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Prepared by MERRILL CORPORATION

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Exhibit 4.6    
  

 
 

WARRANT AGREEMENT    
  

    THIS WARRANT AGREEMENT (this "Agreement"), dated as of October 31, 2001, is by and between FLORIDA GAMING CORPORATION, a Delaware corporation (the
"Company"), and CIB BANK, an Illinois banking corporation (the "Lender"). 

    WHEREAS,
the Company proposes to issue to the Lender 200,000 warrants (the "Warrants"), to purchase up to 200,000 shares of Common Stock, par value $.10 per share, of the Company (the
"Common Shares"), subject to adjustment as set forth herein (the Common Shares issuable on exercise of the Warrants as described and limited by the terms of this Agreement shall be referred to herein
as the "Warrant Shares"), pursuant to a Loan Agreement, as amended from time to time (the "Loan Agreement"), by and among the Lender, Florida Gaming Centers, Inc., a Florida corporation and a
wholly-owned subsidiary of the Company ("FGCI"), and City National Bank, as Trustee, dated of even date herewith. Capitalized terms used herein but not otherwise defined herein shall have the meanings
given them in the Loan Agreement. 

    NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows: 

    SECTION 1.  Warrant
Certificates.  The Company hereby issues 200,000 Warrants to the Lender. Upon execution of this Agreement, the Company shall deliver a certificate or
certificates evidencing such Warrants (the "Warrant Certificates") to the Lender. Such certificate or certificates shall be in registered form and shall be substantially in the form set forth as
Exhibit A attached hereto. Warrant Certificates shall be dated the date of issuance by the Company. 

    SECTION 2.  Execution of Warrant
Certificates.  Warrant Certificates shall be signed on behalf of the Company by its President and its Secretary. 

    SECTION 3.  Registration.  The
Company shall number and record the Warrant Certificates in a warrant register as they are issued (the "Warrant Register"). The Company may deem and treat the registered holder(s) of the Warrant
Certificates (each such registered holder being hereinafter referred to as the "Holder"), as the absolute owner(s) thereof (notwithstanding any notation of ownership or other writing thereon made by
anyone) for all purposes and shall not be affected by any notice to the contrary. The Warrants shall be registered initially in the name of the Lender. 

    SECTION 4.  Registration of Transfers and
Exchanges.  The Company shall from time to time register in the Warrant Register a transfer of any outstanding Warrant Certificates upon surrender thereof
accompanied by a written instrument or instruments of transfer in form reasonably satisfactory to the Company, duly executed by the registered Holder thereof or by the duly appointed legal
representative thereof. Upon any such registration of transfer, the Company, at its own expense, will issue a new Warrant Certificate or, if requested by the Holder, Warrant Certificates, of the same
type and of a like aggregate principal amount in exchange therefor to the transferee(s) designated by the Holder and the surrendered Warrant Certificate shall be canceled and disposed of by the
Company. Except as may be limited by applicable law, any Warrant and the Warrant Shares shall be freely transferable. Warrant Certificates may be exchanged at the option of the Holder thereof when
surrendered to the Company at its office for another Warrant Certificate or other Warrant Certificates of like tenor and representing in the aggregate a like number of Warrants. All Warrant
Certificates issued upon any exchange or transfer, upon issuance, will be the legal and valid obligations of the Company, entitled to the same benefits as the Warrant Certificate surrendered for
transfer or exchange. Warrant Certificates surrendered for exchange shall be canceled and disposed of by the Company. 

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    SECTION 5.  Warrants; Exercise of
Warrants.  Subject to the terms of this Agreement, the Holder shall have the right, which may be exercised in the event that the Lender does not elect to take
the Deferred Fee in the form of cash pursuant to Section 3.6 of the Loan Agreement, and at any time from and after the earlier to occur of (i) any acceleration by the Lender of the
principal balance of the Loan as permitted by the Loan Documents, (ii) any prepayment of the Loan in full by FGCI, and (iii) October 31, 2004, to receive from the Company the
number of fully paid and nonassessable Warrant Shares which the Holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such
Warrant. The price at which each Warrant shall be exercisable (the "Exercise Price") shall be $0.10 per Warrant Share issued upon such exercise, subject to adjustment as described below.
Notwithstanding the foregoing, the maximum aggregate Exercise Price with respect to all Warrants issued hereunder shall not exceed the greater of (1) the aggregate par value of all of the
Warrant Shares and (2) $20,000.00, such maximum aggregate Exercise Price to be allocated pro rata among all outstanding Warrants. In the event of an adjustment in the number of Warrant Shares
as provided in Section 9, the maximum aggregate Exercise Price (less the aggregate Exercise Price paid prior to such adjustment upon the exercise of Warrants (the "Remaining Maximum Exercise
Price")) shall not be adjusted, but shall be reallocated pro rata among all outstanding Warrants, and the Exercise Price per Warrant shall be adjusted to reflect such reallocation to the extent the
product of the then current Exercise Price and the maximum number of Warrant Shares remaining to be issued under this Agreement would otherwise exceed the Remaining Maximum Exercise Price. 

    A
Warrant may be exercised by (i) surrender to the Company at its office designated for such purpose (the address of which is set forth in Section 12 hereof) of the
Warrant Certificate or Certificates to be exercised, with the form of election to purchase attached thereto duly filled in and signed and (ii) payment or delivery to the Company of the Exercise
Price for the number of Warrants being exercised. Payment of the aggregate Exercise Price may at the Holder's sole option be paid (i) by delivery of immediately available funds, (ii) by
the Holder's instruction to the Company to deduct from the number of Warrant Shares issuable to the Holder on account of such exercise such Warrant Shares or fractional Warrant Shares having an
aggregate Current Market Value equal to the aggregate Exercise Price for the number of Warrants being exercised, or (iii) by the Holder's delivery to the Company for redemption or cancellation
of other securities of the Company or fractional portions thereof accompanied by appropriate assignments having an aggregate Current Market Value equal to the Exercise Price for the number of Warrants
being exercised. 

    Upon
such surrender of Warrants and payment of the Exercise Price as described above, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the
written order of the Holder and in such name or names of the Holder as such Holder may designate a certificate or certificates for the number of Warrant Shares issuable upon the exercise of such
Warrants. Such certificate or certificates shall be deemed to have been issued and the person so named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date
of the surrender of such Warrants and payment of the Exercise Price, irrespective of the date of delivery of such certificate or certificates for Warrant Shares. 

    Each
Warrant shall be exercisable, at the election of the Holder thereof, either in full or from time to time in part and, in the event that a Warrant Certificate is exercised in
respect of fewer than all of the Warrants evidenced thereby, a new Warrant Certificate evidencing the remaining Warrant or Warrants will be issued and delivered pursuant to the provisions of this
Section and of Section 2 hereof. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled and disposed of by the Company. The Company shall keep copies of this Agreement
and any notices given or received hereunder available for inspection by the Holder during normal business hours at its office. 

    Notwithstanding
the foregoing, however, the Lender acknowledges that Florida law prohibits any Person from acquiring a five percent (5%) or greater equity interest in a
pari-mutuel operator and 

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exercising control with respect to such interest until such Person has received the approval of the Florida Department of Business and Professional Regulation, Division of Pari-Mutuel
Wagering. Therefore, the Lender acknowledges that the acquisition of five percent (5%) or more of the Company's Common Shares upon the exercise of the Warrants requires such approval before the
Company is required to issue Common Shares in excess of such percentage to the Lender pursuant hereto. 

    The
Warrants and all rights and options thereunder shall expire on October 31, 2006, and shall be wholly null and void to the extent the Warrants are not exercised before
expiration. 

    "Current
Market Value" means, as at any time, with respect to securities that are publicly traded, the average of the daily closing prices of such security for thirty
(30) consecutive trading days ending three (3) trading days before such date (as adjusted for any stock dividend, split, combination or reclassification that took effect during such
thirty (30) trading day period). The closing price for each day shall be the last reported sale price regular way or, in case no such reported sale takes place on such day, the average of the
last closing bid and asked prices regular way, in either case on the principal national securities exchange on which such security is listed or admitted to trading, or if not listed or admitted to
trading on any national securities exchange, the closing sale price for such day reported by NASDAQ, if such security is traded over-the-counter and quoted in the National
Market System, or if such security is so traded, but not so quoted, the average of the closing reported bid and asked prices of such security reported by NASDAQ, including the OTC Bulletin Board or
any comparable system, or, if such security is not listed on NASDAQ or any comparable system, the average of the closing bid and asked prices as furnished by two (2) members of the National
Association of Securities Dealers, Inc., selected from time to time by the Holder for that purpose. If such security is not traded in such manner that the quotations referred to above are
available for the period required hereunder, Current Market Value shall be deemed to be the fair market value of such security (without applying any discounts for lack of liquidity or minority
interests) or property, each as reasonably determined in good faith by the Board of Directors of the Company taking into account all information that should reasonably be taken into account in valuing
the Company as a going concern and dividing by the number of Common Share Equivalents (as defined below) then outstanding. If Holders of a majority of the then outstanding Warrants dispute the value
determination by the Board of Directors, the value determination shall be made by a regional or national independent appraiser or investment bank mutually agreed upon by such Holders and the Company.
The fees of such appraiser shall be (i) paid by the Holders of the Warrants in the event that the appraiser's determination of Current Market Value is less than ninety percent (90%) of the
Current Market Value determined by the Board of Directors, (ii) paid one-half by the Company and one-half by the Holders of the Warrants in the event the appraiser's
determination of Current Market Value is between ninety percent (90%) and one hundred ten percent (110%) of the Current Market Value determined by the Board of Directors, and (iii) paid by the
Company in the event that the appraiser's determination of Current Market Value is in excess of one hundred ten percent (110%) of the Current Market Value determined by the Board of Directors. The
Company shall give each Holder written notice of each determination of Current Market Value by the Board of Directors (and the market basis for such determination) or by such appraisal process. For
purposes of this Agreement, "Common Share Equivalents" means, as at any time, the number of Common Shares that are outstanding, plus the maximum number of Common Shares issuable upon the exercise of
the Warrants and the exercise or conversion of all other outstanding options and convertible securities of the Company from time to time, without regard to whether such exercise or conversion is then
available. 

    Notwithstanding
anything in this Agreement to the contrary, the ratio which the number of Warrant Shares issuable upon the exercise of the Warrants bears to the total number of Common
Share Equivalents outstanding as of the time the Warrants are exercised shall not exceed the ratio which 

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200,000 Warrant Shares bears to the total number of Common Share Equivalents outstanding as of the date of this Agreement. 

    SECTION 6.  Payment of
Taxes.  The Company will pay all documentary stamp taxes and other governmental charges in connection with the issuance, sale, delivery or transfer of the
Warrants hereunder, as well as all such taxes attributable to the issuance of Warrant Shares upon the exercise of Warrants and payment of the Exercise Price. 

    SECTION 7.  Replacement of
Securities.  Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant Certificate and, in the case of
loss, theft or destruction, provision of reasonable indemnification, the Company, at its expense, will issue and deliver to the Holder a new Warrant Certificate of like tenor, in lieu of such lost,
stolen, destroyed or mutilated Warrant Certificate. Any new Warrant Certificate issued upon the loss, theft, destruction or mutilation of such Warrant Certificate shall be in substantially the form of
the Warrant Certificate so lost, stolen, destroyed or mutilated. 

    SECTION 8.  Reservation of Warrant
Shares.  The Company shall at all times reserve and keep available, free from preemptive rights, for the purpose of enabling it to satisfy any obligation to
issue Common Shares upon exercise of Warrants, the maximum number of Common Shares which may at such time be deliverable upon the exercise of all outstanding Warrants. The Company or, if appointed,
the transfer agent for the Common Shares and each transfer agent for any of the Company's capital stock issuable upon the exercise of any of the Warrants (collectively, the "Transfer Agent"), will be
irrevocably authorized and directed at all times to reserve such number of authorized Common Shares as shall be required for such purpose. The Company shall keep a copy of this Agreement on file with
the Transfer Agent. The Company will supply the Transfer Agent with duly executed certificates for such purposes. The Company will furnish such Transfer Agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to the Holder pursuant to Section 10 hereof. 

    The
Company covenants that all Warrant Shares and other equity securities issued upon exercise of Warrants pursuant to the terms of this Agreement will, upon payment of the Exercise
Price therefor and issuance thereof, be validly authorized and issued, fully paid, nonassessable, free of preemptive rights and free from all taxes, liens, charges and security interests with respect
to the issuance thereof. If Common Shares are listed on one or more principal securities exchanges or markets within the United States of America, the Company shall list on such exchanges or markets,
Common Shares issued upon exercise of the Warrants, immediately upon their issuance. Thereafter, the Company shall register the Common Shares issued upon exercise of the Warrants (the "Registrable
Shares") pursuant to Section 18 hereof. 

Page 9 of 97 Pages

 
    SECTION 9.  Adjustment of Number of Warrant Shares Issuable.  The number of
Warrant Shares issuable upon the exercise of each Warrant from time to time is referred to as the "Warrant Number." The Warrant Number shall initially be one (1). The Warrant Number shall be subject
to adjustment from time to time as hereinafter provided. 

    A.  Adjustments to the Warrant Number.  The Warrant Number will be subject to adjustment from time to
time as described in Subsections B, C and D below. If and whenever on or after the date of this Agreement, the Company issues or sells, or in accordance with Subsection B is deemed to have issued or
sold, any Common Shares of the Company (other than as described in Subsection C or Subsection D) for a consideration per share less than the Current Market Value in effect immediately prior to
such issuance or sale, or deemed issuance or sale, then forthwith upon such issuance or sale, or deemed issuance or sale, the Warrant Number in effect will be adjusted by multiplying such Warrant
Number by a fraction, (x) the numerator of which shall be the total number of Common Share Equivalents outstanding as determined immediately after such issuance or sale, or deemed issuance or
sale (including taking into account those deemed to have been issued pursuant to Subsection B below in such transaction), and (y) the denominator of which shall be an amount equal to the sum of
(A) the number of Common Share Equivalents outstanding immediately prior to such issuance or sale, or deemed issuance or sale, plus (B) the number of Common Shares which the aggregate
consideration, if any, received by the Company for such shares would buy at the Current Market Value thereof, as of the date immediately prior to such issuance or sale, or deemed issuance or sale;
provided, however, that Common Shares issued or sold (or deemed issued or sold) without consideration shall be deemed to have been issued or sold for $.001 per share. 

    B.  Effect of Certain Events on Warrant Number.  For purposes of determining the adjusted Warrant Number
under Subsection A, the following will be applicable: 

    1.  Issuance of Rights or Options.  If the Company in any manner grants any right or option to subscribe
for or to purchase Common Shares or any other securities convertible into or exchangeable for Common Shares (such right or option being herein called an "Option" and such convertible or exchangeable
securities being herein called "Convertible Securities") and the price per share for which Common Shares are issuable upon the exercise of such Option or upon conversion or exchange of such
Convertible Securities is less than the Current Market Value per Common Share in effect immediately prior to the time of the granting of such Option, then the total maximum number of Common Shares
issuable upon the exercise of such Option or upon conversion or exchange of the total maximum amount of such Convertible Securities issuable upon exercise of such Option will be deemed to be
outstanding and to have been issued and sold by the Company for such price per share. For purposes of this paragraph, the "price per Share for which Common Shares are issuable" will be determined by
dividing (i) the total amount, if any, received or receivable by the Company as consideration for the granting of such Option, plus the minimum aggregate amount of additional consideration
payable to the Company upon exercise of such Option, plus in the case of an Option which relates to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable to
the Company
upon the issuance or sale of such Convertible Securities and the conversion or exchange thereof, by (ii) the total maximum number of Common Shares issuable upon the exercise of the Option or
upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of such Option. No further adjustment of the Warrant Number will be made when Convertible Securities are
actually issued upon the exercise of such Option or when Common Shares are actually issued upon the exercise of such Option or the conversion or exchange of such Convertible Securities. 

    2.  Issuance of Convertible Securities.  If the Company in any manner issues or sells any Convertible
Security and the price per share for which Common Shares are issuable upon the conversion or exchange of such Convertible Securities is less than the Current Market Value per Common Share in effect
immediately prior to the time of such issue or sale, then the maximum 

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number of Common Shares issuable upon conversion or exchange of such Convertible Security will be deemed to be outstanding and to have been issued and sold by the Company for such price per share. For
purposes of this paragraph, the "price per share for which Common Shares are issuable" will be determined by dividing (i) the total amount received or receivable by the Company as consideration
for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by
(ii) the total maximum number of Common Shares issuable upon the conversion or exchange of such Convertible Securities. No further adjustment of the Warrant Number will be made when Common
Shares are actually issued upon the conversion or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which
adjustments of the Warrant Number had been or are to be made pursuant to other provisions of this Agreement, no further adjustment of the Warrant Number will be made by reason of such issue or sale. 

    3.  Change in Option Price or Conversion Rate.  If the purchase price provided for in any Options, the
additional consideration, if any, payable upon the conversion or exchange of any Convertible Securities, or the rate at which any Options are exercisable or Convertible Securities are convertible into
or exchangeable for Common Shares changes at any time, including, but not limited to, a change resulting from any applicable anti-dilution provisions of such securities, the Warrant Number
in effect at the time of such change will be readjusted to the Warrant Number which would have been at such time had such Options or Convertible Securities still outstanding provided for such changed
purchase price, additional consideration or changed exercise or conversion rate, as the case may be, at the time initially granted, issued or sold. 

    4.  Treatment of Expired Options and Unexercised Convertible Securities.  Upon the expiration of any
Option without the exercise thereof or the termination of any right to convert or exchange any Convertible Security without the exercise of any such right, the Warrant Number then in effect hereunder
will be adjusted to the Warrant Number that would have been in effect at the time of such expiration or termination had such Option or Convertible Security, to the extent outstanding immediately prior
to such expiration or termination, never been issued. 

    5.  Calculation of Consideration Received.  If any Common Shares, Options or Convertible Securities are
issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the amount received by the Company therefor. In case any Common Shares, Options
or Convertible Securities are issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Company will be the fair value of such consideration
as of the date of receipt determined as set forth below. Any consideration received shall be net of discounts, commissions, taxes and other expenses allowed, paid or incurred by the Company for
underwriting or otherwise in connection with the issuance and sale of such securities. If any Common Shares, Options or Convertible Securities are issued in connection with any merger in which the
Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is
attributable to such Common Shares, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash will be the Current Market Value of such consideration;
provided, however, that no value shall be credited as consideration for services rendered. 

