EXHIBIT 10.2

 

REIMBURSEMENT AGREEMENT

 

For Pledged Certificate of Deposit

 

THIS REIMBURSEMENT AGREEMENT FOR PLEDGED CERTIFICATE OF DEPOSIT (this
“Agreement”), dated as of December 10, 2009, between Leroy’s Horse and Sports
Place, a Nevada corporation (“Obligor”), and Robert and Tracey Kocienski, a
married couple (the “Kocienskis”).

 

Recitals

 

A.            Obligor is required under Nevada Gaming Commission (“NGC”)
Regulation 22.040 to maintain a reserve sufficient to cover any of its
outstanding wagering liability, including unpaid winning tickets and telephone
account deposits.

 

B.            On October 1, 2009, subject to the execution of definitive
agreements, the Kocienskis agreed to pledge, for the benefit of the Obligor, a
certificate of deposit in the amount of $500,000 (the “Pledged Amount”) in favor
of the Nevada Gaming Control Board (“NGCB”) to increase the Company’s reserve
balance to satisfy the requirements of Regulation 22.040.

 

C.            In connection with the foregoing, the Kocienskis deposited the
Pledged Amount into Nevada State Bank and entered into the following definitive
agreements: (i) Agreement, dated November 11, 2009, between the Kocienskis and
Nevada State Bank, and (ii) Pledged Certificate of Deposit Statement, dated
November 23, 2009, by the Kocienskis in favor of NGCB (collectively, the
“Pledged Documents”).

 

D.            Obligor agreed to enter into this Agreement to induce the
Kocienskis to enter into the Pledged Documents.

 

Agreements

 

NOW, THEREFORE, in consideration of the premises and in order to induce the
Kocienskis to execute and deliver the Pledged Documents, the parties hereto
agree as follows:

 

1.             PLEDGE FEE.  OBLIGOR SHALL PAY, OR CAUSE TO BE PAID, TO THE
KOCIENSKIS A FEE EQUAL TO TWELVE PERCENT (12%) PER ANNUM OF THE OUTSTANDING
PLEDGED AMOUNT, EXCLUDING ANY EARNED INTEREST FROM NEVADA STATE BANK, (THE
“PLEDGE FEE”) SO LONG AS THE PLEDGED DOCUMENTS ARE IN EFFECT, PAYABLE ON THE 1ST
DAY OF EACH MONTH COMMENCING ON NOVEMBER 1, 2009.

 

2.             REIMBURSEMENT.  OBLIGOR SHALL PAY TO THE KOCIENSKIS (I) ON EACH
DATE ON WHICH THE PLEDGED AMOUNT, OR ANY PORTION THEREOF, SHALL BE RELEASED TO
THE NGCB PURSUANT TO THE TERMS OF THE PLEDGED DOCUMENTS A SUM EQUAL TO THE
AMOUNT SO RELEASED (A “RELEASE”), PLUS (II) IN ADDITION TO THE PLEDGE
FEE, INTEREST ON THE UNREIMBURSED AMOUNT FROM THE RELEASE DATE UNTIL
REIMBURSEMENT IS RECEIVED BY THE KOCIENSKIS IN FULL.  SUCH INTEREST SHALL BE AT
THE THEN PRIME RATE OF NEVADA STATE BANK OR ITS SUCCESSOR.

 

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3.             PAYMENTS AND COMPUTATIONS.  OBLIGOR SHALL MAKE EACH PAYMENT
HEREUNDER NOT LATER THAN 3:00 P.M. (PACIFIC TIME) ON THE DAY WHEN DUE WITHOUT
DEDUCTION OR OFFSET IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA TO THE
KOCIENSKIS AT THE ADDRESS OF THE KOCIENSKIS REFERRED TO IN SECTION 8 IN SAME-DAY
FUNDS OR IN ACCORDANCE WITH THE WIRE INSTRUCTIONS IN SUCH SECTION.  COMPUTATIONS
OF FEES AND INTEREST ESTABLISHED HEREIN (AS APPLICABLE) SHALL BE MADE BY THE
KOCIENSKIS ON THE BASIS OF A YEAR OF 360 DAYS FOR THE ACTUAL NUMBER OF DAYS
ELAPSED.

 

4.             NON-BUSINESS DAYS.  WHENEVER ANY PAYMENT TO BE MADE HEREUNDER
SHALL BE STATED TO 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 IN SUCH CASE BE INCLUDED IN THE COMPUTATION OF PAYMENT OF INTEREST OR
COMMISSION, AS THE CASE MAY BE.

 

5.             NATURE OF OBLIGATIONS.  OBLIGOR’S OBLIGATIONS TO THE KOCIENSKIS
UNDER THIS AGREEMENT ARE ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE
PAID AND PERFORMED IN ACCORDANCE WITH THE TERMS HEREOF IRRESPECTIVE OF ANY ACT,
OMISSION, EVENT OR CONDITION.  OBLIGORS’ OBLIGATIONS TO THE KOCIENSKIS UNDER
THIS AGREEMENT SHALL BE UNSECURED.

