issues:

In the event that there are technical difficulties related to the server, software or any other online auction-related technologies, the Receiver reserves the right to extend bidding, continue the bidding, reschedule the closing date and time or close the bidding. Neither the company providing the software nor L.W. Benton Company, Inc. shall be held responsible for a missed bid or the failure of the software to function properly for any reason. Email notifications may be sent to registered bidders with updated information as deemed necessary by L.W. Benton Company, Inc.

Confidentiality

“Confidential Information” is all non-public or proprietary information concerning the assets of S&W being auctioned which is disclosed by or through the Receiver or its representatives to a bidder. All Confidential Information will be used by Bidder for the sole purpose of evaluating a possible purchase and will not be used for any other purpose. Except as may be otherwise required by applicable law, all Confidential Information will be kept confidential by the bidder and not disclosed to any other parties; provided, however, that such information may be disclosed to bidder’s directors, officers and professional advisors.

No Representation

Receiver and any representative of the Receiver shall have no liability to any qualified bidder or any person whomsoever for any claim, loss, damage or expense (including attorneys’ fees) of any kind or nature, whether special, consequential, economic or otherwise, caused or alleged to be caused indirectly, incidentally, or consequentially by the assets of any part thereof or products therefrom, by any inadequacy of the assets or defect or deficiency therein, by any incident whatsoever and howsoever caused.

Survival

All of the terms, provisions and obligations of the bidder contained herein shall survive he the closing of the transaction/s provided for herein.

S&W Amusements, Inc COAM Master License, Location Contracts & COAMs Liquidation