    6.  Integrated Transactions.  In case any Option is issued in connection with the issuance or sale of
other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Option by the parties thereto, the Option will be deemed to have
been issued without consideration. 

Page 11 of 97 Pages

 

    7.  Authorized But Unissued Common Shares.  The number of Common Shares outstanding at any given time
does not include Common Shares owned or held by or for the account of the Company or any subsidiary, but the disposition of any Common Shares so owned or held will be considered an issuance or sale of
Common Shares. 

    8.  Record Date.  If the Company takes a record of the holders of Common Shares for the purpose of
entitling them (i) to receive a distribution payable in Common Shares, Options or Convertible Securities or (ii) to subscribe for or purchase Common Shares, Options or Convertible
Securities, then for purposes of this Warrant such record date will be deemed to be the date of the issuance or sale of the Common Shares deemed to have been issued or sold upon the declaration of
such dividend or upon the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. 

    9.  Certain Exceptions.  Anything herein to the contrary notwithstanding, no adjustment will be made to
the Warrant Number by reason of (i) the issuance of capital stock or Options or Convertible Securities issues to financial institutions or lessors in connection with commercial credit
arrangements, equipment financings or similar transactions, which issuances are primarily for other than equity financing purposes, and provided that the aggregate of such issuance and similar
issuances do not exceed one percent (1%) of the then outstanding Common Shares (assuming full conversion and exercise of all outstanding convertible and exercisable securities), or (ii) the
issuance of Common Shares upon a
subdivision of the Common Shares for which an adjustment to the Warrant Number is made pursuant to Subsection C below. 

    C.  Subdivision or Combination of Common Shares.  If the Company at any time subdivides (by any split,
dividend, recapitalization or otherwise) its outstanding Common Shares into a greater number of shares, the Warrant Number in effect immediately prior to such subdivision will be proportionately
increased and the number of Common Shares obtainable upon exercise of this Warrant will be proportionately increased. If the Company at any time combines (by reverse split or otherwise) one or more
classes of its outstanding Common Shares into a smaller number of shares, the Warrant Number in effect immediately prior to such combination will be proportionately reduced and the number of Common
Shares obtainable upon exercise of this Warrant will be proportionately decreased. Any adjustment under this Subsection C shall be effective at the close of business on the date the subdivision or
combination becomes effective. 

    D.  Adjustments and Payments for Other Distributions.  In the event the Company, at any time or from time
to time, makes or issues, or fixes a record date for the determination of holders of Common Shares entitled to receive, a dividend or other distribution of assets, evidences of indebtedness or
securities other than Common Shares (a "Special Dividend"), unless there would otherwise have been an adjustment in the Warrant Number pursuant to Subsections B or C above, then and in each such event
the Warrant Number then in effect shall be increased, effective immediately after the record date at which the holders of Common Shares are determined for purposes of such Special Dividend, to a
number determined by multiplying the Warrant Number in effect immediately before such Special Dividend by a fraction, the numerator of which shall be the Current Market Value per outstanding Common
Share on such record date and the denominator of which shall be the Current Market Value per outstanding Common Share on such record date less the then Current Market Value of the assets, evidences of
indebtedness or securities other than Common Shares issued or distributed in such Special Dividend with respect to one Common Share; provided, however, if such record date shall have been fixed and
such dividend is not fully paid or if such distribution is not fully made on the date fixed therefore, the Warrant Number shall be recomputed accordingly as of the close of business on such record
date and thereafter the Warrant Number shall be adjusted pursuant to this Subsection D as of the time of actual payment of such dividend or distribution. 

Page 12 of 97 Pages

 

    E.  Notice of Adjustment; Roundings.  Whenever the Warrant Number is adjusted, the Company shall provide
the notices required by Section 10 hereof. All calculations under this Warrant Agreement shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case
may be. 

    F.  Reorganizations.  In case of any capital reorganization (other than in the cases referred to in
Sections 9(B), (C) or (D) hereof) or the consolidation or merger of the Company with or into another entity (other than a merger or consolidation in which the Company is the continuing
corporation and which does not result in any reclassification of the outstanding Common Shares into shares of other securities or property), or the sale of the property of the Company as an entirety
or substantially as an entirety
(collectively such actions being hereinafter referred to as "Reorganizations"), there shall thereafter be deliverable upon exercise of any Warrant (in lieu of the number of Common Shares theretofore
deliverable) the number of shares or other securities or property to which a holder of the number of Common Shares that would otherwise have been deliverable upon the exercise of such Warrant would
have been entitled upon such Reorganization if such Warrant had been exercised in full immediately prior to such Reorganization. In case of any Reorganization, appropriate adjustment, as reasonably
determined in good faith by the Company and reasonably acceptable to the Holder, shall be made in the application of the provisions herein set forth with respect to the rights and interests of the
Holder so that the provisions set forth herein shall thereafter be applicable, as nearly as possible, in relation to any shares or other property thereafter deliverable upon exercise of Warrants. The
Company shall not effect any such Reorganization unless prior to or simultaneously with the consummation thereof the successor entity (if other than the Company) resulting from such reorganization or
the entity purchasing or leasing such assets or other appropriate corporation or entity shall assume, by a supplemental Warrant Agreement in form reasonably acceptable to the Holder, the obligation to
deliver to the Holder such securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to receive, and all other obligations under this Agreement. 

    G.  Form of Warrants.  Irrespective of any adjustments in the Exercise Price or the number or kind of
shares purchasable upon the exercise of the Warrants, Warrants theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement. 

    H.  Certain Events.  If any event occurs of the type contemplated by the provisions of this
Section 9 hereof but not expressly provided for by such provisions (including, without limitation, the granting of equity appreciation rights, phantom equity rights or other rights with equity
features), then the Company's Board of Directors shall make an appropriate increase in the Warrant Number so as to protect the rights of the Holders. 

    I.  Miscellaneous.  For purposes of this Section 9, the term "Common Shares" shall mean shares of
(i) the class of equity designated as the Common Stock of the Company as of the date of this Agreement, and (ii) any other class of equity resulting from successive changes or
reclassification of any such shares. 

    J.  Protection of Rights of Warrant Holders.  The Company shall not amend its articles of incorporation
or bylaws or participate in any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities or any other voluntary action, for the purpose of avoiding or
seeking to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company (including any amendment to the Company's articles of incorporation to increase
the par value of its Common Shares), but will at all times in good faith assist in the carrying out of all the provisions of this Agreement and will take all actions that may be necessary or
appropriate in order to protect the rights of the Holder to exercise such Warrants without impairment. 

Page 13 of 97 Pages

 
    SECTION 10.  Notices to Warrant Holders.  

    A.  Upon
any adjustment pursuant to Section 9 hereof, the Company shall promptly thereafter cause to be given to the Holder at such Holder's address appearing on
the Warrant register written notice of such adjustments by first class mail, postage prepaid. Where appropriate, such notice may be given in advance and included as a part of the notice required to be
mailed under the other provisions of this Section 10. 

    B.  In
the event (i) the Company shall authorize the issuance to all holders of Common Shares of rights, options or warrants to subscribe for or purchase Common
Shares or of any other subscription rights or warrants; (ii) the Company shall authorize the distribution to all holders of Common Shares of evidences of its indebtedness or assets;
(iii) of any consolidation or merger to which the Company is a party and for which approval of the shareholders of the Company is required, or of the conveyance or transfer of the properties
and assets of the Company substantially as an entirety, or of any reclassification or change of Common Shares issuable upon exercise of the Warrants (other than as a result of a subdivision or
combination), or a tender offer or exchange offer for Common Shares; (iv) of the voluntary dissolution, liquidation or winding up of the Company; or (v) the Company proposes to take any
action that would require an adjustment to the Warrant Number pursuant to Section 9 hereof; then the Company shall cause to be given to the Holder at such Holder's address appearing on the
Warrant Register, at least 30 days prior to the applicable record date hereinafter specified, or promptly in the case of events for which there is no record date, by first-class mail, postage
prepaid, a written notice stating (i) the date as of which the holders of record of Common Shares to be entitled to receive any such rights, options, warrants or distribution are to be
determined, or (ii) the initial expiration date set forth in any tender offer or exchange offer for Common Shares, or (iii) the date on which any such consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up is expected to become effective or consummated, and the date as of which it is expected that holders of record of Common Shares shall be entitled to
exchange such shares for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding up. The Company
shall give to the Holder written notice of any determination to make a distribution to the holders of its Common Shares of any assets (including cash), debt securities, preferred stock, or any rights
or warrants to purchase debt securities, assets or other securities (other than Common Shares, or rights, options, or warrants to purchase Common Shares) of the Company, which notice shall state the
nature and amount of such planned distribution and the record date therefor, and shall be given to the Holder at least 30 days prior to such record date therefor. Nothing contained in this
Agreement or in any of the Warrant Certificates shall be construed as conferring upon the Holder the right to vote or to consent or to receive notice as shareholders in respect of the meetings of
shareholders or any other matter, or any rights whatsoever as shareholders of the Company. 

    SECTION 11.  Legend.  The Warrants and the Warrant Shares
or other securities issued upon exercise of the Warrants have not been registered under the Securities Act of 1933, as amended (the "Securities
Act"), and will be issued in reliance upon an exemption from the registration requirements thereof. Pursuant to the foregoing, the Holder acknowledges that the certificates representing the Warrants
and the Warrant Shares shall each bear a restrictive legend substantially as follows: 

    "THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH ACT." 

Page 14 of 97 Pages

 

    SECTION 12.  Notices to the Company and the Warrant
Holder.  Any notices required or permitted to be given hereunder shall be delivered personally or mailed, certified or registered mail, return receipt requested,
postage prepaid or delivered by commercial overnight courier service, charges prepaid, to the following addresses, or such other address as any party hereto designates by written notice to the
Company, and shall be deemed to have been given upon delivery, if delivered personally, three days after mailing, if mailed, or one business day after delivery to the courier, if delivered by
overnight courier service: 

    If
to the Company: 

Florida
Gaming Corporation

3500 N.W. 37th Avenue

Miami, Florida 33142

Attention:        W. Bennett Collett 

    with
a copy to: 

Phillip
E. Allen

The Market Place

Suite 130

12910 Shelbyville Road

Louisville, Kentucky 40243 

If
to any Holder, at the address appearing on the Warrant Register of the Company (until the Company is otherwise notified in accordance with this Section by such Holder). Any party may change, or any
new Holder may provide, the address to which notices to it are to be sent by giving written notice given pursuant to this Section to the other parties hereto. 

    SECTION 13.  Successors.  All the covenants and
provisions of this Agreement by or for the benefit of the Company or the Holder shall bind and inure to the benefit of its respective successors and assigns hereunder. 

    SECTION 14.  Governing Law.  This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Illinois and for all purposes shall be construed in accordance with the internal laws of said
State. 

    SECTION 15.  Counterparts.  This Agreement may be
executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same
instrument. 

    SECTION 16.  Waiver.  No provision of this Agreement may
be waived except by an instrument in writing signed by the party be bound; provided that any waiver sought from the Holders of any provision of this Agreement which affects Holders generally may be
given by Holders of a majority of (i) all of the Warrant Shares issuable upon exercise of the Warrants and (ii) all the Common Shares issued upon exercise or in respect of the Warrants
then outstanding and any waiver so given shall be binding on all Holders. No failure or delay by any party in exercising any right or remedy hereunder shall operate as a waiver thereof, and a waiver
of a particular right or remedy on one occasion shall not be deemed a waiver of any other right or remedy or a waiver of the same right or remedy on any subsequent occasion. 

    SECTION 17.  Survival.  Notwithstanding anything herein
to the contrary, this Agreement and the rights of the Holders of the Warrant Shares hereunder shall survive the exercise of all of the Warrants. 

Page 15 of 97 Pages

 

    SECTION 18.  Registration.  

    A.  At
the request of any Holder or Holders of Registrable Shares, the Company shall make one registration available for the sale of Registrable Shares (a
"Registration"), but only if and to the extent that the Registrable Shares are not transferable freely without restriction under the Securities Act and any applicable state securities laws. If a
Registration is to be an underwritten public offering, and if an underwriter for marketing reasons requests the inclusion in the registration statement of information which is not required under the
Securities Act to be included in a registration statement on the applicable form for the Registration, the Company will provide such information for inclusion by the underwriter in the Registration.
If a Registration is an underwritten public offering and the managing underwriters advise the Company in writing that in their reasonable opinion the number of Registrable Shares and other securities
requested to be included in the Registration (the "Other Shares") exceeds the number of shares which can be sold in such offering without having an adverse effect on the price of such shares (such
number of shares, the "Maximum Number"), the Company will include in such registration first, the Registrable Shares, up to the Maximum Number, and second, if the number of Registrable Shares is less
than the Maximum Number, the Other Shares, up to the Maximum Number. 

    B.  The
Company may postpone for up to ninety (90) days the filing or effectiveness of any Registration if the Board of Directors of the Company determines in
good faith that such Registration is reasonably likely to materially interfere with, or have a materially adverse effect on, any material corporate development (including any material business
combination or acquisition transaction). 

    C.  All
expenses incident to the Company's performance of or compliance with this Section 18 shall be borne by the Company. 

    D.  The
Company agrees to indemnify, to the fullest extent permitted by law, each seller of Registrable Shares, its officers and directors and each Person who controls
such seller (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including without limitation attorneys' fees) caused by any untrue or alleged
untrue statement of a material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the statements therein not misleading. In connection with any Registration in which a seller of Registrable Shares is participating,
each such seller severally, but not jointly, shall indemnify the Company, its Affiliates, officers, directors and each Person who controls the Company (within the meaning of the Securities Act),
insofar as and to the extent that losses, claims, damages, liabilities, and expenses (including without limitation attorneys' fees) are caused by any untrue statement of a material
fact contained in the registration statement, prospectus or preliminary prospectus or any amendment or supplement thereto or any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing
by such seller expressly for use therein. 

    E.  At
any time and from time to time after (i) the Company registers a class of securities under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Securities Exchange Act"), or (ii) the expiration of 90 days following the close of business on the earlier of such date as the Company commences to file reports under
Section 13 or Section 15(d) of the Securities Exchange Act, then upon receipt of a written request of a holder of Registrable Shares, stating that such holder proposes to sell securities
in compliance with Rule 144 of the Securities and Exchange Commission (the "Commission"), the Company will (1) forthwith furnish to such holder a written statement of compliance with the
filing requirements of the Commission as set forth in Rule 144, as such rule may be amended from time to time and (2) make available to the public and such holder such information as
will enable the holder to make sales pursuant to Rule 144. 

Page 16 of 97 Pages

 

    F.  The Company agrees to give each Holder prompt written notice of its intention to register any of its securities under the Securities Act. 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.] 

Page 17 of 97 Pages

 

    IN WITNESS WHEREOF, the parties hereto have executed this Warrant Agreement on the date first set forth above. 

	 	 	 	 	FLORIDA GAMING CORPORATION
	

 	
 	

 	
 	

 	
 	

 
	Attest:	 	/s/ W. B. Collett, Jr.
	 	By:	 	/s/ W. Bennett Collett, Sr.

	 	 	Secretary	 	Its:	 	Chairman and CEO
	

 	
 	

 	
 	
CIB BANK
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	By:	 	/s/ Joseph Pratl

	 	 	 	 	Its:	 	Sr. V.P.

Page 18 of 97 Pages

  

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH ACT. 

	No. 1	 	200,000 Warrants

 
 

Warrant Certificate    
    
    FLORIDA GAMING CORPORATION    
  

    This Warrant Certificate certifies that CIB BANK, or its successors, is the registered holder of the number of Warrants (the "Warrants") set forth above to
purchase shares of the Common Stock, $0.10 par value per share (the "Common Shares"), of FLORIDA GAMING CORPORATION, a Delaware corporation (the "Company"). Each Warrant entitles the holder upon
exercise to receive from the Company one fully paid and nonassessable Common Share of the Company (a "Warrant Share") at the initial aggregate exercise price (the "Exercise Price") of $0.10 per
Warrant Share, upon surrender of this Warrant Certificate and payment of the Exercise Price (payable as set forth in the Warrant Agreement), at the office of the Company designated for such purpose,
but only subject to the conditions set forth herein and in the Warrant Agreement. Notwithstanding the foregoing, the aggregate Exercise Price for all Warrants issued pursuant to the Warrant Agreement
shall not exceed $20,000.00. The Exercise Price and the number of Warrant Shares issuable upon exercise of the Warrants are subject to adjustment upon the occurrence of certain events as set forth in
the Warrant Agreement. 

    The
Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants issued pursuant to a Warrant Agreement dated as of October 31, 2001 (the
"Warrant Agreement"), duly executed and delivered by the Company, which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a
description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the Company and the holders (the words "holders" or "holder" meaning the registered holders or registered holder) of the
Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. 

    The
holder of Warrants evidenced by this Warrant Certificate may exercise such Warrants under and pursuant to the terms and conditions of the Warrant Agreement by surrendering this
Warrant Certificate, with the form of election to purchase set forth hereon (and by this reference made a part hereof) properly completed and executed, at the office of the Company designated for such
purpose. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued by
the Company to the holder hereof or his or its registered assignee a new Warrant Certificate evidencing the number of Warrants not exercised. 

    The
Warrant Agreement provides that upon the occurrence of certain events the number of Warrants Shares and the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted. 

    Warrant
Certificates, when surrendered at the office of the Company by the registered holder thereof in person or by legal representative or attorney duly authorized in writing, may
be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants. 

Page 19 of 97 Pages

 

    Subject to the terms and conditions of the Warrant Agreement, upon due presentation for registration of transfer of this Warrant Certificate at the office of the Company a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to
the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith. 

    The
Company may deem and treat the registered holder(s) thereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a shareholder of the Company. 

    IN
WITNESS WHEREOF, this Warrant Certificate is duly executed on behalf of Florida Gaming Corporation as of the 31st day of October, 2001. 

