Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.1

 

 

 

 

 

 

 

 

 

GAS GATHERING AND PROCESSING AGREEMENT

by

and

between

PVR EAST TEXAS GAS PROCESSING LLC

“Gatherer"

and

GMX RESOURCES INC.

as

“Shipper"

CONTRACT NUMBER 9002-00

 

 

 

GAS GATHERING AND PROCESSING AGREEMENT

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	ARTICLE I1 COMMITMENT
	 	 	3	 
	ARTICLE I11 RESERVATIONS OF SHIPPER
	 	 	4	 
	ARTICLE IV RECEIPT AND DELIVERY POINTS
	 	 	5	 
	ARTICLE V FACILITIES
	 	 	6	 
	ARTICLE VI RIGHTS OF WAY
	 	 	9	 
	ARTICLE VII QUANTITY
	 	 	9	 
	ARTICLE VIII QUALITY
	 	 	12	 
	ARTICLE IX SERVICE FEE
	 	 	14	 
	ARTICLE X TERM
	 	 	15	 
	ARTICLE XI MEASUREMENT
	 	 	16	 
	ARTICLE XI1 STATEMENTS AND PAYMENT
	 	 	17	 
	ARTICLE XI11 FORCE MAJEURE
	 	 	18	 
	ARTICLE XIV WARRANTY OF RIGHT TO DELJVER AND REDELIVER
	 	 	19	 
	ARTICLE XV ROYALTY AND TAXES
	 	 	20	 
	ARTICLE XVI LAWS AND REGULATIONS
	 	 	21	 
	ARTICLE XVII RATIFICATION AND SELLER’S REPRESEIVTATIVE
	 	 	21	 
	ARTICLE XVIII NOTICES
	 	 	22	 
	ARTICLE XIX ASSIGNMENT
	 	 	22	 
	ARTICLE XX MISCELLANEOUS
	 	 	23	 
	SIGNATURE BLOCK
	 	 	24	 
	EXHIBIT “A”
	 	 	25	 
	EXHIBIT “A- 1
	 	 	26	 
	EXHIBIT “B”
	 	 	27	 

 

 

 

GAS GATHERING AND PROCESSING AGREEMENT

This Gas Gathering and Processing Agreement (“Agreement”) is made and entered into this
loth day of January, 2008 by and between GMX RESOURCES INC., as “Shipper” and PVR EAST TEXAS GAS
PROCESSING LLC, as “Gatherer.”

WITNESSETH

WHEREAS, Shipper owns and/or controls and has rights to deliver natural gas that will be
produced and saved from wells located on lands and leases described in the Exhibit “A”, attached
hereto and made a part hereof, and desires that Gatherer gather and process such gas upon the terms
and for the consideration herein expressed; and

WHEREAS, Gatherer and/or its affiliates own and operate a natural gas gathering system and gas
processing plant and desires to gather and process the natural gas which Shipper has available for
delivery;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the parties hereto agree as follows:

I. DEFINITIONS

For all purposes of this Agreement, the following terms and expressions whether capitalized or
not shall mean the following:

1.1 “Allocated Share of Inlet Gas” shall mean that volume of gas measured on a monthly basis
at Shipper’s Receipt Points as well as all other receipt point(s) delivering gas into the System
which volume shall be adjusted on a pro rata basis, by system and/or pipeline lateral, to the
actual total gas volume and corresponding heating values calculated at the inlet to the Plant for
the corresponding month. Shipper’s Allocated Share of Inlet Gas shall be the quantity of Gas
delivered by Shipper at the Receipt Points less System Fuel and System Losses (subject to the
limitation described in Paragraph 7.2 below).

1.2 “BTU” shall mean British Thermal Unit by which Gross Heating Value is measured and is
determined by the amount of heat required to raise the temperature of one (1) avoirdupois pound of
pure water from fifty-eight and five-tenths degrees Fahrenheit (58.5“F) to fifty-nine and
five-tenths degrees (59.5“F) under standard conditions.

1.3 “Cubic Foot of Gas” shall mean the amount of anhydrous gas required to fill a cubic foot
of space when the gas is at a base pressure of fourteen and seventy-three hundredths (14.65) psia,
at a base temperature of sixty degrees Fahrenheit (60°F) and under standard gravitational force.

 

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1.4 “Condensate” shall mean all liquid hydrocarbons, together with all other fluids (including
water) and/or solids (including sediments), collected through drips, separators and/or slug
catchers on the System and at the Plant prior to the gas processing facilities included within the
Plant.

1.5 “Day” shall mean a period of twenty-four (24) consecutive hours beginning at 9:00 a.m.
local time on any calendar day and ending at 9:00 a.m. local time on the calendar day immediately
following.

1.6
“Dedicated Gas” shall mean the gas as described and defined
in Article II.

1.7 “Downstream Pipeline” shall mean the pipeline(s) downstream of the Plant to which Gatherer
will deliver Products or Residue Gas, as applicable, at the Delivery Points.

1.8 “Fuel” shall mean Shipper’s prorata share of gas consumed as fuel in the Plant, which
consumption shall be metered by Gatherer.

1.9 “Gas” or “gas” shall mean the effluent vapor stream including all elements and compounds
contained therein as produced from oil and gas wells.

1.10 “Gross Heating Value” shall mean the number of BTUs produced by the combustion at
constant pressure of a Cubic Foot of Gas at a temperature of sixty degrees Fahrenheit (60°F), at a
constant pressure of fourteen and seventy-three hundredths (14.65) psia and adjusted as set forth
in Section 11.3.

1.11 “Losses” shall mean Shipper’s prorata share of gas lost and/or unaccounted for on or in
the Plant.

1.12 “MCF” shall mean one thousand (1,000) cubic feet.

1.13 “Month” shall mean the period beginning at 9:00 a.m. local time on the first day of a
calendar month and ending at 9:00 a.m. local time on the first day of the next succeeding calendar
month.

1.14 “MMBTU” shall mean one million (1,000,000) BTUs.

1.15 “MMCF” shall mean one million (1,000,000) cubic feet of gas.

1.16 “Plant” shall mean the gas processing facilities downstream of inlet gas compression that
are constructed, owned and operated by Gatherer to process gas hereunder, together with any
pipeline and other facilities that are constructed, owned and operated by Gatherer and/or any of
its affiliates to deliver Products from such gas processing facilities to the applicable Downstream
Pipeline at the applicable Delivery Point.

1.17 “Products” shall mean commercial ethane, propane, butanes, pentanes and hexanes,
individually or as a mixture, which are extracted from gas processed at the Plant, and delivered to
the applicable Downstream Pipeline but specifically excludes Condensate.

 

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1.18 “Psia” shall mean pounds per square inch absolute.

1.19 “Psig” shall mean pounds per square inch gauge.

1.20 “Residue Gas” shall mean that portion of Shipper’s Allocated Share of Inlet Gas remaining
after (i) processing in the Plant for the extraction of Products and (ii) the deduction of a volume
of gas for Fuel and Losses (subject to the limitation described in Paragraph 7.2 below). Residue
gas shall also include Shipper’s Allocated Share of Inlet Gas that Gatherer, from time to time may
not process due to operational or economic conditions.

1.21 Wherever used herein, “Shipper” shall mean GMX Resources, Inc.

1.22 “System” shall mean the pipelines, compressors and related facilities owned and operated
or utilized by Gatherer for the purpose of gathering gas produced by Shipper and other third
parties for delivery to the Plant.

1.23 “System Fuel” shall mean Shipper’s pro rata share of gas consumed as fuel in the
facilities utilized for the movement of Shipper’s gas on the System, which consumption shall be
metered by Gatherer.

1.24 “System Losses” shall mean Shipper’s prorata share of gas lost and unaccounted for in or
on the System.

1.25 “Year” shall mean a period of twelve (12) consecutive months.

II. COMMITMENT

2.1 Shipper hereby commits and dedicates to the performance of this Agreement for the term
hereof, all of Shipper’s interest it now owns and controls in (i) the lands described in Exhibit
“A” (the “Dedicated Lands”) and (ii) all gas, including the processing rights thereto, which is or
may be produced from wells now or hereafter located on the Dedicated Lands and attributable to all
such Shipper’s interests it now owns or controls, except such gas as is reserved by Shipper under
Article I11 hereof (the “Dedicated Gas”). Shipper represents that the interests it now owns and
controls in the Dedicated Lands are set forth on Exhibit “A-1 .” The parties understand and agree
that the Dedicated Gas may be subject to certain existing options and preferential rights in favor
of royalty interest owners or other working interest owners in the lands described on Exhibit “A”,
and Shipper is obligated to offer and make available that portion of the Dedicated Gas which is
subject to such an option or preferential right to others and that, if such other parties exercise
such right, then such gas shall not be covered by or considered Dedicated Gas hereunder from the
time of such other parties exercise of such right until such option or preferential right
terminates or expires by its own terms. Inasmuch as the description set forth on Exhibit “A-1” of
Shipper’s owned and controlled interests in the Dedicated Lands does not include Shipper’s specific
working interest in each of the Dedicated Lands, Shipper agrees that Gatherer shall have the right
to review and obtain copies of any records in either Shipper’s or Penn Virginia Oil & Gas, L.P.’s
possession pertaining to Shipper’s interests in the Dedicated Lands and/or any options or
preferential rights to which the Dedicated Gas may be subject. In the event Shipper is otherwise
dedicating gas hereunder which is owned by others, and the owners have the right to terminate
Shipper’s right to market such gas, in the event of a subsequent termination of Shipper’s right to
market such gas, the parties agree and understand that such gas shall not thereafter be covered hereby or
considered dedicated hereunder. This Agreement shall cover all renewals, extensions and
reacquisition of the interests Shipper now owns and controls in leases or other mineral rights
encompassing any of the lands described on Exhibit “A”, and rights in wells now or hereafter
located on such lands and attributable to such interests Shipper now owns and controls, for the
full term hereof and waiver or release of this covenant shall be ineffective unless expressed in
writing by Gatherer. Nothing in this Agreement shall be construed to create a minimum delivery
obligation upon Shipper. This Agreement and dedication does not include any interests which Shipper
may acquire subsequent to the date hereof, regardless of the nature or location of such
subsequently acquired interests.

 

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III. RESERVATIONS OF SHIPPER

3.1 Shipper reserves the following rights with respect to the lands and leases, and the gas
produced therefrom, dedicated hereunder:

(a) To operate the lands, leases and wells free from control by Gatherer and in such a manner
as Shipper, in Shipper’s sole discretion, may deem advisable including without limitation the right
but never the obligation to drill new wells, to conduct operations as a reasonably prudent
operator, to repair and rework old wells, renew or extend in whole or in part the leaseholds and to
abandon any well or surrender any lease in whole or in part,

(b) To use gas produced from the wells prior to delivery into the System for developing and
operating Shipper’s interests in the properties committed hereunder including fuel as needed in
compression, drilling, normal pumping, heater or treater operations and other miscellaneous uses
incidental to the operation of the lands and leases committed hereunder and to fulfill Shipper’s
obligations to its lessors,

(c) To retain all oil and liquid hydrocarbons separated from the gas by the use of separators
or drips prior to entering the System; provided, however, that Shipper shall not be permitted to
remove or recover hydrocarbons from the gas other than such as can be removed through the use of
conventional mechanical gasloil field separators or drips of the type commonly used in the
industry.

(d) To pool, combine or unitize Shipper’s lands and leases with other lands and leases in the
same field and in the event of such pooling, combining or unitizing, this Agreement shall cover and
apply to Shipper’s interest in such pool, combination or unit attributable to the leases, lands and
wells committed hereunder and the gas associated therewith.

(e) To re-inject or recycle gas from said lands, leases and wells, and to recover hydrocarbon
liquids from such gas, where, in Shipper’s sole discretion, it is reasonable or prudent to do so
for gas lift purposes.

None of the gas reserved under Paragraph 3.l(b) above, nor the liquid hydrocarbons reserved under
Paragraph 3.l(c) or (e) above shall ever be considered Dedicated Gas hereunder. In addition, any
gas reinjected or recycled under Paragraph 3.l(e) above shall not be considered Dedicated Gas
unless and until it is produced after such reinjection or recycling.

 

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IV. RECEIPT AND DELIVERY POINTS

4. The “Receipt Points” for gas to be delivered hereunder shall be at the inlet flange of
Gatherer’s meters at the locations set forth on Exhibit “B”.

4.2 Custody and control of the gas and all constituent components thereof (including the
processing rights thereto) shall pass to and vest in Gatherer at the Receipt Points.

4.3 Shipper shall deliver gas to Gatherer at the Receipt Points at a pressure sufficient to
enable it to enter the System against the working pressure therein at reasonably uniform rates of
delivery not to exceed the maximum allowable operating pressure of the System. Gatherer shall
operate and maintain, or cause to be operated and maintained, the System such that the average
operating pressure at each of the Receipt Points each Day does not exceed 500 psig (the “Maximum
Receipt Point Pressure”); provided, however, Gatherer shall endeavor to maintain a System pressure
at each of the Receipt Points not greater than 450 psig.

4.4 In the event that the average operating pressure at any Receipt Point exceeds the Maximum
Receipt Point Pressure for twenty (20) or more Days out of a thirty (30) consecutive Day period,
Shipper may give written notice of such failure to so maintain such Maximum Receipt Point Pressure
to Gatherer. Upon receipt of such notice, Gatherer shall have thirty (30) Days in which to remedy
such failure without liability. During such thirty (30) Day period, Shipper shall cooperate with
Gatherer in any remedial activity, but shall have no financial obligation regarding any such
activity. During such 30 day period, the provisions of Paragraph 7.1 shall apply, including without
limitation Shipper’s right to make other arrangements to market any gas not taken by Gatherer due
to the excessive pressure at the pertinent Receipt Point(s). Subject to Paragraph 4.5, if
applicable, in the event such failure to so maintain such Maximum Receipt Point Pressure at the
applicable Receipt Point is not remedied within such thirty (30) Day period, Shipper shall have the
right to terminate this Agreement with respect to all Dedicated Gas behind such Receipt Point(s) by
giving Gatherer written notice of such termination within thirty (30) Days after the end of such
thirty (30) Day period.

4.5 Shipper recognizes and agrees that it may be necessary from time to time for Gatherer to
expand the capacity of the System or Plant in order to maintain the Maximum Receipt Point Pressure
at the Receipt Points. In such event, Gatherer shall provide written notice to Shipper with full
particulars relating to the need for the expansion, the work to be performed, and the estimated
length of time necessary to perform the expansion project. Upon delivery of such notice to Shipper,
Gatherer shall be excused from its obligation to maintain the Maximum Receipt Point Pressure at the
affected Receipt Point(s) for such time as Gatherer may require in order to complete such expansion
project? provided however that Gatherer, or its agents, must proceed with due diligence to complete
such expansion project, which shall in no event exceed a period of one hundred twenty (120) Days.
During the period of the expansion project, not to exceed one hundred twenty (120) Days, the
provisions of Paragraph 7.1 shall apply, including without limitation Shipper’s right to make other
arrangements to market the gas not taken by Gatherer during the expansion project. Upon the
expiration of such one hundred twenty (120) Day period, regardless of whether or not the expansion
project has been completed, Gatherer’s obligation to maintain the Maximum Receipt Point Pressure,
pursuant to Paragraphs 4.3 and 4.4, shall resume and such expansion project undertaken by Gatherer
during such one hundred twenty (120) Day period shall no longer excuse Gatherer from its obligation to maintain the Maximum Receipt
Point Pressure. After the expiration of such one hundred twenty (120) day period, if Gatherer has
not remedied its failure to maintain the Maximum Receipt Point Pressure which was the subject of
Gatherer’s notice to Shipper under this Section, Shipper shall have the right to terminate this
Agreement with respect to all Dedicated Gas behind the affected Receipt Point(s) by giving Gatherer
written notice of such termination within thirty (30) Days after the end of such one hundred twenty
(120) Day period.

 

5

 

4.6 The “Delivery Points” for Products and Residue Gas to be delivered to or for the account
of Shipper hereunder shall be at the points of interconnect to be established with the Downstream
Pipelines as set forth on Exhibit “B.” Gatherer will cause Shipper’s Products and Residue Gas to be
delivered at the Delivery Points at the operating pressures of the applicable Downstream Pipelines
at such points, as such pressure may exist from time to time. The Delivery Points for Condensate
will be at the tanks in which such Condensate is collected.

