Document:

exv10w13

 

Exhibit 10.13

LAS VEGAS GAMING, INC.

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (“Agreement”) is entered into this 8th day of July 2005, between
Las Vegas Gaming, Inc., a Nevada Corporation having offices located at 4000 West Ali Baba, Suite D,
Las Vegas, Nevada 89118 ( “LVGI”), and Leroy’s Horse and Sports Place having offices located at,
675 Grier Drive, Las Vegas, Nevada 89119 (“Licensee”).

RECITALS

The parties entered into this Agreement with the understanding that:

	A.	 	LVGI is the owner of certain U.S. patent applications, trademarks, trademark applications,
copyrights, copyright applications and registrations in respect of a 2-10 spot linked and
progressive keno games and provider of certain hardware and software. Nevada Numbers (“NN”)
is a linked progressive five spot keno game in which only five numbers are drawn with a base
jackpot of five million dollars.

	B.	 	Leroy’s is a successful operator of a race book, pari-mutuel race pool and/or sports pool in
the State of Nevada. An integral aspect of Leroy’s success is the unique service it provides
an operator of a gaming establishment with a nonrestricted state gaming license (“Location”),
who wants to offer the amenity of a race book and/or sports pool (the “Book”) to its customers
but does not wish, or cannot afford, to assume the financial responsibility associated with
owning and operating its own Book, which includes but is not limited to, the risk of loss due
to the payment of winning wagers, the reserves required by the Nevada Gaming Commission and
Gaming Control Board (the “Gaming Authorities”), initial investment costs for equipment,
hardware, and software to install the Book, labor and other costs to operate the Book, and
applicable federal and state fees and taxes. Leroy’s operates the Book inside the Location’s
gaming establishment and assumes all financial responsibilities associated with its operation.
Leroy’s currently operates Books in approximately sixty (60) Locations.

	C.	 	LVGI and Leroy’s desire to offer to LVGI’s keno game, Nevada Numbers (“NN”), as an amenity in
Leroy’s Books upon written approval from the specific Location in which Leroy’s operates its
Book.

The parties agree as follows:

	 	1.	 	Grant
	 
	 	 	 	LVGI grants to Licensee a non-exclusive license to offer Nevada Numbers tickets, at $2.00
each, in its Books upon written approval from the Location in which the Book is
operating. LVGI acknowledges that Licensee cannot operate NN in any of its Books without
written approval from the Location in which the Book is operating. Moreover, LVGI
understands that Licensee makes no guarantee as to the number of Locations that will
approve of Licensee’s operation of NN in Licensee’s Book.
	 
	 	2.	 	Fees
	 
	 	 	 	Licensee shall sell to the public each Nevada Numbers ticket for TWO DOLLAR ($2.00).
From each $2.00 NN sold, Licensee shall pay

	 	a.	 	To NN’s base jackpot: $ 0.22; and
	 
	 	b.	 	To NN’s progressive jackpot: $0.50.
	 
	 	c.	 	To Licensee for payments to winning customers that correctly match one
through four numbers: $0.3632

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	 	d.	 	To LVGI as its portion of profits: $0.36;
	 
	 	e.	 	To Licensee as its portion of profits (which may be split with Location
if necessary): $0.5568. Any agreement reached between Licensee and Location shall
be and remain separate from and independent of this Agreement.
	 
	 	f.	 	Both parties acknowledge that the insurance or base jackpot fee noted
above of $0.22 is subject to change or cancellation due to uncontrollable actions of
third parties. In the event of a change in the fee or cancellation of the
insurance, either party shall have the right to terminate this Agreement concurrent
with the effective date of the change or cancellation by providing written notice to
the other party.

	 	3.	 	Jackpot Payments

	 	a.	 	5 out of 5 Winners

	 	 	 	LVGI shall have sole responsibility for paying all jackpot winners (patrons picking all 5
numbers correctly). Jackpot winners shall have the option of receiving 20 equal annual
installments equivalent to 1/20 of the progressive jackpot, or a single disbursement
equal to the discounted net present value of the periodic payments. The periodic payment
period may be increased to 25 years subject to Nevada Gaming Commission approval.
Licensee shall have sole responsibility for paying all other winning tickets (i.e.
tickets with 1-4 correct selections). If Licensee should withdraw from the Nevada
Numbers progressive network, its contributions to the jackpot fund shall remain in the
jackpot fund. In addition, LVGI shall have the unilateral right to change the pay table
associated with the Nevada Numbers game upon 30 day written notice to Licensee

	 	b.	 	1 Through 4 Winners

	 	 	 	Licensee shall have sole responsibility for paying NN ticket holders who correctly chose
between 1 and 4 of the 5 possible numbers in an individual drawing.