	 	 	 	 	FLORIDA GAMING CORPORATION
	

Attest:	
 	

W. B.Collett, Jr.
	
 	

By:	
 	

W. Bennett Collett

	 	 	Secretary	 	Its:	 	Chairman and CEO

Page 20 of 97 Pages

  

 
 

Form of Election to Purchase
  
    (To Be Executed Upon Exercise of Warrant)    
  

    The undersigned holder hereby represents that such holder is the registered holder of this Warrant Certificate, and hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive      Common Shares of Florida Gaming Corporation. The undersigned requests that a certificate for such shares be registered in
the name of the undersigned or nominee hereinafter set forth, and further that such certificate be delivered to the undersigned at the address hereinafter set forth or to such other person or entity
as is hereinafter set forth. If said number of Common Shares is less than all of the Common Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the
remaining balance of such shares be registered in the name of the undersigned or nominee hereinafter set forth, and further that such certificate be delivered to the undersigned at the address
hereinafter set forth or to such other person or entity as is hereinafter set forth. 

	 	 	Certificate to be registered as follows:	 	 
	

 	
 	

 	
 	

 	
 	

 
	 	 	Name:	 	 	 	 
	 	 	 	 	
	 	 
	

 	
 	

 	
 	

 	
 	

 
	 	 	Address:	 	 	 	 
	 	 	 	 	
	 	 
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	
	 	 
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	
	 	 
	

 	
 	

 	
 	

 	
 	

 
	 	 	Certificate to be delivered as follows:	 	 
	

 	
 	

 	
 	

 	
 	

 
	 	 	Name:	 	 	 	 
	 	 	 	 	
	 	 
	

 	
 	

 	
 	

 	
 	

 
	 	 	Address:	 	 	 	 
	 	 	 	 	
	 	 
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	
	 	 
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	
	 	 

	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	Signature:	 	 
	 	 	 	 	 	 	

	

 	
 	

 	
 	

 	
 	

 
	Date:	 	 	 	 	 	 
	 	 	
	 	 	 	 

Page 21 of 97 Pages

QuickLinks

Exhibit 4.6

WARRANT AGREEMENT

Warrant Certificate FLORIDA GAMING CORPORATION

Form of Election to Purchase (To Be Executed Upon Exercise of Warrant)Prepared by MERRILL CORPORATION

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   Exhibit 10.44  

LOAN AGREEMENT  

BY AND BETWEEN 

CIB BANK
  20527 SOUTH LAGRANGE ROAD

FRANKFORT, ILLINOIS 60423 

AND

FLORIDA GAMING CENTERS, INC.  

AND 

CITY NATIONAL BANK OF FLORIDA, as Trustee 

DATED
AS OF October 31, 2001 

Page 22 of 97 Pages

   TABLE OF CONTENTS  

	 
	 	 
	 	Page

	ARTICLE 1 INCORPORATION OF RECITALS AND EXHIBITS	 	27
	 	

SECTION 1.1	
 	

Incorporation of Recitals	
 	

27
	 	

SECTION 1.2	
 	

Incorporation of Exhibits	
 	

27
	
ARTICLE 2 DEFINITIONS	
 	

28
	 	

SECTION 2.1	
 	

Definitions	
 	

28
	
ARTICLE 3 THE LOAN	
 	

32
	
ARTICLE 3 THE LOAN	
 	

32
	 	

SECTION 3.1	
 	

The Loan	
 	

32
	 	

SECTION 3.2	
 	

The Note	
 	

32
	 	

SECTION 3.3	
 	

Interest	
 	

32
	 	

SECTION 3.4	
 	

Interest on Overdue Amounts	
 	

32
	 	

SECTION 3.5	
 	

Payments	
 	

33
	 	

SECTION 3.6	
 	

Loan Fee; Stock Warrants	
 	

34
	 	

SECTION 3.7	
 	

Late Fees	
 	

34
	 	

SECTION 3.8	
 	

Loan Documents	
 	

34
	
ARTICLE 4 REPRESENTATIONS AND WARRANTIES	
 	

36
	 	

SECTION 4.1	
 	

Representations and Warranties of the Borrower	
 	

36
	 	

SECTION 4.2	
 	

Survival of Representations and Warranties	
 	

40
	
ARTICLE 5 REQUIREMENTS PRECEDENT TO THE CLOSING OF THE LOAN	
 	

41
	 	

SECTION 5.1	
 	

Loan Closing Conditions	
 	

41
	 	

SECTION 5.2	
 	

Loan Disbursement	
 	

43

Page 23 of 97 Pages

 

	
ARTICLE 6 THE BORROWER'S AGREEMENTS	
 	

43
	 	

SECTION 6.1	
 	

Closing of Loan on or Prior to Loan Closing Date	
 	

43
	 	

SECTION 6.2	
 	

Inspection by the Lender	
 	

44
	 	

SECTION 6.3	
 	

Mechanics' Liens	
 	

44
	 	

SECTION 6.4	
 	

Condemnation	
 	

44
	 	

SECTION 6.5	
 	

Proceedings to Enjoin or Prevent Operations	
 	

44
	 	

SECTION 6.6	
 	

Lender's Fees and Expenses	
 	

45
	 	

SECTION 6.7	
 	

Lender's Actions for Own Protection Only	
 	

45
	 	

SECTION 6.8	
 	

Tax Returns; Material Adverse Changes; Books and Records	
 	

45
	 	

SECTION 6.9	
 	

Documents of Further Assurance	
 	

45
	 	

SECTION 6.11	
 	

No Additional Debt	
 	

45
	 	

SECTION 6.11	
 	

Mortgage	
 	

46
	 	

SECTION 6.12	
 	

Compliance with Laws	
 	

46
	 	

SECTION 6.13	
 	

Business Purpose	
 	

46
	 	

SECTION 6.14	
 	

Transfer of Premises; Change in Ownership	
 	

46
	 	

SECTION 6.15	
 	

Leases	
 	

46
	 	

SECTION 6.16	
 	

Brokerage Indemnity	
 	

47
	 	

SECTION 6.17	
 	

Financial Statements	
 	

47
	 	

SECTION 6.19	
 	

Depository Relationship	
 	

47
	 	

SECTION 6.20	
 	

Operation of Premises	
 	

47
	 	

SECTION 6.21	
 	

Management and Franchise Agreements	
 	

47
	 	

SECTION 6.22	
 	

Initial Reservation of Warrant Shares	
 	

47
	 	

SECTION 6.23	
 	

Warrant Shares	
 	

47
	 	

SECTION 6.24	
 	

Financial Covenants	
 	

48
	 	

SECTION 6.25	
 	

Environmental Matters	
 	

48
	
ARTICLE 7 INSURANCE	
 	

49
	 	

SECTION 7.1	
 	

Insurance Policies	
 	

49
	 	

SECTION 7.2	
 	

Illinois Insurance Notice	
 	

49
	
ARTICLE 8 CASUALTIES	
 	

50
	 	

SECTION 8.1	
 	

Lender's Election to Apply Insurance Proceeds to Indebtedness	
 	

250
	 	

SECTION 8.2	
 	

Borrower's Obligation to Rebuild and Use of Proceeds Therefor	
 	

50
	
ARTICLE 9 DEFAULTS	
 	

52
	 	

SECTION 9.1	
 	

Events of Default	
 	

52

Page 24 of 97 Pages

 

	
ARTICLE 10 LENDER'S REMEDIES IN EVENT OF DEFAULT	
 	

52
	 	

SECTION 10.1	
 	

Remedies Conferred Upon the Lender	
 	

52
	 	

SECTION 10.2	
 	

Non-Waiver of Remedies	
 	

52
	
ARTICLE 11 GENERAL PROVISIONS	
 	

53
	 	

SECTION 11.1	
 	

Notices	
 	

53
	 	

SECTION 11.2	
 	

Survival of Agreement	
 	

53
	 	

SECTION 11.3	
 	

Successors and Assigns	
 	

53
	 	

SECTION 11.4	
 	

Expenses of the Lender; Indemnity	
 	

54
	 	

SECTION 11.5	
 	

Right of Setoff	
 	

54
	 	

SECTION 11.6	
 	

Applicable Law	
 	

55
	 	

SECTION 11.7	
 	

Waivers	
 	

55
	 	

SECTION 11.8	
 	

Amendments	
 	

55
	 	

SECTION 11.9	
 	

Severability	
 	

55
	 	

SECTION 11.10	
 	

Counterparts	
 	

56
	 	

SECTION 11.11	
 	

Headings	
 	

56
	 	

SECTION 11.12	
 	

Consent to Jurisdiction	
 	

56
	 	

SECTION 11.13	
 	

Waiver of Jury Trial	
 	

56
	 	

SECTION 11.14	
 	

Interest Limitation	
 	

56
	 	

SECTION 11.15	
 	

Apparent Inconsistencies	
 	

57
	 	

SECTION 11.16	
 	

No Partnership or Joint Venture; Limitation of Liability	
 	

57
	 	

SECTION 11.17	
 	

Specific Performance	
 	

57
	 	

SECTION 11.18	
 	

Construction	
 	

57
	 	

SECTION 11.19	
 	

Land Trust Exculpation	
 	

57

Page 25 of 97 Pages

 

	
EXHIBITS	
 	

 
	 	

EXHIBIT A-1	
 	

Legal Description of Miami Premises	
 	

59
	 	

EXHIBIT A-2	
 	

Legal Description of Fort Pierce Premises	
 	

60
	 	

EXHIBIT A-3	
 	

Legal Description of FGC Property	
 	

61
	 	

EXHIBIT B-1	
 	

Miami Permitted Exceptions	
 	

63
	 	

EXHIBIT B-2	
 	

Fort Pierce Permitted Exceptions	
 	

64
	 	

EXHIBIT B-3	
 	

FGC Permitted Exceptions	
 	

64
	 	

EXHIBIT C	
 	

Warrant Agreement	
 	

65
	 	

Schedule 4.1(j)	
 	

Partnership or Joint Ventures	
 	

66
	 	

Schedule 4.1(l)	
 	

Stock Agreements	
 	

67
	 	

Schedule 4.1(o)	
 	

Litigation	
 	

68
	 	

Schedule 4.1(aa)	
 	

Condemnation	
 	

69
	 	

Schedule 4.1(bb)	
 	

Permits and Licenses	
 	

70
	 	

Schedule 4.1(dd)	
 	

Agreements	
 	

61

Page 26 of 97 Pages

  

 
 

LOAN AGREEMENT    
  

    THIS LOAN AGREEMENT (as from time to time amended, modified, restated, supplemented and in effect, this
"Agreement") is entered into as of October 31, 2001, by and among FLORIDA GAMING
CENTERS, INC., a Florida corporation ("FGCI"), CITY NATIONAL BANK OF
FLORIDA, successor by merger to City National Bank of Miami, as Trustee under Trust Agreement dated January 3, 1979 and
known as Trust No. 5003471 ("Trustee" and together with FGCI, the "Borrower") and  CIB BANK, its
successors and assigns ("Lender"). 

RECITALS  

    A.  FGCI owns and operates the real property commonly known as the Miami Jai Alai, located at 3500 NW 37th
Street, Miami, Florida and legally described on Exhibit A-1 hereto ("Miami Property"). Trustee owns the real property commonly known
as the Fort Pierce Jai Alai, located at 1750 South Kings Highway, Fort Pierce, Florida and legally described on Exhibit A-2 hereto ("Fort Pierce
Property" and together with the Miami Property, the "Property"). 

    B.  The Miami Property is improved with a one and partial five story Jai Alai fronton ("Miami
Improvements" and collectively with the Miami Property, the "Miami Premises"). The Fort Pierce Property is improved with a two
story Jai Alai fronton ("Fort Pierce Improvements" and collectively with the Fort Pierce Property, the "Fort Pierce
Premises"). The Fort Pierce Premises are operated by FGCI, which is the sole beneficiary of the Trust. The Miami Premises and the Fort Pierce Premises are sometimes
collectively referred to herein as the "Premises". 

    C.  FGCI is a wholly owned subsidiary of Florida Gaming Corporation
("FGC"), a Delaware corporation. FGC owns certain unimproved real property adjacent to the Fort Pierce Property and legally described on
Exhibit A-3 hereto ("FGC Property"). 

    D.  The Borrower has requested that the Lender make a loan to the Borrower in the original principal amount of Four
Million Six Hundred Thousand United States Dollars (U.S. $4,600,000) (the "Loan") subject to the terms and conditions contained herein. 

AGREEMENTS  

    NOW, THEREFORE, for and in consideration of the matters set forth in the foregoing Recitals, the mutual
covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 

ARTICLE 1

INCORPORATION OF RECITALS AND EXHIBITS  

Incorporation of Recitals  

	1.1
	The foregoing Recitals are incorporated in and expressly made a part of this Agreement. 

Incorporation of Exhibits  

	1.2
	All Exhibits attached hereto are incorporated in and expressly made a part of this Agreement. 

Page 27 of 97 Pages

 

ARTICLE 2

DEFINITIONS  

Definitions  

	2.1
	The following terms have the following meanings in this Agreement: 

    Affiliate:  With respect to any Person, any other Person that, directly or indirectly, controls or is controlled by, or
is under common control with, such Person. For purpose of this definition, "control" and the correlative meanings of the terms "controlled by" and "under common control with" means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting shares or units or by contract or
otherwise. 

    Annual Financial Statements:  The annual financial statements of Borrower, including all notes thereto, which statements
shall include a balance sheet as of the end of such fiscal year and an income statement, retained earnings statement and statement of cash flows for such fiscal year, all setting forth in comparative
form the corresponding figures from the previous fiscal year, all prepared in conformity with GAAP, and without expressing any doubt as to Borrower's ability to continue as a going concern, and
accompanied by a report and opinion of independent certified public accountants, which shall state that such financial statements, in the opinion of such accountants, present fairly, in all material
respects, the financial position of Borrower as of the date thereof and the results of its operations for the period covered thereby in conformity with GAAP. Such statements shall be accompanied by a
certificate of such accountants that in making the appropriate audit and/or investigation in connection with such report and opinion, such accountants did not become aware of any Default or, if in the
opinion of such accountant any such Default exists, a description of the nature and status thereof. 

    Business Day:  Any day other than a Saturday, Sunday or legal holiday in the State of Illinois on which the Lender is
open for business in Chicago, Illinois. 

    Collateral:  All of the collateral which secures the Borrower's obligations under the Loan Documents. 

    Collett:  W. Bennett Collett, an individual. 

    Collett Guaranty:  The Guaranty to be executed by Collett and delivered to the Lender on the date hereof which
guarantees the payment and performance of the Obligations. 

    Control:  With respect to any Person, the possession, either directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the ownership of voting shares or by contract. 

    Debt Coverage Ratio:  For any period, the ratio of EBITDA for such period to Fixed Charges for such period. 

    Default:  Any event or circumstance which, if it were to continue uncured, would, with notice or passage of time or
both, constitute an Event of Default (as such term is defined in Section 9.1) and any event or circumstance which immediately upon occurrence of
the same constitutes an Event of Default. 

    Default Rate:  The Default Rate specified in Section 3.4. 

    Deferred Fee:  The Deferred Loan Fee described in Section 3.6.

    EBITDA:  For any period, the net income of Borrower for such period, as determined under GAAP, adjusted by
(i) adding thereto the amount of all interest expense, taxes, amortization and 

Page 28 of 97 Pages

 

depreciation that were deducted in arriving at such net income, (ii) adding thereto the amount of any state of Florida tax credits resulting from excess Florida revenue taxes paid in the prior
operating year, and (iii) subtracting therefrom all extraordinary gains, gains from sales of assets, and all non-cash gains that were added in arriving at such net income. 

    Environmental Laws:  All laws relating to environmental, health or safety matters, including those relating to fines,
orders, injunctions, penalties, damages, contribution, cost recovery, compensation, losses or injuries resulting from the release or threatened release of Hazardous Materials and to the generation,
use, storage, transportation, or disposal of Hazardous Materials, in any manner applicable to the Mortgaged Property, each as heretofore and hereafter amended or supplemented, and any analogous future
or present local, state or federal statutes, rules and regulations promulgated
thereunder or pursuant thereto, and any other present or future law, ordinance, rule, regulation, permit or permit condition, order or directive addressing environmental, health or safety issues. 

    ERISA:  The Employee Retirement Income Security Act of 1974, as the same may be amended from time to time. 

    Event of Default:  Any Event of Default described in Section 9.1
and any other event or circumstance defined as an Event of Default elsewhere in this Agreement. 

    FGC:  Florida Gaming Corporation, a Delaware corporation. 

    FGC Guaranty:  The Guaranty to be executed by FGC and delivered to the Lender on the date hereof which guarantees the
payment and performance of the Obligations. 

    FGC Mortgage:  The Mortgage dated of even date herewith to be recorded in the Recorder's Office of St. Lucie County,
Florida, providing Lender with a first lien on the FGC Property. 

    FGC Permitted Exceptions:  Those matters listed in Exhibit B-2 to which FGC's interest in the FGC
Property may be subject at the Loan Closing Date and thereafter any such other title exceptions or objections, if any, that the Lender may specifically approve in writing. 

    FGC Property:  The real property described in Recital C. 

    FGCI:  Florida Gaming Centers, Inc., a Florida corporation. 

    Fixed Charges:  For any period, the total debt service expense of Borrower for such period, including scheduled
principal and interest payments on the Loan and on any other indebtedness of Borrower for borrowed money or for the deferred purchase price of property or services. 

    Fort Pierce Improvements:  The improvements described in Recital B. 

    Fort Pierce Mortgage:  The Mortgage dated of even date herewith to be recorded in the Recorder's Office of St. Lucie
County, Florida, providing Lender with a first lien on the Fort Pierce Premises. 

    Fort Pierce Permitted Exceptions:  Those matters listed in  Exhibit B-2 to which the Borrower's interest in the Fort
Pierce Premises may be subject at the Loan Closing Date and thereafter any
such other title exceptions or objections, if any, that the Lender may specifically approve in writing. 

    Fort Pierce Premises:  The real property and improvements described in Recital B. 

    Fort Pierce Property:  The real property described in Recital A. 

