Exhibit 10.1

LOAN MODIFICATION AGREEMENT

THIS LOAN MODIFICATION AGREEMENT (the “Agreement”), is made and entered into as
of June 2, 2011 by and between POKERTEK, INC. a North Carolina corporation, (the
“Company”) on the one hand and Gehrig White and Arthur Lomax (the "Lenders"), on
the other hand.
 
WHEREAS, the Company and Lyle Berman, Gehrig White, James Crawford and Arthur
Lomax (the “Original Lenders”) are parties to a Note Purchase Agreement dated as
of March 21, 2008, which was amended September 10, 2009 (the “Purchase
Agreement”); and
 
WHEREAS, pursuant to the Purchase Agreement, the Company issued to the Original
Lenders a Secured Promissory Note in the principal amount of $2,000,000, which
was amended as of July 9, 2009 and September 10, 2009 (the “Original Note”); and
 
WHEREAS, the Company and the Original Lenders, entered into a Security Agreement
dated as of March 21, 2008, which was amended as of September 9, 2009, wherein
the Company has granted to the Original Lenders a security interest in certain
of its assets (the “Security Agreement”, and together with the Purchase
Agreement and the Note hereinafter collectively called the “Loan Agreements”) to
secure its Secured Obligations (as defined in the Security Agreement) to the
Original Lenders; and
 
WHEREAS, all amounts due to Lyle Berman and James Crawford pursuant to the
Original Note have been paid in full; and
 
WHEREAS, the Company and the Lenders wish to modify certain terms of the Loan
Agreements.
 
NOW THEREFORE, the parties hereto agree as follows:
 
1.           Waiver of Defaults.
 
Subject to and expressly conditioned upon all of the terms and conditions
contained in this Agreement, the Lenders hereby waive any and all defaults under
the Original Note, the Purchase Agreement and/or the Security Agreement,
existing on the date hereof, if any.
 
2.           Amendment of Notes.
 
(a)           The Original Note is amended and restated in its entirety as is
set forth on Exhibit A hereto.
 
(b)           The Security Agreement is amended and restated in its entirety as
set forth on Exhibit B hereto.
 
3.           Miscellaneous.
 
(a)           This Agreement including the Exhibits hereto constitutes the
entire agreement of the parties with respect to the subject matter hereof and is
intended to supersede all prior negotiations, understandings and agreements with
respect thereto. No provision of this Agreement may be modified or amended
except by a written agreement specifically referring to this Agreement and
signed by the parties hereto.
 
(b)           This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.
 
 
 

--------------------------------------------------------------------------------

 
 
(c)           Each party shall take such further action and execute and deliver
such further documents as may be necessary or appropriate in order to carry out
the provisions and purposes of this Agreement.
 
(d)           This Agreement shall be governed by and construed and in
accordance with the laws of the State of North Carolina, without regard to the
principles of conflicts of law or choice of law provisions.
 
(e)           This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement. In the event that
any signature is delivered by facsimile transmission or .pdf, such signature
shall create a valid binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect as if
such facsimile signature were the original thereof.
 
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the date first above indicated.
 

 
POKERTEK, INC.
         
By:
 
/s/ Mark Roberson
 
Name:
 
Mark Roberson
 
Title:
 
Chief Executive Officer

 
/s/ Gehrig White
Gehrig White
 
/s/ Arthur Lomax
Arthur Lomax

 
 
 

--------------------------------------------------------------------------------

 
 
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE. THIS NOTE MAY NOT BE SOLD,
MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY
APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF AN EXEMPTION FROM THE
REGISTRATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
APPLICABLE STATE SECURITIES LAWS.

Original Issue Date:                                March 21, 2008

Date of this Amended and Restated Note: June 2, 2011

AMENDED AND RESTATED
 pokertek, inc.
Secured Promissory Note

 $700,000.00

1.           Principal. POKERTEK INC., a North Carolina corporation (the
“Company”), for value received, hereby promises to pay to the order of Gehrig
White and Arthur Lomax (collectively, and in the proportion set forth on
Schedule A annexed hereto, individually a “Holder” and collectively the
"Holders") in lawful money of the United States of America at the address for
notices to Holder set forth below, the principal amount of $700,000.00, together
with interest as set forth below.

