STOCK REPURCHASE AGREEMENT
This
Stock Repurchase Agreement (“Agreement”) is entered into as of January 1, 2010
(the “Effective
Date”), by and between LAS VEGAS GAMING, INC., a Nevada corporation (the
“Company”)
and TRIANGLE HOLDINGS VI LLC, an Oregon limited liability company (“Seller”).
RECITALS
A. Seller
owns 150,000 shares of Series G Convertible Preferred Stock of the Company,
recorded in the name of Seller on the books of the Company (the “Shares”).
B. Pursuant
to the terms of Shares, Seller is entitled to receive a 12% annual
dividend. The Company was unable to pay the dividend due January 1,
2010, which amounted to $107,847.12.
C. As
a result of Seller’s failure to pay the past due dividend, Seller has asked the
Company to repurchase the Shares for the amount of Seller’s initial
investment.
D. The
Company desires to repurchase the Shares from Seller and Seller desires to sell
the Shares to the Company on the terms and subject to the conditions set forth
in this Agreement.
AGREEMENT
NOW,
THEREFORE, the parties agree as follows:
1.
Sale
and Purchase of Shares.
1.1 Sale. Subject
to the terms and conditions of this Agreement, the Seller hereby sells, assigns,
and transfers all of the Shares to Company (“Repurchase”)
in consideration for the Purchase Price (as defined below).
1.2 Purchase
Price. Company shall purchase the Shares for $750,000 (the
“Purchase
Price”), payable in the form of, and pursuant to, a promissory note
substantially in the form of Exhibit A hereto (the “Note”). The
amount of such promissory note shall include, in addition, the amount of the
past due dividend of $107,847.12.
1.3 Closing. Upon
execution of this Agreement, (i) Seller shall deliver to the Company the
certificate or certificates for the Shares, together with an assignment separate
from certificate in the form attached to this Agreement as Exhibit B and
endorsed in blank, and (ii) Company shall deliver the Note.
2.
Representations
by Seller.
2.1 Authorization;
Enforcement. Seller represents and warrants to the Company
that Seller has the absolute and unrestricted right, power and authority to
sell, transfer and assign the Shares to the Company pursuant to this
Agreement. This Agreement has been duly authorized and executed by
Seller, and is the valid and binding agreement of Seller, enforceable against it
in accordance with its terms.
2.2 Consents. No
consent, approval or authorization of or notice to any third party is necessary
to be obtained or given by or on behalf of Seller in connection with the
Repurchase. Seller further represents and warrants to Company that the
Repurchase does not violate the organizational documents of Seller or any
agreement to which Seller is a party.
2.3 Ownership. Seller
has and is conveying to the Company good and marketable title to the Shares,
free and clear of any liens, restrictions, claims or other
encumbrances.
2.4 Knowledge of
Seller. Seller has sufficient knowledge to independently
evaluate, and is fully familiar with, the Company and its financial position,
prospects and valuation. Seller has not relied on, is not relying on, and has
not been influenced by, any representation, information or recommendation
provided by Company, its directors, management, employees, agents or advisors in
determining the sale price or evaluating or reaching Seller’s decision to sell
the Shares.
3.
Miscellaneous.
3.1 Governing
Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Nevada.
3.2 Entire Agreement;
Enforcement of Rights. This Agreement, including all exhibits
hereto, contains the entire agreement and understanding of the parties relating
to its subject matter and supersedes all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the
parties. The failure by either party to enforce any rights under this Agreement
shall not be construed as a waiver of any rights of such party.
3.3 Severability. Any
provision of this Agreement which is invalid, illegal or unenforceable shall be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof or rendering that
or any other provision of this Agreement invalid, illegal or unenforceable. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.
3.4 Costs. Each
party shall pay all of its own costs and expenses, including the fees and costs
of its attorneys, consultants, contractors and representatives, incurred in
connection with this Agreement. If any dispute arises out of or relates to this
Agreement, whether or not a suit or other proceeding is commenced, and whether
in mediation, in arbitration, at trial, on appeal, the prevailing party shall be
entitled to recover and be reimbursed for its costs and expenses incurred,
including reasonable attorney fees.