	 	4.	 	Contributions to Jackpot
	 
	 	 	 	LVGI has the unilateral right to change the pay table associated with the NN upon 30 days
written notice to Licensee. In the event that LVGI exercises its right to change the pay
table associated with the NN, Licensee shall have the right to terminate this Agreement,
thereby withdrawing from the NN progressive network. Should Licensee choose to
terminate this Agreement, its contributions to the basic and progressive jackpot funds
shall remain in the respective jackpot funds. Licensee must provide written notice of
its intent to terminate this Agreement within 60 days of LVGI’s change to the pay table.
	 
	 	5.	 	Timing
	 
	 	 	 	All monies due LVGI under this contract are due by 2:00 p.m. the Thursday following the
week (Monday through Sunday) in which the money was earned. The payments will be
calculated on an accrual basis. That is, Licensee shall remit to LVGI each Thursday the
payment due for NN tickets sold during the prior week.
	 
	 	6.	 	Operation of NN
	 
	 	 	 	LVGI shall be responsible for all necessary incremental local communication costs at
Licensee’s Books for the operation of NN. In the event that the Nevada Gaming Commission
or the Nevada Gaming Control Board approves the use of a Virtual Private Network (VPN)
for use in wide area progressive games, Licensee shall provide a broadband internet
connection with a static IP address for operation of the game(s) and LVGI shall provide
all VPN hardware.
	 
	 	7.	 	Discontinuation of the NN
	 
	 	 	 	In the event LVGI discontinues NN, LVGI shall submit a plan to satisfy the liability for
the progressive jackpot to the Chairman of the Nevada State Gaming Control Board at least
sixty (60)

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	 	 	 	days prior to cessation of operations and any funds remaining in the jackpot after
satisfaction of such liability shall be divided consistent with this plan.
	 
	 	8.	 	Marketing Expenses
	 
	 	 	 	Initial marketing collateral and signage will be provided by LVGI. Ongoing marketing,
advertising and any other promotions within Licensee’s Book shall be at the sole
discretion and expense of Licensee. However, all collateral materials and promotions
used by Licensee in marketing NN must be consistent in form and content with materials
recommended by LVGI. Licensee’s use of inconsistent collateral materials or promotions
may result in a breach of this Agreement and entitle LVGI to terminate this Agreement
with fifteen (15) days written notice, providing Licensee with the ability within the
notice period to cure any such non-compliance.
	 
	 	9.	 	Limited Right to Terminate
	 
	 	 	 	Either party may terminate this Agreement, at any time during the term of this Agreement,
with a 60 day written notice after the initial 120 days of operation.
	 
	 	10.	 	Training
	 
	 	 	 	LVGI shall (i) provide or arrange to provide as much training of Licensee’s employees in
the operation of NN as Licensee deems necessary and (ii) conducted such training at times
approved by Licensee.
	 
	 	11.	 	Responsibilities of Licensee 
	 
	 	 	 	During the term of this Agreement, Licensee shall, at its sole expense: (a) run and
maintain all necessary cabling and power to operate NN; (b) maintain any necessary
signage for NN; (c) operate any LVGI equipment maintained on Licensee’s premises in a
responsible manner; (d) submit any required forms to the State of Nevada Gaming Control
Board for licensing of NN to Licensee; and (e) be responsible for any employees needed to
operate NN; Licensee, through its Race Book and/or Sports Pool Agreement with Location,
shall, at its sole expense, provide surveillance and security necessary to operate the NN
within Location’s gaming establishment.
	 
	 	12.	 	Rules of Play
	 
	 	 	 	Licensee shall operate NN in accordance with the rules of play specified by LVGI. In
addition, Licensee shall operate NN within its Book in a high quality, professional and
lawful manner. LVGI shall have the right to inspect the operation of NN within
Licensee’s Book to ensure that Licensee complies with this quality control standard.
Failure to comply with this standard shall entitle LVGI, in its sole discretion, to
terminate this Agreement. Any termination shall be made only by 15 days written notice,
providing Licensee with the ability within the notice period to cure any such
non-compliance.
	 