2.           Interest and Maturity. The Company promises to pay interest on the
unpaid principal amount from and after the date hereof at the option of each
individual Holder, payable quarterly in arrears, at the rate of (a) nine percent
(9%) per annum payable in cash or (b) thirteen percent (13%) per annum payable
in common stock of the Company, at an individual Holder’s election, calculated
as the interest amount due and owing for the month divided by the consolidated
closing bid price per share of the Company’s common stock as reported on the
NASDAQ Capital Market on the last trading day of a given calendar quarter.
Notwithstanding any other provision of the Agreement, an individual Holder shall
always be able to personally elect whether he is paid in cash or common stock
under this Section 2. For the sake of clarity, notwithstanding anything in the
Purchase Agreement (as defined below), the Holders, collectively, shall not have
the ability to amend any agreement to provide that an individual Holder must
choose to be repaid in common stock. Put differently, the Holders cannot force
an individual Holder to convert his portion of the Note into stock.

The Company agrees to make such calculation and submit to the Board of Directors
a resolution for the issuance of such shares, and thereafter deliver such
resolution with instructions for issuance of the shares to its transfer agent.
After an election is made by a Holder, the Holder can change his election upon
30 days prior written notice to the Chief Financial Officer of the Company, and
the new interest election shall be effective for the next payment date after the
notice was given. Unless prepaid earlier as set forth below, all unpaid
principal and unpaid accrued interest on this Note shall be due and payable on
March 21, 2013 (the “Maturity Date”). This Note was originally issued pursuant
to, and it is subject to the terms of the Note Purchase Agreement among the
Company and the Holder dated as of March 21, 2008 (the "Purchase Agreement"). In
the event of any conflict between this Note and the Purchase Agreement, the
terms of this Note will control. The assets of the Company defined as
“Collateral” in an Amended and Restated Security Agreement dated as of June 2,
2011, (the "Security Agreement") shall serve as security for repayment of this
Note, as further described in the Security Agreement.

3.           Prepayment.                      All unpaid principal and unpaid
accrued interest of this Note may be prepaid, in whole or in part, at any time
in the discretion of the Company without any prepayment penalty or charge. Any
prepayment of this Note will be credited first against accrued interest, then
principal. Upon payment in full of the amount of all principal and interest
payable hereunder, this Note shall be surrendered to the Company for
cancellation.
 
 
 

--------------------------------------------------------------------------------

 

4.           Notices. Any notice, other communication or payment required or
permitted hereunder shall be given in writing and shall be deemed effectively
given as provided in the Purchase Agreement.

5.           Defaults and Remedies.

5.1           Events of Default. An “Event of Default” shall occur hereunder if:

 
(i)
the Company shall default in the payment of any interest or principal on this
Note, when and as the same shall become due and payable (and such default is not
cured within 15 business days); or

 
(ii)
the Company shall default in the due observance or performance of any covenant,
representation, warranty, condition or agreement on the part of the Company to
be observed or performed pursuant to the terms hereof or pursuant to the terms
of the Purchase Agreement or Security Agreement, and such default is not
remedied or waived within the time periods permitted therein, or if no cure
period is provided therein, within thirty (30) days after the Company receives
notice of such default; or

 
(iii)
any representation, warranty, certification or statement made by or on behalf of
the Company in the Purchase Agreement or Security Agreement shall have been
incorrect in any material respect when made; or

 
(iv)
if the Company shall commence any proceeding in bankruptcy or for dissolution,
liquidation, winding-up, composition or other relief under state or federal
bankruptcy laws; or

 
(v)
if such proceedings are commenced against the Company, or a receiver or trustee
is appointed for the Company or a substantial part of its property, and such
proceeding or appointment is not dismissed or discharged within sixty (60) days
after its commencement.

