Exhibit 10.12
 
PROMISSORY NOTE ("Note")

$1,000,000.00
June 26, 2008

THE UNDERSIGNED ("Maker") promises to pay to the order of James W. Stuckert
("Payee"), whose mailing address is 500 West Jefferson Street, Louisville,
Kentucky 40202, the principal sum of ONE MILLION DOLLARS ($1,000,000.00), with
interest on the unpaid principal calculated at the following rate and payable in
the following manner:
 

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(a)
The interest rate shall be equal to the "Prime Rate" plus three (3) percentage
points. The term "Prime Rate" shall mean the annual rate of interest as
published in the Wall Street Journal on the date hereof. Notwithstanding
anything herein to the contrary, the interest rate applied to this Note shall at
no time exceed the maximum rate permitted by applicable law, whether now or
hereafter in effect.

 

(b)
The entire unpaid principal balance of this Note, together with accrued
interest, shall be due and payable on or before September 30, 2008 (the
"Maturity Date"), unless the Maturity Date is amended as provided below.

 
Warrant. As additional inducement to Payee to provide to Maker the loan
referenced herein, simultaneously with the execution and delivery of this Note
Maker shall execute and deliver to Payee a warrant to acquire up to Twenty
Thousand (20,000) shares of its common stock upon the terms and conditions
contained in, and substantially in the form of, the form of Warrant attached
hereto as Exhibit A.
 
Amendment of Maturity Date. If on or before the date ten (10) days before the
scheduled Maturity Date, Maker executes and delivers to Payee a warrant to
purchase up to Ten Thousand (10,000) shares of its common stock substantially in
the form of Exhibit A hereto, the Maturity Date shall be amended to become
December 31, 2008. That amended date shall become the “Maturity Date” for all
purposes under this Note.
 
Interest Basis. Interest shall be calculated on the basis of a three hundred
sixty (360) day year for actual days elapsed.
 
Prepayment. The Maker shall have the privilege of prepaying this Note in part or
in full at any time.
 
Mandatory Repayment. In the event Maker receives proceeds, through settlement or
otherwise, derived from its status as plaintiff in FGC v. Affiliated FM
Insurance Company, Case No. 07-20897-CIV-UNGARO, filed in the United States
District Court for the Southern District of Florida, within ten (10) days
following receipt of such proceeds Maker shall pay to Payee the outstanding
principal balance of this Note plus all accrued but unpaid interest thereon.
 
Application of Payments. All payments made on the indebtedness evidenced by this
Note shall be applied first to payment of accrued interest, and then to payments
of principal.
 
Place and Manner of Payment. All payments of interest and principal are payable
in lawful money of the United States of America in cash or immediately available
funds, at the Payee's office at which the payment is made, or at such other
place as the Payee may designate in writing. At its option, the Payee may elect
to give the Maker credit for any payment made by check or other instrument in
accordance with the Payee's availability schedule in effect from time to time
for such items and instruments, which the Payee will make available to the Maker
on request.
 
Event of Default. Maker shall be in default in this Note upon Maker's failure to
make any payment of any sum due hereunder on or before the date fifteen (15)
days following the Maturity Date without further notice or demand.
 

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Remedies after Default. At the option of Payee, all or any part of the principal
and accrued interest on the Note, and all other obligations of the Maker to the
Payee shall become immediately due and payable without additional notice or
demand, upon the occurrence of an Event of Default or at any time thereafter.
Payee may exercise all rights and remedies provided by law, equity, or this
Note. All rights and remedies are cumulative and concurrent and may be pursued
singularly, successively or together, at the sole discretion of Payee, and may
be exercised as often as occasion therefore shall arise. Such remedies are not
exclusive, and Payee is entitled to all remedies provided at law or equity,
whether or not expressly set forth therein. No act, or omission or commission or
waiver of Payee, including specifically any failure to exercise any right,
remedy or recourse, shall be effective unless set forth in a written document
executed by Payee and then only to the extent specifically recited therein. A
waiver or release with reference to one event shall not be construed as
continuing, as a bar to, or as a waiver or release of, any subsequent right,
remedy or recourse as to any subsequent event, nor shall any single or partial
exercise thereof preclude any other or further exercise or the exercise of any
other right, remedy or recourse. No notice to or demand on any party liable for
the payment of this Note in any case shall entitle any such party to any other
or further notice or demand in the same, similar or other circumstances.
 