	 	13.	 	Compliance with Law
	 
	 	 	 	Licensee and LVGI represent and warrant to each other that they are in compliance with
all registration and licensing required by law and that they shall comply with all gaming
laws, compacts, ordinances, rules and regulations, including, but not limited to, if
necessary, approval, certification and licensing by all federal, state and local
authorities. Licensee shall pay, and have sole responsibility for, all costs, dues,
assessments, charges, registration fees and any other cost, fee or charge which may be
applicable to the sale, licensing, ownership, possession, operation or use of the NN.
LVGI is responsible for paying all applicable gaming taxes on its share of revenue
derived from the NN. Weekly invoices shall be net of any tax credit due Licensee. Upon
validation of a winning jackpot ticket, LVGI will provide each participating property
with their pro-rated share of the payout for deduction on NGC-1 tax returns. NN is to be
operated exclusively in the State of Nevada. No other jurisdictions may be linked to the
system.

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	 	14.	 	Indemnity and Release

	 	a.	 	Licensee agrees to indemnify and hold LVGI, its officers, employees and
directors, harmless from and against any and all claims, actions, damages,
liability, costs and expenses (including reasonable attorneys’ fees) arising from or
out of; (i) any occurrence caused by the act or omission of Licensee, its customers,
invitees, contractors, vendors or suppliers; (ii) any violation of any law,
regulation or ordinance applicable to Licensee; or (iii) any breach or violation of
the terms of this Agreement, except to the extent any of the foregoing is caused by
the negligence or willful misconduct of LVGI, its officers, employees or directors.
	 
	 	b.	 	LVGI agrees to indemnify and hold Licensee, its officers, employees and
directors harmless from and against any and all claims, actions, damages,
liabilities, costs and expenses (including reasonable attorneys’ fees) arising from
or relating to (i) any occurrence caused by the act or omission of LVGI; (ii) any
violation of any law, regulation or ordinance applicable to LVGI; (iii) any breach
or violation of the terms of this Agreement, except to the extent any of the
foregoing is caused by the negligence or willful misconduct of Licensee, including
the officers, directors or employees of Licensee; (iv) any infringement of any
party’s trademark, copyright or patent rights in connection with NN except as to any
modification of NN by Licensee not authorized by LVGI, or any breach or violation of
the terms of this Agreement. At its option, LVGI may, at any time, modify NN in
order to avoid or settle and infringement claim.
	 
	 	c.	 	All parties to this Agreement and their heirs, executors, administrators,
successors and assigns, hereby release, remise, and forever discharge the State of
Nevada, the Nevada Gaming Commission, the State Gaming Control Board, the Nevada
Attorney General, and each of their members, agents, and employees in their
individual and representative capacities, from any and all manner of actions, causes
of action, suits, debts, judgments, executions, claims and demands whatsoever, known
or unknown, in law or equity. Furthermore, all parties to this contract hereby
agree to indemnify and hold harmless, the State of Nevada, the Nevada Gaming
Commission, the State Gaming Control Board, the Nevada Attorney General, and each of
their members, agents, and employees in their individual and representative
capacities from any and all claims, suits, and actions, brought by anyone associated
with this Agreement.

	 	15.	 	Limitation of Liability
	 
	 	 	 	LVGI does not make any express or implied warranties beyond those expressed herein, and
in no event will LVGI be liable for any lost revenues, profits or other special indirect,
consequential or punitive damages, associated with the performance of this Agreement,
even if LVGI has been advised of the possibility of such damages.

	 	16.	 	Term

	 	a.	 	The term of this Agreement shall commence on the date it is signed and
shall remain in force and effect for a period of five (5) years. This Agreement
shall automatically renew in five-year increments, unless one of the parties hereto
provides the other with written notice of termination at least 90 days prior to the
expiration date.
	 
	 	b.	 	However, LVGI acknowledges that, at any time, Licensee may have to
discontinue operating NN in a Book’s Location should Location (i) decide not to
permit Licensee to operate NN in its gaming establishment, (ii) choose to Operate
its Own Book (as defined in the Race Book and/or Sports Pool Agreement), (iii) Close
the Book (as defined in the Race Book and/or Sports Pool Agreement) , or (iv) allow
Licensee’s Race Book and Sports Pool Agreement to expire or should the Race Book
and/or Sports Pool Agreement terminate.

