This Guaranty (this “Guaranty”) is
made as of the 3rd day of December, 2008, by UT Gaming, Inc., a
Delaware corporation (“Guarantor”), in favor of
National City Bank, a national banking association
(“Lender”).
A. Guarantor’s affiliates,
Youbet.com, Inc., a Delaware corporation (“Youbet”),
United Tote Company, a Montana corporation (“United
Tote”), and Youbet Services Corporation, a Delaware
corporation (“Youbet Services”) (Youbet, United Tote
and Youbet Services are each individually a “Borrower”
and collectively the “Borrowers”), have requested that
Lender provide certain loans, extensions of credit and other
financial accommodations (collectively the “Financial
Accommodations”) to Borrowers evidenced by, among other
things, (i) that certain Loan and Security Agreement of even
date herewith by and between Borrowers and Lender (as amended,
renewed or restated from time to time, the “Loan
Agreement”), (ii) that certain Revolving Note of even
date herewith executed and delivered by Borrowers to Lender in a
maximum aggregate principal amount not to exceed Five Million and
no/100 Dollars ($5,000,000.00) (as amended, renewed or restated
from time to time, the “Revolving Note”),
(iii) that certain Term Note A of even date herewith executed
and delivered by Borrowers to Lender in a maximum aggregate
principal amount not to exceed Ten Million and no/100 Dollars
($10,000,000.00) (as amended, renewed or restated from time to
time, the “Term Note A”), and (iv) the other
documents, agreements and instruments referenced in any of the
foregoing or otherwise executed and delivered by Borrowers to
Lender (the “Other Agreements”) (the Other Agreements,
together with the Loan Agreement, the Revolving Note and the Term
Note A are collectively the “Loan Documents”). Except
as expressly set forth in this Guaranty, all terms which have an
initial capital letter where not required by the rules of grammar
are defined in the Loan Agreement.
B. Lender is willing to provide the
Financial Accommodations to Borrowers pursuant to the Loan
Agreement and the other Loan Documents provided, among other
things, Guarantor executes and delivers this Guaranty to
Lender.
C. Guarantor acknowledges and agrees that
(i) Guarantor has a financial interest in each Borrower,
(ii) Guarantor is benefited by the Financial Accommodations
made by Lender to Borrowers, (iii) Guarantor’s execution
and delivery of this Guaranty is a material inducement to Lender
providing the Financial Accommodations to Borrowers, and
(iv) without this Guaranty, Lender would not have provided the
Financial Accommodations to Borrowers.
D. In consideration of the foregoing, and
other good and valuable consideration, the receipt and sufficiency
of such consideration is hereby acknowledged by Guarantor,
Guarantor hereby covenants unto and agrees with Lender as set forth
in this Guaranty.
A. “ Borrowers’
Liabilities ” shall mean, individually and
collectively, all debts, liabilities, indebtedness, Rate Management
Obligations, fees, costs, expenses, covenants, duties, obligations
and agreements of any kind, nature or description whatsoever of
Borrowers or any Borrower to Lender, heretofore, now or hereafter
made, incurred, evidenced or created, whether voluntary or
involuntary, and however arising, whether due or not due, absolute
or contingent, liquidated or unliquidated, determined or
undetermined, direct or indirect, insured or uninsured, foreseeable
or unforeseeable, including, but not limited to, the indebtedness
owed by Borrowers to Lender pursuant to (i) the Loan
Agreement, (ii) the Revolving Note, (iii) the Term Note
A, (iv) the other Loan Documents, and (v) any Rate
Management Agreement.
B. “ Covenants ”
shall mean all now existing or hereafter arising covenants, duties,
obligations and agreements of Borrowers or any Borrower to and with
Lender.
C. “ Event of Default
” shall mean the occurrence of any one of the following
events: (i) Guarantor fails or neglects to perform, keep or observe
any term, provision, condition, warranty, representation or
covenant contained in this Guaranty or any other agreement,
document or instrument executed and delivered by Guarantor to
Lender, and such failure continues for thirty (30) days after
the occurrence thereof; or (ii) an “Event of
Default” as defined in the Loan Agreement.