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3.5 Notices. Any
notice required or permitted by this Agreement shall be in writing and shall be
deemed sufficient when delivered personally or sent by facsimile or other form
of electronic transmission or 48 hours after being deposited in the U.S. mail,
as certified or registered mail, with postage prepaid, and addressed to the
party to be notified at such party’s address, facsimile number or email address
as set forth below or as subsequently modified by written notice.
3.6 Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties, their successors and assigns.
3.7 Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original and which together shall constitute one and the same instrument.
Evidence of execution may be provided on a facsimile basis by telecopy or other
electronic means.
3.8 Further
Assurances. Each of the parties agrees to execute such further
instruments or documents reasonably requested by the other party or as necessary
to carry out the purposes of this Agreement.
The
parties have executed this Stock Repurchase Agreement as of the day and year
first set forth above.
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COMPANY:
LAS
VEGAS GAMING, INC.
By:_______________________________
Name:_____________________________
Its:_______________________________
Address:___________________________
__________________________
Facsimile:___________________________
Email: ____________________________
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SELLER:
TRIANGLE
HOLDINGS VI LLC
By:________________________________
Name:______________________________
Its:________________________________
Address:____________________________
___________________________
Facsimile:____________________________
Email: _____________________________
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EXHIBIT
A
ASSIGNMENT
SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that
certain Stock Repurchase Agreement between the undersigned (“Seller”) and LAS
VEGAS GAMING, INC. (the “Company”), dated as of January 1, 2010, Seller hereby
sells, assigns and transfers unto Company a total of 150,000 shares of Series G
Convertible Preferred Stock of the Company, recorded in Seller’s name on the
books of Company and does hereby irrevocably constitute and appoint Company as
transfer agent to transfer the said shares on the books of Company with full
power of substitution in the premises.
Dated:
________________________
SELLER:
TRIANGLE
HOLDINGS VI LLC
By:
_____________________________
Name: _____________________________
Title:
_____________________________
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EXHIBIT
B
SECURED SECOND POSITION
PROMISSORY NOTE
FOR VALUE
RECEIVED, the undersigned, LAS VEGAS GAMING, INC., a Nevada corporation with its
principal place of business at 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxx Xxxxx,
Xxxxxx 00000 (“Maker”),
hereby unconditionally promises to pay to the order of Triangle Holdings VI LLC,
(“Payee”) at
0000 XX Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000, in immediately available funds by
wire transfer or cashier’s check, the principal sum of ONE MILLION ONE HUNDRED
SEVEN THOUSAND EIGHT HUNDRED FORTY SEVEN AND 12/100 DOLLARS ($1,107,847.12), or
such lesser amount as may be payable hereunder pursuant to the terms of this
Secured Second Position Promissory Note (this “Note”),
together with accrued interest on the outstanding and unpaid principal balance
as herein specified.
1. Loans. The
principal amount of this Note represents (a) the repurchase by Maker of 150,000
shares of Series G Convertible Preferred Stock of Maker currently held by Payee
for the amount of Payee’s initial investment of $750,000, together with the 12%
dividend amounting to $107,847.12 that was due and payable on January 1, 2010,
which Maker is unable to pay, (b) a new loan in the amount of $150,000, to be
made on March 18, 2010, and to be used to lease or purchase materials that will
be used to produce, and that will become a part or component of, Maker’s
products, including PlayerVision 3 software applications incorporated into
Maker’s slot machine products, and (c) a $100,000 loan fee charged by Payee in
connection with making the new loan (the “Loan
Fee”).