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	 	17.	 	Breach
	 
	 	 	 	Upon the failure of any party to make any payment due hereunder for a period of ten (10)
days following written notice of such default, LVGI shall have the right to terminate
this Agreement. In the case of such a default, Licensee shall assemble the property,
which is the subject of this Agreement, and return it to LVGI immediately.
	 
	 	18.	 	Internal Usage
	 
	 	 	 	NN is the sole and exclusive property of LVGI. Licensee agrees to use NN solely in its
own Books and not to modify, reproduce, sell or sub-license NN without the written
consent from LVGI. LVGI retains and reserves all rights in NN not granted to Licensee
under this Agreement. Nothing contained herein shall, however, preclude Licensee from
disclosing report and/or information generated from NN for internal use and for reporting
to any government regulatory agency.
	 
	 	19.	 	Force Majeure
	 
	 	 	 	Neither party shall be liable for failure to perform its obligations under this Agreement
(other than the payment of fees and other amounts due any party) due to unavoidable
delays caused by fire, catastrophe, strikes or labor trouble, civil commotion, acts of
God, governmental prohibitions of regulations or inability to obtain materials by reason
thereof, or any other causes beyond such party’s reasonable control. The party suffering
an event of force majeure shall have additional time for performance.
	 
	 	20.	 	Transfer of Rights
	 
	 	 	 	The rights, the benefits, and the obligations under this Agreement shall not be assigned
or transferred by either party without the prior written consent of the other party.
Such consent shall not be unreasonable withheld. Such consent shall not be required,
however, in the case of an assignment to an affiliated company or to a successor entity
resulting from a merger or consolidation.
	 
	 	21.	 	Independent Contractor
	 
	 	 	 	Licensee is an independent contractor. Licensee is not an agent, partner, employee or
legal representative or otherwise authorized to act for or on behalf of LVGI. Licensee
is not authorized to make any agreement, warranty, covenant or other representation or to
create any implied or express obligation on behalf of LVGI.
	 
	 	22.	 	Notices
	 
	 	 	 	All notices to be given and all payments to be made hereunder shall be given or made at
the respective addresses of the parties as set forth above, unless notification of a
change of address is given.
	 
	 	23.	 	Amendments
	 
	 	 	 	This Agreement may be modified only by a written agreement between LVGI and Licensee
executed by persons authorized to execute agreements on their behalf. No failure to
exercise and no delay in exercising any right, power or privilege hereunder on the part
of either party shall operate as a waiver or any right, power or privilege.
	 
	 	24.	 	Severability
	 
	 	 	 	If any part of this Agreement is adjudged by any court of competent jurisdiction to be
invalid, that judgment shall not affect or nullify the remainder of this Agreement.
	 
	 	25.	 	Compliance Committee

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	 	 	 	LVGI and Licensee acknowledge that both parties hold privileged gaming licenses. As a
result, this Agreement is subject to the approval of each party’s compliance committee
prior to and during the term of this Agreement. In the event either party’s compliance
committee determines, in its absolute discretion, that a continued association with the
other party or its agents could be detrimental to a gaming license the company holds, the
committee may terminate this Agreement immediately upon notice to the other party,
without any liability whatsoever, except as to amounts previously accrued and owing.
	 
	 	26.	 	Supplemental Exhibit
	 
	 	 	 	LVGI and Licensee shall execute a Supplemental Exhibit that shall be incorporated herein
for each Location that provides written approval for Licensee to operate NN in its gaming
establishment. The Supplemental Exhibit shall set forth the pay schedule for the
remaining portion of the $1.00 NN that is to be divided between LVGI and Licensee (and
Location, if applicable).
	 
	 	27.	 	Governing Law
	 
	 	 	 	This Agreement shall be deemed to have been made in and shall be construed pursuant to
the laws of the State of Nevada.
	 
	 	28.	 	Entire Agreement
	 
	 	 	 	The Agreement, together with the Attachments, Exhibits, or Schedules, if any, constitutes
the final written expression of all of the agreements between the parties and is a
complete and exclusive statement of all the terms and promises made between the parties.
It supersedes all earlier and contemporaneous agreements, representations, and
understandings of the parties, whether written or oral, concerning the same subject
matter. The parties specifically represent each to the other that there are no
additional or supplemental agreements between them related in any way to the matters
contained in this Agreement unless specifically included or referred to herein.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement this 8th day of
July, 2005.