    GAAP:  Such accounting practice as, in the opinion of the independent certified public accountants regularly retained by
Borrower and acceptable to Lender, conforms at the time to 

Page 29 of 97 Pages

 

generally accepted accounting principles, consistently applied. GAAP means those principles and practices (a) which are recognized as such by the Financial Accounting Standards Board,
(b) which are applied for all periods after the date hereof in a manner consistent with the manner in which such principles and practices were applied to the most recent audited financial
statements furnished to Lender, and (c) which are consistently applied for all periods after the date hereof so as to reflect properly the financial condition, and results of operations and
changes in financial position, of Borrower. 

    Guarantor:  Collectively, Collett and FGC. 

    Hazardous Materials:  Hazardous Materials shall mean (a) any chemical, material or substance defined as or
included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous waste," "restricted hazardous waste," "toxic pollutants," contaminants,"
"pollutants," "toxic substances" or words of similar import under any applicable local, state or Federal law or under the regulations adopted or publications promulgated pursuant thereto, including
Environmental Laws, (b) any oil, petroleum or petroleum derived substances, any drilling fluids, produced waters or other wastes associated with the exploration, development or production of
crude oil, any flammable substances or explosives, any radioactive materials, any hazardous wastes or substances, any toxic wastes or substances or any other materials or pollutants which
(i) pose a hazard to any property of the Borrower or to Persons on or about such properties, or (ii) cause such properties to be in violation of any Environmental Laws,
(c) asbestos in any form which is or could become friable, radon gas, urea formaldehyde foam insulation, or transformers or other electrical equipment which contain any oil or dielectric fluid
containing polychlorinated biphenyls, and (d) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by any governmental authority. 

    Including and including: Including but not limited to. 

    Legal Opinion:  The legal opinion described in Section 5.1(g). 

    Loan:  The $4,600,000 loan from the Lender to the Borrower described in this Agreement. 

    Loan Documents:  The documents and instruments listed in  Section 3.8, and all other agreements, documents and
instruments now or hereafter evidencing or securing the Loan, in each case, as they may be
revised, amended, modified or supplemented from time to time in accordance with the terms and provisions thereof. 

    Loan Closing:  The disbursement of Loan proceeds. 

    Loan Closing Date:  The date of the Loan Closing, which shall be no later than November 15, 2001. 

    Material Adverse Change:  In the Lender's reasonable judgment, any material adverse change in the financial condition of
the Borrower or any Guarantor or in the condition of the Mortgaged Property which could prevent timely repayment of the Loan or performance under any of the Loan Documents. 

    Maturity Date:  October 31, 2004. 

Page 30 of 97 Pages

       Miami Improvements:  The improvements described in Recital B. 

    Miami Permitted Exceptions:  Those matters listed in  Exhibit B-1 to which the Borrower's interest in the Premises
may be subject at the Loan Closing Date and thereafter any such other
title exceptions or objections, if any, that the Lender may specifically approve in writing. 

    Miami Premises  The real property and improvements described in Recital B. 

    Miami Property  The real property described in Recital A. 

    Miami Mortgage:  The Mortgage dated of even date herewith to be recorded in the Recorder's
Office of Dade County, Florida, providing Lender with a first lien on the Miami Premises. 

    Mortgaged Property:  Collectively, the Premises and the FGC Property. 

    Note:  The Promissory Note described in  Section 3.2. 

    Obligations:  The payment of all principal, interest and other sums due under the Note, this
Agreement or the other Loan Documents, and the performance of all obligations due and owing by Borrower thereunder. 

    Person:  A natural person, corporation (business, municipal or
not-for-profit), limited partnership, limited liability company, general partnership, joint stock company, joint venture, association, trust, trust company, land trust,
business trust or other organization, whether or not a legal entity, or a government, agency or political subdivision thereof. 

    Premises:  The Premises described in Recital B. 

    Prime Rate:  A fluctuating rate per annum equal to the prime rate of interest as published in
the "Money Rates" section of the Wall Street Journal, or, if such rate is not so designated in the Wall Street Journal, the rate designated by the Lender from time to time as its "Prime Rate." The
Prime Rate is not necessarily the lowest rate of interest charged by the Lender in connection with extensions of credit. Changes in the rate of interest on the Loan shall take effect simultaneously
with each change in the Prime Rate. The applicable Prime Rate shall be determined by the Lender in its sole judgment, and such determination shall be conclusive absent manifest error. 

    Property:  The real property described in Recital A. 

    Quarterly Financial Statements:  The quarterly financial statements of Borrower, including all
notes thereto, which statements shall include a balance sheet as of the end of such calendar quarter and an income statement and a statement of cash flows for such calendar quarter, and for the fiscal
year to date, subject to normal year-end adjustments, all setting forth in comparative form the corresponding figures for the corresponding calendar quarter of the preceding year, prepared
in accordance with GAAP and certified as true and correct by an appropriate officer or other responsible party acceptable to Lender on behalf of Borrower. 

    Regulation D:  Regulation D of the Board of Governors of the Federal Reserve
System from time to time in effect and including any successor or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System. 

    Section:  Unless otherwise specified, any section, subsection or paragraph of this Agreement. 

    Title Insurance Policy:  The Title Insurance Policy or Policies described in  Section 5.1(d).

    Title Insurer:  Chicago Title Insurance Company. 

Page 31 of 97 Pages

 

    Transactions:  The execution, delivery and performance by the Borrower of this Agreement and
each of the other Loan Documents, the grant of liens and security interests pursuant to the Loan Documents and the other transactions contemplated by this Agreement and the other Loan Documents. 

    U.S.:  United States of America. 

    Warrant Agreement:  The Warrant Agreement dated the date hereof between the Lender and FGC
providing for the issuance of the Warrants in a form acceptable to the Lender in form attached hereto as Exhibit C. 

    Warrants:  The warrants issued to the Lender to purchase an aggregate of
200,000 shares of common stock of FGC, subject to adjustment, pursuant to this Agreement and the Warrant Agreement. 

ARTICLE 3

THE LOAN  

The Loan  

    3.1 Subject to the terms, provisions and conditions set forth in this Agreement, the Lender agrees to disburse to or for
the benefit of the Borrower, and the Borrower agrees to accept from the Lender, the Loan; provided, that, if the Loan is not closed on or before the Loan Closing Date, the Lender's obligations
hereunder shall terminate. 

The Note  

    3.2 The Loan shall be evidenced by the Note. The terms of the Note are hereby incorporated into this Agreement by this
reference. 

Interest  

    3.3 Except as set forth in Section 3.4, the Borrower shall pay to the Lender interest on the principal balance of
the Loan outstanding from time to time at a rate per annum ("Interest Rate") equal to the greater of (i) seven and one-half percent
(7.5%) or (ii) the sum of the Prime Rate plus two percent (2.0%). The records of the Lender as to the Interest Rate applicable to the Loan shall be binding and conclusive absent manifest error.
Interest shall be payable from the Loan Closing Date to the date of repayment of the Loan in full. Interest shall be computed on the basis of the actual number of days elapsed on the basis of a year
consisting of 360 days. Interest shall be payable as provided in Section 3.5. 

Interest on Overdue Amounts  

    3.4 If an Event of Default has occurred and is continuing or if the Borrower shall default in the payment of the
principal of or interest on the Loan or any other amount becoming due hereunder, by scheduled maturity, notice of prepayment, acceleration or otherwise, the Borrower shall on demand from time to time
from the Lender pay interest, to the extent permitted by law, on such defaulted amount from the day after the due date thereof to the date of actual payment (after as well as before judgment) at a
rate per annum, computed on the basis of the actual number of days elapsed on the basis of a year consisting of 360 days, equal to the interest rate otherwise applicable to the Loan pursuant to  Section 3.3 above plus five percent (5%) ("Default Rate"). 

Page 32 of 97 Pages

 

Payments  

    3.5 

    (a) Maturity/Principal and Interest. Commencing on November 20, 2001 and continuing on
the 20th day of each month thereafter until the Maturity Date, Borrower shall make monthly payments of principal and interest to Lender on the amount of the principal balance outstanding
hereunder, in an amount calculated by Lender as necessary to repay the then outstanding principal balance at the Interest Rate
(with interest payable in arrears) amortized on a level term basis over a twenty-five (25) year term commencing on the Loan Closing Date. If not sooner paid, the outstanding
principal amount of the Loan and all interest accrued and unpaid thereon shall be paid on the Maturity Date. All payments by the Borrower pursuant to this Agreement, the Note or any other Loan
Document, whether in respect of principal, interest, or otherwise, shall be made without setoff, counterclaim or deduction in same day funds by the Borrower to the Lender. All such payments required
to be made to the Lender shall be made not later than 2:00 p.m., Illinois time, on the date due by wire transfer (or by advice of transfer from or between accounts of the Borrower at the
Lender) to such account as the Lender shall specify from time to time by notice to the Borrower. Funds received after that time shall be deemed to have been received by the 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. Amounts repaid on the Loan may not be
reborrowed. 

    (b) Prepayments. Except for principal amortization payments as set forth in
Section 3.5(a) above, Borrower may not voluntarily prepay the Loan prior to the first anniversary of the Loan Closing Date. After the first anniversary of the Loan Closing Date, the Borrower
may prepay all or any portion of the Loan, at any time and from time to time, subject to the following terms: 

     (i) Each partial prepayment shall be in a minimum principal amount of $100,000 and in integral multiples of $50,000; 

    (ii) The Borrower shall provide the Lender with at least fifteen (15) days notice prior to any prepayment; 

   (iii) The Borrower shall pay to the Lender all accrued and unpaid interest through the date of such prepayment on the
principal balance being prepaid; and 

    (iv) The Borrower shall pay to the Lender any other obligations of the Borrower to the Lender with respect to the Loan
then due which remain unpaid. 

    (c) Application of Payments. The Borrower irrevocably waives the right to direct the application
of payments and collections received by the Lender from or on behalf of the Borrower, and the Borrower agrees that the Lender shall have the continuing exclusive right to apply and reapply any and all
such payments and collections against the Obligations in such manner as the Lender may deem appropriate, notwithstanding any entry by the Lender upon any of its books and records. To the extent that
the Borrower makes a payment or payments to the Lender or the Lender receives any payment or proceeds of the Collateral which secures the Loan for the Borrower's benefit, which payments or proceeds or
any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy act,
state or federal law, common law or equitable case, then, to the extent of such payment or proceeds
received, the Obligations or part thereof intended to be satisfied shall be revived and shall continue in full force and effect, as if such payments or proceeds had not been received by the Lender. 

Page 33 of 97 Pages

 

Loan Fee; Stock Warrants  

    3.6 Concurrently with the execution of this Agreement, the Borrower shall pay the Lender a closing fee of $69,000. From
and after the date which is the earlier to occur of (i) any acceleration by Lender of the principal balance of the Loan as permitted by the Loan Documents, (ii) any prepayment of the
Loan in full by the Borrower, or (iii) the Maturity Date, Lender shall have the right to either (x) receive from Borrower an additional loan fee of $250,000
("Deferred Fee"), in which case the Warrants will expire in accordance with the Warrant Agreement, or (y) retain the right to exercise the
Warrants in accordance with the terms of the Warrants and the Warrant Agreement. In the event Lender elects to receive the Deferred Fee as provided in subclause (x) above and Lender provides
written notice of such election to Borrower prior to payment of the principal balance of the Loan, Borrower shall pay such Deferred Fee to Lender at the time such principal balance is paid in full. If
Lender has provided written notice to Borrower of its election to receive the Deferred Fee, Borrower may not make any prepayment in full unless such prepayment is accompanied by the Deferred fee.
Lender's failure to make the election described in this Section 3.6 prior to the Maturity Date or prior to any prepayment of the Loan in full shall not be deemed a waiver of Lender's right to
make the election described in this Section 3.6 at any time thereafter. 

Late Fees  

    3.7 In the event that any payment of interest or principal due under this Agreement, the Note or any of the Loan
Documents (including, without limitation, any payment of principal not paid when due on the Maturity Date) is not made within ten (10) days after such payment is due in accordance with the
terms of such documents, then, in addition to the payment of the amount so due, the Borrower shall pay to the Lender a "late charge" of $.05 for each one dollar so overdue to defray part of the costs
of collection and handling such late payment. The Borrower agrees that the damages to be sustained by the Lender caused by such late payment are extremely difficult and impracticable to ascertain, and
that the amount of $.05 per each one dollar due is a reasonable estimate of such damages, does not constitute interest and is not a penalty. 

Loan Documents  

    3.8 The Borrower agrees that it will, in sufficient time for review by the Lender prior to the Loan Closing Date,
execute and deliver or cause to be executed and delivered to the Lender the following documents and instruments (collectively, as each may be revised, amended, modified or supplemented from time to
time in accordance with the terms and provisions thereof, the "Loan Documents") in form and substance satisfactory to the Lender: 

    (a) a promissory note from the Borrower payable to the order of the Lender in the aggregate original principal amount of
U.S. $4,600,000 (together with any and all replacements thereof, the "Note"); 

    (b) a valid first mortgage with security agreement and assignment of leases and rents from the Borrower to the Lender
encumbering the Borrower's interest in the Miami Premises and other rights described therein ("Miami Mortgage"); 

    (c) a valid first mortgage with security agreement and assignment of leases and rents from the Trust to the Lender
encumbering the Trust's interest in the Fort Pierce Premises and other rights described therein ("Fort Pierce Mortgage"); 

    (d) a valid first mortgage with security agreement and assignment of leases and rents from FGC to the Lender encumbering
FGC's interest in the FGC Property and other rights described therein ("FGC Mortgage"); 

Page 34 of 97 Pages

 

    (e) assignments of leases and rents from the Borrower, Trust and FGC in favor of the Lender with respect to the Miami
Premises, the Fort Pierce Premises and the FGC Property, respectively; 

    (f)  a security agreement from the Borrower in favor of Lender, granting Lender a first priority security interest in
all equipment, general intangibles, inventory, receivables and any other tangible or intangible personal property now or hereafter owned by Borrower; 

    (g) an environmental indemnity and agreement from the Borrower and the Guarantors in favor of the Lender with respect to
the Mortgaged Property; 

    (h) such financing statements as may be necessary in the Lender's sole judgment to perfect valid first liens and
security interests in personal property and fixtures as aforesaid; 

    (i)  the Collett Guaranty and the FGC Guaranty; 

    (j)  a collateral assignment of beneficial interest in the land trust holding title to the Fort Pierce Property; and, 

    (k) such other documents as may be required by this Agreement or as the Lender may require to evidence and secure the
Loan. 

Capital Improvement Reserve  

    3.9 Borrower shall establish a Capital Improvement Reserve ("Improvement
Reserve") with Lender and shall pay into such reserve annual payments of $26,152 each year that the Obligations are outstanding, which shall be deposited into the Improvement
Reserve monthly in equal installments of $2,179.33, at the time and place designated for payments of principal and interest as set forth in  Section 3.5(a). Amounts in the Improvement Reserve may be
commingled with Lender's other funds. If no Default or Event of Default then exists,
Lender shall release funds from the Improvement Reserve (not more frequently than monthly) sufficient to pay the costs of repairs and replacements to the Premises, including furniture, fixtures and
equipment reasonably deemed by Borrower to be necessary or desirable to the operation of the Premises; provided that Borrower first delivers a written request for such funds to Lender, which shall
itemize the anticipated expenditures in reasonable detail. Lender's consent to such disbursement requests will not be unreasonably withheld. Borrower shall use all funds released from the Improvement
Reserve solely for the purposes described in such request for funds. Lender may, at its sole option, make disbursements from the Improvement Reserve directly to the applicable vendor, contractor or
other person or entity whom Lender reasonably believes is entitled to payment. No interest shall be paid on account of any funds held in the Improvement Reserve. All monies at any time held by or
deposited with Lender under this Agreement, including but not limited to the Improvement Reserve and any real estate tax reserve shall be held as cash collateral, as additional security for the Loan
and the obligations of Borrower under the Loan Documents, in one or more closed accounts under the exclusive dominion and control of Lender. Borrower shall have no right of withdrawal from any such
accounts. Borrower hereby grants Lender a first priority lien and security interest on such cash collateral and shall execute and deliver to Lender from time to time any and all security agreements,
financing statements or other instruments necessary to create, perfect, continue or maintain Lender's lien and security interest in such cash collateral. 

Page 35 of 97 Pages

   ARTICLE 4

REPRESENTATIONS AND WARRANTIES  

Representations and Warranties of the Borrower  

    4.1 To induce the Lender to execute this Agreement and perform the obligations of the Lender under this Agreement, the
Borrower hereby represents and warrants to the Lender as follows: 

    (a) FGCI is a corporation, duly organized, validly existing and in good standing under the laws of the State of Florida.
FGCI has the requisite power and authority, including all material licenses, registrations, permits, franchises, patents, copyrights, trademarks, trade names, consents and approvals, to own its
property and assets and to carry on its business as now conducted and is qualified to do business and in good standing in Florida and in every jurisdiction where such qualification is required. The
Borrower has all requisite power and authority to consummate the Transactions. 

    (b) The consummation of the Transactions (a) has been duly authorized by all requisite corporate action of FGCI
and all trust action of the Trust, (b) will not violate (i) any provision of law, statute, rule or regulation (including Regulations D, G, T, U or X) or the articles of
incorporation, bylaws or other constitutive documents of FGCI or the trust agreement of Trust (ii) any order of any court, or any rule, regulation or order of any other agency of government
binding upon the Borrower, or (iii) any provisions of any indenture, agreement or other instrument to which the Borrower is a party, or by which the Borrower or any of its properties or assets
is or may be bound and (c) will not result in the creation or imposition of any lien (other than in favor of the Lender as contemplated by this Agreement) upon any property or assets of the
Borrower. 

    (c) The execution and delivery of the Warrant Agreement, the Warrants, the FGC Guaranty and each other document to be
delivered by FGC in connection with the Loan (a) has been duly authorized by all requisite corporate action of FGC, (b) will not violate (i) any provision of law, statute, rule or
regulation (including Regulations D, G, T, U or X) or the articles of incorporation, bylaws or other constitutive documents of FGC (ii) any order of any court, or any rule, regulation or
order of any other
agency of government binding upon FGC, or (iii) any provisions of any indenture, agreement or other instrument to which FGC is a party, or by which FGC or any of its properties or assets is or
may be bound and (c) will not result in the creation or imposition of any lien (other than in favor of the Lender as contemplated by this Agreement) upon any property or assets of FGC. 