Waiver and Consent. By the making or guaranty of this Note:
 
(a)  Maker and Guarantor waives demand, presentment, protest, notice of protest,
notice of dishonor, suit against any party and all of the requirements necessary
to hold any maker, cosigner, endorser, surety or guarantor liable;
 
(b)  The Guarantor consents to any renewals or extensions of time for payment on
this Note;
 
(c)  Maker and the Guarantor consent to Payee's release of, agreement not sue,
suspension of the right to enforce this instrument against and discharge or
compromise of any obligation of any co-signer, endorser, surety or guarantor,
all without notice to or further reservations of rights against any of such
parties, and all without in any way affecting or releasing the liability of any
of such parties;
 
(d)  The Guarantor consents to any modification of the terms of this Note agreed
to in writing by Maker and Payee;
 
(e)  Maker and the Guarantor consent to any and all sales, repurchases,
participations and sub-participations of this Note to or by any person or entity
in any amounts and waive notice of such sales, repurchases, participations and
sub-participations of this Note; and
 
(f)  Maker and the Guarantor consent to Payee's right of set-off as well as any
participant's or sub-participant's right of set-off.
 
Usury Limitation. The parties agree and intend to comply with the applicable
usury law, and notwithstanding anything contained herein or other document
related to the loan evidenced by this Note, the effective rate of interest to be
paid on this Note (including all costs, charges and fees which are characterized
as interest under applicable law) shall not exceed the maximum contract rate of
interest permitted under applicable law, as it exists from time to time. Payee
agrees not to knowingly collect or charge interest (whether denominated as fees,
interest or other charges) which will render the interest rate hereunder
usurious, and if any payment of interest or fees by Maker to Payee would render
this Note usurious, Maker agrees to give Payee written notice of such fact with
or in advance of such payment. If Payee should receive any payment which
constitutes interest under applicable law in excess of the maximum lawful
contract rate permitted under applicable law (whether denominated as interest,
fees or other charges), the amount of interest received in excess of the maximum
lawful rate shall automatically be applied to reduce the principal balance,
regardless of how such sum is characterized or recorded by the parties.
 

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Disclaimer of Relationship. The Maker and the Guarantor to this obligation
acknowledge that:
 
(a)  The relationship between the Payee, Maker and the Guarantor is one of
creditor and debtor and not one of partner or joint venturer;
 
(b)  The Maker and the Guarantor have not relied on any representation of the
Payee regarding the merits of the use of proceeds of the loan.
 
Choice of Law. This Note shall be governed by the Laws of the State of Delaware
(without regard to its choice of law rules) and the United States of America,
whichever the context may require or permit.
 
Severability. If any provision of this Note shall be held unenforceable or void,
then such provision shall be deemed severable from the remaining provisions and
shall in no way affect the enforceability of the remaining provisions nor the
validity of this Note.
 
Captions and Pronouns. The captions and headings of the various sections of this
Note are for convenience only, and are not to be construed as confining or
limiting in any way the scope or intent of the provisions hereof. Whenever the
context requires or permits, the singular shall include the plural, the plural
shall include the singular, and the masculine, feminine and neuter shall be
freely interchangeable.
 
Time of the Essence. Time is of the essence with respect to each provision in
this Note where a time or date for performance is stated. All time periods or
dates for performance stated in this Note are material provisions of this Note.
 
Waiver of Trial by Jury. The Maker hereby, and the Payee by its acceptance of
this Note, knowingly, voluntarily and intentionally waive the right either may
have to a trial by jury in respect to any litigation arising out of, under, or
in connection with this Note and other agreements executed or contemplated to be
executed in connection herewith, or arising out of, under, or in connection with
any course of conduct, course of dealing, statements (whether verbal or written)
or action of either party, whether in connection with the making of the loan,
collection of the loan, or otherwise. This provision is a material inducement
for the Payee making the loan evidenced by this Note.
 
IN WITNESS WHEREOF, Maker has executed and delivered this instrument as of the
day and year first above written.

FLORIDA GAMING CORPORATION, a Delaware
corporation
 
By: 
/s/W.Bennett Collett
 
W. Bennett Collett
 
Chairman and CEO

 

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GUARANTY

The undersigned W. Bennett Collett hereby personally guaranties the full and
prompt payment of all amounts due hereunder by Maker to Payee.

/s/ W. Bennett Collett
W. Bennett Collett

 

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EXHIBT A

Form of Warrant

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER STATE SECURITIES LAWS. THESE
SECURITIES MAY NOT BE RESOLD OR TRANSFERRED UNLESS REGISTERED OR EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS, AND HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED.