Leroy’s Horse and Sports Place

/s/

By:

Its:

Las Vegas Gaming, Inc.

/s/ Zak Khal

By: Zak Khal

Its: VP Gaming Operations

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Exhibit 10.14

LAS VEGAS GAMING, INC.

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (“Agreement”) is entered into this 11th day of July, 2005,
between Las Vegas Gaming, Inc., a Nevada Corporation having offices located at 4000 West Ali Baba,
Suite D, Las Vegas, Nevada 89118 ( “LVGI”), and Leroy’s Horse and Sports Place having offices
located at, 675 Grier Drive, Las Vegas, Nevada 89119 (“Licensee”).

RECITALS

The parties entered into this Agreement with the understanding that:

	A.	 	LVGI is the owner of certain U.S. patent applications, trademarks, trademark applications,
copyrights, copyright applications and registrations in respect of a 2-10 spot linked and
progressive keno games and provider of certain hardware and software. The Million Dollar
Ticket (“TMDT”) is a linked progressive ten spot keno game with a base jackpot of one million
dollars.

	B.	 	Leroy’s is a successful operator of a race book, pari-mutuel race pool and/or sports pool in
the State of Nevada. An integral aspect of Leroy’s success is the unique service it provides
an operator of a gaming establishment with a nonrestricted state gaming license (“Location”),
who wants to offer the amenity of a race book and/or sports pool (the “Book”) to its customers
but does not wish, or cannot afford, to assume the financial responsibility associated with
owning and operating its own Book, which includes but is not limited to, the risk of loss due
to the payment of winning wagers, the reserves required by the Nevada Gaming Commission and
Gaming Control Board (the “Gaming Authorities”), initial investment costs for equipment,
hardware, and software to install the Book, labor and other costs to operate the Book, and
applicable federal and state fees and taxes. Leroy’s operates the Book inside the Location’s
gaming establishment and assumes all financial responsibilities associated with its operation.
Leroy’s currently operates Books in approximately sixty (60) Locations.

	C.	 	LVGI and Leroy’s desire to offer to LVGI’s keno game, The Million Dollar Ticket (“TMDT”), as
an amenity in Leroy’s Books upon written approval from the specific Location in which Leroy’s
operates its Book.

The parties agree as follows:

	 	1.	 	Grant
	 
	 	 	 	LVGI grants to Licensee a non-exclusive license to offer TMDT in its Books upon written
approval from the Location in which the Book is operating. LVGI acknowledges that
Licensee cannot operate TMDT in any of its Books without written approval from the
Location in which the Book is operating. Moreover, LVGI understands that Licensee makes
no guarantee as to the number of Locations that will approve of Licensee’s operation of
TMDT in Licensee’s Book.
	 
	 	2.	 	Fees
	 
	 	 	 	Licensee shall sell to the public each TMDT for ONE DOLLAR ($1.00) per ticket. From each
$1.00 TMDT sold, Licensee shall pay

	 	a.	 	To TMDT’s base jackpot: $ 0.2116; and
	 
	 	b.	 	To TMDT’s progressive jackpot: $0.05.
	 
	 	c.	 	To Licensee for payments to winning customers that correctly match four
through nine numbers plus the $5,000 grand prize co-payment as noted in 3(a):
$0.3619

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	 	d.	 	To LVGI as its portion of profits: $0.10;
	 
	 	e.	 	To Licensee as its portion of profits (which may be split with Location
if necessary): $0.2765. Any agreement reached between Licensee and Location shall
be and remain separate from and independent of this Agreement.
	 
	 	f.	 	Both parties acknowledge that the insurance or base jackpot fee noted
above of $0.2116 is subject to change or cancellation due to uncontrollable actions
of third parties. In the event of a change in the fee or cancellation of the
insurance, either party shall have the right to terminate this Agreement concurrent
with the effective date of the change or cancellation by providing written notice to
the other party.

	 	3.	 	Jackpot Payments

	 	a.	 	10 out of 10 Winners

	 	 	 	The one million dollar ($1,000,000) jackpot will be split equally among all TMDT ticket
holders who correctly match all 10 of 10 numbers from the twenty ball draw in an
individual drawing (each ticket holder being a “10 out of 10 Winner”). Licensee shall
pay five thousand dollars ($5,000) of the $1,000,000 jackpot, to be split equally among
all 10 out of 10 Winners. LVGI shall pay the remaining nine hundred ninety-five thousand
($995,000) of the jackpot, to be split equally among all 10 out of 10 Winners.

	 	b.	 	4 Through 9 Winners

	 	 	 	Licensee shall have sole responsibility for paying TMDT ticket holders who correctly
match between 4 and 9 of the 20 possible numbers in an individual drawing.