V. FACILITIES

5.1 Upon complete execution of this Agreement, Shipper and Gatherer shall commence and
prosecute with due diligence the following:

(a) Shipper, subject to the terms and conditions contained in this Agreement, at its sole cost
and expense, will construct, install, maintain and operate pipelines, compression and/or other
equipment necessary to deliver all of the Dedicated Gas to Gatherer at the Receipt Points (or at
any new receipt points which may be subsequently mutually agreed upon by the parties).
Notwithstanding the foregoing, with respect to wells located within the area encompassed by the
Dedicated Lands which do not currently exist but which are drilled and completed hereafter and in
which Shipper owns an interest, if, in Shipper’s sole good faith discretion, it is not economical.
because of insufficient volume, quality or pressure, to construct, install, maintain and operate
the pipelines, compressors and/or other equipment necessary to deliver gas from any such wells to
Shipper’s or its affiliates’ then existing (i.e. existing at the time such well(s) are drilled)
facilities (whether owned in whole or part) which are at that time connected to any of the Receipt
Points for delivery thereto (i.e. such existing facilities are at that time connected to any of the
Receipt Points for delivery of Dedicated Gas from any well(s) then connected to such existing
facilities), then, in such event, Shipper shall so notify Gatherer in writing and Shipper shall
forever thereafter be relieved of any obligation to deliver such gas from such wells hereunder,
such gas from such wells shall not be considered or treated as Dedicated Gas hereunder, and Shipper
shall be entitled thereafter to sell, transport or process such gas from such wells to other
purchasers. transporters or processors where it is economical for Shipper to do so (except that
Shipper shall not deliver such gas to Shipper’s or its affiliates’ then existing gas gathering
facilities, whether owned in whole or in part, which are then connected to a Receipt Point:
provided, however, Shipper agrees with respect to any well located in the area encompassed by the
Dedicated Lands in which Shipper owns an interest and in which the operator of such well then owns
an interest and which such operator has agreed to connect and actually connects to Penn Virginia
Oil and Gas, L.P.’s, Shipper’s and/or their respective affiliates’ facilities for delivery
(subject, in the case of Shipper’s or its affiliate’s facilities, to a mutually agreeable gathering
agreement between Shipper or its affiliate and such operator, which agreement Shipper or its
affiliate shall not be obligated to enter into) to the applicable Receipt Point, that Shipper shall
not exercise its “uneconomic” rights set

 

6

 

forth in this sentence; provided further, however, in the event Shipper determines that it is
not economical, because of insufficient volume, quality or pressure, to connect and deliver gas
from such new wells to Shipper’s or its affiliates’ then existing gas gathering facilities (whether
owned in whole or in part) which are then connected to any of the Receipt Points for delivery
thereto, Gatherer shall have the option, in its sole discretion and at its sole cost and expense,
to construct, install, maintain and operate the pipelines, compressors, and/or other equipment
necessary to deliver such gas to either (i) Shipper’s or its affiliates’ then existing gas
gathering facilities (whether owned in whole or in part) which are then connected to a Receipt
Point for delivery thereto or (ii) the Receipt Points, in which case Shipper agrees to deliver such
gas to the Gatherer at the wellhead connection constructed for such purpose by Gatherer. In the
event that Gatherer exercises such right and elects to construct facilities to connect a well to
Shipper’s or its affiliates’ then existing gas gathering facilities (whether owned in whole or in
part) which are then connected to a Receipt Point for delivery thereto, Gatherer shall reimburse
Shipper for any costs to establish a tap or connection to Shipper’s facilities, costs to set a
meter if necessary, and any other applicable costs incurred by Shipper in establishing such
connection to Shipper’s facilities. In the event Gatherer intends to exercise such option, it shall
so notify Shipper in writing within thirty (30) days of Gatherer’s receipt of Shipper’s written
notice of uneconomical to connect. The foregoing and all other provisions herein notwithstanding,
in the event that Shipper has determined and notified Gatherer that it is not economical to connect
a new well to its then existing gathering facilities which are then connected to a Receipt Point
hereunder due to insufficient volume, quality or pressure, and in the event that Gatherer elects
not to exercise its above-described option to construct facilities to connect any such well to
Shipper’s or its affiliates’ then existing gathering facilities which are then connected to a
Receipt Point hereunder or directly to a Receipt Point hereunder or to establish a new Receipt
Point at such well, then, in such event, if another purchaser, transporter or processor is willing
to construct the necessary facilities to connect any such well to Shipper’s or its affiliates’ then
existing gas gathering facilities at said purchaser’s, transporter’s or processor’s expense,
Shipper shall be entitled to transport, process and/or sell the gas from any such well to other
purchasers, transporters or processors, and to transport such gas on Shipper’s or its affiliates’
gas gathering facilities in order to facilitate same, and such actions shall not constitute a
breach or violation of this Agreement, and such gas shall not be covered hereby. In the event
Shipper is not the operator of any well and/or Receipt Point from or at which gas is delivered
hereunder, Shipper hereby authorizes Gatherer to deal directly with the operator of any such well
or Receipt Point with respect to nominations, scheduling and allocations of receipts and deliveries
of gas from such well or Receipt Point and any other related operational issues, and Gatherer shall
be entitled to rely on all information provided by such operator with respect to such matters in
connection with performance under this Agreement. However, Shipper’s agreement to allow Gatherer to
rely on such information from such operator shall not be interpreted to mean that, with respect to
any subsequent dispute between such operator and Shipper (or Shipper’s affiliates) regarding
nominations, scheduling and allocations of receipts or deliveries of any such gas, that as between
such operator and Shipper (or Shipper’s affiliates) that Shipper (or Shipper’s affiliates) (i) is
in agreement with such information or (ii) is bound thereby.

(b) Gatherer and/or its affiliates, subject to the terms and conditions contained in this
Agreement, at their sole cost and expense, will acquire, construct, install, maintain and operate
the System and the Plant necessary to accept the Dedicated Gas at the Receipt Points, process such
Dedicated Gas. and deliver Products, Residue Gas and Condensate to the Delivery Points (all of the foregoing collectively referred to as the “Facilities”). If an affiliate of Gatherer owns
any of the System or Plant facilities, if necessary in order for Gatherer to cause the Dedicated
Gas, or Products attributable to the Dedicated Gas, to be moved on such affiliates’ facilities,
Shipper hereby designates and appoints Gatherer to act as Shipper’s agent with respect to the
movement of such Dedicated Gas and/or Products attributable to such Dedicated Gas on such
facilities.

 

7

 

5.2 Shipper shall install sufficient pressure regulating equipment upstream of the Receipt
Points in order to keep the pressure of the gas delivered to Gatherer from exceeding the maximum
allowable operating pressure of the System.

5.3
Gatherer shall keep the pipelines receiving Shipper’s gas relatively clear of obstructions
and may install drips, separators and slug catchers necessary to collect any fluids removed from
the System and at the Plant prior to the gas processing facilities included within the Plant.
Gatherer shall allocate Condensate collected through such drips, separators and slug catchers
proportionately to Shipper and all other persons delivering gas into the System based on the
quantity of MMBtus received from Shipper at the Receipt Points compared to the total quantity of
MMBTUs received from all persons or entities at all receipt points into the System during each
month. Shipper’s proportionate share of the cost for the disposal of any base sediment, water or
other nonhydrocarbon fluids or solids which may be contained in the Condensate will be added to the
Service Fee set forth in Section 9.1. Any shrink associated with the Condensate collected shall be
deemed to be System Fuel, except for purposes of the last sentence of Section 7.2 below.

5.4 Gatherer shall operate, or cause to be operated, the Facilities as a reasonably prudent
operator and in reasonable compliance with applicable local, state and federal laws, rules and
regulations. With respect to any wells, gathering pipelines and related facilities that produce
Dedicated Gas or move same to any Receipt Point which are operated by Shipper or an affiliate of
Shipper, Shipper shall operate same, or cause same to be operated as a reasonably prudent operator
and in compliance with all applicable local, state and federal laws, rules and regulations.

VI. RIGHTS OF WAY

6.1 To the extent authorized by law and any applicable agreements (and subject to any
restrictions or limitations contained therein, including without limitation restrictions on the
right to transport off-lease gas), Shipper hereby authorizes Gatherer and its affiliates the right
to co- use and enjoy Shipper’s easements and right-of-way, including surface locations, on and
across the lands and leases committed hereunder for the purpose of installing, using, inspecting,
repairing, operating. replacing and removing Gatherer’s and/or its affiliates pipelines, meters and
other equipment used or useful in the performance of this Agreement, all at Gatherer’s and/or its
affiliates sole cost, risk and expense. Shipper otherwise retains its easements, rights-of-way,
surface locations and leases and its right to use and enjoy same. Any property of Gatherer and/or
its affiliates placed in or upon any of such lands shall remain the personal property of Gatherer
or its affiliates, as applicable, subject to removal by them at any time for any reason within a
reasonable time after the termination of this Agreement. To the extent permitted by law and by any
applicable agreements, Gatherer and its affiliates shall fully enjoy the rights of ingress and
egress across the land and leases of Shipper for the purposes herein.

 

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VII. QUANTITY

7.1 Subject to the other provisions hereof, Shipper shall deliver, and Gatherer shall receive
and process, all of the gas which Shipper as a reasonably prudent operator can legally produce and
deliver from wells now or hereafter located on the lands dedicated hereunder. If for any reason
Gatherer is unable to take or process all of Shipper’s gas to be delivered by Shipper to Gatherer
pursuant to the preceding sentence (other than due to Shipper’s failure to comply with the
provisions of this Agreement), Gatherer shall use its best reasonable efforts to take or process
such gas of Shipper on a ratable basis with all other gas being delivered into the System or
processed in the Plant, as applicable, which is affected by the situation which resulted in
Gatherer being unable to so take or process all such gas of Shipper. In such event, Gatherer shall,
where practicable, provide Shipper ten (1 0) days advance notice so that Shipper can make other
arrangements to market the gas which Gatherer has indicated it cannot take or process. In such
event Shipper shall have the right to dispose of any gas so not taken by Gatherer subject to
Gatherer’s right to resume receipt of such gas on the first day of the month after having given
Shipper thirty (30) days prior written notice.

7.2 For all gas received at the Receipt Points hereunder during each month, Gatherer agrees to
redeliver to or for the account of Shipper (a) to the Downstream Pipeline at the applicable
Delivery Point: (i) the Products recovered from Shipper’s Allocated Share of Inlet Gas for such
month and (ii) Shipper’s Residue Gas for such month, and (b) at the Delivery Point(s) for
Condensate, Shipper’s allocated share of liquid hydrocarbons recovered from Condensate under
Section 5.3 above for such month. All other provisions herein notwithstanding, the actual
cumulative monthly volume of Fuel, System Fuel, Losses and System Losses shall never exceed three
and one-half percent (3-1/2%) of the Shipper’s total monthly MMBtus delivered at all Receipt Points.

7.3 If Gatherer in its sole good faith discretion determines, at any time and from time to
time, that Shipper’s gas delivered hereunder at any Receipt Point is, or is expected to become
uneconomic because of insufficient volume, quality or pressure or if all or any part of the
Facilities becomes uneconomic to continue to operate, maintain or repair, because of insufficient
volume, quality or pressure then Gatherer shall have the right upon thirty (30) days prior written
notice, to refuse or cease taking Shipper’s gas from such Receipt Point without liability so long
as such condition exists; provided however, during such thirty (30) day period, Gatherer shall
continue to receive and process Shipper’s gas and the parties shall attempt to negotiate an
amendment to this Agreement which would remove such uneconomic situation. If during such thirty
(30) day period the parties i) mutually agree on such an amendment, Gatherer shall not refuse or
cease taking Shipper’s gas from such Receipt Point at the end of such thirty (30) day period, or
ii) fail to agree on such an amendment,-then either party may terminate this agreement with respect
to the pertinent Receipt Point(s) by providing thirty (30) days advance written notice to the other
party, which termination notice must be given, if at all, within thirty (30) days after the end of
the thirty (30) day negotiation period. In the event of such termination, until the expiration of
the thirty (30) day termination notice period, both parties shall remain obligated to perform
hereunder with respect to such Receipt Point(s).

 

9

 

7.4 Shipper shall provide, not later than 12:OO noon, three (3) business days prior to the
nomination deadline for the applicable Month of gas deliveries hereunder of the Downstream
Pipeline which is to receive the Residue Gas at the Delivery Point, its nomination of the
quantities of Gas to be received by Gatherer at each Receipt Point and the Residue Gas and the
Products attributable to such gas to be delivered at the applicable Delivery Point during such
Month. Gatherer shall provide confirmation of such nomination, or a revised nomination (if
Shipper’s nomination is not accepted due to operational reasons on the Facilities or is not
confirmed by the Downstream Pipeline at the applicable Delivery Point) no later than two (2)
business Days prior to the end of the Month. Shipper’s failure to timely nominate shall be deemed a
zero (0) nomination until such time as an acceptable nomination is subsequently submitted and
confirmed. Shipper shall be entitled to submit nominations after the deadline described above, in
which event, the zero (0) nomination shall only apply for the number of applicable days from the
deadline described above until the subsequent nomination is submitted and confirmed. Shipper may
also, during any Month, adjust its nomination prospectively for the remainder of that Month by
providing Gatherer not less than twenty-four (24) hours notice prior to the nomination deadline of
the applicable Downstream Pipeline for making such changes. Shipper recognizes and agrees that
Gatherer shall have the right to require Shipper to adjust its nominations to the applicable
Downstream Pipeline based upon the available capacity and operating conditions of the Facilities
and of the Downstream Pipeline’(s) pipeline system and on the actual quantities of Gas being
delivered by Shipper at the Receipt Points. Gatherer has no obligation to accommodate any
imbalances caused by Shipper’s inability or failure to match nominations with actual performance.

7.5 When required by Gatherer, Shipper shall advise Gatherer each day, or at such other
intervals as may be required by Gatherer, of the MMBTUs of Gas scheduled to be tendered at each
Receipt Point and Shipper’s Products and Residue Gas to be taken at the applicable Delivery Point
on the following operating day or during the next interval. Gatherer may further require that
Shipper confirm the delivery of such scheduled quantity of Gas, Products or Residue Gas, as
applicable, on said following day or during the next interval.

7.6 Shipper shall endeavor to achieve a daily operational gas and Products balance. Shipper
shall, upon request, furnish such data as Gatherer deems necessary to maintain control of the
Facilities including, but not limited to, estimated BTU content of the gas received by Gatherer at
each of the Receipt Points. Gatherer shall not be required to (i) deliver more or less Products or
Residue Gas for Shipper’s account at the applicable Delivery Point than the quantities of Products
or Residue Gas, as applicable, properly nominated by Shipper at the applicable Delivery Point or
the quantities of Products or Residue Gas, as applicable, which are attributable to the quantities
of gas properly nominated and delivered by Shipper hereunder at the Receipt Points, or (ii) receive
more or less gas at the Receipt Points than the quantities of gas properly nominated by Shipper at
such Receipt Points or the quantities of gas which would result in the quantities of Products and
Residue Gas properly nominated by Shipper at the applicable Delivery Point(s).

7.7 Shipper shall be responsible for any imbalance or other penalties assessed against either
party by a third party transporter as a result of Shipper’s improper nomination or failure to
comply with Gatherer’s requests under Sections 7.4, 7.5 and 7.6 or imposed by Downstream
Pipeline(s) at the Delivery Point(s) as a result of the failure of Shipper or Shipper’s market to
accept and receive at the applicable Delivery Point the quantities of Residue Gas and Products
properly nominated and scheduled hereunder. Subject to Sections 7.4, 7.5 and 7.6 above, Gatherer
shall be responsible for any imbalance or other penalties assessed against either party by a third
party transporter, as a result of Gatherer’s improper failure to receive properly nominated volumes at the Receipt Points or to deliver quantities of Residue Gas and Products at the applicable
Delivery Point properly nominated and scheduled by Shipper hereunder.