 
WARRANT TO PURCHASE COMMON STOCK OF
FLORIDA GAMING CORPORATION

Void after June 26, 2013
 
Number of Shares: 20,000

This certifies that James W. Stuckert (the “Holder”), for value received, is
entitled to purchase, subject to the terms and conditions of this warrant (this
“Warrant”), from Florida Gaming Corporation, a Delaware corporation (the
“Company”), having its principal place of business at 3500 N.W. 37th Avenue,
Miami, Florida 33142, an aggregate of Twenty Thousand (20,000) shares (the
“Warrant Shares”) of the Company’s common stock, par value $0.20 per share
(together with any common stock into which such common stock may be converted in
connection with any merger or consolidation of the Company, the “Common Stock”),
at a price per share of $12.50 (the “Exercise Price”).
 
This Warrant shall be exercisable, in whole or in part, at any time or from time
to time from and after June 26, 2008 (the “Initial Exercise Date”) up to and
including 5:00 p.m. (Eastern Time) on June 26, 2013 (such date being referred to
herein as the “Expiration Date”), upon surrender to the Company at its principal
office (or at such other location as the Company may advise the Holder in
writing) of this Warrant properly endorsed with (i) the Exercise Form attached
hereto duly completed and executed and (ii) payment pursuant to Section 2 of the
aggregate Exercise Price for the number of Warrant Shares for which this Warrant
is being exercised determined in accordance with the provisions hereof. The
Exercise Price and the number of Warrant Shares purchasable hereunder are
subject to further adjustment as provided in Section 4 of this Warrant.
 

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Exercise; Issuance of Certificates; Acknowledgement. This Warrant is exercisable
at the option of the Holder of record hereof, at any time or from time to time
on or after the Initial Exercise Date up to the Expiration Date, for all or any
part of the Warrant Shares (but not for a fraction of a Warrant Share) which may
be purchased hereunder. The Company agrees that the shares of Common Stock
purchased under this Warrant shall be and are deemed to be issued to the Holder
hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered, properly endorsed, the
completed, executed Exercise Form delivered and payment made for such shares.
Certificates for the shares of the Common Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company’s expense within a reasonable time after the rights represented by this
Warrant have been so exercised. Each certificate so delivered shall be in such
denominations of the Warrant Shares as may be requested by the Holder hereof and
shall be registered in the name of such Holder. In case of a purchase of less
than all the Warrant Shares, the Company shall execute and deliver to Holder
within a reasonable time an Acknowledgement in the form attached hereto
indicating the number of Warrant Shares which remain subject to this Warrant, if
any.
 
Payment for Shares. The aggregate purchase price for Warrant Shares being
purchased hereunder must be paid by check or wire transfer of immediately
available funds to an account designated in writing by the Company to the
Holder.
 
Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees
that all shares of Common Stock which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all preemptive rights
of any shareholder and free and clear of all taxes, liens and charges with
respect to the issue thereof. The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved, for the
purpose of issue or transfer upon exercise of the rights evidenced by this
Warrant, a sufficient number of shares of authorized but unissued shares of
Common Stock, or other securities and property, when and as required to provide
for the exercise of the rights represented by this Warrant in full.
 
Adjustment of Exercise Price and Number of Shares. The number of shares of
Common Stock issuable upon the exercise of this Warrant and the Exercise Price
hereunder shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
 
Dividends or Distributions of Common Stock. If the Company shall at any time or
from time to time after the date hereof make or issue, or fix a record date for
the determination of stockholders entitled to receive, a dividend or other
distribution on the Common Stock payable in additional shares of Common Stock,
then and in each such event the Exercise Price hereunder then in effect shall be
decreased as of the time of such issuance or, in the event such a record date
shall have been fixed, as of the close of business on such record date, by
multiplying the Exercise Price hereunder then in effect by a fraction: (a) the
numerator of which shall be the total number of shares of Common Stock (assuming
the conversion or exercise of all outstanding securities of the Company that are
convertible into or exercisable for the purchase of Common Stock, including the
exercise of all options and warrants to purchase Common Stock or securities that
are convertible into or exercisable for the purchase of Common Stock) issued and
outstanding immediately prior to the time of issuance or the close of business
on such record date; and (b) the denominator of which shall be the total number
of shares of Common Stock (assuming the conversion or exercise of all
outstanding securities of the Company that are convertible into or exercisable
for the purchase of Common Stock, including the exercise of all options and
warrants to purchase Common Stock or securities that are convertible into or
exercisable for the purchase of Common Stock) issued and outstanding immediately
after the time of issuance or the close of business on such record date.
 