    (d) No registration with or consent or approval of, or other action by, any federal, state or other governmental agency,
authority or regulatory body or any other Person is or will be required in connection with (i) the consummation of the Transactions by the Borrower or (ii) the execution and delivery of
the Warrant Agreement, the Warrants or the FGC Guaranty by FGC or (iii) the execution and delivery of the Collett Guaranty by Collett. 

    (e) This Agreement constitutes, and each of the other Loan Documents when duly executed and delivered by the Borrower
will constitute, legal, valid and binding obligations of the Borrower enforceable in accordance with their respective terms except to the extent enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) the availability of equitable
remedies. 

    (f)  The Warrant Agreement, the Warrants and the FGC Guaranty constitute the legal, valid and binding obligations of FGC
enforceable in accordance with their respective terms except to the extent enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium, 

Page 36 of 97 Pages

 

fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) the availability of equitable remedies. 

    (g) The Collett Guaranty constitutes the legal, valid and binding obligations of Collett enforceable in accordance with
its terms except to the extent enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) the availability of equitable remedies. 

    (h) FGCI and each Guarantor have heretofore furnished to the Lender true, correct and complete copies of all filed tax
returns for the 2000 tax year. 

    (i)  Since January 1, 2000 there has been no event or occurrence that could constitute a Material Adverse Change. 

    (j)  FGCI does not have any subsidiaries and is not a partner or joint venturer in any partnerships or joint ventures
except as described on Schedule 4.1(j) hereto. 

    (k) FGCI is a wholly owned subsidiary of FGC; Freedom Financial Corporation beneficially owns 30% of the common stock of
FGC; Collett beneficially owns 70% of the voting common stock of Freedom Financial Corporation and Controls Freedom Financial Corporation; and pursuant to an agreement dated February 1, 2000
with the Bank of Oklahoma, Collett controls the voting rights to an additional 11.4% of the common stock of FGC. 

    (l)  The authorized capital stock of FGC consists of 15,000,000 shares of common stock having a par value of $.10 per
share, 500,000 shares of convertible preferred stock having a par value of $.10 per share, 1,200,000 shares of Class A convertible preferred stock, having a par value of $.10 per share, and
500,000 shares of preferred stock having a par value of $.10 per share issuable in one or more series. The only shares of capital stock issued and outstanding, reserved for issuance or committed to be
issued are (i) 6,189,395 shares of common stock issued and outstanding, (ii) 1,965,000 shares of common stock reserved for issuance upon the exercise of outstanding options,
(iii) 7,568 shares of common stock reserved for issuance upon the conversion of 33,635 issued and outstanding shares of Class A convertible preferred stock, (iv) 126,216 shares of
common stock reserved for issuance upon the conversion of 45 issued and outstanding shares of Series B convertible preferred stock, (v) 625,000 shares of common stock reserved for
issuance upon the conversion of 300 issued and outstanding shares of Series E 8% cumulative convertible preferred stock, (vi) 593,338 shares of common stock reserved for issuance upon
the conversion of 2,000 shares of Series F 8% cumulative convertible preferred stock, and (vii) 200,000 shares of common stock reserved for issuance upon the exercise of warrants issued
to the Lender. Except as set forth herein, in the Warrant Agreement, or in Schedule 4.1(l), there are no outstanding preemptive (statutory or contractual), exercise, voting or other rights,
options, warrants or agreements granted or issued by or binding upon FGC for the purchase or acquisition of any shares of its capital stock or other equity interests or otherwise providing for the
"put" or "call" of any shares of its capital stock or other equity interests. All outstanding securities of FGC have been issued in accordance with all federal and state securities laws (or under an
exemption therefrom). 

    (m) The authorized capital stock of FGCI consists of 1,000 shares of common stock, no par value per share. The only
shares of capital stock issued and outstanding, reserved for issuance or committed to be issued are 1,000 shares of common stock issued to FGC. There are no outstanding preemptive, conversion or other
rights, options, warrants or agreements granted or issued by or binding upon FGCI for the purchase or acquisition of any shares of its capital stock or otherwise providing for the "put" or "call" of
any shares of its capital stock. All outstanding 

Page 37 of 97 Pages

 

securities of FGCI have been issued in accordance with all federal and state securities laws (or under an exemption therefrom). 

    (n) The shares of common stock of FGC issuable upon the exercise of the Warrants have been duly and validly reserved by
FGC and, upon issuance in accordance with the exercise provisions of the Warrants, will be duly and validly issued, fully paid, non-assessable and free and clear of all liens. 

    (o) There are no actions, suits or proceedings at law or in equity or by or before any arbitrator or any governmental
instrumentality or other agency or regulatory authority now pending or, to the best of its knowledge threatened, against or affecting the Borrower, FGC or Collett, or the businesses, assets or rights
of the Borrower, FGC or Collett, except as disclosed on Schedule 4.1(o) hereto. 

    (p) The Borrower is not in violation in any material respect of any law, including but not limited to, any Environmental
Law, or in default with respect to any judgment, writ, injunction, decree, rule or regulation of any court or governmental agency or instrumentality. 

    (q) (i) After giving effect to the Transactions, the business of the Borrower, the methods and means employed by
the Borrower in the operation thereof (including all operations and conditions at or in the properties of the Borrower), and the assets owned, leased, held or operated by the Borrower, comply in all
material respects with all applicable laws, rules, regulations, ordinances and codes of every kind, including Environmental Laws; (ii) the Borrower has obtained all permits under Environmental
Laws necessary to its operations, and all such permits are in good standing and the Borrower is in compliance with all material terms and conditions of such permits; (iii) no mechanic's or
materialmen's liens have been filed against the Mortgaged Property and neither the Borrower nor FGC has received any notice from any subcontractor of any intent to file a lien or from any
governmental authority of any complaint or violation pertaining to the Mortgaged Property; and (iv) neither the Borrower nor FGC has received any claim or notice of violation, lien, complaint,
suit, order or other claim or notice to the effect that it is or may be liable to any Person as a result of (A) the environmental condition of the Mortgaged Property or any other property, or
(B) the release or threatened release of any Hazardous Materials, or (y) any letter or request for information under Section 104 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. §9604), or comparable state laws, and none of the operations of the Borrower or FGC are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a release or threatened release of any Hazardous Material at the Premises or at any other location, including any location
to which the Borrower or FGC has transported, or arranged for the transportation of, any Hazardous Materials. 

    (r) FGCI has filed or caused to be filed all federal, state and local tax returns which are required to be filed by it,
and has paid or caused to be paid all taxes shown to be due and payable on such returns or on any assessments received by it. 

    (s) FGCI does not have a defined benefit pension plan under ERISA, the unfunded liabilities of which upon termination
could be held to be a liability of FGCI by the Pension Benefit Guaranty Corporation; FGCI is not an "employee benefit plan" and FGCI's assets do not constitute assets of any such plan. 

    (t) FGCI is not (a) an "investment company" or a company "controlled" by an "investment company" within the
meaning of, or subject to regulation under, the Investment Company Act of 1940, or (b) a "holding company" or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of, or subject to regulation under, the Public Utility Holding Company Act of 1935. 

Page 38 of 97 Pages

 

    (u) The Borrower has good and marketable title to the Premises, subject to no liens except for the Miami Permitted
Exceptions and the Fort Pierce Permitted Exceptions. The Miami Improvements and the Fort Pierce Improvements are in good repair, working order and condition. FGC has good and marketable title to the
FGC Property, subject to no liens except for the FGC Permitted Exceptions. 

    (v) The Borrower is not insolvent and the execution and delivery of this Agreement and the other Loan Documents pursuant
thereto and the consummation of the Transactions will not render the Borrower insolvent. The fair value and present fair saleable value of the assets of the Borrower exceeds its liabilities. The
Borrower understands that in this context "insolvent" means that the present fair saleable value of the total assets of the Borrower is less than the amount of the total liabilities of the Borrower.
The Borrower also understands that the term "liabilities" includes any legal liability, whether matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent (with contingent
liabilities valued based on the Borrower's good faith estimate of the probability of occurrence). The Borrower will be able to pay its debts as they become absolute and mature. The Borrower will not
incur debts beyond its ability to pay as they mature. The borrowing of the maximum amount available under this Agreement, and the Borrower's granting liens on its properties pursuant to this Agreement
and the other Loan Documents executed pursuant thereto, will not leave the Borrower with property remaining in its hands constituting unreasonably small capital with which to conduct its business. 

    (w) The Borrower has not received any notice from any insurance company or governmental agency of any defects or
inadequacies in the Premises which would either adversely affect the insurability of the Premises or materially increase the cost of insuring the Premises beyond that which is customarily charged for
similar property in the vicinity of the Premises used for a similar purpose. 

    (x) Neither the Borrower, nor any of its agents, employees, partners or representatives, nor to the best of the
Borrower's knowledge, any other Person, has transported, used, generated, handled, stored, released, emitted, leached, discharged, dumped or disposed of any Hazardous Materials onto, into or from the
Mortgaged Property, or any part thereof, or from the Mortgaged Property onto or into any property adjacent to the Mortgaged Property or any other property in violation of any Environmental Laws. No
Hazardous Materials are currently or, to the best of the Borrower's knowledge, have been located at, in, on, under or about the Mortgaged Property in a manner which violates any Environmental Laws or
which requires response, cleanup or corrective action of any kind under any Environmental Laws. No notice of violation, lien, complaint, suit, order or other notice with respect to the environmental
condition of the Mortgaged Property is outstanding or has been received by the Borrower or FGC, nor has any such notice been issued which has not been fully satisfied and complied
with in a timely fashion so as to bring the Mortgaged Property into full compliance with all Environmental Laws. No underground storage tanks are, to the best of the Borrower's knowledge, located on
the Mortgaged Property. The Mortgaged Property is not listed on any local, state or federal lists of potentially contaminated sites, including the National Priorities List, CERCLIS and any state or
federal hazardous waste site or leaking underground storage tank lists. To the best of the Borrower's knowledge, the Mortgaged Property has been and is currently in compliance with all Environmental
Laws. There are no pending or, to the best of the Borrower's knowledge, threatened actions or proceedings to which the Borrower or FGC is a party which relate to the environmental condition of the
Mortgaged Property. All required governmental permits and licenses relating to the environmental condition of the Mortgaged Property have been obtained and the Borrower and FGC are in compliance
therewith. 

    (y) The Miami Premises is taxed separately without regard to any other property and has been subdivided from all other
property in compliance with all applicable laws. The Fort Pierce 

Page 39 of 97 Pages

 

and the FGC Property are collectively taxed separately without regard to any other property and have been subdivided from all other property in compliance with all applicable laws. 

    (z) For all purposes, each of the Miami Premises, the Fort Pierce Premises and the FGC Property may be mortgaged,
conveyed and otherwise dealt with as an independent, contiguous parcel. No special assessments have been imposed or are outstanding against the Mortgaged Property and the Borrower has not received any
notice that a special assessment is being contemplated by any governmental authority or other Person having jurisdiction over the Mortgaged Property. 

    (aa) Except as set forth on Schedule 4.1(aa) with respect to the Miami Premises, no governmental authority has
commenced, or to the best of Borrower's knowledge, threatened any (i) condemnation of any portion of the Mortgaged Property, (ii) condemnation, relocation or change in elevation of any
roadways abutting the Mortgaged Property or (iii) denial of access to the Mortgaged Property from any point of access to the Mortgaged Property. 

    (bb) (i) All consents, licenses and permits and all other authorizations or approvals required under applicable
laws, ordinances, regulations, restrictive covenants and requirements of all governmental authorities having jurisdiction over the Premises to operate the Premises as currently operated (including,
without limitation, pari-mutuel permits and licenses, liquor licenses, restaurant permits and concession permits) have been obtained and are listed in Schedule 4.1(bb) hereto;
(ii) each such license and permit is owned by Borrower, is unexpired and is in good standing; with all rights of appeal having expired with no appeal having been filed; and (iii) all
laws, ordinances, regulations, restrictive covenants and requirements of all governmental authorities (including, building, health, fire, water, use, zoning, environmental and similar laws, codes,
ordinances, rules and regulations) relating to the ownership and operation of the Premises have been or can be complied with. 

    (cc) The Premises is zoned under applicable zoning laws so as to permit the operation and use of the Premises as
currently operated. Adequate water, gas and electrical supply, storm and sanitary sewerage facilities and any other required public utilities are available for the Premises. There are adequate means
of access between the Premises and public streets for pedestrians and motor vehicles. 

    (dd) Except as disclosed in Schedule 4.1(dd) hereto, there are no management agreements, franchise agreement,
service contracts, employment contracts, leases or other contracts or agreements affecting the Mortgaged Property. 

    (ee) All factual information furnished by or on behalf of the Borrower to the Lender for purposes of or in connection
with this Agreement or the Transactions is, and all other such factual information hereafter furnished by or on behalf of the Borrower will be, true and accurate in all material respects on the date
as of which such information is furnished and not incomplete by omitting to state any fact necessary to make such information not misleading at such time in light of the circumstances under which such
information was provided. 

Survival of Representations and Warranties  

    4.2 The Borrower agrees that all representations and warranties in this Agreement will be true, correct and complete in
all material respects at the Loan Closing Date and at all times thereafter until the Loan is repaid in full. 

Page 40 of 97 Pages

   ARTICLE 5

REQUIREMENTS PRECEDENT TO THE CLOSING OF THE LOAN  

Loan Closing Conditions  

    5.1 The Borrower agrees that the Borrower will perform and satisfy all of the following conditions precedent on or
before the Loan Closing Date, and the Borrower agrees that the Lender's obligation to make the Loan is conditioned upon the Borrower's furnishing (or causing to be furnished) to the Lender the
following, all in form and substance satisfactory to the Lender, in its sole discretion on or before the Loan Closing Date: 

    (a) Loan Documents. Each of the Loan Documents, as required by  Section 3.8 above. 

    (b) Warrant Agreement; Warrants. The Warrant Agreement, executed by FGC and a warrant
certificate, executed by FGC effectively issuing the Warrants. 

    (c) Fees. The Lender's counsel fees and all amounts due to the Lender in connection with the
opening of the Loan, including, without limitation, all amounts due in accordance with Section 11.4 below, after deducting therefrom the good
faith deposit of $25,000 heretofore paid by Borrower to Lender. 

    (d) Title Insurance Policy. ALTA Title Insurance Policies (containing extended coverage and
without a creditor's right exclusion) in the face amount of the Loan issued by the Title Insurer, insuring (i) the lien of the Miami Mortgage, as a first lien against the Borrower's fee simple
interest in the Miami Premises, subject only to the Miami Permitted Exceptions; (ii) the lien of the Fort Pierce Mortgage; as a first lien against the Trust's fee simple interest in the Fort
Pierce Premises, subject only to the Fort Pierce Permitted Exception; and (iii) the lien of the FGC Mortgage, as a first lien against FGC's interest in the FGC Property, subject only to the FGC
Permitted Exceptions. The Title Insurance Policies shall contain, if available: (i) a comprehensive endorsement, (ii) a survey endorsement
specifically insuring the Lender that the survey described in Section 5.1(e) below is accurate and accurately depicts the same real estate
covered by the Title Insurance Policy, (iii) a contiguity endorsement, if applicable, (iv) an endorsement to the effect that the Mortgaged Property is assessed separately from all other
lands for purposes of ad valorem taxation, (v) an access endorsement, (vi) an endorsement to the effect that all applicable subdivision and platting laws have been complied with,
(vii) a variable rate of interest endorsement, (viii) a 3.1 zoning endorsement, (ix) an interim mechanics' lien endorsement, (x) a usury endorsement, and (xi) any
other endorsements the Lender may reasonably require. 

    (e) Survey. Current plats of survey of the Miami Premises, the Fort Pierce Premises and the FGC
Property prepared by a licensed Florida land surveyor in accordance with 1999 ALTA standards and certified to the Lender and its successors and assigns, and the Title Insurer, showing with respect to
each such Mortgaged Property: (A) the perimeter boundary, (B) the location of all buildings located thereon, (C) the acreage, (D) no encroachments by improvements located
on adjoining property onto such property or encroachments by improvements that are part of the property onto adjoining property, (E) adequate means of ingress and egress to and from such
property by means of a public way or road, (F) to the extent locatable, the location of each of the Miami Permitted Exceptions, the Fort Pierce Permitted Exceptions, and the FGC Permitted
Exceptions, as applicable, and (G) the flood zone designations. 

    (f)  Insurance. All forms of insurance required by the Lender in accordance with
Article 7 of this Agreement. 

    (g) Legal Opinion. An opinion of Florida counsel to the Borrower and the Guarantor dated the
Loan Closing Date addressed to the Lender in form and substance as the Lender may require. 

Page 41 of 97 Pages

 

    (h) Authorization Documents. Evidence reasonably satisfactory to the Lender (including certified
resolutions, land trust directions, and incumbency certificates) that the individuals executing this Agreement and the Loan Documents on behalf of the Borrower have been duly authorized by all
appropriate action to execute and deliver this Agreement and the Loan Documents on behalf of the Borrower, and that the individuals executing the Guaranty, the Warrant Agreement, the Warrants and any
other documents executed by FGC in connection with the Loan on behalf of FGC have been duly authorized by all appropriate action to execute and deliver such documents on behalf of FGC. 

    (i)  Organizational Documents. Copies of the organizational and constitutive documents of FGCI,
the Trust and FGC, each certified by a Person authorized to act on behalf of each respective entity, along with appropriate certificates of good standing from the state of organization, and
qualifications to transact business, if applicable, from the Florida Secretary of State's Office. 

    (j)  UCC Searches. Current searches of all Uniform Commercial Code financing statements filed
against FGCI, the Trust, FGC or Collett with the appropriate governmental offices showing that no Uniform Commercial Code financing statements are filed or recorded against FGCI, the Trust, FGC or
Collett. 

    (k) Environmental Audit. With respect to each of the Miami Premises, the Fort Pierce Premises
and the FGC Property, an environmental audit certified to the Lender prepared by a professional environmental engineer acceptable to Lender, containing, without limitation, a history of the prior
ownership and use of such property and the surrounding parcels and indicating that such property complies in all respects with all Environmental Laws and is free of any Hazardous Materials. 