 

10

 

7.8 If, from time to time, in Shipper’s sole good faith discretion, it is not economic to
process theDedicated Gas then, in such event, Shipper shall have the right to notify Gatherer, by
written notice given at least ten (10) days prior to the succeeding month, that Shipper does not
desire to have the Dedicated Gas processed, in which case, commencing in the succeeding month after
notice is given and continuing thereafter until the next succeeding month after at least ten days
advance written notice is given by Shipper revoking such request, Gatherer shall to the extent
operationally feasible by-pass the Plant processing with respect to the Dedicated Gas, and
redeliver to the residue gas Delivery Point for Shipper’s account a MMBtu volume of gas equal to
Shipper’s MMBtu volume delivered at all Receipt Points for the month less Shipper’s System Fuel and
System Losses; provided, however, Gatherer shall not be required to so by-pass the Plant processing
with respect to the Dedicated Gas if such Dedicated Gas requires processing in order to meet the
minimum required quality specifications of the Downstream Pipeline into which all or some of the
gas is delivered. During any such period of bypassing of the Plant, Shipper shall remain obligated
to pay Gatherer the Service Fee described in Paragraph 9.1.

7.9 In the processing of gas in the Plant, Gatherer agrees that any decision from time to time
to accept or reject ethane shall be based on Gatherer’s good faith determination, made in
consultation with Shipper, that it is in the economic interest of all shippers whose gas is being
processed in the Plant to accept or reject ethane, as applicable.

7.10 If Gatherer is unable or refuses for any reason, including Force Majeure, to receive and
process at least seventy-five percent (75%) of Shipper’s available Dedicated Gas which Shipper is
ready, willing and able to deliver at a Receipt Point for a period of ninety (90) consecutive Days
then, in such event, Shipper shall have the right, at its sole discretion and upon whatever terms
Shipper deems acceptable, and free of any further obligations hereunder, to dispose of any gas from
any such Receipt Point so not taken by Gatherer; provided, however, Shipper must exercise such
right, if at all, within thirty (30) days following the end of such ninety (90) consecutive day
period, and if Shipper so exercises such right, then with respect to any gas for which Shipper so
exercises such right, neither Shipper nor Gatherer shall thereafter have any obligation to deliver,
receive, gather and/or process such gas. For purposes of the foregoing, any period in which
Gatherer is unable or refuses to receive and process Shipper’s available Dedicated Gas at a Receipt
Point due to (i) Shipper’s breach of any of its obligations under this Agreement, (ii) an expansion
of the System or the Plant under Section 4.5, or (iii) such gas failing to meet the requirements of
Section 8.1, shall not be counted in determining whether Shipper may exercise the right set forth
above in this Section 7.10

VIII. QUALITY

8.1 The gas delivered at the Receipt Points shall be of merchantable quality and commercially
free of gum, gum-forming constituents, hazardous substances, bacteria, other objectionable liquids,
solids or gas components and other solid or liquid matter that may become separated from the gas
during transportation thereof or cause interference with the proper and safe operation of the
pipelines, meters, regulators or other appliances through which it may flow and shall conform at
all times with the following specifications:

 

11

 

	 	 	 
	(a) Dust, rust and other solids
	 	None
	 
	 	 
	(b) Free liquids

	 	None
	 
	 	 
	(c) Oxygen

	 	Not more than two hundredths of one percent (0.02%) by volume
	 
	 	 
	(d) Carbon Dioxide

	 	Not more than two percent (2%) by volume
	 
	 	 
	(e) Total Inerts

	 	Not more than four percent (4%) by volume
	 
	 	 
	(f) Hydrogen Sulfide

	 	Not more than one-fourth grain per one hundred cubic feet (.25 grain/ccf)
	 
	 	 
	(g) Total Sulfur

	 	Not more than twenty grains per one hundred cubic feet (20 grains/ccf)
	 
	 	 
	(h) Temperature

	 	Not less than forty degree Fahrenheit (40°F) nor more than one hundred twenty degrees Fahrenheit (120°F)
	 
	 	 
	(i) Heating Value

	 	Not less than one thousand BTU per standard cubic foot (1,000 BTU/scf)
	 
	 	 
	(j) Water content

	 	Not more than seven (7) pounds of water vapor per million cubic feet of gas

In addition, the gas shall conform to the then current quality specifications of the Downstream
Pipeline(s) into which all or some of the gas is delivered; provided, however, the gas shall not be
required to conform to the hydrocarbon dewpoint specifications of such Downstream Pipeline(s), but
rather Gatherer will process, treat or otherwise blend such gas so that Shipper’s Residue Gas meets
such hydrocarbon dewpoint specifications of such Downstream Pipeline(s).

8.2 The determination as to conformity with the above specifications shall be made by Gatherer
in accordance with generally accepted industry practice. If the gas fails to meet the quality
specification set out above, Gatherer may at its option and exercisable from time to time, curtail
Shipper’s gas in whole or in part without liability until the gas meets said specifications.
Gatherer will notify Shipper in writing of the gas so affected. Shipper shall have the right to
treat the gas to conform it to the above specifications. If Shipper does not elect to treat the
gas, then Gatherer may accept gas tendered by Shipper and charge Shipper the actual cost of
treating the gas or any charges incurred by Gatherer for the treating or acceptance of
nonconforming gas; provided, however, in the event the fees or charges assessed by Gatherer for
treating or accepting non-conforming gas exceeds the Maximum Treating Fee (as hereafter defined)
for each MNIBtu received at the applicable Receipt Point to which such non-conforming gas is
delivered, Shipper shall have the right, while such fees are being charged, to have such
nonconforming gas released from this Agreement upon thirty (30) days prior written notice to
Gatherer. For purposes of this Section 8.2, the Maximum Treating Fee shall be five cents ($0.05)
per MMBtu for each of the first five (5) years of this Agreement. Each year thereafter, the five (5) cents per MMBtu shall be
escalated 5% per year, e.g. by $.0025 in year six (6), to determine the Maximum Treating Fee for
each succeeding year.

 

12

 

8.3 The receipt by Gatherer of gas that fails to meet any one of the above quality
specifications shall not be held to be a waiver of Gatherer’s right to refuse to accept future
delivery of such gas.

IX. SERVICE FEE

9. Service Fee -Gatherer shall charge and Shipper shall pay a service fee of thirty cents
($0.30) on each MMBtu of gas delivered hereunder at the Receipt Points (the “Service Fee”). This
Service Fee shall be increased annually by one cent ($0.01) per MMBtu beginning on the first day of
the month following the first anniversary of initial deliveries of gas hereunder and on the first
day of such month each year thereafter. With the exception of the charges described in Paragraphs
5.3, and 8.2 and 9.2, this Service Fee represents the entire amounts to be paid by Shipper to
Gatherer for all services provided by Gatherer under this Agreement, including without limitation
all amounts to be paid for receiving, gathering, processing and redelivering the Dedicated Gas. As
such, subject to the other provisions of this Agreement, Gatherer shall be responsible, at its sole
cost and expense, for all maintenance, repair, materials, supplies, electrical power, technical
supervision, overhead and operating personnel required to provide such services.

9.2 Gatherer may increase the Service Fee as necessary to recover the cost of any new or
increased (i.e. after the date of this Agreement) tax or similar assessment or charge imposed by a
governing authority (a “New Tax”) relating to the handling, gathering or processing of Shipper’s
gas and/or the delivery of Shipper’s Products, Residue Gas or liquid hydrocarbons recovered from
Shipper’s allocated share of Condensate, to the Delivery Points (which would include Shipper’s
prorata share of a governing authority’s new or increased tax or similar assessment based on total
quantities of gas moving through the Plant and/or the System), other than ad valorem taxes and
taxes based on Gatherer’s income or right to do business. Gatherer shall provide Shipper at least
ninety (90) days prior written notice of any such increase in the Service Fee to recover any such
New Tax. In the event such increase in the Service Fee to recover any such New Tax is unacceptable
to Shipper, Shipper shall have the right to terminate this Agreement at any time within such ninety
(90) day period by prior written notice to Gatherer. If Shipper fails to so terminate this
Agreement during such ninety (90) day period, Shipper shall be deemed to have accepted such
increased Service Fee. The foregoing process shall be repeated each time Gatherer may exercise its
right under this Section 9.2 to increase the Service Fee to recover any New Tax.

X. TERM

10.1 This Agreement shall be effective as of the date first written above and shall continue
and remain in full force and effect for a “Primary Term” ending on the tenth (loth) anniversary of
the commencement of initial deliveries and receipts of gas hereunder (i.e. after the completion of
the Facilities as described in Section 10.2 below) and continuing year to year thereafter provided
that either party shall have the right to terminate this Agreement at the end of the Primary Term
or any anniversary thereafter by giving the other party ninety (90) days prior written notice;
provided, however, the foregoing notwithstanding Shipper shall have the right to extend the Primary Term of this Agreement by an additional five (5) years by providing Gatherer prior
written notice of its election to so extend the Primary Term by an additional five (5) years at
least one hundred twenty (120) days prior to the end of the original Primary Term.

 

13

 

10.2 Notwithstanding the fact that the effective date is the date first written above in this
Agreement, deliveries and receipts of gas hereunder shall not commence until the completion of the
installation of the Facilities (as defined in Section 5.1). If for any reason, including Force
Majeure, Gatherer is unable to begin receipt and processing of Shipper’s Dedicated Gas by April 1,
2008, then Shipper may, at its sole discretion terminate this Agreement by giving written notice to
Gatherer on or before April 1, 2008; provided, however, if by April 1, 2008 Gatherer has
constructed the Gathering System and is able to receive Shipper’s Dedicated Gas into the Gathering
System but the Plant is not yet complete and operational, then Gatherer shall have the right to
prevent termination of this Agreement by notifying Shipper within fifteen (15) days of Gatherer’s
receipt of such termination notice, that it agrees to receive Shipper’s Dedicated Gas hereunder and
to deliver Residue Gas and Condensate to Shipper hereunder as if Shipper’s Dedicated Gas had been
processed hereunder, and it further agrees to keep Shipper economically neutral as if the Plant
were complete and processing Shipper’s Dedicated Gas (by either (i) paying Shipper each month an
amount to compensate Shipper for any additional amounts it would have realized by having its
Dedicated Gas processed or (ii) delivering each month a quantity of Products (equal to that
quantity of Products which would have been recovered from Shipper’s Allocated Share of Inlet Gas
had Gatherer processed Shipper’s Dedicated Gas) for Shipper’s account at a delivery point on the
Downstream Pipeline (with such delivery point to be at a location at which the cost for
transportation of such Products on the Downstream Pipeline would not exceed the cost for
transportation if such Products had been delivered to the Products Delivery Point under this
Agreement). If Gatherer so notifies Shipper of the foregoing within such fifteen (15) day period,
then this Agreement shall not terminate and, until the Plant is complete and commences processing
Shipper’s Dedicated Gas and delivering Shippers’ Products attributable thereto to the Downstream
Pipeline at the Delivery Point, the Agreement shall be deemed modified to conform to the provisions
of the preceding sentence. If, however, the Plant is not complete and operational by October 1,
2008, Shipper shall have the right to terminate this Agreement at any time within thirty (30) days
following October 1, 2008 by giving prior written notice to Gatherer of such termination. .

XI. MEASUREMENT

11.1 Gas shall be measured at the Receipt Points by orifice meters installed, maintained and
operated by Gatherer or its designee and computations made in accordance with accepted industry
practice. Gatherer will install, or cause to be installed, electronic flow recording and computing
devices and volume computations shall be made as accurately as possible and within the accuracy
prescribed by the manufacturer of the recording and computing equipment used.

11.2 The unit of volume for purposes of measurement shall be one (1) cubic foot of gas at a
temperature of sixty degrees Fahrenheit (60° F) and at a pressure base of fourteen and sixty-five
one hundredths (14.65) psia. Corrections shall be made for deviations from Boyle’s Law and the
Ideal Gas Laws.

 

14

 

11.3 Temperature of the gas at the Receipt Points shall be determined by a recording
thermometer or in the absence of such working device the temperature of the gas shall be assumed to
be sixty degrees Fahrenheit (60°F). Specific Gravity of the gas at the Receipt Points shall be
determined by taking samples of the gas at such times as determined by Gatherer but at least
quarterly. The atmospheric pressure at the Receipt Points shall be the atmospheric pressure
determined and used by the Downstream Pipeline(s). Gross Heating Value of the gas at the Receipt
Points shall be determine by compositional analysis of samples of the gas taken at the Receipt
Point at least quarterly or at more frequent times as may be determined by Gatherer. The Gross
Heating Value shall be adjusted for compressibility and the actual water vapor content of the gas
at actual delivery conditions. In determining Gross Heating Value, no heating value will be
credited for Btus in H2S or other non-hydrocarbon components.

11.4 Shipper may install, maintain and operate, at its own expense, pressure regulators and
check measuring equipment at the Receipt Points, provided that such equipment shall not interfere
with the operation of Gatherer’s or its designee’s equipment.

11.5 The accuracy of Gatherer’s or its designee’s measuring equipment at the Receipt Points
shall be verified by Gatherer or its designee at reasonable intervals as determined by Gatherer but
at least quarterly. Upon request by Shipper, notice of the date and time of the testing of such
equipment or for the quality of the gas shall be given by Gatherer to Shipper sufficiently in
advance to permit convenient arrangement for Shipper’s representative to be present. If after
proper notice, Shipper fails to have a representative present, the results of the test shall
nevertheless be considered accurate. All tests shall be made at Gatherer’s expense, except that
Shipper shall bear the expense of tests made at its request if any inaccuracy is found to be two
percent (2%) or less.

11.6 If at any time any measuring or testing equipment at the Receipt Points is found to be
out of service, or registering inaccurately in any percentage, it shall be adjusted at once to read
accurately within the limits prescribed by the manufacturer. If such equipment is out of service,
or inaccurate by an amount exceeding two percent (2%) at a reading corresponding to the average
rate of flow for the period since the last preceding test, then any previous recordings of such
equipment shall be corrected to zero error for any period that is definitely known or agreed upon.
The quantity of gas delivered at the applicable Receipt Point during such period shall be
determined by the first of the following methods which is available:

(a) using the data recorded by any check-measuring equipment if installed and accurately
registering;

(b) by correcting the error if the percentage of error is ascertainable by calibration, test,
or mathematical calculation, or if neither such method is feasible;

(c) by estimating the quantity, or quality, delivered, based upon deliveries under similar
conditions during a period when the equipment was registering accurately.

No corrections shall be made for recorded inaccuracies of two percent (2%) or less.

11.7 Gatherer and Shipper shall have the right to inspect equipment installed or furnished by
the other and the charts and other measurement or testing data of the other at all times during regular business hours but the reading, calibration and adjustment of such equipment shall be
done only by the party with the responsibility for operating such equipment. Gatherer shall
preserve all test data, charts and other similar records for a period of at least two (2) years.

 

15

 

11.8 All measurements of Products and residue gas at the Delivery Points shall be determined
by the applicable Downstream Pipeline at the applicable Delivery Point, in coordination with and
subject to the agreement of Gatherer. Gatherer agrees to install, maintain and operate. or cause to
be installed, maintained and operated, check measurement equipment, at the outlet of Gatherer’s gas
processing facilities which will process the gas delivered hereunder, to measure the Products and
residue gas delivered from such facilities.

XII. STATEMENTS AND PAYMENT

12.1 Gatherer shall render to Shipper on or before the twentieth (20th) day of each month a
statement showing the quantity of gas delivered by Shipper at the Receipt Points during the
preceding month, Shipper’s Residue Gas and the Products recovered from Shipper’s Allocated Share of
Inlet Gas, Shipper’s allocated share of Condensate, in each case attributable to Shipper’s gas so
delivered hereunder, System Fuel and the Fuel and all amounts owed by Shipper to Gatherer
hereunder. In addition, if requested by Shipper, Gatherer agrees to provide Shipper such other
information that Shipper may reasonably request and which Gatherer possesses which Shipper needs in
order to satisfy any reporting requirements to its royalty owners and/or non-operating working
interest owners. Shipper shall make payment by wire transfer to an account designated by Gatherer
from time to time of all amounts due as reflected in each such statement within twenty (20) days of
Shipper’s receipt of such statement. If Shipper fails to pay the amounts so due by such date,
interest shall accrue from such date until the date of payment at the prime rate published in the
Wall Street Journal plus 2% per annum. In addition, if Shipper fails to pay the amounts so due by
such date and Gatherer provides written notice to Shipper of such failure to pay the amounts so due
by such date, and Shipper fails to pay such amounts within ten (10) days of Gatherer giving such
notice to Shipper, Gatherer shall have the right to suspend performance under this Agreement until
Shipper pays such amounts, together with all applicable interest.