 

6.             OTHER COVENANT.  OBLIGOR MUST MAKE REASONABLE EFFORTS TO INCREASE
ITS CASH DEPOSIT REQUIREMENT UNDER REGULATION 22,040 AND SECURE THE RELEASE OF
THIS AGREEMENT FROM THE NEVADA GAMING CONTROL BOARD IN WHOLE OR IN PART WITHIN
12 MONTHS FROM THE DATE OF THIS AGREEMENT.

 

7.             WAIVER.  OBLIGOR WAIVES PRESENTMENT, PROTEST, DISHONOR, NOTICE OF
DISHONOR, DEMAND, NOTICE OF PROTEST, NOTICE OF NON-PAYMENT, AND NOTICE OF
ACCEPTANCE OF THIS AGREEMENT, AND ANY OTHER NOTICE OR DEMAND OF ANY KIND FROM
THE KOCIENSKIS.

 

8.             AMENDMENTS.  THIS AGREEMENT MAY BE AMENDED ONLY BY A WRITTEN
INSTRUMENT DULY EXECUTED BY EACH OF THE PARTIES HERETO.

 

9.             NOTICES.  EACH NOTICE, REQUEST OR COMMUNICATION SHALL BE
EFFECTIVE (I) IF GIVEN BY FACSIMILE, ELECTRONIC MAIL OR OTHER ELECTRONIC MEANS,
WHEN SUCH COMMUNICATION IS TRANSMITTED TO THE ADDRESS SPECIFIED BELOW AND ANY
APPROPRIATE CONFIRMATION IS RECEIVED, (II) IF GIVEN BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, ON THE DATE OF RECEIPT APPEARING ON THE RETURN
POSTAL RECEIPT FOR NOTICES GIVEN BY CERTIFIED OR REGISTERED MAIL, OR (III) IF
GIVEN BY HAND DELIVERY, WHEN DELIVERED AT THE ADDRESS SPECIFIED BELOW:

 

If to Obligor:

 

Leroy’s Horse and Sports Place.

 

 

675 Grier Drive

 

 

Las Vegas, Nevada 89119

 

 

Attention: President

 

 

 

If to the Kocienskis:

 

Robert Kocienski

 

 

c/o American Wagering, Inc.

 

 

675 Grier Drive

 

 

Las Vegas, Nevada 89119

 

 

Attention: Legal Department

 

or for any of the foregoing cases, at such other address or facsimile number as
the addressee may hereafter specify for the purpose in a notice to the other
party specifically captioned “Notice of Change of Address pursuant to Section 8
of the Reimbursement Agreement for Pledged Certificates of Deposit.”

 

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10.           INDEMNIFICATION.  OBLIGOR SHALL INDEMNIFY AND HOLD THE KOCIENSKIS
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS, PROCEEDINGS, DAMAGES,
LOSSES, LIABILITIES, COSTS AND EXPENSES (INCLUDING BUT NOT LIMITED TO ATTORNEYS’
FEES AND COSTS) WHICH THE KOCIENSKIS MAY INCUR OR WHICH MAY BE CLAIMED AGAINST
THE KOCIENSKIS BY ANY PERSON:

 

(a)           by reason of, or in connection with, the execution, delivery or
performance of this Agreement or any of the Pledged Documents; or

 

(b)           by reason of, or in connection with, any of the transactions or
other matters contemplated by this Agreement or any Pledged Document; or

 

(c)           by reason of, or in connection with, any Release to the NGCB under
the Pledged Documents.

 

11.           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEVADA.

 

12.           EXECUTION IN COUNTERPARTS.  IT SHALL NOT BE NECESSARY THAT ALL
PARTIES EXECUTE AND DELIVER THE SAME COUNTERPART OF THIS AGREEMENT.  THIS
AGREEMENT SHALL THEREFORE BECOME EFFECTIVE WHEN EACH PARTY HAS EXECUTED ANY
COUNTERPART HEREOF AND DELIVERED THE SAME TO THE OTHER PARTIES.  ALL SUCH
COUNTERPARTS, COLLECTIVELY, SHALL BE DEEMED A SINGLE AGREEMENT.

 

IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE DULY
EXECUTED AND DELIVERED AS OF THE DATE FIRST ABOVE WRITTEN.

 

 

LEROY’S HORSE AND SPORTS PLACE
a Nevada corporation

 

 

 

 

 

 

By:

/s/ John Salerno

 

 

 

John Salerno, Secretary

 

 

 

 

 

 

 

 

 

 

 /s/Robert Kocienski

 

 

 Robert Kocienski

 

 

 

 

 

 

 

 

 

 

 /s/Tracey Kocienski

 

 

 Tracey Kocienski

 

 

 

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