5.2           Acceleration. If an Event of Default occurs under Section 5.1(iv)
or (v), then the outstanding principal of and accrued and unpaid interest on
this Note shall automatically become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are expressly
waived. If any other Event of Default occurs and is continuing, the Holder, by
written notice to the Company, may declare the principal of and interest on this
Note to be due and payable immediately. Upon any such declaration of
acceleration, the Maturity Date shall be deemed to be the date of such
acceleration and such principal and interest shall become immediately due and
payable and the Holder shall be entitled to exercise all of its rights and
remedies hereunder and under the Purchase Agreement and Security Agreement
whether at law or in equity. The failure of the Holders to declare the Note due
and payable shall not be a waiver of their right to do so, and the Holders shall
retain the right to declare the Note due and payable unless they shall execute a
written waiver.

6.           Waiver of Notice of Presentment. The Company hereby waives
presentment, demand for performance, notice of non-performance, protest, notice
of protest and notice of dishonor. No delay on the part of Holders in exercising
any right hereunder shall operate as a waiver of such right or any other right.

7.           Non-Waiver. The failure of the Holders to enforce or exercise any
right or remedy provided in this Note or at law or in equity upon any default or
breach shall not be construed as waiving the rights to enforce or exercise such
or any other right or remedy at any later date. No exercise of the rights and
powers granted in or held pursuant to this Note by the Holders, and no delays or
omissions in the exercise of such rights and powers shall be held to exhaust the
same or be construed as a waiver thereof, and every such right and power may be
exercised at any time and from time to time.

8.           Governing Law. This Note is being delivered in and shall be
construed in accordance with the laws of the State of North Carolina, without
regard to the conflicts of laws or choice of law provisions thereof.

9.           Amendment. Any term of this Note may be amended only with the
written consent of the Company and at least three-quarters (3/4) in interest of
the Holders. Any amendment or waiver effected in accordance with this Section 9
shall be binding upon each individual Holder, each future holder and the
Company, and the Company shall promptly give notice to all the Holders of any
amendment or waiver effected in accordance with this Section 9.
 
 
 

--------------------------------------------------------------------------------

 

This Amended and Restated Note is hereby issued by the Company as of June 2,
2011.
 

 
POKERTEK, INC.
         
By:
 
/s/ Mark Roberson
 
Name:
 
Mark Roberson
 
Title:
 
Chief Executive Officer

 
/s/ Gehrig White
Gehrig White
 
/s/ Arthur Lomax
Arthur Lomax

 
SCHEDULE A

INDIVIDUAL HOLDER
 
PROPORTION
     
Gehrig White
 
57%
     
Arthur Lomax
 
43%

 
 
 

--------------------------------------------------------------------------------

 
 
AMENDED AND RESTATED
SECURITY AGREEMENT

This AMENDED AND RESTATED SECURITY AGREEMENT (this “Agreement”) is dated as of
June 2, 2011 and entered into between PokerTek, Inc., a North Carolina
corporation (“Grantor”), and the entities set forth on the Schedule of Secured
Parties attached hereto (each a “Secured Party” and collectively, the “Secured
Parties”).
 
PRELIMINARY STATEMENTS
 
A.           Pursuant to the terms of that certain Loan Modification Agreement
between Grantor and the Secured Parties (the “Modification Agreement”; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), the Secured Parties have agreed to modify the terms of a promissory
note made by the Grantor, a copy of which modified Note is annexed hereto (the
"Note") and, together with this Agreement, the Modification Agreement, the
Purchase Agreement (as defined in the Note), and each of the other agreements
and documents contemplated herein and therein, the “Loan Documents”).
 
B.            As a condition precedent to the execution of the Modification
Agreement, the Secured Parties have required Grantor to agree to amend the
original security agreement and as so amended to grant, and Grantor has agreed
to grant, the Secured Parties a continuing security interest (subject to
Permitted Liens (as hereinafter defined)) in and to the Collateral (as
hereinafter defined) of Grantor to secure Grantor’s obligations to the Secured
Parties under the Loan Documents.