12.2 Each party shall have the right at any and all reasonable times to examine the accounting
records and other documents maintained by the other party to the extent necessary to verify the
accuracy of any statement, payment, charge. computation or demand made under or pursuant to this
Agreement. In the event an error is discovered in the amount paid or in any other statement, such
error shall be adjusted within thirty (30) days of the determination thereof. All statements and
payments made hereunder shall be deemed to be correct and final twenty-four (24) months after such
statement has been rendered or payment has been made and no claim for any adjustment shall be
allowed unless written demand has been made within twenty-four (24) months from the date such
statement was rendered or such payment was made.

12.3 If gas, other than Dedicated Gas is being delivered at any Receipt Point, Shipper shall
be responsible for providing to Gatherer proper allocations of the Dedicated Gas and the other gas
being delivered at such Receipt Point. Such allocations shall be provided to Gatherer in a timely
manner which affords Gatherer reasonable time to (i) furnish its monthly statements described
above, and (ii) confirm and/or verify nominations of gas to be delivered into Gatherer’s System and nominations of Products and Residue Gas to be received by the Downstream Pipelines at the
Delivery Points.

 

16

 

XIII. FORCE MAJEURE

13.1 If either party is prevented, in whole or in part, to perform or comply with any
obligation under this Agreement by reason of Force Majeure (as defined below), such obligation
shall be suspended for the whole period of such inability; provided however, no obligation to make
payments due pursuant to this Agreement shall be suspended. The cause of suspension (other than
strikes or lockouts) shall be remedied with all commercially reasonable dispatch. The affected
party shall give notice and full particulars of such Force Majeure event causing a suspension of
obligations hereunder in writing by mail or facsimile transmission to the other party as soon as
practicable after the occurrence of such event, and shall give notice in writing in the same manner
when such Force Majeure event has been remedied. If Gatherer curtails receipts of gas hereunder due
to claimed Force Majeure, to the extent possible, Gatherer agrees to curtail ratably between all
shippers that deliver gas into the System and Plant affected by such Force Majeure.

13.2 The term “Force Majeure” as employed herein shall mean acts of God, acts of federal,
state or local government or any agencies thereof; compliance with rules, regulations, permits or
orders of any governmental authority or any office, department, agency, or instrumentality thereof;
strikes, lockouts or other industrial disturbances; acts of public enemy, wars, blockages,
insurrections, riots or epidemics; landslides, lightning, earthquakes, fires, storms, floods or
washouts; arrests and restraint of people; civil disturbances; explosions, leakage, breakage, or
accident to equipment or pipes; freezing of wells or pipes; weather-related shutdowns, inability to
secure rights-of-way; inability to timely obtain equipment, supplies, materials, permits or labor;
failures or delays in transportation; receipt of non-specification or non-merchantable gas; and any
other causes, whether of the kind herein enumerated or otherwise, not within the reasonable control
of the part claiming suspension, which, by the exercise of due diligence, such party shall not have
been able to avoid. The settlement of strikes or lockouts shall be entirely within the discretion
of the party having the difficulty. The requirement that any Force Majeure shall be remedied with
all commercially reasonable dispatch shall not require the settlement of strikes or lockouts by
acceding to the demands of the opposing party, when such is deemed inadvisable by the party
involved.

XIV. WARRANTY OF RIGHT TO DELIVER AND REDELIVER

14.1 Shipper warrants for itself, its heirs, successors and assigns that it has good title to
the gas delivered hereunder (including all hydrocarbons contained therein) free and clear of any
and all liens, encumbrances and claims whatsoever and that Shipper has the right and lawful
authority to deliver same to Gatherer for gathering and processing. Shipper agrees to defend,
indemnify and save Gatherer harmless from any and all suits, claims, liens and encumbrances of
whatsoever nature relating to any breach or alleged breach of such warranty. If Shipper’s title is
challenged by a third party, then Gatherer may request and Shipper shall furnish Gatherer title
information satisfactory to-Gatherer to confirm Shipper’s ownership of such disputed gas and the
accuracy of such warranty. Until any such information is furnished, or in the event the disputed
interest becomes involved in litigation, Gatherer shall have the right to suspend receipts of the
gas associated with the disputed interest (but not as to any interests which are not in dispute)
without liability until the third party claim or litigation is resolved or until Shipper furnishes
a bond conditioned to hold Gatherer harmless with surety acceptable to Gatherer. Gatherer agrees
that, in the event of a third party claim or litigation as above-described, Shipper shall have the
right to elect to suspend deliveries of any gas associated with the disputed interest, in which
case such suspension shall not be considered a breach of Shipper’s obligations hereunder; provided,
however, in the event Shipper so elects to suspend deliveries of gas associated with the disputed
interest, such gas shall not be delivered to any other person or entity.

 

17

 

14.2 Subject to the accuracy of Shipper’s warranty under Section 14.1, Gatherer warrants for
itself, its heirs, successors and assigns that the Products and Shipper’s Residue Gas delivered to
or for the account of Shipper to the Downstream Pipelines at the Delivery Points, and the liquid
hydrocarbons recovered from Shipper’s allocated share of Condensate will be free and clear of any
and all liens, encumbrances and claims whatsoever created by, through or under Gatherer. Gatherer
agrees to defend, indemnify and save Shipper harmless from any and all suits, claims, liens and
encumbrances of whatsoever nature relating to any breach or alleged breach of such warranty.

14.3 As between the parties hereto, Shipper shall be in exclusive control and possession of
the gas until it has been delivered to Gatherer at the Receipt Points after which Gatherer shall be
deemed to be in exclusive control and possession until Shipper’s Products, Residue Gas and liquid
hydrocarbons from Shipper’s allocated share of Condensate, as applicable, are delivered at the
Delivery Points to or for the account of Shipper, at which time Shipper shall be in exclusive
control and possession of such Products, Residue Gas and liquid hydrocarbons. Gatherer agrees to
indemnify and hold Shipper harmless against any and all claims, damages, liability, costs or
expenses (including without limitation attorneys fees and court costs) due to injury or damage
occurring to persons or property caused by the gas, Products, Residue Gas or any other hydrocarbons
associated with the Dedicated Gas while such gaseous and/or liquid hydrocarbons are in Gatherer’s
exclusive control and possession, unless any of the foregoing are due to the acts or omissions of
Shipper. Shipper agrees to similarly indemnify and hold Gatherer harmless against any and all
claims, damages, liability, costs or expenses (including without limitation, attorneys fees and
court costs) due to injury or damage occurring to persons or property caused by the gas, Products,
Residue Gas or any other hydrocarbons associated with the Dedicated Gas while such gaseous andlor
liquid hydrocarbons are in Shipper’s exclusive control and possession, unless any of the foregoing
are due to the acts or omissions of Gatherer.

14.4 In the event of breach of this Agreement the parties agree that neither party will seek
or be entitled to recover punitive or exemplary damages against the other.

14.5 Each party hereto represents and warrants to the other party that all requisite corporate
authorities for it to enter into this Agreement and to perform its obligations hereunder have been
properly obtained, that this Agreement has been duly executed and delivered by an officer with
proper authority to bind such party, and that the Agreement constitutes a valid and binding
obligation of such party, and no consent or approval of any third party is required to be obtained
by such party in order to make this Agreement fully effective and binding upon such party.

 

18

 

14.6 Gatherer represents and warrants that all taxes, license fees or other charges on or
relating to the Facilities and/or the operation thereof have been or will be paid when due, unless
any such taxes, license fees or charges are being contested in good faith. Shipper represents and
warrants that all taxes, license fees or other charges on or relating to Shipper’s interests in the
wells, pipelines and other appurtenant facilities used to produce, move and deliver the Dedicated
Gas to Gatherer hereunder and/or the operation thereof have been or will be paid when due, unless
any such taxes, license fees or charges are being contested in good faith.

XV. ROYALTY AND TAXES

15.1 Shipper shall be responsible for making all payments accruing from the production and/or
delivery of gas hereunder (including, without limitation, on the Residue Gas and Shipper’s
allocated share of Products and liquid hydrocarbons recovered from Condensate) to the owners of all
royalties, overriding royalties, bonus payments and production payments as well as any and all
taxes that may be levied or assessed against such production and/or delivery of gas hereunder and
shall hold Gatherer harmless therefrom; provided however, if Gatherer is responsible under the law
to report and pay any such taxes on behalf of Shipper, Gatherer shall do so and Shipper shall
promptly reimburse Gatherer for same and shall furnish Gatherer on a timely basis all information
necessary to timely and accurately report and pay such taxes and shall hold Gatherer harmless from
all interest and penalties that may be levied or assessed due to late or inaccurate reporting and
payment that results from Shipper’s failure to provide any such necessary information.

XVI. LAWS AND REGULATIONS

16.1 This Agreement and all operations to be had hereunder or in connection herewith are and
shall be subject to all valid and applicable state and federal laws, orders, directives, statutes,
rules and regulations of any duly constituted governmental authority now existing or hereafter
promulgated having any jurisdiction over the production, gathering, transportation, processing
and/or handling of Dedicated Gas, Products, Residue Gas or Condensate. The parties agree that this
Agreement shall be governed by and construed in accordance with the laws of the State of Texas,
excluding any conflicts of law principles which would apply the laws of another jurisdiction.

16.2 In the event any provision of this Agreement is ruled invalid or unenforceable by a court
of competent jurisdiction or by operation of law, rule or regulation, the remaining provisions of
this Agreement shall otherwise remain in full force and effect.

XVII. RATIFICATION AND SHIPPER’S REPRESENTATIVE

17.1 In those situations where Shipper is the operator of a well dedicated hereunder and
Shipper is delivering gas therefrom which is owned by a person or entity other than Shipper, upon
written request from Gatherer (and not otherwise), Shipper agrees to attempt to obtain from such
other “Owners”, ratifications of this Agreement on a form acceptable to Gatherer and in a timely
manner. Each Owner so ratifying this Agreement hereby designates the Shipper specified in Article
XVIII Notices, herein as their Shipper’s Representative. If despite Shipper’s good faith efforts it
is unable to obtain such a ratification so requested by Gatherer, then Shipper shall attempt to
obtain an agency letter from such “Owner” authorizing Shipper to deliver such Owner’s gas under
this Agreement for the remaining term hereof, and designating Shipper as its “Shipper’s Representative.” If Shipper is unable to obtain a ratification or agency letter from any such
Owner, then Shipper shall cease delivering gas attributable to such Owner’s interest, and such gas
shall not thereafter be considered as Dedicated Gas hereunder or otherwise be subject to the terms
and conditions hereof.

 

19

 

17.2 Upon the signing of a ratification agreement or agency letter described in Paragraph 17.1
by any other “Owners”, Gatherer shall be fully protected, indemnified and held harmless by all such
“Owners” in acting in reliance upon any and all acts and things done or performed under this
Agreement by Shipper’s Representative as fully and effectively as though each Owner had done the
same including the execution of any amendment or letter agreement affecting this Agreement.

XVIII. NOTICES

18.1 Any notice, request, demand or statement provided for in this Agreement shall be in
writing and shall be deemed given (i) when delivered, in the case of personal delivery, (ii) on the
date on which it is deposited in a regularly maintained receptacle for the deposit of United States
mail with proper address and postage affixed whether as regular, registered or certified mail or
(iii) on the date received by addressee if received by 5:00 p.m. local time or otherwise the next
business day, in the case of facsimile transmission. The addresses and facsimile numbers of the
parties are as follows:

	 	 	 
	Shipper:

	 	Gatherer:
	Statements and Notices

	 	Notices
	GMX Resources Inc.

	 	PVR East Texas Gas Processing LLC
	Attn: Keith Leffel

	 	Contract Administration
	9400 N. Broadway, Suite 600

	 	8080 Central Expressway, Suite 900
	Oklahoma City, Oklahoma 73114

	 	Dallas, Texas 75206
	Phone: 405-600-0711, Ext. 329

	 	Phone: 2 14-750-9223
	Fax: 405-600-0600

	 	Fax: 214-750-7120
	Tax IDNo.: 731534474

	 	Tax ID No.: 23-3087517
	 
	 	 
	 

	 	Payments (by Wire)
	 

	 	ABA # 061 000 104
	 

	 	Acct #100000 1625036
	 

	 	(Account Name: PVR Midstream LLC)

Either party may from time to time designate as the address under this Agreement any other
address of its choice by giving written notice to the other party.

XIX. ASSIGNMENT

19.1 This Agreement shall extend to and be binding upon the parties hereto. their heirs,
administrators, successors and assigns but no transfer of or succession to any interest of either
party hereunder, wholly or in part, shall affect or bind the other party until it shall have been
furnished with written notice and a true copy of such assignment evidencing that the claimant is
legally entitled to such interest. It is further agreed, however, that nothing herein contained
shall in any way prevent either party from pledging or mortgaging all or any part of such party’s
property as security under any mortgage, deed of trust or other similar lien or from pledging this
Agreement or any benefits accruing hereunder, without the assumption of the obligations hereunder
by the mortgagee, pledgee or other grantee under such a document. No assignment or transfer of
Shipper’s interest in the leases, lands, wells and/or gas subject to this Agreement shall be
effective unless said assignment or transfer is made subject to the terms of this Agreement.

 

20

 

XX. MISCELLANEOUS

20.1 The waiver by either party of any default or breach of any provision hereof by the other
party shall not be deemed to be a waiver of any other existing or future default or breach, whether
of like or different nature.

20.2 This Agreement constitutes the entire understanding and agreement between the parties and
supersedes all other oral or written discussions or negotiations between the parties relating to
the subject matter of this Agreement. There shall be no modification or amendment hereof except in
writing and signed by the parties hereto. The parties acknowledge that this Agreement was prepared
by both of them jointly and not by one party to the exclusion of the other and after the
opportunity for full and complete discussion of the terms hereof.

20.3 The descriptive headings of the provisions in this Agreement are inserted for reference
only and shall not limit or otherwise affect the terms of this Agreement.

20.4 Nothing contained in this Agreement, express or implied, is intended to confer upon any
person or other entity that is not a party hereto any benefits, rights or remedies.

20.5 This Agreement may be executed in any number of counterparts, no one of which needs to be
executed by all parties, or this Agreement may be ratified (to the extent permitted under Section
17.1 above) by separate written instrument specifically referring hereto, and it shall be binding
upon all parties who execute a counterpart or ratification instrument with the same force and
effect, with each separate counterpart or ratification instrument deemed to be one and the same
original Agreement.

20.6 This Agreement and the specific business terms hereof shall be confidential between the
parties and the terms contained herein shall not be disclosed to any third party without the prior
written consent of the other party unless required to do so by order of a court or regulatory body
asserting competent jurisdiction. However, the parties may disclose the terms of this agreement to
third parties to the extent necessary to comply with reporting obligations, including without
limitation disclosure necessary to comply with royalty obligations, SEC requirements, auditing
requirements, and any tax compliance and reporting obligations; provided such third parties first
agree in writing to maintain the confidentiality of such information and not to use such
information except for the purpose for which it is disclosed, unless such third parties are
governmental agencies or bodies for which public disclosure is required, or unless such parties are
royalty owners who are entitled to receive such information notwithstanding their refusal to sign
an agreement to maintain the confidentiality of such information. In addition, the terms hereof may
be disclosed to any other Owners whose gas is being marketed by Shipper pursuant to the terms
hereof, or from whom any ratification or agency letters are sought, provided such Owners first
agree in writing to maintain the confidentiality of such terms and not to use such information except for the purposes for which it is disclosed. Further, the terms hereof may be disclosed
by either party hereto in furtherance of any bona fide efforts to obtain financing where the
properties, interests or Facilities covered hereby are to be pledged, mortgaged or otherwise
evaluated as collateral for any such financing; provided the persons or entities to which such
disclosure is made agree in writing to maintain the confidentiality of such terms and not to use
such information except for the purpose for which it is disclosed. Similarly, the parties may
disclose the terms hereof where a party is pursuing a bona fide sale of all or any portion of the
properties, interests or Facilities which are subject hereto; provided the persons or entities to
which such disclosure is made agree in writing to maintain the confidentiality of such terms and
not to use such information except for the purpose for which it is disclosed.

