GUARANTY AGREEMENT
THIS
GUARANTY AGREEMENT
(this
“Guaranty”) is made as of the 31st
day of
October, 2005 by
FLORIDA GAMING CORPORATION,
a
Delaware corporation (the “Guarantor”), in favor of FREEDOM
FINANCIAL CORPORATION,
an
Indiana corporation (the “Lender”).
A.
Pursuant
to that certain Third Amended and Restated Loan Agreement (the “Loan Agreement”)
by and between Florida Gaming Centers, Inc. and City National Bank of Florida,
as Trustee under Trust Agreement dated January 3, 1979 and known as Trust
No.
5003471 (collectively the Borrower”) and Lender dated concurrently herewith (the
“Loan Agreement”), Lender has agreed to make and Borrower has accepted a loan in
the principal amount of $2,400,000 (the “Loan”), which Loan is evidenced by a
certain Third Amended and Restated Note dated concurrently herewith and executed
by Borrower in favor of Lender (the “Note”), and is secured by, among
other things, certain Mortgages (collectively the “Mortgages”) assigned by First
Bank to Lender encumbering the property described in said Mortgages (the
“Property”), excluding approximately 70 acres of land adjoining Florida Gaming
Centers, Inc.’s Fort Xxxxxx, Florida Xxx Xxxx which land is in the process of
being sold.
B.
The
Guarantor is financially interested in the Property, through ownership and
control in Borrower, and as a material inducement to Lender to agree to enter
into the Loan Agreement and make the Loan, the Guarantor has agreed to enter
into this Guaranty on the terms and conditions hereinafter set
forth.
C.
It
will
be of substantial economic benefit to the Guarantor for the Borrower to issue
the Note and borrow the principal evidenced thereby, the Guarantor expecting
to
receive, directly or indirectly, substantial economic benefit therefrom and
from
Borrower’s ownership and operation of the Property, and any all loans or other
financial accommodations made to Borrower by Lender are made with Lender’s full
reliance on this Guaranty.
NOW,
THEREFORE,
in
consideration of the foregoing, Guarantor agrees as follows:
1.Definitions.
(a)
“Borrower’s Liabilities” means all obligations and liabilities of Borrower to
Lender, including, without limitation, all debts, claims and indebtedness
whether primary, secondary, direct, contingent, fixed or otherwise,
heretofore, now and/or from time to time hereafter owing, due or payable,
however evidenced, created, incurred, acquired or owing and however arising,
whether under the Loan Documents or by oral agreement or operation of law
or
otherwise, and all terms, conditions, agreements, representations, warranties,
undertakings, covenants, guaranties and provisions to be performed, observed
or
discharged by Borrower under the Loan Documents.
(b)
“Guarantor’s Liabilities” means all of Guarantor’s obligations and liabilities
to Lender under this Guaranty.
(c)
“Loan
Documents” means the Loan Agreement, the Note, the Mortgages, and
all
agreements
and instruments and documents, including, without limitation, promissory
notes,
loan and security agreements, guaranties, letters of credit, mortgages, deeds
of
trust, pledges, powers of attorney, consents, assignments, contracts, notices,
leases, financing statements and all other written matter heretofore, now
and/or
from time to time hereafter executed by and/or on behalf of Borrower and
delivered to Lender and any and substitutions, replacements, renewals and/or
amendments to and of the aforementioned agreements, instruments and
documents.
2.Guaranty.
Guarantor
unconditionally and absolutely guarantees to Lender the prompt performance
and
payment of all of Borrower’s Liabilities when such performance or payment is due
or declared due by Lender.
Prior
to
enforcing its rights under this Guaranty, Lender is not required to (a)
prosecute collection or seek to enforce or to resort to any remedies against
Borrower or any other party liable to Lender on account of Borrower’s
Liabilities or any guaranty thereof; or (b) to enforce or resort to any remedies
with respect to any security interests, liens or encumbrances granted to
Lender
by Borrower or any other party to secure the repayment of Borrower’s
Liabilities.