AGREEMENT
 
NOW, THEREFORE, in consideration of the premises and in order to induce the
Secured Parties to enter into the Loan Documents, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Grantor hereby agrees with the Secured Parties to amend and
restate the Security Agreement dated as of March 21, 2008 in its entirety as
follows.
 
SECTION 1. Grant of Security.
 
Grantor hereby assigns to the Secured Parties, and hereby grants to the Secured
Parties, a security interest in, all of Grantor’s right, title and interest in
and to all of those items set forth on Exhibit A attached hereto and
incorporated herein by reference (collectively, the “Collateral”), in each case
whether now or hereafter existing, whether tangible or intangible, or in which
Grantor now has or hereafter acquires an interest and wherever the same may be
located.
 
SECTION 2. Security for Obligations.
 
This Agreement is given to secure the due and punctual payment of the principal
of and interest on the Note (along with any penalties and/or adjustments to the
amounts owed under the Note thereunder) and the due and punctual performance of
all other obligations under the Loan Documents, together with any extensions and
renewals of the foregoing obligations (collectively the “Secured Obligations”).
 
SECTION 3. Grantor Remains Liable.
 
Anything contained herein to the contrary notwithstanding, (a) Grantor shall
remain liable under any contracts and agreements included in the Collateral, to
the extent set forth therein, to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed,
(b) the exercise by the Secured Parties of any of their rights hereunder shall
not release Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral, and (c) except in the roles as
officers and/or directors of the Grantor, the Secured Parties shall not have any
obligation or liability under any contracts, licenses, and agreements included
in the Collateral by reason of this Agreement, nor shall the Secured Parties be
obligated to perform any of the obligations or duties of Grantor thereunder or
to take any action to collect or enforce any claim for payment assigned
hereunder.
 
 
 

--------------------------------------------------------------------------------

 
 
SECTION 4. Representations and Warranties; Covenants.
 
Grantor represents and warrants and covenants as follows:
 
(a)           Except for the security interest created by this Agreement, the
Permitted Liens (as defined below) and the priority security interest of Silicon
Valley Bank, Grantor owns the Collateral free and clear of any encumbrance. No
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any filing or recording office.
 
For purposes of this Agreement, “Permitted Liens” means (i) any liens arising
under this Security Agreement or any other Loan Documents; (ii) liens for taxes
or other governmental charges not at the time delinquent or thereafter payable
without penalty or being contested in good faith; (iii) materialmen’s,
mechanics’, warehousemen’s, carriers’, repairmen’s, artisans’, landlords’ or
other similar liens arising in the ordinary course of business or by operation
of law; or (iv) easements, reservations, rights-of-law, restrictions, minor
defects or irregularities in title and other similar charges or encumbrances
affecting real property not having a material adverse effect on Grantor’s
business or assets.

(b)           No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body, or any person is
required for the grant by Grantor of the security interest in the Collateral
granted hereby or for the execution, delivery or performance of the Agreement by
Grantor.
 
(c)           Grantor will not grant further security interests or allow the
imposition of further liens on the Collateral other than encumbrances in favor
of the Secured Parties and the Permitted Liens without the consent of the
Secured Parties holding a majority of the Secured Obligations.
 
SECTION 5. Further Assurances.
 
(a)           Grantor agrees that from time to time, Grantor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Secured Parties may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Secured Parties to
exercise and enforce their rights and remedies hereunder with respect to any
Collateral.
 
SECTION 6. Certain Covenants of Grantor.
 
Grantor shall:
 
(a)           not use or permit any Collateral to be used unlawfully or in
material violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
 
(b)           notify the Secured Parties of any change in Grantor’s name,
identity or corporate structure within 30 days of such change;
 
(c)           pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, services, materials and supplies) against, the Collateral,
except to the extent the validity thereof is being contested in good faith; and
 
(d)           maintain sole physical custody of the only original of each lease
or other item of chattel paper constituting Collateral.
 