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Dividends or Distributions of Other Securities. If the Company shall at any time
or from time to time after the date hereof make or issue, or fix a record date
for the determination of stockholders entitled to receive, a dividend or other
distribution on the Common Stock payable in securities of the Company other than
Common Stock and other than as otherwise adjusted in this Section 4, then and in
each such event the Holder shall be entitled to receive upon the exercise of
this Warrant, in addition to the number of shares of Common Stock receivable
thereupon, the kind and amount of such other securities receivable upon such
dividend or distribution, to which a holder of the number of shares of Common
Stock (or any shares of stock or other securities which may be) issuable upon
the exercise of this Warrant would have received if this Warrant had been
exercised immediately prior to such dividend or distribution, all subject to
further adjustment as provided herein.
 
Stock Splits or Combinations. If the Company shall at any time subdivide the
outstanding shares of Common Stock, or if the Company shall at any time combine
the outstanding shares of Common Stock then the exercise price hereunder
immediately shall be decreased proportionally (in the case of a subdivision) or
increased proportionally (in the case of a combination). Any such adjustment
shall become effective at the close of business on the date the subdivision or
combination becomes effective.
 
Reclassification or Reorganization. If the Common Stock issuable upon the
exercise of this Warrant shall be changed into the same or different number of
shares of any class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend provided for in Section 4.1, 4.2 or 4.3 above, or a
reorganization, merger, consolidation or sale of assets provided for in Section
4.5 below), then and in each such event the Holder shall be entitled to receive
upon the exercise of this Warrant the kind and amount of shares of stock and
other securities and property receivable upon such reorganization,
reclassification or other change, to which a holder of the number of shares of
Common Stock (or any shares of stock or other securities which may be) issuable
upon the exercise of this Warrant would have received if this Warrant had been
exercised immediately prior to such reorganization, reclassification or other
change, all subject to further adjustment as provided herein.
 
Merger, Consolidation or Sale of Assets. If at any time or from time to time
there shall be a capital reorganization of the Common Stock (other than a
subdivision, combination, reclassification or exchange of shares provided for
elsewhere in this Section 4) or a merger or consolidation of the Company with or
into another corporation, or the sale of all or substantially all of the
Company’s assets and properties to any other person or entity, then as a part of
such reorganization, merger, consolidation or sale, provision shall be made so
that the Holder shall thereafter be entitled to receive upon the exercise of
this Warrant, the number of shares of stock or other securities or property of
the Company, or of the successor corporation resulting from such reorganization,
merger, consolidation or sale, to which a holder of the number of shares of
Common Stock (or any shares of stock or other securities which may be) issuable
upon the exercise of this Warrant would have received if this Warrant had been
exercised immediately prior to such reorganization, merger, consolidation or
sale.
 
Notice of Adjustment and Record Dates. The Company shall promptly notify the
Holder in writing of each adjustment or readjustment of the exercise price
hereunder and the number of shares of Common Stock issuable upon the exercise of
this Warrant. Such notice shall state the adjustment or readjustment and show in
reasonable detail the facts on which that adjustment or readjustment is based.
In the event of any taking by the Company of a record of the holders of Common
Stock for the purpose of determining the holders thereof who are entitled to
receive any dividend or other distribution, the Company shall notify the Holder
in writing of such record date at least ten (10) days prior to the date
specified therein.
 
Rights of Holder. This Warrant does not entitle the Holder to any voting rights
or any other rights as a stockholder of the Company prior to the date of
exercise hereof.
 

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No Impairment. Except and to the extent as waived or consented to by the Holder,
the Company will not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may be necessary or appropriate in order to protect
the exercise rights of the Holder against impairment.
 
Transfer; Assignment. Neither this Warrant nor any legal, economic or beneficial
interest in this Warrant shall be transferred by way of sale, exchange,
conversion, assignment, pledge, gift or other disposition or transfer (all of
which acts shall be deemed included in the term “transfer” as used in this
Agreement) by the Holder to any person or entity. Any attempt by the Holder to
transfer this Warrant, any rights, interests or obligations hereunder in
violation of this Section 7 shall be null and void. Subject to the preceding
sentences, this Warrant shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
 
Loss, Theft, Destruction or Mutilation of Warrant. If this Warrant is mutilated,
lost, stolen or destroyed, the Company shall issue and deliver in substitution
for and upon cancellation of the mutilated Warrant, or in substitution for the
Warrant lost, stolen or destroyed, a new warrant or warrants of like tenor and
representing an equivalent right or interest, but only upon, in the case of a
lost, stolen or destroyed certificate, receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction. If required by
the Company, then Holder shall furnish an affidavit or other evidence reasonably
satisfactory to the Company of the loss, theft or destruction of such Warrant
and an indemnification agreement.
 