D. “ Guarantor’s
Liabilities ” shall mean all of Guarantor’s now
existing and hereafter arising debts, liabilities, covenants,
duties, obligations and agreements to and with Lender, whether
pursuant to this Guaranty or otherwise.
A. Guarantor hereby
(i) unconditionally guaranties the full and timely payment of
Borrowers’ Liabilities when due or declared due, whether by
acceleration, maturity or otherwise; (ii) unconditionally
guaranties the full and timely performance of the Covenants;
(iii) agrees to pay all reasonable costs, expenses and fees,
including, but not limited to, attorneys’ fees, costs and
expenses (including without limitation, those fees, costs and
expenses of attorneys and paralegals who may be employees of
Lender, its parent or affiliates), incurred by Lender in connection
with this Guaranty, Guarantor’s Liabilities or any collateral
or security securing Guarantor’s Liabilities or any
collection or enforcement thereof; (iv) agrees to pay to
Lender the amount of any payments made to Lender in full or partial
satisfaction of Borrowers’ Liabilities, and which are
subsequently invalidated, declared to be preferential or
fraudulent, set aside or required to be repaid by Lender to
Borrowers, a trustee, a receiver or any other party under the
United States Bankruptcy Code or any similar federal, state or
local law, statute or regulation; and (v) interest on any of
the foregoing from and after demand from Lender to Guarantor for
payment until such time as Guarantor’s Liabilities hereunder
are paid in full, at a floating per annum rate of interest equal to
the Default Rate as set forth in the Loan Agreement.
B. This Guaranty and the full and timely
performance of the Covenants and the full and timely payment of
Borrowers’ Liabilities by Guarantor pursuant to this Guaranty
shall be a continuing, absolute and unconditional guaranty of
payment and not of collection, irrespective of (i) the
validity or enforceability of any instrument, agreement or document
evidencing all or any part of Borrowers’ Liabilities;
(ii) the absence of any attempt to collect or enforce
Borrowers’ Liabilities from or against Borrowers or other
action to enforce the full and timely performance of the Covenants
and the full and timely payment of Borrowers’ Liabilities,
and the absence of any such attempt shall in no way preclude or be
a condition precedent to proceeding against Guarantor;
(iii) any waiver or consent by Lender with respect to any term
or provision of any instrument, agreement or document executed and
delivered by Borrowers or Guarantor to Lender; (iv) Lender
obtaining any additional guaranties or any collateral to secure
Borrowers’ Liabilities from Borrowers or any other person or
entity; (v) any failure by Lender to take any steps to
preserve its rights to any security or collateral securing
Borrowers’ Liabilities or the Covenants or to utilize any of
its remedies, which failure shall in no way preclude or be a
condition precedent to Lender proceeding against Guarantor; or
(vi) any other fact, event, act, omission or circumstance
which might otherwise constitute a legal or equitable discharge of
liability or performance by Guarantor.
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C. Lender shall not be required or
obligated to (i) take any action to collect from, or to file
any claim of any kind against, Borrowers, any other guarantor or
any other person or entity liable, jointly or severally, for the
full and timely performance of any of the Covenants or the full and
timely payment of any of Borrowers’ Liabilities, prior to
pursuing any rights or remedies Lender may have against Guarantor;
(ii) take any steps to protect, enforce, take possession of,
perfect any interest in, foreclose or realize on any collateral or
security, if any, securing the Covenants or Borrowers’
Liabilities; or (iii) in any other respect, exercise any
diligence whatsoever in enforcing, collecting or attempting to
collect any of Borrowers’ Liabilities by any
means.
Guarantor hereby represents, warrants and
covenants unto Lender that none of such Guarantor’s real and
personal property is currently subject to any liens, security
interests, mortgages or other encumbrances and at all times prior
to the indefeasible payment and satisfaction in full of the
Borrowers’ Liabilities and the Guarantor’s Liabilities
(except,
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