    (l)  Leases. Copies of all leases affecting the Mortgaged Property, if any, and all amendments
thereto, certified by the Borrower as true, correct and complete. 

    (m) Lien Searches. Pending litigation, judgment and state and federal tax lien search reports on
FGCI, the Trust, FGC and Collett. 

    (n) Title Documents. Copies of all underlying title documents. 

    (o) Appraisal. With respect to each of the Miami Premises, the Fort Pierce Premises and the FGC
Property, an appraisal of such property satisfactory in form and content to the Lender, certified to the Lender and prepared by an independent, licensed, MAI appraiser selected and engaged by the
Lender. 

    (p) Financial Statements. 2000 year-end and the most recent quarterly
interim, financial statements for the FGCI, FGC and Collett. 

    (q) Code Compliance. Letters or other appropriate evidence from governmental authorities
evidencing compliance of the Premises with applicable zoning laws and building and health codes. 

    (r) Litigation Settlements. Payoff letters, settlement agreements or other evidence in form and
substance satisfactory to Lender indicating the amount necessary to pay Borrower's obligations in full under the notes and asset purchase agreement which are the subject of the litigation referenced
in items 2 and 3 of the Litigation Schedule attached hereto as Schedule 4.1(o). Lender shall have the right to disburse portions of the Loan directly to the parties entitled to payment of such
settlement amounts, as evidenced by the settlement agreements or payoff letters delivered by Borrower. 

Page 42 of 97 Pages

 

    (s) Further Assurances. All documents and other assurances reasonably required by the Lender to
evidence and secure the Loan and otherwise required in connection with the Loan pursuant to this Agreement. 

Loan Disbursement  

    5.2 After payment of all of Lender's fees and expenses as described herein, and the payment of all loan closing costs
shown on the loan settlement statement to be executed by Borrower and Lender, the remaining proceeds of the Loan shall be disbursed as follows: 

    (a) to Millennium Partners, in an amount calculated in accordance with the payoff letter obtained from Millennium
Partners by Borrower, in settlement of the lawsuit referenced in item 3 of Schedule 4.1(o) attached hereto; 

    (b) to the Miami-Dade County tax collector and the St. Lucie County tax collector, amounts necessary to pay
all past due real estate taxes and interest and penalties thereon; 

    (c) to Legong Investments, in an amount calculated in accordance with the payoff letter obtained by Borrower from M.I.T.
Fund Management, Ltd., as investment advisor to Legong Investments; 

    (d) to Thomas Baumker, First St. Lucie Associates, Roger Baumker and Philip Wagner, (collectively,
"Mortgagees") in accordance with the payoff letters obtained by Borrower from Mortgagees, in order to payoff all existing mortgage debt on the Fort
Pierce Premises; 

    (e) $548,415, which is hereby represented by Borrower to be the maximum aggregate amount owing in order to
buy-out Borrower's obligations under those certain Consulting and Noncompetition Agreements (collectively, the "Consulting Agreements") each dated as of December 31, 1996 and
amended by amendments dated November 24, 1998, between Borrower and each of Richard P. Donovan and Roger M. Wheeler, Jr. respectively. The Loan proceeds to be disbursed pursuant to in this
Section 5.2(e) shall be disbursed by Lender into a non-interest bearing account maintained by Lender, until such time that Borrower executes a final settlement agreement with
respect to the Consulting
Agreements, at which time Lender will disburse such funds in accordance with such settlement agreement, and any excess funds remaining after payment of the amounts necessary to satisfy all of
Borrower's obligations under the Consulting Agreement, shall be disbursed to Borrower; and, 

    (f)  any excess remaining shall be disbursed to Borrower. 

Notwithstanding
anything in this Loan Agreement or any of the Loan Documents to the contrary, it is the express intent of Lender and Borrower that this Loan Agreement and the Loan Documents create no
rights in any person or entity other than Lender and Borrower, whether under a third party beneficiary theory or otherwise. 

ARTICLE 6

THE BORROWER'S AGREEMENTS  

    The Borrower further covenants and agrees as follows: 

Closing of Loan on or Prior to Loan Closing Date  

    6.1 All conditions precedent to the Loan Closing shall be complied with on or before the Loan Closing Date. 

Page 43 of 97 Pages

 

Inspection by the Lender  

    6.2 The Borrower will cooperate with the Lender to arrange for inspections of the Mortgaged Property by the Lender and
its agents and representatives upon reasonable notice during normal business hours. 

Mechanics' Liens  

    6.3 The Borrower will not suffer or permit any mechanics' liens to be filed or otherwise asserted against the Mortgaged
Property. 

Condemnation  

    6.4 The Borrower hereby assigns, transfers and sets over unto the Lender the entire proceeds of any award or any claim
for damages for any of the Premises (or any interest therein) taken or damaged by the power of eminent domain or by condemnation. The Lender shall be entitled (but shall not be obligated) to
participate in the collection of such proceeds and any such proceeds shall be first applied to reimburse the Lender for all costs and expenses, including attorneys' fees and expenses, incurred in
connection with the collection of such proceeds. The Lender may retain the remainder of such award in payment or reduction of the Loan, whether due or not, and any excess after payment in full of the
Loan and all sums due hereunder, shall be returned to the Borrower; provided, however, that the Lender shall hold the proceeds of such award and permit the same to be used to reimburse the Borrower
for the cost of the rebuilding or restoration of the Premises in accordance with plans and specifications to be submitted to and approved by the Lender, so long as: (i) such proceeds are
sufficient, in the Lender's sole judgment, to complete the rebuilding or restoration of the Premises, or if such proceeds are not sufficient in the Lender's sole judgment, then the Borrower shall have
paid from its own funds costs of restoration in the amount of such deficiency or, upon request by the Lender, shall have deposited with the Lender the amount of such deficiency in cash, (ii) in
the Lender's sole judgment, the Premises can be fully rebuilt and restored, can be operated on an economically feasible basis and will have a value substantially the same as that existing prior to
such taking, (iii) there is no Default or Event of Default hereunder, and (iv) in the Lender's sole judgment, the rebuilding or restoration can be completed prior to the Maturity Date.
If the proceeds are to be used to reimburse the Borrower for rebuilding or restoration, the proceeds of the award shall be paid out in the same manner as is provided in  Article 9 hereof for the
payment of insurance proceeds toward the cost of rebuilding or restoration. Any payment or deposit made by the Borrower
under subparagraph (i) above shall be disbursed for the cost of rebuilding or restoration before the Borrower receives any reimbursement out of the award. Provided that Lender reasonably
determines that the Premises has been restored to its full function and value, any surplus which may remain out of said award after payment of such cost of rebuilding or restoration shall be paid to
any other party entitled thereto. If, however, Lender reasonably determines that the Premises has not been restored to its full function and value, Lender may apply such surplus on account of the
Loan. 

Proceedings to Enjoin or Prevent Operations  

    6.5 If any proceedings are filed seeking to enjoin or otherwise prevent or declare unlawful the occupancy, maintenance
or operation of the Mortgaged Property or any portion thereof, the Borrower at its sole expense shall (i) cause such proceedings to be contested vigorously in good faith and (ii) in the
event of an adverse ruling or decision, prosecute all allowable appeals therefrom. Without limiting the generality of the foregoing, the Borrower shall resist the entry or seek the stay of any
temporary or permanent injunction that may be entered and use its best efforts to bring about a favorable and speedy disposition of all such proceedings. 

Page 44 of 97 Pages

 

Lender's Fees and Expenses  

    6.6 The Borrower shall pay all of the Lender's fees and expenses incurred in the origination, documentation, closing,
administration and enforcement of the Loan as required pursuant to Section 11.4(a), after deducting therefrom the good faith deposit of $25,000
heretofore paid by Borrower to Lender. 

Lender's Actions for Own Protection Only  

    6.7 The authority herein conferred upon the Lender, and any action taken by the Lender, including inspecting the
Mortgaged Property, will be exercised and taken by the Lender for the Lender's protection only and may not be relied upon by the Borrower for any purposes whatever; and the Lender shall not be deemed
to have assumed any responsibility to the Borrower with respect to any such action herein authorized or taken by the Lender. Any review, investigation or inspection conducted by the Lender, any
architectural or engineering consultants retained by the Lender or any agent or representative of the Lender to verify independently the Borrower's satisfaction of any conditions precedent to Loan
disbursements under this Agreement, the Borrower's performance of any of the covenants, agreements and obligations of the Borrower under this Agreement, or the validity of any representations and
warranties made by the Borrower hereunder (regardless of whether the party conducting such review, investigation or inspection shall have discovered that any of such conditions
precedent were not satisfied or that any such covenants, agreements or obligations were not performed or that any such representations or warranties were not true), shall not affect (or constitute a
waiver by the Lender of): (i) any of the Borrower's representations and warranties under this Agreement or the Lender's reliance thereon or (ii) the Lender's reliance upon any
certifications of the Borrower or any other facts, information or reports furnished to the Lender by the Borrower hereunder. 

Tax Returns; Material Adverse Changes; Books and Records  

    6.8 

    (a) The Borrower shall deliver to the Lender true, correct and complete copies of all filed tax returns of Borrower not
later than thirty (30) days after filing. The Borrower shall cause FGC and Collett to deliver to the Lender true, correct and complete copies of all filed tax returns of FGC and Collett
respectively, not later than thirty (30) days after filing. 

    (b) The Borrower shall promptly notify the Lender if any Material Adverse Change occurs. 

    (c) The Borrower shall, at any time during regular business hours and on reasonable notice, permit the Lender and its
agents or representatives to examine and copy all of its books and records regarding the operation of the Premises. 

Documents of Further Assurance  

    6.9 The Borrower, from time to time, upon the Lender's request, shall execute, deliver, record and furnish such
documents as the Lender may deem necessary or desirable to (i) perfect and maintain perfected as valid liens upon the Mortgaged Property, the liens granted to the Lender under the Miami
Mortgage, the Fort Pierce Mortgage, and the FGC Mortgage and the collateral assignments and other security interests under the other Loan Documents as contemplated by this Agreement,
(ii) correct any errors of a typographical nature which may be contained in this Agreement or any of the Loan Documents and (iii) consummate fully the transaction contemplated under this
Agreement. 

No Additional Debt  

    6.10 Without the prior written consent of the Lender, which consent will not be unreasonably withheld, the Borrower
shall not incur or guaranty any indebtedness (whether personal or nonrecourse, 

Page 45 of 97 Pages

 

secured or unsecured) other than indebtedness arising in the ordinary course of the Borrower's business. 

Mortgage  

    6.11 The Borrower hereby restates each of the representations, warranties, covenants and obligations of "Mortgagor" made
in the Miami Mortgage and the Fort Pierce Mortgage, and the terms of the Miami Mortgage and the Fort Pierce Mortgage are hereby incorporated into this Agreement by this reference. 

Compliance with Laws  

    6.12 The Borrower and the Premises shall comply with all applicable requirements (including zoning, building, health,
safety and fire laws, ordinances, rules and regulations and all Environmental Laws) of any governmental authority having jurisdiction over the Borrower or the Premises, including Title III of The
Americans With Disabilities Act, and all rules and regulations promulgated with respect thereto. 

Business Purpose  

    6.13 The Borrower shall not engage in any business other than the operation and ownership of the Premises. 

Transfer of Mortgaged Property; Change in Ownership  

    6.14 

    (a) FGCI shall not transfer, sell, assign, convey, mortgage or otherwise encumber in any way the Miami Premises or the
beneficial interest in the Fort Pierce Premises, or allow any transfer, sale, assignment, conveyance, mortgage or encumbrance of the Fort Pierce Premises, or, in each case, any portion thereof or any
direct or indirect interest therein. 

    (b) FGC shall not transfer, sell, assign, convey, mortgage or otherwise encumber in any way the FGC Property or any
portion thereof or any direct or indirect interest therein without Lender's prior written consent, which consent shall not be unreasonably withheld by Lender with respect to a sale of a portion of the
FGC Property if, after taking into account such sale and the net proceeds to be received by Lender as a Loan paydown in connection with such sale, there is no increase in the loan to value ratio for
the Loan, as reasonably determined by Lender. 

    (c) No change in the Control of FGCI shall occur without the prior written consent of the Lender, and Collett shall
maintain Control over FGC. 

    (d) In the event Lender consents to the assignment and assumption of the Borrower's obligations hereunder and under the
other Loan Documents in connection with any transfer of the Mortgaged Property, which consent shall be provided or denied (or made subject to conditions, including approval of all documentation
related thereto), in Lender's sole discretion, Borrower shall pay to Lender a loan assumption fee in the amount of one percent (1%) of the then-outstanding principal balance of the Loan. 

Leases  

    6.15 Neither the Borrower nor FGC shall amend, modify, restate, terminate or alter any real property lease affecting the
Mortgaged Property in any way, or enter into any new real property leases affecting the Mortgaged Property, without the prior written consent of the Lender. Any such modification or amendment shall be
null and void unless consented to in writing by the Lender. 

Page 46 of 97 Pages

 

Brokerage Indemnity  

    6.16 The Borrower hereby indemnifies and holds the Lender harmless from and against any and all claims, costs, expenses,
damage, loss and liability arising out of or in connection with any claim for a brokerage or finder's fee in connection with the Loan or the Loan Documents. 

Financial Statements  

    6.17 

    (a) Borrower shall furnish or cause to be furnished to Lender three copies of each of the following: (1) as soon
as available and in any event within 90 days after the end of each fiscal year of FGCI and FGC, Annual Financial Statements of FGCI and FGC, respectively; (2) as soon as available and in
any event within 45 days after the end of each calendar quarter (except the last calendar quarter) of each fiscal year of FGCI and FGC, Quarterly Financial Statements of FGCI and FGC;
(3) within thirty (30) days of the anniversary date of the previous financial statement furnished by Collett, an updated personal financial statement of Collett; and (4) such
other information relating to the financial condition, operations, prospects or business of Borrower and each Guarantor as from time to time may be reasonably requested by Lender. Each delivery of a
financial statement pursuant to this Section shall constitute a republication of the representations and warranties contained in Section 4.1
hereof. 

    (b) Borrower shall permit Lender to inspect the Premises, to examine its files, books and records and make and take away
copies thereof, and to discuss its affairs with its officers and accountants, all at such times and intervals and to such extent as Lender may reasonably desire. 

    (c) Borrower and FGC shall maintain books and records in accordance with GAAP. 

Depository Relationship  

    6.19 Borrower shall maintain all operating and deposit accounts related to receipts and operations of the Premises at
Lender's North Miami Beach, Florida branch. 

Operation of Premises  

    6.20 Borrower shall operate each of the Miami Premises and the Fort Pierce Premises as a first class Jai Alai and gaming
establishment, in accordance with all applicable laws and ordinances applicable thereto. 

Management and Franchise Agreements  

    6.21 Borrower shall not terminate, modify, amend or enter into any management agreement or any franchise agreement,
without the prior written approval of Lender. 

Initial Reservation of Warrant Shares  

    6.22 Prior to the Loan Closing Date, Borrower will cause FGC to authorize the issuance of the Warrants and reserve
200,000 shares of common stock for issuance upon exercise of the Warrants. 

Warrant Shares  

    6.23 Prior to the Loan Closing Date, Borrower will cause FGC to reserve for issuance, free of preemptive rights, such
number of shares of common stock as shall be issuable upon the exercise of the Warrants and such further number as may from time to time be required to implement the conversion adjustment provisions
applicable to the Warrants. 

Page 47 of 97 Pages

 

Financial Covenants  

    6.24 Borrower shall maintain at all times, a Debt Coverage Ratio of no less than 1.85 to 1. 

Environmental Matters  

    6.25 Within sixty (60) days after the Loan Closing Date, provide Lender with evidence satisfactory to Lender that
Borrower has (a) repaired the leak in the above ground storage tank located in the fire control building located on the Fort Pierce Premises, as recommended in the Phase I Environmental Report
dated September 11, 2001, prepared by National Assessment Corporation ("Fort Pierce Phase I"), (b) implement an operations and maintenance program in order to safely manage the
identified and suspect asbestos-containing material described in the Fort Pierce Phase I, (c) repair the leak in the back up generator located in the generator room located on the Miami
Premises, as recommended in the Phase I Environmental Report dated September 8, 2001, prepared by National Assessment Corporation ("Miami Phase I"), and (d) implement an operations and
maintenance program in order to safely manage the identified and suspect asbestos-containing material described in the Miami Phase I. 

Page 48 of 97 Pages

   ARTICLE 7

INSURANCE  

Insurance Policies  

    7.1  The Borrower will at all times maintain, or cause to be maintained, insurance policies issued by companies
acceptable to the Lender covering loss by perils, hazards, liabilities and other risks and casualties and in such amounts as required by the Lender. All physical damage policies and renewals shall
contain a standard mortgagee clause naming only the Lender as mortgagee, which clause shall expressly state that any breach of any condition or warranty by the Borrower shall not prejudice the rights
of the Lender under such insurance, and a loss payable clause in favor of the Lender for property, contents, inventory, equipment, loss of rents and business interruption. All liability policies and
renewals shall name the Lender as additional insured. No additional parties shall appear in the mortgagee or loss payable clauses without the Lender's express prior written consent. All deductibles
exceeding U.S. $10,000 shall be subject to the approval of the Lender. In the event of foreclosure or any other transfer of title to the Premises in full or partial satisfaction of the Loan, all
right, title and interest of the Borrower in and to the benefit of all prepaid insurance premiums shall pass to the purchaser or grantee and the Borrower agrees to assist the Lender and such purchaser
or grantee in obtaining such benefit and replacement insurance policies. 

    Without
limiting the generality of the foregoing, the Borrower shall maintain or cause to be maintained (i) all risks form of property insurance covering real and personal
property, (ii) business interruption, rent or loss of rent insurance covering not less than twelve (12) months income, (iii) commercial general liability insurance and excess
umbrella liability insurance, in an amount not less than $3,000,000, (iii) workers' compensation and employers' liability insurance, (iv) contractual liability insurance,
(v) broad form boiler and machinery insurance, including boiler and machinery extra expense and business interruption coverage, and (vi) unless the Borrower delivers satisfactory
evidence in connection with delivery of the survey pursuant to Section 5.1(e), flood insurance. 