 
 

--------------------------------------------------------------------------------

 
 
SECTION 7. Events of Default. Any one or more of the following shall constitute
a default or event of default by Grantor hereunder (each, an “Event of
Default”):
 
(a)           failure of Grantor to observe or perform any material obligation,
covenant, condition or term of this Agreement, the Note, or any of the other
Loan Documents; or
 
(b)           any warranty or representation made or furnished to the Secured
Parties by or on behalf of Grantor in connection with this Agreement or any of
the other Loan Documents proves to have been false or misleading in any material
respect when made or furnished; or
 
(c)           any Event of Default under the Note.
 
SECTION 8. Attorney-in-Fact.
 
Each Secured Party hereby appoints Gehrig White as collateral agent (the
“Collateral Agent”) for the purposes of perfecting the Secured Parties’ security
interests hereunder and for the purposes set forth in this Section 8. Grantor
does hereby irrevocably make, constitute and appoint the Collateral Agent on
behalf of all of the Secured Parties as its true and lawful attorney-in-fact
(the “Power of Attorney”), with full power and authority to do any and all acts
necessary or proper to carry out the intent of this Agreement including, without
limitation, the right, power and authority (a) to enforce all rights of Grantor
under and pursuant to any agreements with respect to the Collateral, all for the
sole benefit of the Secured Parties; (b) to enter into and perform such
arrangements as may be necessary in order to carry out the terms, covenants and
conditions of this Agreement that are required to be observed or performed by
Grantor; (c) to execute such other and further mortgages, pledges and
assignments of the Collateral as the Secured Parties may reasonably require for
the purpose of perfecting, protecting or maintaining the security interest
granted to the Secured Parties by this Agreement; and (d) to do any and all
other things necessary or proper to carry out the intent of this Agreement, and
Grantor hereby ratifies and confirms that the party reflected above as such
attorney-in-fact or its substitutes does by virtue of this Power of Attorney,
which power is coupled with an interest and is irrevocable, until Grantor has
paid in full the Secured Obligations and this Agreement is terminated. The
person or entity charged with the foregoing Power of Attorney may be changed by
the written approval of a majority in interest of the Secured Parties and, upon
written notice thereof to Grantor, Grantor shall be bound thereby; provided,
however, that any such newly appointed Power of Attorney shall be selected from
the Secured Parties party to this Security Agreement.
 
SECTION 9.Remedies.
 
If the occurrence of any Event of Default shall have occurred and be continuing,
any of the Secured Parties acting on its own behalf, or the Collateral Agent
acting on behalf of all of the Secured Parties may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to them, all the rights and remedies of a secured party on
default under the Uniform Commercial Code in the State of North Carolina (the
“UCC”), and also may (a) require Grantor to, and Grantor hereby agrees that it
will at its expense and upon request of any of the Secured Parties or upon the
request of the Collateral Agent forthwith, assemble all or part of the
Collateral as directed by the Secured Parties and make it available to the
Secured Parties at a place to be designated by the Secured Parties that is
reasonably convenient to both parties; (b) peacefully enter onto the property
where any Collateral is located and take possession thereof with or without
judicial process; (c) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent the Secured Parties deem
appropriate; (d) peacefully take possession of any Grantor’s premises or place
custodians in exclusive control thereof, remain on such premises and use the
same and any of Grantor’s equipment for the purpose of completing any work in
process, taking any actions described in the preceding clause (c) and collecting
any Secured Obligation; and (e) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or private
sale, at any of the Secured Parties’ offices or elsewhere, for cash, on credit
or for future delivery, at such time or times and at such price or prices and
upon such other terms as the Secured Parties may deem commercially reasonable.
The Secured Parties may be the purchaser of any or all of the Collateral at any
such sale and the Secured Parties shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by the Secured Parties at such sale. Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten (10) days’ notice to
Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The Secured
Parties shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Secured Parties may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
 
 
 

--------------------------------------------------------------------------------

 
 
It is understood that each Secured Party shall have the right to pursue any or
all of the remedies available hereunder without approval of any other Secured
Party, subject to the application of proceeds set forth in Section 10 below.
 
