PROMISSORY NOTE
Exhibit 10.13

U.S. $1,322,573.73
November 1, 2008
 
New Albany, Indiana

F0R VALUE RECEIVED, FLORIDA GAMING CENTERS, INC., a Florida Corporation
(“FGCI”), promise to pay to the order of FREEDOM HOLDING, INC. a Delaware
corporation, (“Lender”), at its place of business in New Albany, Indiana or such
other place as Lender may designate from time to time hereafter, the principal
amount of One Million Three Hundred Twenty Two Thousand Five Hundred Seventy
Three Dollars and 73/100 ($1,322,573.73) or such lesser principal amount as may
be owed by Borrower to Lender hereunder, together with interest on the unpaid
balance until paid, at the rate of ten percent (10%) per annum(the “Stated
Rate”). Interest shall be computed on the basis of a 360 day year and charged
for the actual number of days elapsed. The final payment of all then outstanding
principal and interest shall be due on May 1, 2009 (the “Maturity Date”).
Borrower’s obligations under this Note shall be defined and referred to herein
as “Borrower’s Liabilities”.

All payments received hereunder shall be first applied to interest due and the
balance, if any,  to principal. Principal and interest shall be payable as
follows:

Borrower may repay all or any portion of this Note, at any time and from time to
time, subject to the following terms:
 

 
(a)
Each partial prepayment shall be in a minimum principal amount of $100,000 and
in integral multiples of $50,000;
       
(b)
Borrower shall provide Lender with at least fifteen (15) days prior written
notice of any prepayment;
       
(c)
Borrower shall pay to Lender all accrued and unpaid interest through the date of
such prepayment on the principal balance being prepaid; and
       
(d)
Borrower shall pay to Lender any other obligations of the Borrower to the Lender
then due which remain unpaid.

 
All principal payments hereunder shall be accompanied by accrued interest on the
principal amount being repaid to the date of payment. All payments hereunder,
whether in respect of principal, interest, or otherwise, shall be made without
setoff, counterclaim or deduction in same day funds no later than 2:00 p.m.,
Indiana time, on the date due by wire transfer (or by advice of transfer from or
between accounts of Borrower and Lender) to such account as Lender shall specify
from time to time by notice to Borrower. Funds received after that time shall be
deemed to have been received by Lender on the next following  Business Day. All
payments shall be made in immediately available U.S. Dollars. Whenever any
payment to be made shall otherwise be due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in computing interest, if any, in connection
with such payment.

Borrower warrants and represents to Lender that Borrower shall use the proceeds
represented by this Note solely for proper business purposes.

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All of Lender’s rights and remedies under this Note are cumulative and non-
exclusive. The acceptance by Lender of any partial payment made hereunder after
the time when any of Borrower’s Liabilities become due and payable will not
establish a custom, or waive any rights of Lender to  enforce prompt payment
hereof. Lender’s failure to require strict performance by Borrower of any
provision of this Note shall not waive, affect, or diminish any right of Lender
thereafter to demand strict compliance and performance therewith. Any waiver of
an Event of Default hereunder shall not suspend, waive or affect any other Event
of Default hereunder. Borrower and every endorser waive presentment demand and
protest and notice of presentment, protest, default, non-payment, maturity,
release, compromise, settlement, extension or renewal of this Note, and hereby
ratify and confirm whatever Lender may do in this regard. Borrower further
waives any and all notice or demand to which Borrower might be entitled with
respect to this Note by virtue of any statute or law (to the extent permitted by
law).

Borrower agrees to pay, upon Lender’s demand therefore, any and all costs, fees
and expenses (including reasonable attorneys’ fees, costs and expenses) incurred
in enforcing any of Lender’s rights hereunder, and to the extent not paid shall
become part of Borrower’s Liabilities hereunder.

If any provision of this Note or the application thereof to any party or
circumstance is held invalid or unenforceable, the remainder of this Note and
the application thereof to other parties or circumstances will not be affected
thereby, the provisions of this Note being severable in any such instance.

If this Note is signed by more than one party, the liability of each such party
shall be joint and several, and each reference herein to Borrower shall be
deemed to refer to each such party.

This Note is submitted by Borrower to Lender at Lender’s principal place of
business and shall be deemed to have been made thereat. This Note shall be
governed and controlled by the laws of the State of Indiana as to
interpretation, enforcement, validity, construction, and effect, but without
reference to its choice of law provisions. Any notice required hereunder shall
be served consistent with the terms and provisions of the Loan Agreement
relating to notice.

No modification, waiver, estoppel, amendment, discharge or change of this Note
or any related instrument shall be valid unless the same is in writing and
signed by the party against which the enforcement of such modification, waiver,
estoppel amendment, discharge or change is sought.

BORROWER IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS IN ANY WAY OR
RESPECT, ARISING OUT OF OR FROM OR RELATED TO THIS NOTE MAY BE LITIGATED IN
COURTS HAVING SITUS WITHIN THE JURISDICTION OF THE COUNTY OF FLOYD, STATE OF
INDIANA. BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY LOCAL, STATE OR
FEDERAL COURT LOCATED IN SAID COUNTY AND STATE AND WAIVES ANY OBJECTION IT MAY
HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY
PROCEEDING HEREUNDER.

BORROWER AND LENDER IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY IN AN ACTION OF
PROCEEDING: (1) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH THIS
NOTE OR AMENDMENT, INSTRUMENT, DOCUMENT, OR AGREEMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED IN CONNECTION HEREWITH 0R (2) ARISING FROM ANY DISPUTE
OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS NOTE OR ANY SUCH AMENDMENT,
INSTRUMENT, DOCUMENT, OR AGREEMENT, AND  AGREE THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

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ATTEST:
 
BORROWER:
         
FLORIDA GAMING CENTERS, INC.
           
By:
  /s/ Kimberly R. Tharp
 
By
  /s/ W.Bennett Collett
Kimberly R. Tharp
 
W. Bennett Collett
Secretary
 
Chairman of the Board and CEO

 
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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 November 1, 2011

Number of Shares: 20,000

This certifies that Freedom Holding, Inc. (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 $8.25 (the “Exercise Price”).
 
This Warrant shall be exercisable, in whole or in part, at any time or from time
to time from and after November 1, 2008 (the “Initial Exercise Date”) up to and
including 5:00 p.m. (Eastern Time) on November 1, 2011 (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
 
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.
 
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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.
 
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, 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, 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.
 
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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 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.
 
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.
 
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.
 
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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, 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:
 
For the Company:

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

For the Holder:

Freedom Holding, Inc.
2669 Charlestown Road, #D
New Albany, Indiana 47150

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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 1st day of November, 2008.

FLORIDA GAMING CORPORATION
   
By:
/s/ W.Bennett Collett
Name:
W. Bennett Collett
Title:
Chairman and CEO
   
HOLDER:
   
Freedom Holding, Inc.
       
By:
/s/ W. Bennett Collett
Name:
W. Bennett Collett
Title:
Chairman and CEO

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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
November 1, 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:
 
                 
 
     
Freedom Holding, Inc.
 

 

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