2. Payments. (a) The
entire outstanding principal balance of this Note, together with all accrued and
unpaid interest, shall be due and payable in one payment on the earlier to occur
of (a) the date that that certain loan from IGT, a Nevada corporation, to Maker
in the principal amount of $1,500,000 is repaid in full and (b) the date on
which IGT forecloses on such loan as a result of a default thereunder (such
date, the “Due
Date”). Maker may prepay all or any portion of the principal of this Note
without giving Payee prior written notice of its intention to make such
prepayment and without a prepayment penalty. Any prepayment shall be accompanied
by the payment of all accrued and unpaid interest on the amount of principal
being so prepaid.
(b) All
payments and prepayments of principal or interest on this Note shall be made in
lawful money of the United States of America at the address of Payee indicated
above, or such other place as the holder of this Note shall designate in writing
to Maker. Each payment under this Note shall be credited as follows:
first, to accrued but unpaid fees (including, without limitation, the Loan Fee);
second, to accrued and unpaid interest; and third, to the unpaid principal
balance of this Note.
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3. Interest Rate. The
principal balance hereof from time to time outstanding, as well as any interest
not paid when due, shall bear interest at the rate of ten percent (10%) per
annum from the date hereof and continuing until all sums due hereunder are paid
in full. All accrued interest shall be payable on the Due
Date.
4. Security. This Note
is executed as of March 18, 2010 to be effective as of January 1, 2010. Maker
hereby grants to Payee, for the benefit of Payee and any affiliate of Payee, a
continuing second priority security interest (except as otherwise noted below)
in and to, and assigns to Payee the following, and each item thereof, whether
now owned or now due, or in which Maker has an interest, or hereafter acquired,
arising, or to become due, or in which Maker obtains an interest, and all
products, proceeds, substitutions, and accessions of or to any of the following
(all of foregoing, together with any other property in which Payee may in the
future be granted a security interest, is referred to herein as the “Collateral”):
(a)
All
accounts and accounts receivable;
(b)
All
inventory;
(c) All
general intangibles (including, without limitation, all intellectual property
and patents for PlayerVision 3
and Nevada Numbers);
(d) All
equipment; (except for 32 slot machines with respect to which Gaming Arts, LLC
holds a second priority
security and with respect to which Payee will hold a third priority security
interest);
(e) All
goods;
(f)
All
fixtures (except the furniture and fixtures at 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx
000, Xxx Xxxxx, Xxxxxx
with respect to which Gaming Arts, LLC holds a second priority
security and with respect to which Payee will
hold a third priority security interest);
(g)
All
chattel paper;
(h)
All
rights under letters of credit of which Seller is the beneficiary;
(i)
All
payment intangibles;
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(j)
All
supporting obligations;
(k) All
books, records, and information relating to the Collateral and/or to the
operation of Maker’s business, and all rights
of access to such books, records, and information, and all property in which
such books, records, and information are
stored, recorded, and maintained;
(l)
All
leasehold interests;
(m) All
investment property, instruments, documents, deposit accounts, money, policies
and certificates of insurance, deposits,
impressed
accounts, compensating balances, cash, or other property;
(n) All
insurance proceeds, refunds, and premium rebates, including, without limitation,
proceeds of fire and credit insurance, whether
any of such proceeds, refunds, and premium rebates arise out of any of the
foregoing. ((a) through (m)) or otherwise; and
(o) All
liens, guaranties, rights, remedies, and privileges pertaining to any of the
foregoing ((a) through (n)), including the right
of stoppage in transit.
All terms
used in this Section 3 and not otherwise defined in this Note shall have the
meanings given to them in the Nevada Uniform Commercial Code (the “UCC”). It
is intended that the Collateral include, without limitation, all PlayerVision
assets of Maker. Maker agrees to execute such financing statements
and to take whatever other actions are requested by Payee to perfect and
continue Payee’s security interest in the Collateral. Maker
authorizes Payee to file one or more financing statements describing the
Collateral in any and all jurisdictions where, and with any and all governmental
authorities with whom, the Payee deems such filing to be necessary or
appropriate to perfect and establish the priority of the liens granted by this
Note.