SECTION 10. Application of Proceeds.
 
All proceeds received by the Secured Parties in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
shall be applied in the following order of priority:
 
FIRST:                      to the payment of all reasonable costs and expenses
of such sale, collection or other realization, including reasonable compensation
to the agents and counsel for the Secured Parties, and all other expenses,
liabilities and advances made or incurred by the Secured Parties in connection
therewith;
 
SECOND: to the payment of all other Secured Obligations on a pro rata basis to
each Secured Party based upon the amount of the Notes owned by each such Secured
Party and, as to obligations arising under the Loan Documents, as provided in
such agreements; and
 
THIRD:                      any balance to Grantor.
 
SECTION 11. Continuing Security Interest; Transfer of Obligations; Termination.
 
This Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until terminated in accordance with
the provisions of this Section or as the parties may otherwise agree, (b) be
binding upon Grantor and its respective successors and assigns, and (c) inure,
together with the rights and remedies of the Secured Parties hereunder, to the
benefit of the Secured Parties and their permitted successors, transferees and
assigns. Grantor acknowledges and agrees that the number and amount of the
Secured Obligations may fluctuate from time to time hereafter. Grantor expressly
agrees that this Agreement and the security interest in the Collateral conveyed
to the Secured Parties hereunder shall remain valid and in full force and
effect, notwithstanding any such fluctuations and future payments. This
Agreement shall terminate, and each Secured Party shall release its security
interest in the Collateral (and shall execute any and all documents reasonably
requested in connection with such release, which obligation shall survive such
termination), upon the earlier of (a) payment in full by or on behalf of Grantor
of all of the then outstanding Notes issued pursuant to the Purchase Agreement,
or (b) mutual agreement.
 
SECTION 12. Amendments; Etc.
 
No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by Grantor therefrom, shall in any
event be effective unless the same shall be in writing and signed by the holders
of Notes representing a majority of the outstanding principal amount of the Loan
and, in the case of any such amendment or modification, by Grantor. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. Notwithstanding anything to the
contrary in this Section 12, the Company shall be entitled to include additional
Secured Parties as parties to this Agreement pursuant to the addition of
additional purchasers of Notes pursuant to the Purchase Agreement, and to treat
such parties as “Secured Parties” hereunder, by amending the Schedule of Secured
Parties attached hereto and providing such amended Schedule of Secured Parties
to the other parties to this Agreement.
 
 
 

--------------------------------------------------------------------------------

 
 
SECTION 13.Notices.
 
Any notice or other communication herein required or permitted to be given shall
be in writing and shall be deemed to have been given to the address provided in
and as determined pursuant to the Purchase Agreement.
 
SECTION 14. Failure or Indulgence Not Waiver; Remedies Cumulative.
 
No failure or delay on the part of any of the Secured Parties in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
 
SECTION 15. Severability.
 
In case any provision in or obligation under this Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
 
SECTION 16.Headings.
 
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
 
SECTION 17. Governing Law; Terms; Rules of Construction.
 
THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER, AND ALL
MATTERS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT
TO THE EXTENT THAT THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NORTH CAROLINA.
 
SECTION 18. Counterparts.
 
This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.
 
IN WITNESS WHEREOF, Grantor and the Secured Parties have caused this Security
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
 

 
Grantor:
     
POKERTEK, INC.
         
By:
 
/s/ Mark Roberson
 
Name:
 
Mark Roberson
 
Title:
 
Chief Executive Officer

 
 
 

--------------------------------------------------------------------------------

 
 
Secured Parties:
 
/s/ Gehrig White
Gehrig White
 
/s/ Arthur Lomax
Arthur Lomax