Guarantor’s
Liabilities shall in no way be impaired, affected, reduced or released by
reason
of (a) Lender’s failure or delay to do or take any of the actions or things
described in this Guaranty; (b) the invalidity or unenforceability of Borrower’s
Liabilities or the Loan Documents; or (c) any loss of or change in priority
or
reduction in or loss of value of any security interest, lien or encumbrances
securing the repayment of Borrower’s Liabilities
2
3.
Representations
and Warranties.
Guarantor
represents and warrants to Lender that:
(a)
The
recitals in this Guaranty are true and correct;
(b)
Guarantor has the right, power and capacity to enter into, execute, deliver
and
perform this Guaranty;
(c)
This
Guaranty, when duly executed and delivered, will constitute a legal, valid
and
binding obligation of Guarantor, enforceable against Guarantor in accordance
with its terms, subject to applicable bankruptcy laws or other laws affecting
creditor’s rights generally or the equity powers of the courts;
(d)
The
execution, delivery and/or performance by Guarantor of this Guaranty shall
not,
by the lapse of time, the giving of notice or otherwise, constitute a violation
of any applicable law or a breach of any provision contained in any agreement
or
document to which Guarantor is now or hereafter a party or by which it is
or may
become bound;
(e)
Guarantor is now, and at all times hereafter shall be, solvent and generally
able to pay its debts as such debts become due, and Guarantor now owns and
shall
at all times hereafter own property which, at fair valuation, exceeds the
sum of
Guarantor’s debts;
(f)
Guarantor does not intend to incur or have reason to believe that Guarantor
will
incur debts beyond Guarantor’s ability to pay such debts as they
mature;
(g)
There
are no actions or proceedings which are pending or threatened against Guarantor
which might result in any material and adverse change in Guarantor’s ability to
perform Guarantor’s Liabilities;
(h)
Upon
written request from Lender, Guarantor agrees to furnish Lender all pertinent
facts relating to the ability of Borrower to pay and perform Borrower’s
Liabilities and all pertinent facts relating to Guarantor’s ability to pay and
perform Guarantor’s Liabilities. Guarantor agrees to keep informed with respect
to all such facts. Guarantor acknowledges and agrees that (i) Lender has
relied
and will continue to rely upon the facts and information to be furnished
to it
by Guarantor, and (ii) in executing this Guaranty and at all times hereafter
Guarantor has relied and will continue to rely upon Guarantor’s own
investigation and upon sources other than Lender for all information and
facts
relating to the ability of Borrower to pay and perform Borrower’s Liabilities,
and Guarantor has not and will not hereafter rely upon Lender for any such
information or facts; and
3
(i)Guarantor
agrees to furnish to Lender all financial statements and other information
required to be furnished by Guarantor under the Loan Agreement at the times
and
in the manner provided in the Loan Agreement.
4.Waivers.
(a)Guarantor
waives any and all right to assert against Lender any claims or defenses
based
upon any failure of Lender to furnish to Guarantor any information or facts
relating to the ability of Borrower to pay and perform the Borrower’s
Liabilities.
(b)To
the
extent permitted by law, Guarantor waives all defenses, counterclaims and
offsets of any kind or nature in connection with the validity and/or
enforceability of this Guaranty, including, without limitation, (i) those
arising directly or indirectly from the perfection, sufficiency, validity
and/or
enforceability of any security interest granted by Borrower to Lender or
acquired by Lender from Borrower, and (ii) those based upon the failure or
adequacy of consideration.
(c)Guarantor
waives any and all right to assert against Lender any claim or defense based
upon any election of remedies by Lender, which, in any manner impairs, affects,
reduces, releases or extinguishes Guarantor’s subrogation rights or Guarantor’s
right to proceed against Borrower for reimbursement , or any other rights
of
Guarantor against Borrower, or against any other person or security, including,
without limitation, any defense based upon an election of remedies by Lender
under any provision or law or regulation of any state, governmental entity
or
country,
(d)Guarantor
waives any right to assert against Lender as a defense, counterclaim, setoff
or
cross claim to the payment or performance of Guarantor’s Liabilities, any
defense, either legal or equitable, setoff, counterclaim or claim which
Guarantor may now or at any time hereafter have against Borrower or any other
party liable to Lender in any way or manner.