 

21

 

20.7 Gatherer shall be regarded as an independent contractor, free from any control or
direction by Shipper. Further, the rights and obligations of the parties hereto shall be defined
solely by the terms hereof and nothing herein shall be construed as creating a partnership, joint
venture, association or trust of any kind.

20.8 Each party will, at the request of the other party, execute and deliver any instruments,
documents, permits, applications or any other papers reasonably required by the other party, and
each party will do such other acts as may be reasonably requested by the other party, all as may be
reasonably necessary to effect the purposes and provisions of this Agreement.

20.9 Shipper may from time to time notify Gatherer of specific entities and/or persons which
may act as Shipper’s agent, representative and/or designee for purposes of performing various
actions or obligations of Shipper hereunder. In such event, Gatherer agrees to deal with such
entities and/or persons as Shipper’s agent, representative and/or designee, as applicable, as if
dealing with Shipper, with respect to the various actions and/or obligations for which Shipper has
so designated such entities and/or persons to act as Shipper’s agent, representative or designee.

IN WITNESS WHEREOF, the parties have executed this Gas Gathering and Processing Agreement in
duplicate originals as of the date first stated above.

	 	 	 	 	 	 	 
	SHIPPER:	 	GATHERER:
	 
	 	 	 	 	 	 
	GMX RESOURCES INC.	 	PVR EAST TEXAS GAS PROCESSING LLC
	 
	 	 	 	 	 	 
	By:

	 	/s/ Ken L. Kenworthy, Jr.
	 	By:
	 	/s/ Ronald K. Page
	 

	 	 
	 	 	 	 
	Name:

	 	Ken L. Kenworthy, Jr.
	 	 	 	Ronald K. Page, President
	 

	 	 	 	 	 	 
	Title:

	 	President	 	 	 	 
	 

	 	 	 	 	 	 

 

22

 

EXHIBIT “A”

This Exhibit “A” to that certain Gas Gathering and Processing Agreement dated January 10, 2008
by and between GMX RESOURCES INC., as “Shipper”, and PVR EAST TEXAS GAS PROCESSING LLC, as
“Gatherer”, is for all purposes made a part of said Agreement.

See Attached Map

 

23

 

 

24

 

EXHIBIT “A-1"

This Exhibit “A-1” to that certain Gas Gathering and Processing Agreement dated January 10,
2008 by and between GMX RESOURCES INC., as “Shipper”, and PVR EAST TEXAS GAS PROCESSING LLC, as
“Gatherer”, is for all purposes made a part of said Agreement.

Shipper Owned and Controlled Interest in the Dedicated Lands

 

25

 

EXHIBIT “B”

This Exhibit “B” to that certain Gas Gathering and Processing Agreement dated January 10, 2008
by and between GMX RESOURCES INC., as “Shipper”, and PVR EAST TEXAS GAS PROCESSING LLC, as
“Gatherer”, is for all purposes made a part of said Agreement.

Receipt Points:

1      Area I    —   At or near the DCP Midstream Blocker CP Meter No. 04821636

2      Area II   —   At or near the DCP Midstream Williams CP Meter No. 0482205

Delivery Points:

For Residue Gas: At the interconnect of the tailgate of the gas processing facilities included
in the Plant and the facilities of Centerpoint Energy Transmission (CP-3) to be located in Harrison
County, Texas

For Products: At the interconnect of the Plant and the facilities of Panola Pipeline to be
located in Panola County, Texas

 

26exhibit10_1.htm

     

    
      

      

    

    
 

    Exhibit
      10.1

    

    SHARE
      EXCHANGE AGREEMENT

     

    This
      share exchange agreement is made effective as of the 10th
      day of January, 2008.

     

    AMONG:

    RACINO
      ROYALE
      INC., a corporation incorporated under the laws of the State of
      Nevada (the "Purchaser")

    -
      and
      -

     

    INTERAMERICAN
      GAMING
      CORP., a corporation incorporated under the laws of the State of
      Nevada ("IAGC")

     

    -
      and
      -

     

    THE
      SELLING
      SHAREHOLDERS named in Schedule "A" of this Agreement (the "IAGC
      Shareholders")

     

    WHEREAS
      the IAGC
      Shareholders are
      the
      registered and beneficial holders of, in the aggregate and individually as
      set
      forth opposite their respective names in the attached Schedule "A", 13,500,000
      IAGC Shares being all of the currently issued and outstanding securities of
      IAGC;

     

    AND
      WHEREAS the
      parties wish to enter into this Agreement to set forth the terms upon which
      the
      Purchaser will purchase the Purchased Shares in exchange for the Share Exchange
      Securities.

     

    NOW
      THEREFORE in
      consideration of the covenants, agreements, representations, warranties and
      payments herein set forth and provided for, the parties hereto respectively
      covenant and agree as set forth below.

     

    NOW
      THEREFORE THIS
      AGREEMENT WITNESSETH THAT in consideration of the mutual covenants and
      agreements herein contained and for other good and valuable consideration,
      the
      receipt and sufficiency of which is hereby acknowledged, the parties hereto
      agree with each other as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE I

    DEFINITIONS

     

    1.1           
      Definitions.
      In this Agreement, unless there is something in the context or subject
      matter inconsistent therewith, the following words and terms set forth in this
      Article I shall
      have the following meanings:

     

    
      	
               

            	
              (a)

            	
              "1933
                Act"
                means the United States Securities Act of 1933, as amended, and
                regulations and rules issued pursuant to that Act;
                

            

    

     

    
      	
               

            	
              (b)

            	
              "1934
                Act"
                means the United States Securities Act of 1934, as amended, and
                regulations and rules issued pursuant to that Act;
                

            

    

     

    
      	
               

            	
              (c)

            	
              "Agreement"
                means this share exchange agreement and all instruments supplemental
                hereto or in amendment or confirmation hereof; "herein", "hereof'
                and
                similar expressions mean and refer to this Agreement and not to any
                particular article, section, clause or subclause; and "Article",
                "Section", "clause" or "subclause" means and refers to the specified
                article, section, clause or subclause of this Agreement;
                

            

    

     

    
      	 	(d)	 "Business
              Day" means a day other than a Saturday, Sunday or statutory holiday
              on which the principal commercial banks located in Toronto, Ontario,
              are
              open for business during normal banking
              hours;

    

     

    
      	
               

            	
              (e)

            	
              "Closing"
                means the completion of the Share Exchange, which shall take place
                on the
                Closing Date at the offices of Fogler, Rubinoff LLP in Toronto, Ontario;
                

            

    

     

    
      	
               

            	
              (f)

            	
              "Closing
                Date" means a date to be agreed to between the parties hereto
                for
                the completion of the transactions contemplated by this Agreement;
                

            

    

     

    
      	
               

            	
              (g)

            	
              "Closing
                Time" means 10:00 a.m. on the Closing Date;
                

            

    

     

    
      	
               

            	
              (h)

            	
              "Code"
                means the United States Internal Revenue Code of 1986, as amended,
                and the
                regulations and published interpretations thereunder;
                

            

    

     

    
      	
               

            	
              (i)

            	
              "Encumbrance"
                means any claim, lien, security interest, mortgage, pledge, charge,
                encumbrance or other right of a third party of any nature or kind
                whatsoever, howsoever created; 

            

    

     

    
      	
               

            	
              (j)

            	
              "Foundation
                Venture" means Foundation Venture Leasing Inc., a corporation
                incorporated pursuant to the laws of the Province of Ontario;
                

            

    

     

    
      	
               

            	
              (k)

            	
              "Governmental
                Body" means any: 

            

    

     

    
      	
               

            	
              (i)

            	
              nation,
                state, county, city, town, village, district, or other jurisdiction
                of any
                nature; 

            

    

     

    
      	
               

            	
              (ii)

            	
              federal,
                state, local, municipal, foreign, or other government;
                

            

    

     

    
      	
               

            	
              (iii)

            	
              governmental
                or quasi-governmental authority of any nature (including any governmental
                agency, branch, department, official, or entity and any court or
                other
                tribunal); or 

            

    

     

    
      	
               

            	
              (iv)

            	
              body
                exercising, or entitled to exercise, any administrative, executive,
                judicial, legislative, police, regulatory, or taxing authority or
                power of
                any nature. 

            

    

     

    
      	
               

            	
              (l)

            	
              "IAGC"
                means InterAmerican Gaming Corp., a corporation incorporated pursuant
                to
                the laws of State of Nevada; 

            

    

     

    
      	
               

            	
              (m)

            	
              "IAGC
                Business" means the business previously and heretofore carried on
                by IAGC and any predecessors; 

            

    

     

    
      	
               

            	
              (n)

            	
              "IAGC
                Share" means one fully paid and non-assessable common share in the
                capital
                of IAGC; 

            

    

     

    
      	
               

            	
              (o)

            	
              "Legal
                Requirement" means any federal, state, local, municipal, foreign,
                international, multinational, or other administrative order, constitution,
                law, ordinance, principle of common law, regulation, statute, or
                treaty
                including, without limitation, those of the SEC;
                

            

    

     

    
      	
               

            	
              (p)

            	
              "Material
                Adverse
                Effect" in respect of a Person means any change, effect, event,
                occurrence, condition or development that has or could reasonably
                be
                expected to have, individually or in the aggregate, a material adverse
                impact on the business, operations, results of operations, assets,
                capitalization or financial condition of such Person;
                

            

    

     

    
      	
               

            	
              (q)

            	
              "Person"
                means an individual, corporation, partnership, unincorporated syndicate,
                unincorporated organization, trust, trustee, executor, administrator
                or
                other legal representative; 

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
              (r)

            	
              "Racino"
                means Racino Royale Inc., a corporation incorporated pursuant to
                the laws
                of the State of Nevada; 

            

    

     

    
      	
               

            	
              (s)

            	
              "Racino
                Business" means the business previously and heretofore carried on
                by Racino and any predecessors; 

            

    

     

    
      	
               

            	
              (t)

            	
              "Racino
                Share" means one fully paid and non-assessable common share in
                the
                capital of Racino; 

            

    

     

    
      	
               

            	
              (u)

            	
              "SEC"
                means
                the United States Securities and Exchange Commission;
                

            

    

     

    
      	
               

            	
              (v)

            	
              "Securities
                Act" means the Securities
                Act (Ontario), as may be amended from time to time, and any
                successors thereto; 

            

    

     

    
      	
               

            	
              (w)

            	
              "Share
                Exchange" means the exchange of IAGC Shares for Racino Shares in
                accordance with Section "A" hereof;

            

    

     

    
      	
               

            	
              (x)

            	
              "Tax"
                or
                "Taxes"
                means any and all taxes (whether federal, state, local or foreign)
                including without limitation, income, gross receipts, license, payroll,
                employment, excise, severance, stamp, occupation, premium, environmental,
                customs, vehicle or other title or registration, capital stock, franchise,
                employees’ income withholding, foreign or domestic withholding, social
                security, unemployment, disability, real property, personal property,
                sales, use, transfer, value added, alternative, add-on minimum and
                other
                tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever
                and any interest, penalty, addition or additional amount thereon
                imposed,
                assessed or collected by or under the authority of any Governmental
                Body
                or payable under any tax-sharing agreement or any other contract;
                

            

    

     

    
      	
               

            	
              (y)

            	
              "Tax
                Return" means any return (including any information return),
                report, statement, schedule, notice, form, or other document or
                information filed with or submitted to, or required to be filed with
                or
                submitted to, any Governmental Body in connection with the determination,
                assessment, collection, or payment of any Tax or in connection with
                the
                administration, implementation, or enforcement of or compliance with
                any
                Legal Requirement relating to any Tax; and

            

    

     

    
      	
               

            	
              (z)

            	
              "Third
                Party" means any Person other than the parties to this Agreement;
                

            

    

     

    1.2           
      Currency.
Unless
      otherwise indicated, all dollar amounts referred to in this
      Agreement are in United States dollars.

     

    1.3           
      Number and
      Gender. Where the context requires, words imparting the singular shall
      include the plural and vice versa, and words imparting gender shall include
      all
      genders.

     

    1.4           
      Headings.
Article
      and Section headings contained in this Agreement are included
      solely for convenience, are not intended to be full or accurate descriptions
      of
      the content thereof and shall not be considered part of this Agreement or affect
      the construction or interpretation of any provision hereof.

     

    ARTICLE II

     

    EXCHANGE
      OF
      SHARES 

     

    2.1           
      IAGC
      Shares.
Subject
      to all of the terms and conditions hereof and in reliance on the
      representations and warranties set forth or referred to herein, at the Closing
      Time each of the IAGC Shareholders severally agrees to exchange, transfer and
      assign all IAGC Shares he or it owns or will own at the Closing Time (being
      the
      number set out opposite his or its name in the attached Schedule "A") to Racino
      in consideration of the issuance by Racino of that number of fully paid, issued
      and outstanding Racino Shares to be allocated to the IAGC Shareholders in the
      amounts outlined in Schedule "A" based on one Racino Share for each IAGC Share
      (the "Share
      Exchange").

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.2           
      Effective Date.
      The Share Exchange shall all take effect at and from the Closing
      Time.

     

    2.3           
      Hold Period and Legend

     

    
      	
               

            	
              (i)

            	
              Hold
                Period 

            

    

     

    
      	
               

            	
              (A)

            	
              The
                IAGC Shareholders acknowledge that the Racino Shares issued pursuant
                to
                the Share Exchange are subject to a "hold period" under applicable
                securities laws and that they will not be able to resell the Racino
                Shares
                until expiration of the applicable "hold period" except in accordance
                with
                limited exemptions under applicable securities legislation and regulatory
                policy and compliance with certain other requirements of applicable
                law.
                

            

    

     

    
      	
               

            	
              (B)

            	
              Racino
                acknowledges that the IAGC Shares assigned to Racino pursuant to
                the Share
                Exchange are subject to a "hold period" under applicable securities
                laws
                and that they will not be able to resell the IAGC Shares until expiration
                of the applicable "hold period" except in accordance with limited
                exemptions under applicable securities legislation and regulatory
                policy
                and compliance with certain other requirements of applicable law.
                

            

    

     

    
      	
               

            	
              (ii)

            	
              The
                certificates evidencing the Racino Shares issued to IAGC Shareholders
                in
                the Share Exchange shall bear the following legend until such time
                as (i)
                such Racino Shares are sold pursuant to an effective registration
                statement under the 1933 Act, (ii) such Racino Shares are eligible
                for
                resale in reliance on paragraph (k) of Rule 144 under the 1933 Act,
                or
                (iii) the IAGC Shareholders or any transferee thereof delivers an
                opinion
                of counsel reasonably acceptable to Racino to the effect that such
                legend
                is no longer required under the 1933 Act:

            

    

     

    
      	
               

            	
              (A)

            	
              For
                Canadian resident IAG Shareholders 

            

    

     

    "UNLESS
      PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
      TRADE THE SECURITY IN CANADA BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY
      AFTER
      THE LATER OF (I) DECEMBER ►,
      2007 AND (II) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE
      OR
      TERRITORY IN CANADA."

     

    
      	
               

            	
              (B)

            	
              For
                all IAG Shareholders 

            

    

     

    "THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").  AS SUCH, THEY MAY NOT
      BE SOLD IN THE UNITED STATES WITHOUT FIRST BEING REGISTERED UNDER THE ACT OR
      BEING SOLD IN COMPLIANCE WITH AN EXEMPTION FROM REGISTRATION SUCH AS RULE
      144.  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED
      SECURITIES AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT, AND WILL, UNTIL
      SUCH TIME AS THEY ARE REGISTERED FOR RESALE UNDER THE ACT, REQUIRE WRITTEN
      RELEASE FROM EITHER THE ISSUING COMPANY OR THEIR ATTORNEY PRIOR TO THE REMOVAL
      OF THIS LEGEND."

     

    
      	
               

            	
              (iii)

            	
              The
                IAGC shareholders further acknowledge that they should consult their
                own
                legal counsel in their jurisdiction for full particulars of applicable
                resale restrictions. 

