Term Note A
Exhibit 10.2
| $10,000,000.00 | Dated as of: December 3, 2008 | |
| Chicago, Illinois | Due: November 30, 2010 |
FOR VALUE RECEIVED, the undersigned, Xxxxxx.xxx, 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”), jointly and severally promise to pay
to the order of National City Bank, a national banking association (“Lender”), on or before
November 30, 2010, the principal sum of Ten Million and no/100 Dollars ($10,000,000.00), or, if
less, the aggregate unpaid principal amount of Term Loan A, together with interest thereon from the
date hereof at the rates set forth in that certain Loan and Security Agreement of even date
herewith by and between Lender and Borrowers, as amended, renewed or restated from time to time
(collectively the “Loan Agreement”). Interest shall be calculated on the basis of a three hundred
sixty (360) day year for the actual number of days in which any of the Liabilities remain
outstanding and shall be paid as set forth in the Loan Agreement. Upon maturity or an “Event of
Default” (hereinafter defined), whichever is first to occur, interest shall accrue upon the
outstanding Liabilities at the Default Rate. Capitalized terms used but not otherwise defined
herein are used herein as defined in the Loan Agreement.
Borrowers shall pay the principal portion of the Liabilities evidenced by this Note to Lender
as follows: (a) eight (8) successive quarterly principal payments beginning on December 31, 2008,
and continuing on the last day of each calendar quarter thereafter through September 30, 2010, each
in an amount equal to the product of (i) the percent obtained by dividing the total principal
amount drawn on Term Loan A (regardless of repayments) as of each such quarterly payment date by
$10,000,000, and (ii) One Million Two Hundred Fifty Thousand and no/100 Dollars ($1,250,000.00),
and (b) a final payment of all then outstanding Liabilities evidenced by this Note on November 30,
2010, all without demand therefor or notice thereof from Lender to Borrower or any other person or
entity. Interest hereunder shall be paid as set forth in the Loan Agreement. Payment of the
Liabilities shall be made at Xxx Xxxxx Xxxxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, or
at such other location as Lender may designate in writing from time to time pursuant to Section
12.14 of the Loan Agreement.
Each Borrower waives the right to direct the application of any and all payments at any time
or times hereafter received by Lender on account of the Liabilities, and each Borrower agrees that
Lender shall have the continuing exclusive right to apply and reapply any and all payments in such
manner and in such order as Lender may deem advisable, including, but not limited to, the payment
of any costs, fees and expenses due and owing by Borrowers to Lender.
The full and timely payment of the Liabilities and Borrowers’ full and timely performance of
the Covenants are secured by security interests, liens and encumbrances granted by Borrowers to
Lender pursuant to the Loan Agreement and the other agreements, instruments, documents and
guaranties as heretofore, contemporaneously herewith or may hereafter be executed and delivered to
Lender by Borrowers and any other persons and entities, from time to time, as the case may be,
evidencing, securing or guarantying the Liabilities and the Covenants (collectively the “Collateral
Documents”), including, without limitation: (i) that certain Stock Pledge Agreement of even date
herewith executed and delivered by Youbet to Lender, (ii) that certain Intellectual Property
Security Agreement of even date herewith by and between Borrowers and Lender, and (iii) all
amendments, restatements and renewals of the foregoing.
Upon the occurrence of an Event of Default at the option of Lender or the legal holder hereof,
as the case may be, and without demand therefor or notice thereof from Lender to Borrowers or any
other Person, all of the Liabilities shall be immediately due and payable and shall be collectible
immediately or at any time after the occurrence and during the continuation of such Event of
Default. The acceptance by Lender of any partial payment of the Liabilities after an Event of
Default will not establish a custom, or waive any of Lender’s rights or remedies pursuant to this
Note, the Collateral Documents, at law, in equity or otherwise. Borrowers and every endorser of
this Note hereby each waive presentment, demand and protest, and notice of presentment, demand,
protest, default, non-payment, maturity, release, compromise, amendment, modification, settlement,
extension or renewal of the Liabilities or this Note, the Covenants, the Collateral Documents or
any collateral or security for the Liabilities or the Covenants.
Any forbearance by Lender or the legal holder hereof, as the case may be, in exercising any
right or remedy pursuant to this Note or the Collateral Documents, at law, in equity or otherwise,
shall not be or be deemed a waiver of nor shall preclude the subsequent exercise of any such right
or remedy.
If at any time or times before or after an Event of Default, Lender:
A. employs an accountant, consultant, counsel or any other representative or advisor:
1. with respect to the Liabilities, this Note, the Collateral Documents or otherwise,
2. to represent or consult with Lender in connection with any litigation, contest,
dispute, suit or proceeding, or to commence, defend, intervene or take any other action
in or with respect to any litigation, contest, dispute, suit or proceeding, whether
initiated by Xxxxxx, Borrowers or any other Person, in any way or respect arising from,
relating to or in connection with the Liabilities, this Note, the Covenants, the
Collateral Documents or any collateral or security for the Liabilities or the
Covenants, or
3. to enforce any of Xxxxxx’s rights or remedies;
B. takes any action or initiates any proceeding to protect, collect, sell, liquidate or
otherwise dispose of any of the collateral or security for the Liabilities, the Covenants or the
Collateral Documents; or
C. attempts to or enforces any of Xxxxxx’s rights or remedies against Xxxxxxxxx,
then the reasonable costs and expenses so incurred by Lender shall be part of the Liabilities
payable by Borrowers to Lender upon demand with interest at the Default Rate until actually paid.