	 	4.	 	Contributions to Jackpot
	 
	 	 	 	LVGI has the unilateral right to change the pay table associated with the TMDT upon 30
days written notice to Licensee. In the event that LVGI exercises its right to change
the pay table associated with the TMDT, Licensee shall have the right to terminate this
Agreement, thereby withdrawing from the TMDT progressive network. Should Licensee
choose to terminate this Agreement, its contributions to the basic and progressive
jackpot funds shall remain in the respective jackpot funds. Licensee must provide
written notice of its intent to terminate this Agreement within 60 days of LVGI’s change
to the pay table.
	 
	 	5.	 	Timing
	 
	 	 	 	All monies due LVGI under this contract are due by 2:00 p.m. the Thursday following the
week (Monday through Sunday) in which the money was earned. The payments will be
calculated on an accrual basis. That is, Licensee shall remit to LVGI each Thursday the
payment due for TMDT tickets sold during the prior week.
	 
	 	6.	 	Operation of TMDT
	 
	 	 	 	LVGI shall be responsible for all necessary incremental local communication costs at
Licensee’s Books for the operation of TMDT. In the event that the Nevada Gaming
Commission or the Nevada Gaming Control Board approves the use of a Virtual Private
Network (VPN) for use in wide area progressive games, Licensee shall provide a broadband
internet connection with a static IP address for operation of the game(s) and LVGI shall
provide all VPN hardware.
	 
	 	7.	 	Discontinuation of the TMDT
	 
	 	 	 	In the event LVGI discontinues TMDT, LVGI shall submit a plan to satisfy the liability
for the progressive jackpot to the Chairman of the Nevada State Gaming Control Board at
least sixty (60) days prior to cessation of operations and any funds remaining in the
jackpot after satisfaction of such liability shall be divided consistent with this plan.

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	 	8.	 	Marketing Expenses
	 
	 	 	 	Initial marketing collateral and signage will be provided by LVGI. Ongoing marketing,
advertising and any other promotions within Licensee’s Book shall be at the sole
discretion and expense of Licensee. However, all collateral materials and promotions
used by Licensee in marketing TMDT must be consistent in form and content with materials
recommended by LVGI. Licensee’s use of inconsistent collateral materials or promotions
may result in a breach of this Agreement and entitle LVGI to terminate this Agreement
with fifteen (15) days written notice, providing Licensee with the ability within the
notice period to cure any such non-compliance.
	 
	 	9.	 	Limited Right to Terminate
	 
	 	 	 	Either party may terminate this Agreement, at any time during the term of this Agreement,
with a 60 day written notice after the initial 120 days of operation.
	 
	 	10.	 	Training
	 
	 	 	 	LVGI shall (i) provide or arrange to provide as much training of Licensee’s employees in
the operation of TMDT as Licensee deems necessary and (ii) conducted such training at
times approved by Licensee.
	 
	 	11.	 	Responsibilities of Licensee 
	 
	 	 	 	During the term of this Agreement, Licensee shall, at its sole expense: (a) run and
maintain all necessary cabling and power to operate TMDT; (b) maintain any necessary
signage for TMDT; (c) operate any LVGI equipment maintained on Licensee’s premises in a
responsible manner; (d) submit any required forms to the State of Nevada Gaming Control
Board for licensing of TMDT to Licensee; and (e) be responsible for any employees needed
to operate TMDT; Licensee, through its Race Book and/or Sports Pool Agreement with
Location, shall, at its sole expense, provide surveillance and security necessary to
operate the TMDT within Location’s gaming establishment.
	 
	 	12.	 	Rules of Play
	 
	 	 	 	Licensee shall operate TMDT in accordance with the rules of play specified by LVGI. In
addition, Licensee shall operate TMDT within its Book in a high quality, professional and
lawful manner. LVGI shall have the right to inspect the operation of TMDT within
Licensee’s Book to ensure that Licensee complies with this quality control standard.
Failure to comply with this standard shall entitle LVGI, in its sole discretion, to
terminate this Agreement. Any termination shall be made only by 15 days written notice,
providing Licensee with the ability within the notice period to cure any such
non-compliance.
	 