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
              2.4

            	
              Share
                Capital.
                For greater certainty, the parties acknowledge that after
                the
                Closing: 

            

    

     

    
      	
               

            	
              (a)

            	
              there
                will be, on a non-diluted basis, an aggregate of 46,723,886 Racino
                Shares
                issued and outstanding, of which an aggregate of 13,500,000 Racino
                Shares
                (28.89%) shall be held by the IAGC Shareholders and an aggregate
                of
                33,223,886 Racino Shares (71.11%) shall be held by the current
                shareholders of Racino; and 

            

    

     

    
      	
               

            	
              (b)

            	
              the
                only other securities of Racino issued and
                outstanding shall be the warrants referred to in Section 3.1(e)(ii).

            

    

     

    2.5           
      Roll
      Over.   Racino agrees that it shall execute and file a joint
      election with any IAGC Shareholder who so requests pursuant to sub-section
      85(1)
      of the Income
      Tax Act (Canada) and any similar provision of provincial law as may be
      necessary as prepared by such IAGC Shareholder in prescribed form and within
      the
      prescribed time.  Such joint election shall designate that the
      proceeds of disposition to such IAGC Shareholder for the IAGC Shares
      and
      the cost of acquisition to Racino for the IAGC Shares shall be the IAGC
      Shareholder's cost amount, as such term is defined under the Income Tax
      Act
      (Canada) (or such other amount as the IAGC Shareholder may properly
      determine).

     

    ARTICLE III

     

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1           
      Representations
      and Warranties of Racino. Racino hereby represents and warrants to IAGC
      and the IAGC Shareholders that:

     

    
      	
               

            	
              (a)

            	
              Due
                Incorporation.  Racino is a corporation incorporated and
                subsisting under the laws of the State of Nevada, has all requisite
                corporate power to own its properties and to conduct its business
                as it is
                presently being conducted and is registered or otherwise qualified
                to
                carry on business in all jurisdictions in which the nature of its
                assets
                or business makes such registration or qualification necessary or
                advisable. 

            

    

     

    
      	
               

            	
              (b)

            	
              Corporate
                Power
                and Capacity.  Racino has full legal capacity and
                corporate power to enter into this Agreement and to take, perform
                or
                execute all proceedings, acts and instruments necessary or advisable
                to
                consummate the actions and transactions contemplated in this
                Agreement;  all necessary corporate action has been taken, or
                will be taken prior to the Closing Date, by or on the part of Racino
                to
                authorize the execution and delivery of this Agreement, and the taking,
                performing or executing of such proceedings, acts and instruments
                as are
                necessary or advisable for consummating the actions and transactions
                contemplated in this Agreement and for fulfilling its obligations
                hereunder. 

            

    

     

    
      	
               

            	
              (c)

            	
              Due
                Execution and
                Delivery.  This Agreement has been duly executed and
                delivered on behalf of Racino and constitutes a legal, valid and
                binding
                obligation of it, enforceable against it in accordance with its terms,
                except as such terms may be limited by bankruptcy, insolvency,
                reorganization or other laws relating to the enforcement of creditors'
                rights generally. 

            

    

     

    
      	
               

            	
              (d)

            	
              No
                Violation. Neither the execution nor delivery of this Agreement,
                nor the consummation of the transactions contemplated hereby, nor
                compliance with and fulfillment of the terms and provisions of this
                Agreement will conflict with or result in a breach of the terms,
                conditions or provisions of, or constitute a default under:
                

            

    

     

    
      	
               

            	
              (i)

            	
              any
                of the constating documents or by-laws of Racino; or
                

            

    

     

    
      	
               

            	
              (ii)

            	
              any
                instrument, agreement, mortgage, judgment, order, award, decree or
                other
                instrument or restriction to which Racino is a party of or by which
                it is
                bound; or 

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
              (iii)

            	
              create
                or result in the imposition of any Encumbrance on any of the assets
                of
                Racino or any of the Racino Shares; or

            

    

     

    
      	
               

            	
              (iv)

            	
              violate
                any applicable laws, rules or regulations.

            

    

     

    
      	
               

            	
              (e)

            	
              Capitalization.

            

    

     

    
      	
               

            	
              (i)

            	
              The
                authorized capital of Racino consists of 100,000,000 common shares,
                of
                which 33,223,886 common shares are presently issued and outstanding.
                All
                of the presently issued and outstanding common shares of Racino have
                been
                validly allotted and issued and are outstanding as fully-paid and
                non-assessable shares. 

            

    

     

    
      	
               

            	
              (ii)

            	
              Racino
                has 500,000 warrants outstanding, with each warrant entitling its
                holder
                to purchase one Racino Share at $0.10 per share until June 19, 2009.
                

            

    

     

    
      	
               

            	
              (iii)

            	
              Racino
                has no reserved securities or other securities
                outstanding other than the warrants referred to in 3.1(e)(ii) above.
                

            

    

     

    
      	
               

            	
              (f)

            	
              Principal
                Shareholder.  As at the date hereof, the only beneficial
                holders holding more than 5% of the outstanding Racino Shares is
                ETIFF
                Holdings, LLC. 

            

    

     

    
      	
               

            	
              (g)

            	
              Consents.  Other
                than any required regulatory approvals, as the case may be, no consent,
                licence, approval, order or authorization of, or registration, filing
                or
                declaration with any governmental authority that has not been obtained
                or
                made by Racino and no consent of any Third Party is required to be
                obtained by Racino in connection with the execution, delivery and
                performance by Racino of this Agreement or the consummation of the
                transactions contemplated hereby; and the issuance of Racino Shares
                to the
                IAGC Shareholders will not result in the loss of any regulatory consent,
                licence, approval, order, authorization or registration materially
                benefiting Racino. 

            

    

     

    
      	
               

            	
              (h)

            	
              Litigation.  There
                is no action, lawsuit, claim, proceeding, or investigation pending
                or, to
                the best knowledge of Racino, threatened against, relating to or
                affecting
                Racino before any court, government agency, or any arbitrator of
                any kind,
                and Racino is not aware of any existing ground on which any such
                proceeding might be commenced with any reasonable likelihood of success
                and there is not presently outstanding against Racino any judgment,
                decree, injunction, rule or order of any court, governmental agency,
                or
                arbitrator relating to or affecting Racino in connection with Racino
                Business. 

            

    

     

    
      	
               

            	
              (i)

            	
              SEC
                Filings.
                Racino has filed all forms, reports and documents required
                to be
                filed with the SEC since the initial filing date of the registration
                for
                the Racino Shares on Form 10-SB under the 1934 Act. All such required
                forms, reports and documents (including those that Racino may file
                subsequent to the date hereof) are referred to herein as the "Racino
                SEC
                Reports". As of their respective dates, Racino SEC Reports (i) were
                prepared in accordance with the requirements of the 1933 Act or the
                1934
                Act, as the case may be, and the rules and regulations of the SEC
                thereunder applicable to such Racino SEC Reports, and (ii) did not
                at the
                time they were filed (or if amended or superseded by a filing prior
                to the
                date of this Agreement, then on the date of such filing) contain
                any
                untrue statement of a material fact or omit to state a material fact
                required to be stated therein or necessary in order to make the statements
                therein, in the light of the circumstances under which they were
                made, not
                misleading. 

            

    

     

    
      	
               

            	
              (j)

            	
              Trading
                of Racino
                Shares.  The Racino Shares are trading on the NASD's OTC
                Bulletin Board under the symbol "RCNR".

            

    

     

    
      	 	(k) 	 Taxes.  Racino
              (i) has accurately and timely prepared and filed all foreign, federal,
              state and local income and all other Tax Returns required by any
              jurisdiction to which it is subject, (ii) has paid all Taxes that are
              material in amount, shown or determined to be due on such returns,
              reports
              and declarations, except those being contested in good faith, with
              respect
              to which adequate reserves have been set aside on the books of Racino
              and
              (iii) has set aside on its books provisions reasonably adequate for
              the
              payment of all Taxes for periods subsequent to the periods to which
              such
              Tax Returns, reports or declarations apply, except, in the case of
              clauses
              (i) and (ii) above, where the failure to so pay or file any such Tax
              would
              not result in a Material Adverse Effect.  There are no unpaid
              Taxes in any material amount claimed to be due by the taxing authority
              of
              any jurisdiction.
	 	
              
                 

              

            	
               

            

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
              (l)

            	
              Books
                and
                Records.  The books of account, minute books, stock
                record books and other records of Racino, all of which have or will
                been
                made available to IAGC and the IAGC Shareholders, are complete and
                correct. 

            

    

     

    
      	
               

            	
              (m)

            	
              Title
                to
                Properties.  Racino owns all the properties and assets
                (whether tangible or intangible) that it purports to own located
                in the
                facilities owned or operated by Racino or reflected as owned by it
                in the
                books and records of Racino (except for assets held under capitalized
                leases in the ordinary course of Racino Business).
                

            

    

     

    
      	
               

            	
              (n)

            	
              Intellectual
                Property.  Racino
                owns or possesses adequate enforceable rights to use all patents,
                patent
                applications, trademarks, service marks, copyrights, trade secrets,
                processes or formulations (including software) used in the conduct
                of the
                Racino Business, and to the best of the knowledge of Racino, the
                conduct
                of the Racino Business does not infringe upon the trademarks, trade
                names,
                service marks or copyrights, trade secrets, know-how, designs or
                other
                proprietary rights or technology, domestic or foreign, of any other
                Person. 

            

    

     

    
      	
               

            	
              (o)

            	
              Financial
                Statements.

            

    

     

    
      	
               

            	
              (i)

            	
              The
                audited financial statements of Racino, as filed on EDGAR, for the
                fiscal
                years ended September 30, 2006 and 2005 are substantially true and
                correct
                in every material respect and present fairly the financial position
                of
                Racino and the results of its operations for the fiscal years described
                therein; and 

            

    

     

    
      	
               

            	
              (ii)

            	
              the
                unaudited interim financial statements of Racino for the nine months
                ended
                June 30, 2007 and 2006, as filed on EDGAR, are substantially true
                and
                correct in every material respect and present fairly the financial
                position of Racino and the results of its operations for the periods
                described therein. 

            

    

     

    
      	
               

            	
              (p)

            	
              Liabilities.  There
                are no liabilities, contingent or otherwise, of Racino which have
                not been
                disclosed in Racino's financial statements or in writing to IAGC
                and the
                IAGC Shareholders, and Racino has not guaranteed, or agreed to guarantee,
                any debt, liability or other obligation of any Person.
                

            

    

     

    
      	
               

            	
              (q)

            	
              Investment
                Intent. 

            

    

     

    
      	
               

            	
              (i)

            	
              Racino
                is acquiring the IAGC Shares for its own account with the present
                intention of holding such securities for purposes of investment,
                and has
                no intention of selling such securities in a public distribution
                in
                violation of the federal securities laws or any applicable state
                securities laws. Racino understands that the IAGC Shares are “restricted
                securities” as defined in Rule 144 under the 1933 Act, and have not been
                registered pursuant to the provisions of the 1933 Act, inasmuch as
                the
                proposed purchase of the IAGC Shares is taking place in a transaction
                not
                to involving any public offering. 

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
              (ii)

            	
              Racino
                is knowledgeable, experienced and sophisticated in financial and
                business
                matters and is able to evaluate the risks and benefits of the investment
                in the IAGC Shares. 

            

    

     

    
      	
               

            	
              (iii)

            	
              Racino
                is able to bear the economic risk of the investment in the IAGC Shares
                for
                an indefinite period of time because the IAGC Shares have not been
                registered under the 1933 Act and, therefore, cannot be sold unless
                subsequently registered under the 1933 Act or an exemption from such
                registration is available. 

            

    

     

    
      	
               

            	
              (iv)

            	
              Racino
                has been furnished or otherwise had full access to such other information
                concerning IAGC as requested and that was necessary to enable them
                to
                evaluate the merits and risks of an investment in IAGC, and after
                a review
                of this information, has had an opportunity to ask questions and
                receive
                answers concerning the financial condition and business of IAGC and
                the
                terms and conditions of the securities purchased hereunder, and has
                had
                access to and has obtained such additional information concerning
                IAGC and
                the securities as they deemed necessary.

            

    

     

    
      	
               

            	
              (r)

            	
              Conflict
                of
                Interest. 

            

    

     

    
      	
               

            	
              (i)

            	
              Racino
                acknowledges that it has been advised that Foundation Venture is
                a
                significant shareholder of each of Racino and IAGC.
                

            

    

     

    
      	
               

            	
              (ii)

            	
              Racino
                represents that the board of directors of Racino independent of Foundation
                Venture have reviewed and approved the Share Exchange in light of
                Foundation's shareholdings in both Racino and IAGC.
                

            

    

     

    
      	
               

            	
              (s)

            	
              Further
                Assurances.  Racino does not know of any fact which, if
                known to the IAGC Shareholders, would deter them from consummating
                the
                transactions contemplated herein.

            

    

     

    3.2           
      Representations
      and Warranties of IAGC and the IAGC Shareholders.  Each of IAGC
      and the IAGC Shareholders jointly and severally hereby represents and warrants
      to Racino that:

     

    
      	
               

            	
              (a)

            	
              Due
                Incorporation.  IAGC is incorporated and subsisting under
                the laws of the State of Nevada, has all legal capacity and requisite
                corporate power to own its properties and to conduct its business
                as
                presently being conducted and is registered or otherwise qualified
                to
                carry on business in all jurisdictions in which the nature of its
                assets
                or business makes such registration or qualification necessary or
                advisable. 

            

    

     

    
      	
               

            	
              (b)

            	
              Corporate
                Power
                and Authority.  Each of IAGC and the IAGC Shareholders
                has the full legal capacity and corporate power, where applicable,
                to
                enter into this Agreement and to take, perform or execute all proceedings,
                acts and instruments necessary or advisable to consummate the other
                actions and transactions contemplated in this Agreement and to fulfill
                its
                respective obligations under this Agreement.
                

            

    

     

    
      	
               

            	
              (c)

            	
              Due
                Execution.  This Agreement has been duly executed and
                delivered by each of IAGC and the IAGC Shareholders and this Agreement
                constitutes a legal, valid and binding obligation of each of IAGC
                and the
                IAGC Shareholders enforceable against each of IAGC and the IAGC
                Shareholders in accordance with its terms, except as such terms may
                be
                limited by bankruptcy, insolvency, re-organization or other laws
                relating
                to the enforcement of creditors' rights generally.
                

            

    

     

    
      	
               

            	
              (d)

            	
              No
                Violation.  Neither the execution, nor delivery of this
                Agreement, nor the consummation of the transactions contemplated
                hereby,
                nor compliance with and fulfillment of the terms and provisions of
                this
                Agreement will conflict with or result in a breach of the terms,
                conditions or provisions of, or constitute a default under:
                

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
              (i)

            	
              any
                of the constating documents or by-laws of IAGC; or
                

            

    

     

    
      	
               

            	
              (ii)

            	
              any
                instrument, agreement, mortgage, judgment, order, award, decree or
                other
                instrument or restriction to which Racino is a party of or by which
                it is
                bound; or 

            

    

     

    
      	
               

            	
              (iii)

            	
              create
                      or result in the imposition of any Encumbrance on any of the
                assets of
                IAGC or any of the IAGC Shares; or 

            

    

     

    
      	
               

            	
              (iv)

            	
              violate
                any applicable laws, rules or regulations.

            

    

     

    
      	
               

            	
              (e)

            	
              No
                Encumbrances.  The IAGC Shareholders are the registered
                and beneficial owners of 13,500,000 of the issued and outstanding
                IAGC
                Shares free and clear of all Encumbrances and no Person has any right,
                option, agreement or arrangement capable of becoming an agreement
                for the
                acquisition of any of the IAGC Shares held by the IAGC Shareholders
                or any
                interest therein from the IAGC Shareholders.
                

            

    

     

    
      	
               

            	
              (f)

            	
              No
                Further
                Rights. No person, firm or corporation has any agreement or option
                or any right or privilege (whether by law, pre-emptive or contractual)
                capable of becoming an agreement or option, including convertible
                securities, warrants or convertible obligations of any nature, for
                the
                purchase of any unissued shares in the securities of IAGC.
                

            

    

     

    
      	
               

            	
              (g)

            	
              Litigation.
                There are no actions, lawsuits, claims, proceedings, or
                investigations pending or, to the best knowledge of IAGC and the
                IAGC
                Shareholders, threatened against, relating to or affecting IAGC before
                any
                court, government agency, or any arbitrator of any kind. Neither
                IAGC nor
                the IAGC Shareholders is aware of any existing ground on which any
                such
                proceeding might be commenced with any reasonable likelihood of success
                and there is not presently outstanding against IAGC any judgment,
                decree,
                injunction, rule or order of any court, governmental agency, or arbitrator
                relating to or affecting IAGC, in connection with IAGC Business.
                