All
policies shall include a provision requiring that the coverage evidenced thereby shall not be terminated or modified without thirty (30) days prior written notice to the Lender. All
property insurance policies shall also include a provision for law and ordinance change coverage. The Borrower
shall deliver duplicate original certificates evidencing such insurance, including duplicate original certificates for all additional policies, together with evidence of full payment of premiums
thereon, to the Lender, and, in the case of insurance about to expire, shall deliver duplicate original certificates for each renewal policy, together with evidence of full payment of premiums
thereon, not less than thirty (30) days prior to their respective dates of expiration. The Borrower shall permit the Lender to review all such policies upon request by the Lender. The Borrower
will not permit any condition to exist on the Mortgaged Property that would wholly or partially invalidate any insurance thereon. The Borrower shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained hereunder unless the Lender is included thereon as an additional insured and under a mortgagee clause acceptable to the Lender.
The Borrower shall immediately notify the Lender whenever any such separate insurance is taken out and shall promptly deliver to the Lender the policy or policies of such insurance. Prior to Loan
Closing and at any time thereafter, if the Borrower changes insurance companies or materially changes its coverage, at the Lender's option, the Lender may engage, at the Borrower's sole cost and
expense, an independent insurance consultant acceptable to the Lender to review the Borrower's insurance coverage to confirm such coverage is in compliance with the terms and conditions of this  Section 7.1. 

Illinois Insurance Notice  

    7.2  Unless Borrower provides Lender with evidence of the insurance coverage required by this Agreement or the other
Loan Documents, Lender may purchase insurance at Borrower's expense to 

Page 49 of 97 Pages

 

protect Lender's interests in the collateral. This insurance may, but need not, protect Borrower's interest. The coverage that Lender purchases may not pay any claim that Borrower makes, or any claim
that is made against Borrower in connection with the collateral. Borrower may later cancel any insurance purchased by Lender, but only after providing Lender with evidence that Borrower has obtained
insurance as required by the Loan Documents. If Lender purchases insurance for the collateral, Borrower will be responsible for the costs of that insurance, including interest and any other charges
Lender may impose in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to Borrower's
total outstanding balance or obligation. The costs of the insurance may be more than the cost of insurance Borrower may be able to obtain on Borrower's own. 

ARTICLE 8

CASUALTIES  

Lender's Election to Apply Insurance Proceeds to Indebtedness  

    8.1  In the event of any loss or damage to any portion of the Premises due to fire or other casualty, the Borrower shall
have the right, but only if no Default or Event of Default exists hereunder, to settle insurance claims or agree with the insurance company or companies on the amount to be paid; provided, however
that the Lender shall be permitted to participate in any such settlement and to hire its own adjusters to advise Lender in connection with any proposed settlement, and any such settlement shall be
subject to the Lender's written approval; further, provided, however, that if a settlement is not reached within a reasonable period of time (as determined by the Lender), then the Lender shall have
the sole right, in its sole discretion, to settle such claim. In any case, the Lender shall, subject to Section 8.2 below, have the right (but
not the obligation) to collect, retain and apply to the Loan all insurance proceeds (after deduction of all expenses of collection and settlement, including attorneys' and adjusters' fees and
expenses), and if such proceeds are insufficient to pay such amount in full, to declare the balance remaining unpaid on the Note to be immediately due and payable and to avail itself of any of the
remedies afforded under this Agreement, the Note or any of the other Loan Documents as in the case of any Event of Default or default hereunder or thereunder. Any proceeds remaining after application
to the Loan shall be paid by the Lender to the Borrower or any other party which may be entitled thereto. 

Borrower's Obligation to Rebuild and Use of Proceeds Therefor  

    8.2  Notwithstanding anything to the contrary set forth in  Section 8.1 above, after deduction of all expenses of
collection and settlement, including reasonable attorneys' and adjusters' fees and
expenses, the Lender shall release such proceeds in installments from time to time to the Borrower provided that: 

       (a)  The Borrower shall expeditiously repair and restore all damage to the Premises resulting from such fire or other casualty; 

       (b)  The proceeds of insurance, in the Lender's sole judgment, are sufficient to complete the repair and restoration of the improvements located
on the Premises, or if such proceeds of insurance are not so sufficient, then the Borrower shall have paid from its own funds the costs of restoration in the amount of such deficiency or, upon request
by the Lender, shall have deposited with the Lender the amount of such deficiency in cash; 

       (c)  no Default or Event of Default shall have occurred hereunder and be continuing; and 

       (d)  in the Lender's sole judgment, the Premises (i) can be fully repaired and restored prior to the Maturity Date, (ii) can be
operated on an economically feasible basis and (iii) will have a value substantially the same as that existing prior to such fire or other casualty. 

Page 50 of 97 Pages

 

    All
payments made by the Borrower and all funds received from the Borrower pursuant to Section 8.2(b) above shall first be fully
made or disbursed before disbursement of any insurance proceeds. Provided that Lender reasonably determines that the Premises has been restored to its full function and value, any surplus which may
remain after payment of such cost of repair and restoration, shall be paid to any other party entitled thereto. If, however, Lender reasonably determines that the Premises has not been restored to its
full function and value, Lender may apply such surplus on account of the Loan. 

ARTICLE 9

DEFAULTS  

Events of Default  

    9.1  Each of the following events shall constitute events of default ("Events of
Default") hereunder: 

       (a)  any representation or warranty made by or on behalf of (i) the Borrower in connection with this Agreement or the other Loan
Documents or any of the Transactions shall prove to have been false or misleading in any material respect when made; 

      (b)  default shall be made in the payment of any principal on the Loan when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise; 

       (c)  default shall be made in the payment of any interest, loan fee or other amounts payable hereunder or under the other Loan Documents when
and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise, and such amount shall remain unpaid for
seven (7) Business Days; 

      (d)  default shall be made in the due observance of any covenant, condition or agreement on the part of the Borrower contained in  Section 6.14 or Article 7; 

       (e)  default shall be made in the due observance or performance of any other covenant, condition or agreement to be observed or performed by the
Borrower pursuant to the terms of this Agreement or the other Loan Documents (a "Nonmonetary Default") and such default shall continue unremedied for a
period of 30 days after written notice from the Lender of such default; provided, however, that if the Borrower promptly commences and diligently pursues a cure to a Nonmonetary Default which
cannot be reasonably cured within the 30 day period, the Borrower shall have an additional 20 day period to complete such cure. 

       (f)  The Borrower shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States
Code or any other federal or state bankruptcy, insolvency or similar law, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any such proceeding or the
filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for itself or for a substantial part of its
properties or assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable generally, or admit in writing its inability, to pay its debts as they become due, (vii) suspend the transaction of all or a substantial portion of its
usual business or (viii) take corporate action for the purpose of effecting any of the foregoing; 

       (g)  An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of the Borrower of a substantial part of any of its properties or assets under Title 11 of the United States Code or any other 

Page 51 of 97 Pages

 

federal or state bankruptcy, insolvency or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar official for the Borrower or for a substantial part of
its properties, or (iii) the winding-up or liquidation of the Borrower; and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall continue unstayed and in effect for 60 days; 

       (h)  A final judgment for the payment of money in excess of $100,000 shall be rendered by a court or other tribunal against the Borrower and
shall remain undischarged for a period of 30 consecutive days during which execution of such judgment shall not have been stayed effectively or final judgments for the payment of money aggregating in
excess of $200,000 shall be rendered against the Borrower and such judgments shall remain undischarged for a period of 30 consecutive days during which execution of such judgments shall not have been
stayed effectively; 

      (i)  Any Loan Document shall cease to be in full force and effect and enforceable in accordance with its terms; or the Borrower shall assert the
invalidity of any such instrument; or any security interest or lien purported to be created by any Loan Document shall cease to be a valid and perfected first priority security interest in any
collateral described therein; 

       (j)  An Event of Default shall occur under any of the other Loan Documents, which shall remain uncured after the expiration of any applicable
notice, cure or grace period, if any; or 

      (k)  An event of default shall occur under any other document evidencing or securing a loan from Lender to Borrower, any Guarantor or any
Affiliate of Borrower or Guarantor, and such default remains uncured after the expiration of any applicable notice, cure or grace period, if any. 

ARTICLE 10

LENDER'S REMEDIES IN EVENT OF DEFAULT  

Remedies Conferred Upon the Lender  

    10.1  Upon the occurrence of any Event of Default, the Lender, in addition to all remedies conferred upon the Lender by
law and by the terms of the Note and the other Loan Documents, shall have the right, but not the obligation, to pursue any one or more of the following remedies concurrently or successively, it being
the intent hereof that all such remedies shall be cumulative and that no such remedy shall be to the exclusion of any other: 

       (a)  declare the Note to be immediately due and payable without notice to the Borrower or any other Person; 

      (b)  audit the books and records of the Borrower at the Borrower's cost and expense; 

       (c)  use and apply any monies deposited by the Borrower with the Lender, regardless of the purpose for which the same was deposited, to cure any
such default or to repay any indebtedness under this Agreement which is due and owing to the Lender; and 

       (d)  exercise or pursue any other right or remedy permitted under this Agreement, or any of the other Loan Documents, or conferred upon the
Lender by operation of law, including, without limitation, foreclosing on the Mortgaged Property. 

Non-Waiver of Remedies  

    10.2  No waiver of any breach or default hereunder shall constitute or be construed as a waiver by the Lender of any
subsequent breach or default or of any breach or default of any other provision of this Agreement. 

Page 52 of 97 Pages

   ARTICLE 11

GENERAL PROVISIONS  

Notices  

    11.1  

      (a)  Notices and other communications provided for herein and in the other Loan Documents shall be in writing and shall be delivered personally,
sent via facsimile, mailed, by certified or registered mail, postage prepaid or delivered by overnight courier addressed: 

If to the Lender:

CIB Bank

20527 South LaGrange Road

Frankfort, IL 60423-1345

Attention: Joseph J. Pratl

Facsimile: (815) 464-4906 

If to the Borrower:

Florida Gaming Centers, Inc.

3500 N.W. 37th Ave.

Miami, FL 33142

Attention: W. Bennett Collett

Facsimile: (770) 554-0777 

With
a copy to: 

Edward
Becht

321 S. 2nd Street

Fort Pierce, FL 34950

Facsimile: (561) 465-8909 

       (b)  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have
been given on the date of personal delivery, mailing or facsimile transmission and on the date one business day after delivery to an overnight courier, in each case addressed to such Person as
provided in this Section 11.1 or in accordance with the latest unrevoked direction from such Person. 

Survival of Agreement  

    11.2  All covenants, agreements, representations and warranties made by the Borrower herein and in the other Loan
Documents shall be considered to have been relied upon by the Lender and shall survive the making by the Lender of the Loan and the execution and delivery to the Lender of the Note evidencing the Loan
and shall continue in full force and effect until the Note and all accrued interest thereon and all other Obligations then due and payable have been fully paid and the Lender has no further commitment
to lend hereunder. 

Successors and Assigns  

    11.3  Whenever in this Agreement or any other Loan Document any of the parties hereto is referred to, such reference
shall be deemed to include the successors and assigns of such party; provided however, that the Borrower may not assign or delegate any of its duties,
obligations or responsibilities hereunder or under the Note or any other Loan Document without the prior written consent of the Lender, which consent shall be in the Lender's sole and absolute
discretion. All 

Page 53 of 97 Pages

 

covenants, promises and agreements by or on behalf of the Borrower which are contained in this Agreement or any other Loan Document to which the Borrower is a party shall inure to the benefit of the
successors and assigns of the Lender. The Lender shall have the right to sell participations in and make assignments of all or any part of the Loan and the Note in its sole and absolute discretion and
without the consent of or notice to the Borrower. 

Expenses of the Lender; Indemnity  

    11.4  

       (a)  The Borrower agrees to pay all expenses reasonably incurred by the Lender (including the fees and expenses of the Lender's counsel and its
paralegals, field exam expenses and related fees and environmental audit and appraisal fees) in connection with the preparation and administration of this Agreement and the other Loan Documents,
including, without limitation, any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the Transactions shall be consummated) or reasonably incurred by the Lender
(including the fees and expenses of the Lender's counsel and its paralegals) in connection with the enforcement of its rights in connection with this Agreement or the other Loan Documents. All such
fees shall bear interest at the Default Rate until paid. The Borrower further agrees that it shall indemnify the Lender from and hold it harmless against any documentary taxes, assessments or charges
made by any governmental authority by reason of the execution and delivery of this Agreement or any of the other Loan Documents. 

      (b)  The Borrower agrees to indemnify the Lender and its Affiliates, directors, officers, employees and agents against, and to hold the Lender
and such Persons harmless from, any and all losses, claims, damages, liabilities, penalties, actions, judgments, suits, costs, and related expenses, including reasonable legal and paralegal fees and
expenses, incurred by or asserted against the Lender or any such Persons arising out of, in any way connected with, or as a result of any claim, investigation, litigation or other proceeding (whether
or not the Lender is a party) relating to (i) this Agreement or the other Loan Documents, (ii) the performance by the parties hereto and thereto of their respective obligations hereunder
and thereunder, (iii) consummation of the Transactions, (iv) the release, spillage, disposal, discharge, transporting, emission or leakage of Hazardous Materials, including any damage or
injury resulting from any such Hazardous Materials to or affecting the Mortgaged Property or the soil, water, air, vegetation, buildings, personal property, persons or animals located on such
properties or on any other property or otherwise, or (v) any violation of any Environmental Laws. The foregoing indemnity includes the cost of remedial action to the extent required to cause
the Mortgaged Property to be in compliance with all applicable Environmental Laws. Notwithstanding the foregoing, this indemnity shall not apply to any such losses, claims, damages, liabilities or
related expenses arising solely from the gross negligence or willful misconduct of the Lender. 

      (c)  The provisions of this Section shall remain operative and in full force and effect regardless of the expiration of the term of this
Agreement, the other Loan Documents, the consummation of the Transactions, the repayment of any of the Loan, the invalidity or unenforceability of any term or provision of this Agreement or any of the
other Loan Documents, or any investigation made by or on behalf of the Lender. All amounts due under this Section 11.4 shall be payable on
written demand. 

Right of Setoff  

    11.5  The Lender is hereby authorized at any time and from time to time after the occurrence and during the continuance
of an Event of Default to setoff and apply any and all deposits (general or special, time or demand, provisional or final, whether held solely or jointly with others) at any time 

Page 54 of 97 Pages

 

held and other indebtedness at any time owing by the Lender to or for the credit or the account of the Borrower (other than trust accounts held for the benefit of third parties in the ordinary course
of the Borrower's business) to amounts then due and payable under this Agreement and the other Loan Documents, irrespective of whether or not the Lender shall have made any demand under this Agreement
or any of the other Loan Documents. The rights of the Lender under this Section 11.5 are in addition to other rights and remedies (including
other rights of setoff) which the Lender may have under applicable law or under the Loan Documents. 

Applicable Law  

    11.6  THIS AGREEMENT, THE NOTE AND EACH OF THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF ILLINOIS (EXCLUSIVE OF ITS CONFLICTS OF LAWS PROVISIONS) EXCEPT WITH RESPECT TO THE PROVISIONS OF ANY LOAN DOCUMENTS WHICH RELATE TO REALIZING UPON ANY COLLATERAL LOCATED
OUTSIDE THE STATE OF ILLINOIS WHICH SHALL BE GOVERNED BY THE LAW OF THE STATE IN WHICH SUCH COLLATERAL IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE,
THE LAW OF THE STATE OF ILLINOIS SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS. 

Waivers  

    11.7  No failure or delay of the Lender in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Lender hereunder are cumulative and not exclusive of any rights or remedies which it would otherwise have. No waiver of any
provision of this Agreement, the Note or the other Loan Documents, or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be authorized as provided
in Section 11.8, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice
or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances. 

Amendments  

    11.8  Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement
or agreements in writing entered into by the Borrower and the Lender. 

Severability  

    11.9  In the event any one or more of the provisions contained in this Agreement, the Note or the other Loan Documents
should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall not in any way be affected or
impaired thereby. If, because of the severance of any provision of this Agreement pursuant to this Section 11.9, the economic benefit of this
Agreement to the Lender is altered in any way, the parties hereto agree to thereafter amend this Agreement in accordance with its terms to provide the Lender with the same economic benefit it had
prior to the severance of such provision. 

Page 55 of 97 Pages

 

Counterparts  

    11.10  This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all
of which when taken together shall constitute but one contract, and shall become effective when copies hereof which, when taken together, bear the signatures of each of the parties hereto shall be
delivered or mailed to the Lender and the Borrower. 

Headings  

    11.11  Article and Section headings and the Table of Contents used herein are for convenience of reference only and are
not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. 

Consent to Jurisdiction  

    11.12  THE BORROWER HEREBY IRREVOCABLY AGREES THAT ANY SUIT, ACTION, PROCEEDING OR CLAIM AGAINST
IT ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF, MAY BE BROUGHT OR ENFORCED IN THE STATE OR
FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS. NOTHING HEREIN SHALL, OR SHALL BE CONSTRUED SO AS TO, LIMIT THE RIGHT OF THE LENDER, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO BRING ACTIONS, SUITS OR
PROCEEDINGS WITH RESPECT TO THE OBLIGATIONS AND LIABILITIES OF THE BORROWER UNDER, OR ANY OTHER MATTER ARISING OUT OF OR IN CONNECTION WITH, THIS AGREEMENT OR THE LOAN DOCUMENTS OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT RENDERED IN ANY SUCH ACTION, SUIT OR PROCEEDING IN THE COURTS OF ANY JURISDICTION IN WHICH ANY ASSETS, PROPERTIES OR REVENUES OF THE BORROWER MAY BE FOUND, OR THE RIGHT TO
AFFECT SERVICE OF PROCESS IN ANY JURISDICTION IN ANY OTHER MANNER PERMITTED BY LAW. IN ADDITION, THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS, SUITS OR PROCEEDINGS BROUGHT IN ANY OF THE COURTS REFERRED TO ABOVE, AND FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY OF THE AFORESAID COURTS HAS BEEN BROUGHT IN ANY INCONVENIENT FORUM.

Waiver of Jury Trial  

    11.13  THE BORROWER AND THE LENDER HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER, OR REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR UNDER OR IN CONNECTION WITH ANY AMENDMENT, INSTRUMENT,
DOCUMENT, OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, AND AGREE THAT ANY SUCH ACTION SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE TERMS AND PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT FOR THE PARTIES
ENTERING INTO THIS AGREEMENT.