	 	13.	 	Compliance with Law
	 
	 	 	 	Licensee and LVGI represent and warrant to each other that they are in compliance with
all registration and licensing required by law and that they shall comply with all gaming
laws, compacts, ordinances, rules and regulations, including, but not limited to, if
necessary, approval, certification and licensing by all federal, state and local
authorities. Licensee shall pay, and have sole responsibility for, all costs, dues,
assessments, charges, registration fees and any other cost, fee or charge which may be
applicable to the sale, licensing, ownership, possession, operation or use of the TMDT.
LVGI is responsible for paying all applicable gaming taxes on its share of revenue
derived from the TMDT. Weekly invoices shall be net of any tax credit due Licensee. Upon
validation of a winning jackpot ticket, LVGI will provide each participating property
with their pro-rated share of the payout for deduction on NGC-1 tax returns. TMDT is to
be operated exclusively in the State of Nevada. No other jurisdictions may be linked to
the system.
	 
	 	14.	 	Indemnity and Release

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	 	a.	 	Licensee agrees to indemnify and hold LVGI, its officers, employees and
directors, harmless from and against any and all claims, actions, damages,
liability, costs and expenses (including reasonable attorneys’ fees) arising from or
out of; (i) any occurrence caused by the act or omission of Licensee, its customers,
invitees, contractors, vendors or suppliers; (ii) any violation of any law,
regulation or ordinance applicable to Licensee; or (iii) any breach or violation of
the terms of this Agreement, except to the extent any of the foregoing is caused by
the negligence or willful misconduct of LVGI, its officers, employees or directors.
	 
	 	b.	 	LVGI agrees to indemnify and hold Licensee, its officers, employees and
directors harmless from and against any and all claims, actions, damages,
liabilities, costs and expenses (including reasonable attorneys’ fees) arising from
or relating to (i) any occurrence caused by the act or omission of LVGI; (ii) any
violation of any law, regulation or ordinance applicable to LVGI; (iii) any breach
or violation of the terms of this Agreement, except to the extent any of the
foregoing is caused by the negligence or willful misconduct of Licensee, including
the officers, directors or employees of Licensee; (iv) any infringement of any
party’s trademark, copyright or patent rights in connection with TMDT except as to
any modification of TMDT by Licensee not authorized by LVGI, or any breach or
violation of the terms of this Agreement. At its option, LVGI may, at any time,
modify TMDT in order to avoid or settle and infringement claim.
	 
	 	c.	 	All parties to this Agreement and their heirs, executors, administrators,
successors and assigns, hereby release, remise, and forever discharge the State of
Nevada, the Nevada Gaming Commission, the State Gaming Control Board, the Nevada
Attorney General, and each of their members, agents, and employees in their
individual and representative capacities, from any and all manner of actions, causes
of action, suits, debts, judgments, executions, claims and demands whatsoever, known
or unknown, in law or equity. Furthermore, all parties to this contract hereby
agree to indemnify and hold harmless, the State of Nevada, the Nevada Gaming
Commission, the State Gaming Control Board, the Nevada Attorney General, and each of
their members, agents, and employees in their individual and representative
capacities from any and all claims, suits, and actions, brought by anyone associated
with this Agreement.

	 	15.	 	Limitation of Liability
	 
	 	 	 	LVGI does not make any express or implied warranties beyond those expressed herein, and
in no event will LVGI be liable for any lost revenues, profits or other special indirect,
consequential or punitive damages, associated with the performance of this Agreement,
even if LVGI has been advised of the possibility of such damages.
	 
	 	16.	 	Term

	 	a.	 	The term of this Agreement shall commence on the date it is signed and
shall remain in force and effect for a period of five (5) years. This Agreement
shall automatically renew in five-year increments, unless one of the parties hereto
provides the other with written notice of termination at least 90 days prior to the
expiration date.
	 
	 	b.	 	However, LVGI acknowledges that, at any time, Licensee may have to
discontinue operating TMDT in a Book’s Location should Location (i) decide not to
permit Licensee to operate TMDT in its gaming establishment, (ii) choose to Operate
its Own Book (as defined in the Race Book and/or Sports Pool Agreement), (iii) Close
the Book (as defined in the Race Book and/or Sports Pool Agreement) , or (iv) allow
Licensee’s Race Book and Sports Pool Agreement to expire or should the Race Book
and/or Sports Pool Agreement terminate.