5. Maker’s
Representations. Maker hereby
represents and warrants to Payee that:
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(a)
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Maker
has good and marketable title to the Collateral, subject only to the liens
or encumbrances disclosed as of the date hereof to Payee by Maker in
writing.
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(b)
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Maker
is duly organized and validly existing as a corporation under the laws of
the state of Nevada, and is in good standing as a corporation and
qualified to do business in each state in which the nature of its business
or property so requires.
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(c)
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Maker
has the corporate power and authority and is duly authorized to execute
and deliver this Note and perform the obligations under this
Note. This Note has been duly executed and delivered by an
authorized officer of Maker and constitutes a valid and legally binding
obligation of Maker, enforceable in accordance with its
terms.
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(d)
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Maker’s
execution, delivery, and performance of this Note and compliance with the
terms, conditions and provisions hereof are not prohibited or restricted
under the articles of incorporation or bylaws of Maker and do not conflict
with, violate or constitute a breach of or default under any provision of
any agreement, contract, lease, deed of trust, indenture, or instrument to
which Maker is a party or by which Maker or its assets and properties,
including the Collateral, are bound, or result in the imposition of any
lien, charge, encumbrance, claim or security interest of any nature
whatsoever upon any of the
Collateral.
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(e)
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The
security interest granted hereby in and to the Collateral constitutes a
present, valid, binding and enforceable security interest as collateral
security for Maker’s obligations under this Note and will be senior and
prior to any liens, encumbrances, charges, title defects, interests and
rights of any others with respect to such Collateral, other than the liens
granted in favor of IGT and Gaming Arts, LLC, which rank senior to Payee’s
security interest.
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(f)
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There
are no actions or proceedings pending or, to the knowledge of Maker,
threatened against Maker that would reasonably be expected to (i) result
in any material adverse change in Maker’s financial or business condition
or (ii) materially adversely affect any of Maker’s assets, including the
Collateral.
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6. Maker’s
Covenant. For so long as this Note remains outstanding, Maker
shall not sell, assign or transfer any of the Collateral, or any part thereof or
interest therein, other than in the ordinary course of business.
7.
Events of
Default. Maker shall be in default hereunder upon the
happening
of any of the following events or conditions (each such event or condition
hereinafter referred to as an “Event of
Default”):
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(a)
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Maker
shall fail to pay when due any principal of or accrued and unpaid interest
on this Note on or before three business days after Payee has given Maker
written notice of such payment
default.
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(b)
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Maker
shall fail to pay when due any principal of or accrued and unpaid interest
on any indebtedness of Maker for borrowed money, and such failure to pay
shall remain unremedied for a period of five business
days.
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(c)
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Maker
or any subsidiary of Maker shall breach any of the terms of any agreement
between Maker or any of its subsidiaries, on the one hand, and Payee or
any of its affiliates, on the other
hand.
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(d)
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Maker
shall commence a voluntary proceeding seeking liquidation, reorganization,
or other relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect, or seeking
the appointment of a trustee, receiver, liquidator, custodian, or other
similar official for it or a substantial part of its property or shall
consent to any such relief or to the appointment of or taking possession
by any such official in an involuntary case or other proceeding commenced
against it or shall make a general assignment for the benefit of creditors
or shall take any corporate action to authorize any of the
foregoing.
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(e)
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Any
involuntary proceeding shall be commenced against Maker seeking
liquidation, reorganization, or other relief with respect to it or its
debts under any bankruptcy, insolvency, or other similar law now or
hereafter in effect, or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official for it or a substantial
part of its property, and such involuntary proceeding shall remain
undismissed and unstayed for a period of ninety (90)
days.
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(f)
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The
failure by Maker to timely file with the United States Securities and
Exchange Commission all reports and other documents required of the Maker
under the Securities Act of 1933 and the Securities Exchange Act of
1934.