Modification and Waiver. Any term of this Warrant may be amended and the
observance of any term of this Warrant may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holder. Any amendment or waiver effected
in accordance with this paragraph shall be binding upon the Company and the
Holder.
 
Notices. Except as may be otherwise provided herein, all notices, requests,
waivers and other communications made pursuant to this Warrant shall be in
writing and shall be conclusively deemed to have been duly given (a) when hand
delivered to the other party; (b) when sent by facsimile to the number set forth
below if sent between 8:00 a.m. and 5:00 p.m. recipient’s local time on a
business day, or on the next business day if sent by facsimile to the number set
forth below if sent other than between 8:00 a.m. and 5:00 p.m. recipient’s local
time on a business day; (c) three business days after deposit in the U.S. mail
with first class or certified mail receipt requested postage prepaid and
addressed to the other party at the address set forth below; or (d) the next
business day after deposit with a national overnight delivery service, postage
prepaid, addressed to the parties as set forth below with next business day
delivery guaranteed, provided that the sending party receives a confirmation of
delivery from the delivery service provider. Each person making a communication
hereunder by facsimile shall promptly confirm by telephone to the person to whom
such communication was addressed each communication made by it by facsimile
pursuant hereto but the absence of such confirmation shall not affect the
validity of any such communication. A party may change or supplement the
addresses given above, or designate additional addresses, for purposes of this
Section 10 by giving the other party written notice of the new address in the
manner set forth above. The addresses for the parties are as follows:
 

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For the Company:
Florida Gaming Corporation
2669 Charlestown Road
New Albany, Indiana 47150
Fax: (812) 945-7717

For the Holder:
James W. Stuckert
The Stuckert Financial Strategies Group
500 West Jefferson Street
Louisville, Kentucky 40202

Saturdays, Sundays, Holidays etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a day, other than a Saturday, Sunday or one on which banks are authorized by
law or regulation to be closed in either New York, New York or San Francisco,
California (a “Business Day”), then such action may be taken or such right may
be exercised on the next succeeding day that is a Business Day.
 
Titles and Subtitles; Governing Law; Venue. The titles and subtitles used in
this Warrant are used for convenience only and are not to be considered in
construing or interpreting this Agreement. This Warrant is to be construed in
accordance with and governed by the internal laws of the State of Delaware
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
Delaware to the rights and duties of the Company and the Holder. All disputes
and controversies arising out of or in connection with this Warrant shall be
resolved exclusively by the state and federal courts located in the State of
Delaware, and each of the Company and the Holder hereto agrees to submit to the
jurisdiction of said courts and agrees that venue shall lie exclusively with
such courts.
 
Specific Performance. The Company agrees that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms maybe specifically enforced by a decree for the specific performance
of any obligation contained herein or by an injunction against a violation of
any of the terms hereof or otherwise.
 
IN WITNESS WHEREOF, the Company and the Holder have caused this Warrant to be
duly executed as of this 26th day of June, 2008.
 
FLORIDA GAMING CORPORATION
   
By:
/s/ W. Bennett Collett
Name: 
W. Bennett Collett
Title:
Chairman and CEO

 
HOLDER
 
/s/ James W. Stuckert
James W. Stuckert

 

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EXERCISE FORM

(To be signed only upon exercise of Warrant)

To: __________________________

The undersigned, the holder of a right to purchase shares of Common Stock of
FLORIDA GAMING CORPORATION (the “Company”) pursuant to that certain Warrant to
Purchase Shares of Florida Gaming Corporation (the “Warrant”), dated as of June
26, 2008, hereby irrevocably elects to exercise the purchase right represented
by such Warrant for, and to purchase thereunder, __________________________
(_________) shares of Common Stock of the Company and herewith makes payment of
_________________________________ Dollars ($__________) therefor by the
following method:

(Check one of the following):

_______ (check if applicable)
The undersigned hereby elects to make payment of ______________ Dollars
($___________) therefor in cash.
   
_______ (check if applicable)
The undersigned hereby elects to make payment for the aggregate exercise price
of this exercise using the Net Issuance method pursuant to Section 2 of the
Warrant.

 
The undersigned represents that it is acquiring such securities for its own
account for investment and not with a view to or for sale in connection with any
distribution thereof.

DATED:
                      
James W. Stuckert

 

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