            

    

     

    
      	
               

            	
              (h)

            	
              Capitalization.

            

    

     

    
      	
               

            	
              (i)

            	
              The
                authorized capital of IAGC consists of 101,000,000 common shares
                of which
                13,500,000 common shares are issued and outstanding. All of the presently
                issued and outstanding common shares of IAGC have been validly allotted
                and issued and are outstanding as fully-paid and non-assessable shares.
                

            

    

     

    
      	
               

            	
              (ii)

            	
              IAGC
                has no options or warrants or other reserved securities or other
                securities outstanding. 

            

    

     

    
      	
               

            	
              (i)

            	
              Taxes.  IAGC
                (i) has accurately and timely prepared and filed all foreign, federal,
                state and local income and all other Tax Returns required by any
                jurisdiction to which it is subject, (ii) has paid all Taxes that
                are
                material in amount, shown or determined to be due on such returns,
                reports
                and declarations, except those being contested in good faith, with
                respect
                to which adequate reserves have been set aside on the books of IAGC
                and
                (iii) has set aside on its books provisions reasonably adequate for
                the
                payment of all Taxes for periods subsequent to the periods to which
                such
                Tax Returns, reports or declarations apply, except, in the case of
                clauses
                (i) and (ii) above, where the failure to so pay or file any such
                Tax would
                not result in a Material Adverse Effect.  There are no unpaid
                Taxes in any material amount claimed to be due by the taxing authority
                of
                any jurisdiction. 

            

    

     

    
      	
               

            	
              (j)

            	
              Books
                and
                Records.  The books of account, minute books, stock
                record books and other records of IAGC, all of which have or will
                been
                made available to Racino, are complete and correct.
                

            

    

     

    
      	
               

            	
              (k)

            	
              Title
                to
                Properties.  IAGC owns all the properties and assets
                (whether tangible or intangible) that it purports to own located
                in the
                facilities owned or operated by IAGC or reflected as owned by it
                in
                

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    the
      books and records of IAGC (except for assets held under capitalized leases
      in
      the ordinary course of IAGC Business).

     

    
      	
               

            	
              (l)

            	
              Intellectual
                Property. IAGC owns or possesses adequate enforceable rights to use
                all patents, patent applications, trademarks, service marks, copyrights,
                trade secrets, processes or formulations (including software) used
                in the
                conduct of the IAGC Business, and to the best of the knowledge of
                IAGC,
                the conduct of the IAGC Business does not infringe upon the trademarks,
                trade names, service marks or copyrights, trade secrets, know-how,
                designs
                or other proprietary rights or technology, domestic or foreign, of
                any
                other Person. 

            

    

     

    
      	
               

            	
              (m)

            	
              Financial
                Statements. The audited interim financial statements of IAGC for
                period ended September 30, 2007, as delivered to Racino, are or will
                be
                substantially true and correct in every material respect and present
                fairly the financial position of IAGC and the results of its operations
                for the period described therein.

            

    

     

    
      	
               

            	
              (n)

            	
              Liabilities.  There
                are no liabilities, contingent or otherwise, of IAGC which have not
                been
                disclosed in IAGC's financial statements or in writing to Racino,
                and IAGC
                has not guaranteed, or agreed to guarantee, any debt, liability or
                other
                obligation of any Person. 

            

    

     

    
      	
               

            	
              (o)

            	
              Investment
                Intent. 

            

    

     

    
      	
               

            	
              (i)

            	
              The
                IAGC Shareholders are acquiring the Racino Shares for their own account
                with the present intention of holding such securities for purposes
                of
                investment, and have no intention of selling such securities in a
                public
                distribution in violation of the federal securities laws or any applicable
                state securities laws. The IAGC Shareholders understand that the
                Racino
                Shares to be issued in the Share Exchange are “restricted securities” as
                defined in Rule 144 under the 1933 Act, and have not been registered
                pursuant to the provisions of the 1933 Act, inasmuch as the proposed
                acquisition of the Racino Shares is taking place in a transaction
                not to
                involving any public offering. 

            

    

     

    
      	
               

            	
              (ii)

            	
              The
                IAGC Shareholders are knowledgeable, experienced and sophisticated
                in
                financial and business matters and are able to evaluate the risks
                and
                benefits of the investment in the Racino Shares.
                

            

    

     

    
      	
               

            	
              (iii)

            	
              The
                IAGC Shareholders are able to bear the economic risk of the investment
                in
                the Racino Shares for an indefinite period of time because the Racino
                Shares have not been registered under the 1933 Act and, therefore,
                cannot
                be sold unless subsequently registered under the 1933 Act or an exemption
                from such registration is available.

            

    

     

    
      	
               

            	
              (iv)

            	
              The
                IAGC Shareholders have been furnished or otherwise had full access
                to such
                other information concerning Racino as requested and that was necessary
                to
                enable them to evaluate the merits and risks of an investment in
                Racino,
                and after a review of this information, has had an opportunity to
                ask
                questions and receive answers concerning the financial condition
                and
                business of Racino and the terms and conditions of the securities
                purchased hereunder, and has had access to and has obtained such
                additional information concerning Racino and the securities as they
                deemed
                necessary. 

            

    

     

    
      	
               

            	
              (p)

            	
              Conflict
                of
                Interest. 

            

    

     

    
      	
               

            	
              (i)

            	
              Each
                of IAGC and the IAGC Shareholders acknowledges that it has been advised
                that Foundation Venture is a significant shareholder of each of Racino
                and
                IAGC. 

            

    

     

    
      	
               

            	
              (ii)
                

            

    

     

    IAGC
      represents that the board of directors of IAGC independent of Foundation Venture
      have reviewed and approved the Share Exchange in light of Foundation's
      shareholdings in both Racino and IAGC.

     

    
      	
               

            	
              (q)

            	
              Further
                Assurances.  None of IAGC or the IAGC Shareholders knows
                of any fact which, if known to Racino would deter it from consummating
                the
                transactions contemplated herein.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE IV

     

    COVENANTS

     

    4.1           
      Filings.  Racino
      shall prepare and file any filings required under any applicable securities
      laws.

     

    4.2           
      General Covenants
      of Racino. Racino covenants and agrees that, unless otherwise
      contemplated herein, Racino shall:

     

    
      	
               

            	
              (a)

            	
              take
                all requisite action to: 

            

    

     

    
      	
               

            	
              (i)

            	
              approve
                this Agreement and the Share Exchange; and

            

    

     

    
      	
               

            	
              (ii)

            	
              approve
                such actions as Racino may determine to be necessary or desirable
                for the
                purposes hereof, including the completion of any actions necessary
                to
                ensure compliance with all securities laws and regulatory authorities;
                

            

    

     

    
      	
               

            	
              (b)

            	
              use
                its reasonable commercial efforts to preserve intact as a going concern
                its business organization; 

            

    

     

    
      	
               

            	
              (c)

            	
              give
                its consent (and provide such other reasonable assurances as may
                be
                required) and use its best efforts to obtain (including the provision
                of
                such reasonable assurances as may be required), consents of all other
                Persons to the transactions contemplated by this Agreement, as may
                be
                required pursuant to any statute, law or ordinance or by any governmental
                or other regulatory authority having jurisdiction;
                

            

    

     

    
      	
               

            	
              (d)

            	
              take
                all steps necessary to make proper disclosure within such time as
                required
                by any regulatory authority and any other applicable statutes and
                laws
                concerning this Agreement and the transactions contemplated herein;
                

            

    

     

    
      	
               

            	
              (e)

            	
              use
                its best efforts to maintain its status as a reporting issuer under
                the
                1934 Act; 

            

    

     

    
      	
               

            	
              (f)

            	
              use
                all reasonable commercial efforts to satisfy (or
                cause the satisfaction of) the conditions precedent to its obligations
                hereunder set forth in Article V to
                the extent the same is
                within its control and take, or cause to be taken, all other action
                and to
                do, or cause to be done, all other things necessary, proper or advisable
                under all applicable laws to complete the Share Exchange, including
                using
                its reasonable commercial efforts to:

            

    

     

    
      	
               

            	
              (i)

            	
              obtain
                all necessary consents, approvals and authorizations as are required
                to be
                obtained by it under any applicable laws;

            

    

     

    
      	
               

            	
              (ii)

            	
              effect
                all necessary registrations and filings and submissions of information
                requested by governmental entities required to be effected by Racino
                in
                connection with the Share Exchange and participate and appear in
                any
                proceedings of either party before governmental entities in connection
                with the Share Exchange; 

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               

            	
              (iii)

            	
              oppose,
                lift or rescind any injunction or restraining order or other order
                or
                action seeking to stop or otherwise adversely affect the ability
                of the
                parties to consummate the transactions contemplated hereby or by
                the Share
                Exchange; 

            

    

     

    
      	
               

            	
              (iv)

            	
              fulfill
                all conditions and satisfy all provisions of this Agreement;
                

            

    

     

    
      	
               

            	
              (v)

            	
              cooperate
                with the other parties to this Agreement in connection with the
                performance by Racino of its obligations hereunder; and
                

            

    

     

    
      	
               

            	
              (vi)

            	
              not
                take any action, refrain from taking any action or permit any action
                to be
                taken or not taken that is inconsistent with this Agreement or that
                would
                reasonably be expected to significantly impede the consummation of
                this
                Agreement; and 

            

    

     

    
      	
               

            	
              (g)

            	
              validly
                issue Racino Shares hereunder as fully paid and non-assessable common
                shares in the capital of Racino, free and clear of all mortgages,
                liens,
                charges, security deposits, adverse claims, pledges, encumbrances,
                options, warrants, rights, privileges and demands whatsoever.
                

            

    

     

    4.3           
      General Covenants
      of IAGC and the IAGC Shareholders. Each of IAGC and the IAGC Shareholders
      covenant and agree that, until Closing or the date on which this Agreement
      is
      terminated, and unless otherwise contemplated herein, they
      shall:

     

    
      	
               

            	
              (a)

            	
              take
                all requisite action to approve this Agreement and the Share Exchange;
                and
                

            

    

     

    
      	
               

            	
              (b)

            	
              give
                their consent (and provide such other reasonable assurances as may
                be
                required) and use their best efforts to obtain (including the provision
                of
                such reasonable assurances as may be required), consents of all other
                Persons to the transactions contemplated by this Agreement, as may
                be
                required pursuant to any statute, law or ordinance or by any governmental
                or other regulatory authority having jurisdiction;
                

            

    

     

    
      	
               

            	
              (c)

            	
              use
                all reasonable commercial efforts to satisfy (or
                cause the satisfaction of) the conditions precedent to their obligations
                hereunder set forth in Article V to
                the extent the same is within their control
                and take, or cause to be taken, all other action and to do, or cause
                to be
                done, all other things necessary, proper or advisable under all applicable
                laws to complete the Share Exchange, including using their reasonable
                commercial efforts to: 

            

    

     

    
      	
               

            	
              (i)

            	
              obtain
                all necessary consents, approvals and authorizations as are required
                to be
                obtained by them under any applicable laws;

            

    

     

    
      	
               

            	
              (ii)

            	
              effect
                all necessary registrations and filings and submissions of information
                requested by governmental entities required to be effected by them
                in
                connection with the Share Exchange and participate and appear in
                any
                proceedings of either party before governmental entities in connection
                with the Share Exchange; 

            

    

     

    
      	
               

            	
              (iii)

            	
              oppose,
                lift or rescind any injunction or restraining order or other order
                or
                action seeking to stop or otherwise adversely affect the ability
                of the
                parties to consummate the transactions contemplated hereby or by
                the Share
                Exchange; 

            

    

     

    
      	
               

            	
              (iv)

            	
              fulfill
                all conditions and satisfy all provisions of this Agreement;
                

            

    

     

    
      	
               

            	
              (v)

            	
              cooperate
                with the other parties to this Agreement in connection with the
                performance by the Companies of their obligations hereunder; and
                

            

    

     

    
      	
               

            	
              (vi)

            	
              not
                take any action, refrain from taking any action or permit any action
                to be
                taken or not taken that is inconsistent with this Agreement or that
                would
                reasonably be expected to significantly impede the consummation of
                the
                Share Exchange. 

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE V

     

    CONDITIONS
      TO
      CLOSING

     

    5.1           
      Conditions
      Precedent to Obligations of IAGC and the IAGC Shareholders. The
      obligations of IAGC and the IAGC Shareholders to complete the transactions
      contemplated hereunder shall be subject to the satisfaction of, or compliance
      with, at or before the Closing Date, each of the following conditions precedent
      (each of which is hereby acknowledged to be for the exclusive benefit of IAGC
      and the IAGC Shareholders and may be waived by the IAGC and the IAGC
      Shareholders in whole or in part on or before the Closing
      Date):

     

    
      	
               

            	
              (a)

            	
              the
                representations in Section 3.1 shall
                be true as of the Closing Date;
                

            

    

     

    
      	
               

            	
              (b)

            	
              IAGC
                and the IAGC Shareholders shall at the Closing Date have received
                from
                Racino certificates representing that number of fully paid, issued
                and
                outstanding Racino Shares in the registration and amounts outlined
                in
                Schedule "A"; 

            

    

     

    
      	
               

            	
              (c)

            	
              Racino
                will have performed and complied with all terms, covenants and conditions
                required by this Agreement to be performed or complied with by it
                o or
                before the Closing Date; and 

            

    

     

    
      	
               

            	
              (d)

            	
              Racino
                shall be a reporting issuer in good standing under the 1934 Act and
                neither Racino nor its shares shall be the subject of any cease trade
                order or regulatory enquiry or investigation in any jurisdiction.
                

            

    

     

    5.2           
      Conditions
      Precedent to Obligations of Racino. The obligation of Racino to complete
      the transactions contemplated hereunder shall be subject to the satisfaction
      of
      or compliance with, at or before the Closing Date, each of the following
      conditions precedent (each of which is hereby acknowledged to be for the
      exclusive benefit of Racino and may be waived by Racino in writing, in whole
      or
      in part, on or before the Closing Date):

     

    
      	
               

            	
              (a)

            	
              the
                representations in Section 3.2 shall
                be true as of the Closing Date;
                

            

    

     

    
      	
               

            	
              (b)

            	
              Racino
                shall on or before the Closing Date have received from the IAGC
                Shareholders certificates representing that number of fully paid,
                issued
                and outstanding IAGC Shares in the registration and amounts outlined
                in
                Schedule "A" duly endorsed by the IAGC Shareholders to transfer the
                IAGC
                shares it or he owns to Racino; and

            

    

     

    
      	
               

            	
              (c)

            	
              IAGC
                and the IAGC Shareholders shall have performed and complied with
                all
                agreements and conditions required by this Agreement to be performed
                and
                complied with by them prior to or on the Closing Date.
                

            

    

     

    ARTICLE VI

     

    TERMINATION

     

    6.1           
      Termination.
      This Agreement may be terminated by written notice given by the
      terminating party to the other parties hereto, at any time prior to the
      Closing:

     

    
      	
               

            	
              (a)

            	
              by
                mutual written consent of each of Racino, IAGC and the IAGC Shareholders;
                

            

    

     

    
      	
               

            	
              (b)

            	
              by
                the each of Racino, IAGC and the IAGC
                Shareholders, if there has been a misrepresentation, breach or
                non-performance by a party (other than the party seeking to terminate
                this
                Agreement pursuant to this Section 6.1)
                of any representation, warranty, covenant or
                obligation contained in this

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
              (c)

            	
              Agreement,
                which could reasonably be expected to have a Material Adverse Effect
                on
                another party, provided the breaching party has been given notice
                of and
                thirty (30) days to cure any such misrepresentation, breach or
                non-performance; or 

            

    

     

    
      	
               

            	
              (d)

            	
              by
                IAGC, the IAGC Shareholders and Racino, if a condition for the terminating
                party's benefit has not been satisfied or waived.
                

            

    

     

    6.2           
      Effect of
      Termination. In the event of the termination of this Agreement as
      provided in Section 6.1,
      this Agreement shall forthwith have no further force or
      effect and there shall be no obligation on the part of the parties hereunder
      except with respect to Article VII and
      Sections 9.1 and
9.3.