Without limiting the generality of the foregoing, such costs and expenses shall include the
reasonable fees, expenses and charges of attorneys, paralegals, accountants, investment bankers,
appraisers, valuation and other specialists, experts, expert witnesses, auctioneers, court
reporters and telefax charges, overnight delivery services, messenger services and expenses for
travel, lodging and meals.
Each Borrower represents and warrants to Lender that the Liabilities and Borrowers’ use of the
principal portion of the Liabilities are solely for general business purposes and consistent with
all applicable laws and statutes, including, without limitation, Illinois Compiled Statutes,
Chapter 815, Act 205, Section 4 (815 ILCS 205/4). Each Borrower further represents and warrants to
Lender that such Borrower does not and will not at any time hereafter own any margin securities,
and that none of the principal portion of the Liabilities shall be used for the purpose of (1)
purchasing or carrying any margin securities, (2) reducing or
retiring any indebtedness which was originally incurred to purchase any margin securities, or (3)
any other purpose not permitted by Regulation U of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
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Borrowers shall execute, acknowledge and deliver, or cause to be executed, acknowledged or
delivered, any and all such further assurances and other agreements or instruments, and take or
cause to be taken all such other action, as shall be reasonably necessary from time to time to give
full effect to the Loan Documents and the transactions contemplated thereby.
This Note is executed and delivered by Borrowers to Lender in Chicago, Illinois, and shall be
governed, controlled by and construed in accordance with the laws and statutes of the State of
Illinois, as to interpretation, enforcement, validity, construction, effect and in all other
respects, but excluding Illinois choice of law principles.
This Note shall inure to the benefit of Lender, the legal holder hereof and any of their
respective successors and assigns, as the case may be, and shall be binding upon each Borrower, its
respective legal representatives and successors.
If any provision of this Note is held to be invalid or unenforceable by a court of competent
jurisdiction, such provision shall be severed here from and such invalidity or unenforceability
shall not affect any other provision of this Note, the balance of which shall remain in and have
its intended full force and effect. However, if such invalid or unenforceable provision may be
modified so as to be valid and enforceable as a matter of law, such provision shall be deemed to
have been modified so as to be valid and enforceable to the maximum extent permitted by law. If
any rate of interest described in this Note is greater than the rate of interest permitted to be
charged or collected by applicable law, as the case may be, such rate of interest shall be reduced
to the maximum rate of interest permitted to be charged or collected by applicable law.
This Note evidences indebtedness incurred under, and is subject to the terms and provisions
of, the Loan Agreement. The Loan Agreement, to which reference is hereby made, sets forth said
terms and provisions, including those under which this Note may or must be paid prior to its due
date or may have its due date accelerated.
All references to “Borrowers” and “Borrower” shall mean Youbet, United Tote and Youbet
Services, both individually and collectively, and jointly and severally, and all representations,
warranties, duties, covenants, agreements and obligations of Borrowers shall be the individual and
collective representations, warranties, duties, covenants, agreements and obligations of each of
Youbet, United Tote and Youbet Services.
EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE
BORROWERS AS SET FORTH IN THE LOAN AGREEMENT IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW,
RULE OF COURT OR OTHERWISE.
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BORROWERS AND LENDER IRREVOCABLY AGREE, AND HEREBY CONSENT AND SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, AND THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION, WITH REGARD TO ANY ACTIONS OR PROCEEDINGS
ARISING
FROM, RELATING TO OR IN CONNECTION WITH THE LIABILITIES, THIS NOTE, ANY OF THE COVENANTS, THE
COLLATERAL DOCUMENTS OR ANY COLLATERAL OR SECURITY FOR THE LIABILITIES OR THE COVENANTS. EACH
BORROWER HEREBY WAIVES ITS RIGHT TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION FILED IN THE
CIRCUIT COURT OF COOK COUNTY, ILLINOIS, OR THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS, EASTERN DIVISION. EACH BORROWER AND XXXXXX XXXXXX WAIVE THEIR RESPECTIVE
RIGHT TO TRIAL BY JURY.
[signature page follows]
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This Note has been executed and delivered by Borrowers to Lender as of the date first set
forth above (a) by each Borrower’s duly authorized officers, and (b) pursuant to resolutions duly
adopted by each Borrower’s respective board of directors if and to the extent such authorization is
required, by applicable law or otherwise.
| Xxxxxx.xxx, Inc., a Delaware corporation |
United Tote Company, a Montana corporation |
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By:
|
/s/ Xxxxx Xxxx
|
By: | /s/ Xxxxx Xxxx
|
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| Name: Xxxxx Xxxx | Name: Xxxxx Xxxx | |||||||||
| Title: Chief Financial Officer | Title: Chief Financial Officer | |||||||||
| Youbet Services Corporation, a Delaware corporation |
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By:
|
/s/ Xxxxxxx X. Xxxxxx
|
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| Name: Xxxxxxx X. Xxxxxx | ||||||||||
| Title: Treasurer | ||||||||||
[Signature Page to Term Note A]
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