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	 	17.	 	Breach
	 
	 	 	 	Upon the failure of any party to make any payment due hereunder for a period of ten (10)
days following written notice of such default, LVGI shall have the right to terminate
this Agreement. In the case of such a default, Licensee shall assemble the property,
which is the subject of this Agreement, and return it to LVGI immediately.
	 
	 	18.	 	Internal Usage
	 
	 	 	 	TMDT is the sole and exclusive property of LVGI. Licensee agrees to use TMDT solely in
its own Books and not to modify, reproduce, sell or sub-license TMDT without the written
consent from LVGI. LVGI retains and reserves all rights in TMDT not granted to Licensee
under this Agreement. Nothing contained herein shall, however, preclude Licensee from
disclosing report and/or information generated from TMDT for internal use and for
reporting to any government regulatory agency.
	 
	 	19.	 	Force Majeure
	 
	 	 	 	Neither party shall be liable for failure to perform its obligations under this Agreement
(other than the payment of fees and other amounts due any party) due to unavoidable
delays caused by fire, catastrophe, strikes or labor trouble, civil commotion, acts of
God, governmental prohibitions of regulations or inability to obtain materials by reason
thereof, or any other causes beyond such party’s reasonable control. The party suffering
an event of force majeure shall have additional time for performance.
	 
	 	20.	 	Transfer of Rights
	 
	 	 	 	The rights, the benefits, and the obligations under this Agreement shall not be assigned
or transferred by either party without the prior written consent of the other party.
Such consent shall not be unreasonable withheld. Such consent shall not be required,
however, in the case of an assignment to an affiliated company or to a successor entity
resulting from a merger or consolidation.
	 
	 	21.	 	Independent Contractor
	 
	 	 	 	Licensee is an independent contractor. Licensee is not an agent, partner, employee or
legal representative or otherwise authorized to act for or on behalf of LVGI. Licensee
is not authorized to make any agreement, warranty, covenant or other representation or to
create any implied or express obligation on behalf of LVGI.
	 
	 	22.	 	Notices
	 
	 	 	 	All notices to be given and all payments to be made hereunder shall be given or made at
the respective addresses of the parties as set forth above, unless notification of a
change of address is given.
	 
	 	23.	 	Amendments
	 
	 	 	 	This Agreement may be modified only by a written agreement between LVGI and Licensee
executed by persons authorized to execute agreements on their behalf. No failure to
exercise and no delay in exercising any right, power or privilege hereunder on the part
of either party shall operate as a waiver or any right, power or privilege.
	 
	 	24.	 	Severability
	 
	 	 	 	If any part of this Agreement is adjudged by any court of competent jurisdiction to be
invalid, that judgment shall not affect or nullify the remainder of this Agreement.

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	 	25.	 	Compliance Committee
	 
	 	 	 	LVGI and Licensee acknowledge that both parties hold privileged gaming licenses. As a
result, this Agreement is subject to the approval of each party’s compliance committee
prior to and during the term of this Agreement. In the event either party’s compliance
committee determines, in its absolute discretion, that a continued association with the
other party or its agents could be detrimental to a gaming license the company holds, the
committee may terminate this Agreement immediately upon notice to the other party,
without any liability whatsoever, except as to amounts previously accrued and owing.
	 
	 	26.	 	Governing Law
	 
	 	 	 	This Agreement shall be deemed to have been made in and shall be construed pursuant to
the laws of the State of Nevada.
	 
	 	27.	 	Entire Agreement
	 
	 	 	 	The Agreement, together with the Attachments, Exhibits, or Schedules, if any, constitutes
the final written expression of all of the agreements between the parties and is a
complete and exclusive statement of all the terms and promises made between the parties.
It supersedes all earlier and contemporaneous agreements, representations, and
understandings of the parties, whether written or oral, concerning the same subject
matter. The parties specifically represent each to the other that there are no
additional or supplemental agreements between them related in any way to the matters
contained in this Agreement unless specifically included or referred to herein.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement this 11th day of
July, 2005.

Leroy’s Horse and Sports Place

/s/

By:

Its:

Las Vegas Gaming, Inc.

/s/ Zak Khal

By: Zak Khal

Its: VP Gaming Operations

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