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(g)
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Any
condition or event occurs that Payee determines, in its sole and absolute
discretion, has or is reasonably likely to have a material adverse effect
on (i) Maker’s business or operations, (ii) the validity or enforceability
of this Note or the rights and remedies of Payee hereunder or (iii) the
value of the Collateral.
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8. Remedies. (a)
Maker shall promptly notify Payee upon becoming aware of the occurrence of an
Event of Default hereunder. Upon the occurrence of any Event of Default set
forth in clauses (a), (b) or (c) above, the entire unpaid principal balance of
and accrued interest on this Note shall immediately become due and payable with
no action required by the holder hereof. Upon the occurrence of any other Event
of Default, the holder hereof may, at its option, declare the entire unpaid
principal balance of and accrued interest on this Note immediately due and
payable without notice, demand or presentment, all of which are hereby waived,
and upon such declaration the same shall become and shall be immediately due and
payable. Upon the occurrence of any Event of Default hereunder, Payee
shall have (a) all rights and remedies provided to a secured party with respect
to the Collateral under the UCC and (b) all rights or remedies available to
Payee at law or in equity.
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(b)
If Payee or any other holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder hereunder,
or if this Note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceedings, all reasonable collection costs and
fees incurred by the holder, including reasonable attorneys’ fees, shall be
added to the principal amount of this Note.
9. GOVERNING LAW; VENUE.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEVADA AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. ANY ACTION OR PROCEEDING UNDER OR IN CONNECTION WITH THIS
NOTE AGAINST MAKER OR ANY OTHER PARTY LIABLE FOR PAYMENT OF ANY SUMS OF MONEY
PAYABLE ON THIS NOTE MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN XXXXX
COUNTY, NEVADA. MAKER AND EACH SUCH OTHER PARTY HEREBY IRREVOCABLY
(A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND (B) WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF PAYEE TO BRING ANY ACTION OR PROCEEDING
AGAINST MAKER OR ANY OTHER PARTY LIABLE HEREUNDER OR WITH RESPECT TO ANY
COLLATERAL IN ANY STATE OR FEDERAL COURT IN ANY OTHER JURISDICTION.
10. Waivers. Maker and
each surety, guarantor, endorser, and other party ever liable for payment of any
sum s of money payable on this Note jointly and severally waive notice,
presentment, demand for payment, protest, notice of protest and non-payment or
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, diligence in collecting, grace, and all other formalities of
any kind, and consent to all extensions without notice for any period or periods
of time and partial payments, before or after maturity, and any impairment of
any collateral securing this Note, all without prejudice to Payee or any other
holder hereof. Payee and any other such holder shall similarly have
the right to deal in any way, at any time, with one or more of the foregoing
parties without notice to any other party, and to grant any such party any
extensions of time for payment of any of said indebtedness, or to release or
substitute part or all of the collateral securing this Note, or to grant any
other indulgences or forbearances whatsoever, without notice to any other party
and without in any way affecting the personal liability of any party
hereunder.
11. Full
Recourse. The liability of Maker for amounts owing hereunder
shall not be limited to the Collateral. Maker shall remain fully
liable for indefeasible repayment in full of the full amount of this Note,
including all accrued and unpaid interest, fees, and expenses, and,
specifically, any remaining amounts owing in the event that sale or other
liquidation of the Collateral is deficient to satisfy the full amount owing
hereunder.
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12. Miscellaneous.
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(a)
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This
Note shall be binding upon Maker and shall inure to the benefit of Payee
and its successors, assigns, heirs, and legal
representatives.
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(b)
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No
failure or delay by Payee to insist upon the strict performance of any
term, condition, covenant or agreement of this Note, or to exercise any
right, power or remedy hereunder shall constitute a waiver of any such
term, condition, covenant, agreement, right, power or
remedy.
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(c)
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Time
is of the essence.
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IN WITNESS WHEREOF, this Note has been executed effective the date and
place first written above.
LAS
VEGAS GAMING, INC.
By:
____________________________
Name: ____________________________
Title:
____________________________
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