Interest Limitation  

    11.14  Anything in this Agreement, the Note or any Loan Document to the contrary notwithstanding, the Borrower shall
never be required to pay interest at a rate in excess of the highest 

Page 56 of 97 Pages

 

lawful rate, and if the effective rate of interest that would otherwise be payable under this Agreement, the Note or any Loan Document would exceed the highest lawful rate, or if any holder of the
Note shall receive monies that are deemed to constitute interest which would increase the effective rate of interest payable under this Agreement, the Note or any Loan Document to a rate in excess of
the highest lawful rate, then (a) the amount of interest that would otherwise be payable under this Agreement, the Note and the Loan Documents shall be reduced to the amount allowed under
applicable law, and (b) any interest paid in excess of the highest lawful rate shall, at the option of the holders of the Note, be either refunded to the payor or credited on the principal of
the Note. 

Apparent Inconsistencies  

    11.15  In the event of any conflict or inconsistency between the terms and provisions of this Agreement and those of any
other Loan Document, the terms and provisions of this Agreement shall govern and control to the extent of such conflict or inconsistency. 

No Partnership or Joint Venture; Limitation of Liability  

    11.16  Nothing herein is intended to establish any partnership or joint venture between Lender and Borrower, it being
agreed that the sole relationship between the parties hereto is that of a lender and a borrower. No provision hereof, and no enumeration herein of the rights or privileges of the Lender, shall give
rise to any liability of the Lender as an owner or other equity holder of the Borrower, whether such liability is asserted by the Borrower or the creditors of the Borrower. 

Specific Performance  

    11.17  The parties hereto agree that in the event of a breach of any of the provisions hereof, equitable remedies and
the remedy of specific performance, among others, shall be available to the parties hereto. 

Construction  

    11.18  The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. 

Land Trust Exculpation  

    11.19  This Agreement is executed and delivered by City National Bank of Florida, not personally, but as Trustee as
aforesaid in the exercise of the power and authority conferred upon and vested in it as such Trustee, provided that City National Bank of Florida hereby personally warrants that it possesses full
power and authority to execute and deliver the same. It is expressly understood and agreed that nothing contained in this Agreement shall be construed as creating any liability on City National Bank
of Florida personally to pay the indebtedness evidenced and secured by the Note and the other Loan Documents or any interest that may accrue thereon, or to perform any covenant, express or implied,
contained therein, all such personal liability, if any, being expressly waived by Lender and by every person now or hereafter claiming any right or security hereunder. 

[SIGNATURE
PAGE FOLLOWS] 

Page 57 of 97 Pages

 

    IN WITNESS WHEREOF, the Borrower and the Lender have executed this Agreement as of the date first above written. 

	 	 	 	 	THE BORROWER:
	

ATTEST:	
 	

FLORIDA GAMING CENTERS, INC.
	By:	 	/s/ William B. Collett, Jr.	 	By:	 	/s/ W. B. Collett
	 	 	
	 	 	 	

	Name:	 	/s/ William B. Collett, Jr.	 	Name:	 	/s/ W. Bennett Collett
	 	 	
	 	 	 	

	Title:	 	Assistant Secretary	 	Title:	 	Chairman & CEO
	 	 	
	 	 	 	

	 	 	 	 	CITY NATIONAL BANK OF FLORIDA, successor by merger to City National Bank of Miami, as Trustee under Trust Agreement dated January 3, 1979 and known as Trust No. 5003471
	

 	
 	

 	
 	

By:	
 	

/s/ Glenn Edward Randle
	 	 	 	 	 	 	

	 	 	 	 	 	 	Glenn Edward Randle

Vice President and Trust Officer
	

 	
 	

 	
 	
THE LENDER:
	

 	
 	

 	
 	

CIB BANK
	

 	
 	

 	
 	

By:	
 	

Joseph J. Pratl
	 	 	 	 	 	 	

	 	 	 	 	Name:	 	J. Pratl
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	Sr. V. P.
	 	 	 	 	 	 	

Page 58 of 97 Pages

  

 
 

EXHIBIT A-1
  
    LEGAL DESCRIPTION OF THE MIAMI PREMISES    
  

    Tract "A" FRONTON HEIGHTS ADDITION, according to the Plat thereof, recorded in Plat Book 90, Page 20, of the public records of Miami-Dade County,
Florida. 

Page 59 of 97 Pages

 
 
 

EXHIBIT A-2
  
    LEGAL DESCRIPTION OF THE FORT PIERCE PREMISES    
  

PARCEL 5: 

    LEGAL
DESCRIPTION: The South 1/2 of the SW 1/4 of the NW 1/4 of Section 13. Township 35 South, Range 39 East, St. Lucie County,
Florida; EXCEPTING therefrom the right of way for Kings Highway and ALSO EXCEPTING therefrom the following described property, to-wit: From the SW corner of said South 1/2
of the SW 1/4 of the NW 1/4 running East 25 feet to the East right of way of Kings Highway for the Point of Beginning; thence continue East 333.4 feet; thence North 243.0
feet; thence West 333.4 feet to the East right of way of Kings Highway; thence South along the said East right of way 243 feet to the Point of Beginning, as delineated on a survey dated
March 24, 1972, prepared by A.G. Weatherington and Associates, Inc., Florida Certificate No. 1859. 

    The
North 1/2 of the NW 1/4 of the SW 1/4 Less the South 150 feet of the North 300 feet of the East 247 feet, more or less, of the West
272 feet, more or less, and LESS the West 134 feet of the East 218 feet of the South 165 feet of the North 337 feet and LESS the East 264 feet of the West 536.4 feet of the North 334.41 feet; ALSO
LESS AND EXCEPTING the right of way for Kings Highway (State Road 607), all lying and being in Section 13, Township 35 South, Range 39 East, St. Lucie County, Florida, as delineated on a survey
dated March 24, 1972, prepared by A.G. WEATHERINGTON and Associates, Inc., Florida Certificate No. 1859. 

    The
West 134 feet of the East 218 feet of the South 165 feet of the North 337 feet of the North 1/2 of the NW 1/4 of the SW 1/4 of
Section 13, Township 35 South, Range 39 East, St. Lucie County, Florida. 

Page 60 of 97 Pages

 
 
 

EXHIBIT A-3
  
    LEGAL DESCRIPTION OF THE FGC PROPERTY    
  

PARCEL 1: 

    The
South one-half of the Northwest one-quarter of the Northwest one-quarter of Section 13, Township 35 South, Range 39 East, St. Lucie
County, Florida; less and except canal right-of-way. 

PARCEL 2: 

    The
North one-half of the Southwest one-quarter of the Northwest one-quarter of Section 13, Township 35 South, Range 39 East, less
rights-of-way for roads and drainage canals. 

PARCEL 3: 

    PARCEL A:  From the NE corner of NW 1/4 of Section 13, Township 35 South, Range 39 East, run Wly
along North line of said Section, 40 feet to West R/W Copenhaver Road; thence Sly along said West R/W, 685 feet to the POINT OF BEGINNING; thence continue Sly along West R/W, 264 feet; thence Wly,
292.46 feet; thence Sly parallel with Copenhaver Road, 132 feet; thence Ely, 25 feet; thence Sly parallel with Copenhaver Road, 132 feet; thence Ely 25 feet; thence Sly parallel with Copenhaver Road,
132 feet; thence Ely, 242.38 feet to West R/W of Copenhaver Road; thence Sly along said West R/W 60 feet; thence Wly 282 feet; thence Sly parallel with Copenhaver Road, 194 feet; thence Ely 282 feet
to West R/W Copenhaver Road; thence Sly along said West R/W, 41.8 feet. M/L to a point that is 1042 feet North of, and 40 feet Wly of, SE corner of aforesaid NW 1/4; thence Wly 399
feet; thence Sly
parallel with Copenhaver Road, 888 feet; thence Ely 272.93 feet; thence Sly parallel with Copenhaver Road, 154 feet to the South line of aforesaid NW 1/4; thence Wly along South line of
aforesaid NW 1/4; 1159.29 feet; to the SW corner of SE 1/4 of aforesaid NW 1/4; thence Nly along West line of said SE 1/4 of NW
1/4, 1339.76 plus or minus feet. M/L to NW corner of said SE 1/4 of NW 1/4; thence Ely along North line of said SE 1/4 of NW
1/4; 662.91 feet. M/K to SE corner of SW 1/4 of NE 1/4 of NW 1/4; thence Nly along East line of said SW 1/4 654.95 plus
or
minus feet. M/L to a point that is 685 feet South of North line of Section; thence Ely 662.83 plus or minus feet. M/L to West R/W Copenhaver Road and the POINT OF BEGINNING. 

    PARCEL B:  Beginning at the SW corner of the NE 1/4 of Section 13, Township 35 South, Range 39
East, St. Lucie County, Florida; thence North 746 feet for Point of Beginning; thence West 439 feet; thence North 296 feet; thence East 439 feet; thence South to Point of Beginning. LESS AND EXCEPTING
right-of-way of Copenhaver Road. 

PARCEL 4: 

    The
East 1288.06 feet of the West 1313.06 feet of the South One-Half (1/2) of the Northwest One-Quarter (1/4) of the Southwest
One-Quarter (1/4) of Section 13, Township 35 South, Range 39 East, recorded in the Public Records of St. Lucie County, Florida, LESS and EXCEPTING therefrom the South
40.00 feet for Graham Road right-of-way. 

PARCEL 6: 

    Starting
at the Southwest corner of the Northwest 1/4 of Section 13, Township 35 South, Range 39 East, St. Lucie County, Florida, run East to the East
right-of-way of Kings Highway; thence run North along said East right-of-way, a distance of 143 feet to the Point of Beginning; thence continue along
said East right of way, a distance of 100 feet; thence run East, a Distance of 333.4 feet; thence run South, a distance of 100 feet; thence run West, a distance of 333.4 feet to the Point of
Beginning. 

Page 61 of 97 Pages

 

PARCEL 7: 

    From
the Southwest corner of the Northwest 1/4 of Section 13, Township 35 South, Range 39 East, St. Lucie County, Florida, run East along the
East-West one-quarter section line to the East right-of-way of Kings Highway for Point of Beginning; thence continue East along said
one-quarter section line a distance of 333.4 feet; thence run North, parallel with the West line of said Section a distance of 143
feet; thence run West, a distance of 333.4 feet to a point on the East right-of-way line of said Kings Highway which is 143 feet North of the Point of Beginning; thence run
South to the Point of Beginning. 

Page 62 of 97 Pages

  

 
 

EXHIBIT B-1
  
    MIAMI PERMITTED EXCEPTIONS    
  

	1.
	Restrictions,
conditions, reservations, easements and other matters contained on the Plat of Fronton-Heights Addition, as recorded in Plat Book 90, Page(s) 20, public records of
Miami-Dade County, Florida.

	2.
	Restrictive
Covenant running with the land recorded in O.R. Book 9900, Page 1251, of the public records of Miami-Dade County, Florida.

	3.
	Right
of Way Agreement recorded in O.R. Book 10328, Page 8 of the public records of Miami-Dade County, Florida.

	4.
	Ordinance
No. 77-90 recorded in O.R. Book 9940, Page 62 of the public records of Miami-Dade County, Florida.

	5.
	State
of Florida Department of Transportation Project Resolution recorded in O.R. Book 18345, Page 410, First Amended in O.R. Book 19022, Page 3992, Second Amended in O.R. Book
19460, Page 3953 of the public records of Miami-Dade County, Florida. 

Page 63 of 97 Pages

 
 
 

EXHIBIT B-2
  
    FORT PIERCE PERMITTED EXCEPTIONS
  and
  FGC PERMITTED EXCEPTIONS    
  

	1.
	Subject
to Right-Of-Way for Kings Highway, as now laid out and in use.

	2.
	General
Permits recorded in Deed Book 220, Page 430, Deed Book 220, Page 431; and Deed Book 220, Page 432, of the public records of St. Lucie County, Florida.

	3.
	Reservations
contained in instrument recorded in Deed Book 119, Page 321, Deed Book 131, Page 137; and Deed Book 132, Page 313, of the public records of St. Lucie County, Florida.

	4.
	Right-Of-Way
Deeds recorded in Deed Book 241, Page 283, and O.R. Book 33, Page 632, of the public records of St. Lucie County, Florida.

	5.
	Right-Of-Way
of Copenhaver Road, as now laid out and in use.

	6.
	Lease
Agreement recorded in O.R. Book 689, Page 1611, of the public records of St. Lucie County, Florida.

	7.
	Easement
to Fort Peirce Utilities Authority recorded in O.R. Book 665, Page 2456 and O.R. Book 632, Page 1888, of the public records of St. Lucie County, Florida.

	8.
	Subject
to matters as shown on survey prepared by James A. Fowler, Land Surveying Company dated October 15, 2001.

	9.
	Agreement
recorded in O.R. Book 585, Page 707, of the public records of St. Lucie County, Florida.

	10.
	Easement
to Florida Power and Light Company recorded in O.R. Book 222, Page 2330, of the public records of St. Lucie County, Florida.

	11.
	Permit
recorded in O.R. Book 204, Page 2155, of the public records of St. Lucie County, Florida.

	12.
	Reservations
contained in Warranty Deed recorded in O.R. Book 221, Page 144, of the public records of St. Lucie County, Florida. 

Page 64 of 97 Pages

 
 
 

EXHIBIT C
  
    WARRANT AGREEMENT    
  

Page 65 of 97 Pages

  

 
 

SCHEDULE 4.1(J)
  
    PARTNERSHIP OR JOINT VENTURES
  
    None    
  

Page 66 of 97 Pages

 
 
 

SCHEDULE 4.1(L)
  
    STOCK AGREEMENTS
  
    None    
  

Page 67 of 97 Pages

 
 
 

SCHEDULE 4.1(O)
  
    LITIGATION    
  

	1.
	Florida
Gaming Centers, Inc. d/b/a Miami Jai Alai and Sumner Jai Alai v. Dept. of Business and Professional Regulation, Division of Pari-Mutuel Wagering, Circuit
Court, 2nd Judicial District, Leon County, Case # 00-2415 (tax issue).

	2.
	Wheeler-Phoenix, Inc.
and WJA Realty L.P. v. Florida Gaming Centers, Inc. and Florida Gaming Corporation (non-payment of $450,000 note and 10% of FGCI
gains)

	3.
	Millennium
Partners, L.P. v. Florida Gaming Corporation (non-payment of $2,000,000 note—stock buy-back)

	4.
	Personal
injury claims brought by James Howard, Willie Baker and Louise Barrett. 

Page 68 of 97 Pages

  

 
 

SCHEDULE 4.1(AA)
  
    CONDEMNATION    
  

    Borrower has disclosed to Lender that the Miami Premises are located within the path of expansion for the Miami airport and the Miami Premises may be acquired
by the airport authority in a sale in lieu of condemnation. The Borrower is presently negotiating with the airport authority for a sale price in the range of $10 million to $12 million. 

Page 69 of 97 Pages

 
 
 

SCHEDULE 4.1(BB)
  
    PERMITS AND LICENSES    
  

	1.
	State
of Florida Pari-Mutuel Wagering License #2040 for Jai-Alai at Miami Jai-Alai dated 3/15/2001.

	2.
	State
of Florida Pari-Mutuel Wagering License #CR273/2001-2002 for various card games at Miami Jai-Alai dated 3/15/2001.

	3.
	State
of Florida Pari-Mutuel Wagering License #2080 for Jai-Alai at Sumner Jai-Alai dated 3/15/2001.

	4.
	State
of Florida Pari-Mutuel Wagering License #CR280/2001-2002 for various card games at Sumner Jai-Alai dated 3/15/2001.

	5.
	State
of Florida Pari-Mutuel Wagering License #2030 for Jai-Alai at Fort Pierce Jai-Alai dated 3/15/2001.

	6.
	State
of Florida Alcoholic Beverages/Tobacco License at Miami Jai Alai expiration date 3/31/2002.

	7.
	State
of Florida Alcoholic Beverages/Tobacco License at Ft. Pierce Jai Alai expiration date 3/31/2002.

	8.
	Various
Occupational License Tax Licenses for snack bars, eating establishments, arenas, and vending machines at Miami Jai-Alai, expiration date 9/30/2001, with Renewals
dated 9/14/2001.

	9.
	Various
Hotel and Restaurant Licenses for snack bars and eating establishments at Miami Jai-Alai, expiration date 10/01/2002.

	10.
	Various
St. Lucie County Occupational Licenses for snack bars, eating establishments, arenas, and vending machines at Ft. Pierce Jai-Alai, expiration date 9/30/2002.

	11.
	Various
Hotel and Restaurant Licenses for snack bars and eating establishments at Ft. Pierce Jai-Alai, expiration date 4/01/2001. 

Page 70 of 97 Pages

 
 
 

SCHEDULE 4.1(DD)
  
    AGREEMENTS    
  

	1.
	Consulting
and Non-Competition Agreement with Richard Donovan dated 12/31/1996 (as amended 11/24/1998).

	2.
	Consulting
and Non-Competition Agreement with Roger Wheeler dated 12/31/1996. 

Page 71 of 97 Pages

QuickLinks

LOAN AGREEMENT

EXHIBIT A-1 LEGAL DESCRIPTION OF THE MIAMI PREMISES

EXHIBIT A-2 LEGAL DESCRIPTION OF THE FORT PIERCE PREMISES

EXHIBIT A-3 LEGAL DESCRIPTION OF THE FGC PROPERTY

EXHIBIT B-1 MIAMI PERMITTED EXCEPTIONS

EXHIBIT B-2 FORT PIERCE PERMITTED EXCEPTIONS and FGC PERMITTED EXCEPTIONS

EXHIBIT C WARRANT AGREEMENT

SCHEDULE 4.1(J) PARTNERSHIP OR JOINT VENTURES None

SCHEDULE 4.1(L) STOCK AGREEMENTS None

SCHEDULE 4.1(O) LITIGATION

SCHEDULE 4.1(AA) CONDEMNATION

SCHEDULE 4.1(BB) PERMITS AND LICENSES

SCHEDULE 4.1(DD) AGREEMENTS

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