     

    6.3           
      Waivers and
      Extensions. At any time prior to the Closing Time, each of the parties
      hereto may (a) extend the time for the performance of any of the obligations
      or
      other acts of another party hereto, (b) waive any inaccuracies in the
      representations and warranties contained herein or in any document delivered
      pursuant hereto or (c) waive compliance with any of the agreements or conditions
      contained herein. Any such extension or waiver shall be valid if set forth
      in an
      instrument in writing signed by the party to be bound
      thereby.

     

    ARTICLE VII

     

    INDEMNIFICATION

     

    7.1           
      Mutual
      Indemnifications for Breaches of Warranty. Subject to section 7.2,
      Racino hereby covenants and agrees with IAGC and the IAGC
      Shareholders, and IAGC and the IAGC Shareholders hereby covenant and agree
      severally with Racino (the parties covenanting and agreeing to indemnify another
      party under this section are hereinafter individually referred to as the "Indemnifying
      Party" and the parties being indemnified by another Party under this
      section are hereinafter individually referred to as the "Indemnified
      Party") to indemnify and save harmless the Indemnified Party from and
      against any claims which may be made or brought against the Indemnified Party
      and/or which it may suffer or incur as a result of, or arising out of any
      non-fulfillment of any covenant or agreement on the part of the Indemnifying
      Party under this Agreement or any incorrectness in or breach of any
      representation or warranty of the Indemnifying Party contained in this
      Agreement.

     

    7.2           
      Limitation
      on
      Mutual Indemnification. The indemnification obligations of each of the
      Parties pursuant to section 7.1  shall
      be subject to the
      following:

     

    
      	
               

            	
              (a)

            	
              the
                applicable limitation limitations contained in the
                Limitations
                Act, 2002 (Ontario); 

            

    

     

    
      	
               

            	
              (b)

            	
              there
                shall be no limit as to amount in respect of breaches of the
                representations and warranties of the Parties other than as specifically
                limited by the provisions of this section; and

            

    

     

    
      	
               

            	
              (c)

            	
              an
                Indemnifying Party shall not be required to indemnify an Indemnified
                Party
                until the aggregate claims sustained by that Indemnified Party exceeds
                a
                value of $10,000, in which case, the Indemnifying Party shall be
                obligated
                to the Indemnified Party for all claims without limit as to amount.
                

            

    

     

    7.3           
      Procedure for
      Indemnification. The following provisions shall apply to any Claims for
      which an Indemnifying Party may be obligated to indemnify an Indemnified Party
      pursuant to this Agreement:

     

    
      	
               

            	
              (a)

            	
              upon
                receipt from a third party by the Indemnified Party of notice of
                a claim
                or the Indemnified Party becoming aware of a claim in respect of
                which the
                Indemnified Party proposes to demand indemnification from the Indemnifying
                Party, the Indemnified Party shall give notice to that effect to
                the
                Indemnifying Party with reasonable promptness, provided that failure
                to
                give such notice shall not relieve the Indemnifying Party from any
                liability it may have to the Indemnified Party except to the extent
                that
                the Indemnifying Party is prejudiced thereby;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
              (b)

            	
              in
                the case of claims arising from third parties, the Indemnifying Party
                shall have the right by notice to the Indemnified Party not later
                than 30
                days after receipt of the notice described in paragraph (1) above
                to
                assume the control of the defense, compromise or settlement of the
                claims,
                provided that such assumption shall, by its terms, be without costs
                to the
                Indemnified Party and the Indemnifying Party shall at the Indemnified
                Party's request furnish it with reasonable security against any costs
                or
                other liabilities to which it may be or become exposed by reason
                of such
                defense, compromise or settlement; 

            

    

     

    
      	
               

            	
              (c)

            	
              upon
                the assumption of control by the Indemnifying Party as aforesaid,
                the
                Indemnifying Party shall diligently proceed with the defense, compromise
                or settlement of the claims at its sole expense, including employment
                of
                counsel reasonably satisfactory to the Indemnified Party and, in
                connection therewith, the Indemnified Party shall co-operate fully,
                but at
                the expense of the Indemnifying Party, to make available to the
                Indemnifying Party all pertinent information and witnesses under
                the
                Indemnified Party's control, make such assignments and take such
                other
                steps as in the opinion of counsel for the Indemnifying Party are
                necessary to enable the Indemnifying Party to conduct such defense;
                provided always that the Indemnified Party shall be entitled to reasonable
                security from the Indemnifying Party for any expense, costs or other
                liabilities to which it may be or may become exposed by reason of
                such
                co-operation; 

            

    

     

    
      	
               

            	
              (d)

            	
              the
                final determination of any such claims arising from third parties,
                including all related costs and expenses, will be binding and conclusive
                upon the Parties as to the validity or invalidity, as the case may
                be, of
                such claims against the Indemnifying Party hereunder; and
                

            

    

     

    
      	
               

            	
              (e)

            	
              should
                the Indemnifying Party fail to give notice to the Indemnified Party
                as
                provided in paragraph (2) above, the Indemnified Party shall be entitled
                to make such settlement of the claims as in its sole discretion may
                appear
                advisable, and such settlement or any other final determination of
                the
                claims shall be binding upon the Indemnifying Party.
                

            

    

     

     

     

    ARTICLE VIII

     

    POST
      CLOSING
      MATTERS

     

    8.1           
      Board of
      Directors. Upon Closing, the board of directors of Racino shall consist
      of the following:

     

    Randy
      Barber

    John
      Simmonds

    Graham
      Simmonds

    Adam
      Szweras

    Jason
      Moretto

     

    8.2           
      Officers.
      Upon Closing, the officers of Racino shall consist of the
      following:

     

    John
      Simmonds                      Chairman,
      President and Chief Executive Officer

    Eric
      Rahn                                
Chief Operating Officer

    Gary
      Hokkanen                       
Chief Financial Officer

    Carrie
      Weiler                           Corporate
      Secretary

     

    8.3           
      Consulting
      Agreements. The parties agree that the terms of the consulting agreements
      with the officers of Racino after Closing shall be acceptable to IAGC and they
      shall be executed within fifteen (15) days from the time of the
      Closing.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE IX

     

     

     

    GENERAL

     

    9.1           
      Confidentiality
      & Public Notices. Except where compliance with this Section 9.1 would
      result in a
      breach of applicable law, notices, releases, statements and communications
      to
      Third Parties, including employees of the parties and the press, relating to
      transactions contemplated by this Agreement will be made only in such manner
      as
      shall be authorized and approved by Racino. Racino and each of IAGC and the
      IAGC
      Shareholders shall maintain the confidentiality of any information received
      from
      each other in connection with the transactions contemplated by this Agreement.
      In the event that the issuance of Racino Shares provided for in this Agreement
      is not consummated, each party shall return any confidential schedules,
      documents or other written information to the party who provided same in
      connection with this Agreement. 

     

    9.2           
      Notices.
      All notices or other communications required to be given in connection with
      this
      Agreement shall be given in writing and shall be given by personal delivery,
      by
      registered mail or by transmittal by facsimile, electronic mail (in portable
      document format ("PDF"))
      or other
      form of recorded communication addressed to the recipient as
      follows:

     

    To
      Racino:

     

    Racino
      Royal Inc.

    144
      Front Street West, Suite 700

    Toronto,
      Ontario

    Canada
      M5J 2L7

     

    Attention:                               
      John
      Simmonds

    Fax
      No.:                                
905-833-9847

     

     

    To
      IAGC:

              
      InterAmerican Gaming Corp.

         2499
      Glades Road

         Boca
      Raton,
      Florida  33431

     

    
      	 	
              Attention:

            	
              Eric
                Rahn

            
	 	
              Fax
                No.:

            	
              (866)
                426-0541

            

    

     

    with
      a copy
      to:

     

    Fogler,
      Rubinoff LLP

    95
      Wellington Street West, Suite 1200

    Toronto-Dominion
      Centre

    Toronto,
      Ontario M5J 2Z9

     

    Attention:                               Adam
      Szweras

    Fax
      No.:                                
416.941.8827

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    To
      the IAGC Shareholders:

     

    As
      per the respective addresses as set out in Schedule "A" hereto;

     

    or
      to
      such other address, facsimile number or individual as may be designated by
      notice given by either party to the other. Any such communication given by
      personal delivery shall be conclusively deemed to have been given on the day
      of
      actual delivery thereof and, if given by registered mail, on the fifth Business
      Day following the deposit thereof in the mail and, if given by facsimile or
      electronic mail or other form of recorded communication, shall be deemed given
      and received on the date of such transmission if received during the normal
      business hours of the recipient and on the next Business Day if it is received
      after the end of such normal business hours on the date of its transmission.
      If
      the party giving any such communication knows or ought reasonably to know of
      any
      difficulties with the postal system which might affect the delivery of mail,
      any
      such communication shall not be mailed but shall be given by personal delivery
      or by facsimile or electronic mail transmittal.

     

    9.3            Expenses.
      Except
      as otherwise provided herein, all costs and expenses (including, without
      limitation, the fees and disbursements of legal counsel) incurred in connection
      with this Agreement and the transactions contemplated hereby shall be paid
      by
      the party incurring such expenses.

     

    9.4           
      Time of the
      Essence. Time shall be of the essence hereof.

     

    9.5            Further
      Assurances. The parties hereto shall with reasonable diligence do all
      such things and provide all such reasonable assurances as may be required to
      consummate the transactions contemplated hereby, and each party shall execute
      and deliver such further documents, instruments, papers and information as
      may
      be reasonably requested by another party hereto in order to carry out the
      purpose and intent of this Agreement.

     

    9.6           
      Law and
      Jurisdiction. This Agreement shall be governed by and construed in
      accordance with the laws of the State of Nevada. The parties hereby attorn
      to
      the non-exclusive jurisdiction of the courts of Florida in any dispute that
      may
      arise hereunder.

     

    9.7            Counterparts.
      For the convenience of the parties, this Agreement may be executed in several
      counterparts, each of which when so executed shall be, and be deemed to be,
      an
      original instrument and such counterparts together shall constitute one and
      the
      same instrument (and notwithstanding their date of execution shall be deemed
      to
      bear date as of the date of this Agreement). A signed facsimile or PDF copy
      of
      this Agreement shall be effective and valid proof of execution and
      delivery.

     

    9.8            Entire
      Agreement.
This Agreement, including the schedules attached hereto, together with
      the agreements and other documents to be delivered pursuant hereto, constitute
      the entire agreement between the parties pertaining to the subject matter hereof
      and supersede all prior agreements, understandings, negotiations and
      discussions, whether oral or written, of the parties and there are no
      warranties, representations or other agreements between the parties in
      connection with the subject matter hereof except as specifically set forth
      herein and therein. This Agreement may not be amended or modified in any respect
      except by written instrument signed by all parties.

     

    9.9            Severability.
      The invalidity or unenforceability of any provision of this Agreement or any
      covenant herein contained shall not affect the validity or enforceability of
      any
      other provision or covenant hereof or herein contained, and this Agreement
      shall
      be construed and interpreted as if such invalid or unenforceable provision
      or
      covenant were omitted.

     

    9.10            Enurement.
      This
      Agreement shall be binding upon and shall inure to the benefit of and be
      enforceable by the successors and permitted assigns of the parties
      hereto.

     

    9.11

     

    Waivers.
      The
      parties hereto may, by written agreement:

     

    
      	
               

            	
              (a)

            	
              extend
                the time for the performance of any of the obligations or other acts
                of
                the parties hereto; 

            

    

     

    
      	
               

            	
              (b)

            	
              waive
                any inaccuracies in the warranties, representations, covenants or
                other
                undertakings contained in this Agreement or in any document or certificate
                delivered pursuant to this Agreement; or

            

    

     

    
      	
               

            	
              (c)

            	
              waive
                compliance with or modify any of the warranties, representations,
                covenants or other undertakings or obligations contained in this
                Agreement
                and waive or modify performance by any of the parties thereto.
                

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    IN
      WITNESS
      WHEREOF the parties hereto have executed this Agreement as of the date
      first written above.

    
      	 	 	
              RACINO
                ROYALE INC.

            
	

              Per:

            	 
	 	

              Name:

              Title:

            
	 	
              I
                have authority to bind the
                corporation

            

    

     

    
      	 	 	
              INTERAMERICAN
                GAMING CORP.

            
	

              Per:

            	 
	 	

              Name:

              Title:

            
	 	
              I
                have authority to bind the
                corporation

            

    

     

    IAGC
      SHAREHOLDER'S
      SIGNATURES: As per Schedule "A" attached hereto.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
      "A"

     

     

     

    
      	 	 	 	 	 	 
	
              INTERAMERICAN
                GAMING (PRIVATECO)

            	 	 	 	 
	
              Shareholder

            	
              Shares

            	
              Warrants

            	
              %
                Basic

            	
              %
                Fully Diluted

            	
              Status/Notes

            
	
              Foundation
                Opportunities Inc.

            	
              2,000,000

            	 	 	
              14.8%

            	 
	
              Brian
                Micner

            	
              150,000

            	 	 	
              1.1%

            	 
	
              Naomi
                Hoffenberg

            	
              150,000

            	 	 	
              1.1%

            	 
	
              Irene
                Szweras

            	
              150,000

            	 	 	
              1.1%

            	 
	
              Zachary
                Goldman

            	
              150,000

            	 	 	
              1.1%

            	 
	
              Mark
                Sternberg

            	
              150,000

            	 	 	
              1.1%

            	 
	
              Angela
                Chiu

            	
              150,000

            	 	 	
              1.1%

            	 
	
              Miriam
                Azimi

            	
              150,000

            	 	 	
              1.1%

            	 
	
              Efstansia
                Banks

            	
              150,000

            	 	 	
              1.1%

            	 
	
              The
                Woodham Group Inc.

            	
              350,000

            	 	 	
              2.6%

            	 
	
              Morningside
                Capital Ltd.

            	
              700,000

            	 	 	
              5.2%

            	 
	
              Rosemary
                Gillespie

            	
              300,000

            	 	 	
              2.2%

            	 
	
              Sarah
                Francis

            	
              150,000

            	 	 	
              1.1%

            	 
	
              Mark
                Gregory

            	
              300,000

            	 	 	
              2.2%

            	 
	
              Kristen
                Gregory

            	
              150,000

            	 	 	
              1.1%

            	 
	
              Michael
                B. Connell

            	
              200,000

            	 	 	
              1.5%

            	 
	
              2022304
                Ontario Inc.

            	
              750,000

            	 	 	
              5.6%

            	 
	
              2148099
                Ontario Inc.

            	
              300,000

            	 	 	
              2.2%

            	 
	
              Morningside
                Capital Ltd. (in trust)

            	
              550,000

            	 	 	
              4.1%

            	 
	
              Cathy
                Mills

            	
              300,000

            	 	 	
              2.2%

            	 
	
              Kimmo
                Oikkimus

            	
              300,000

            	 	 	
              2.2%

            	 
	
              Gracom
                Holdings

            	
              1,000,000

            	 	 	
              7.4%

            	 
	
              Morningside
                Capital

            	
              800,000

            	 	 	
              5.9%

            	 
	
              Matthew
                Linton

            	
              250,000

            	 	 	
              1.9%

            	 
	
              Eric
                Rahn

            	
              1,800,000

            	 	 	
              13.3%

            	 
	
              Robert
                Stakis

            	
              200,000

            	 	 	
              1.5%

            	 
	
              Robert
                Rodriguez

            	
              750,000

            	 	 	
              5.6%

            	 
	
              David
                Tsubouchi

            	
              100,000

            	 	 	
              0.7%

            	 
	
              G.R.
                Barber

            	
              200,000

            	 	 	
              1.5%

            	 
	
              Adam
                Petrillo

            	
              200,000

            	 	 	
              1.5%

            	 
	
              Aubrey
                Zidenberg

            	
              100,000

            	 	 	
              0.7%

            	 
	
              David
                Carbonaro

            	
              200,000

            	 	 	
              1.5%

            	 
	
              Gordon
                Ashworth

            	
              125,000

            	 	 	
              0.9%

            	 
	
              Helmut
                Biemann

            	
              125,000

            	 	 	
              0.9%

            	 
	
              James
                Boyden

            	
              100,000

            	 	 	
              0.7%

            	 
	
              Total

            	
              13,500,000

            	 	 	
              100.0%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]