(e)
Guarantor hereby waives notice of the following events or occurrences and
agrees that Lender may do any or all of the following in such
manner, upon such terms and at such times as Lender in its sole and absolute
discretion deems advisable without in any way impairing, affecting, reducing
or
releasing Guarantor from Guarantor’s liabilities:
(i)
Lender’s
acceptance of this Guaranty:
(ii)
Presentment,
demand, notices of default, nonpayment, partial payment and protest, and
all
other notices of formality to which Guarantor may be entitled.
4
(iii)
Borrower’s
heretofore, now or from time to time hereafter doing any of the
following:
(A)loaning
monies or extending credit to or for the benefit of Borrower, whether pursuant
to the Loan Documents or any amendments, modifications, additions or
substitutions thereto:
(B)
substituting for, releasing, waiving or modifying any security interests,
liens
or encumbrances in any of Borrower’s assets;
(C)obtaining,
releasing, waiving or modifying any other party’s guaranty of Borrower’s
Liabilities or any security interest, lien, encumbrance in any other party’s
assets given to Lender to secure such party’s guaranty of Borrower’s
Liabilities;
(D)
obtaining, amending, substituting for, releasing, waiving or modifying any
of
the Loan Documents;
(E)
granting to Borrower and any other party liable to Lender on account of
Borrower’s Liabilities any indulgences or extensions of time of payment of
Borrower’s Liabilities; and
(F)
accepting from Borrower or any other party any partial payment or payments
on
account of Borrower’s Liabilities or any collateral securing the payment thereof
or settling, subordinating, compromising, discharging or releasing the
same.
5.Covenants
and Agreements.
Guarantor
covenants and agrees with Lender that:
(a)all
security interests, liens and encumbrances heretofore, now and at any time
hereafter granted by Guarantor to Lender shall secure Guarantor’s
Liabilities;
(b)all
indebtedness, liability or liabilities now and at any time hereafter owing
by
Borrower to Guarantor are hereby subordinated to Borrower’s
liabilities.
(c)all
security interests, liens and encumbrances which Guarantor now has and from
time
to time hereafter may have upon any of Borrower’s assets are hereby subordinated
to all security interests, liens and encumbrances which Lender now has and
from
time to time hereafter may have thereon; and
5
0.Xxxxxxxx.
To
secure
the prompt payment to Lender of the Guarantor’s Liabilities and the prompt,
full, and faithful performance of Guarantor’s Liabilities, Guarantor grants to
Lender a security interest in and a lien upon all of Guarantor’s now existing
and/or owned and hereafter arising and/or acquired money, reserves, deposits,
deposit accounts and interest or dividends thereon, cash, cash equivalents
and
other property now or at any time or times in possession or under the control
of
Lender and its bailee for any purpose (individually and collectively the
“Collateral”).
Guarantor
shall execute and/or deliver to Lender, at any time and from time to time
hereafter at the request of Lender, all agreements, instruments, documents
and
other written materials that Lender reasonably may request, in a form and
substance acceptable to Lender, to perfect and maintain perfected Lender’s
security interest in the Collateral or other property pledged by Guarantor
to secure Guarantor’s Liabilities. Lender shall have no obligation to protect,
secure or insure any of the foregoing security interests, liens or encumbrances
or the properties or interests in properties subject thereto.
Guarantor
warrants and represents to and covenants with Lender that (a) Guarantor has
good, indefeasible and merchantable title to the Collateral; (b) Lender’s
security interest in and lien upon the Collateral is now, and at all times
hereafter shall be, valid, perfected and have a first priority; and (c)
Guarantor shall not grant a security interest in, or permit a lien, claim
or
encumbrance upon any of the Collateral in favor of a third party.
7.
Defaults.
The
occurrence of any of the following events shall, at the election of Lender,
be
deemed a default by Guarantor (an “Event of Default”) under this
Guaranty:
(a)Guarantor
fails to pay any of Guarantor’s Liabilities when due and payable or properly
declared due and payable and such payment is not made within thirty (30)
days of
the original due date;
(b)Guarantor
fails or neglects to perform, keep or observe any other term, provision,
condition, covenant, warranty or representation contained in this Guaranty,
which is required to be performed, kept or observed by Guarantor and Guarantor
shall fail to remedy such within thirty (30) days of being served with written
notice from Lender, during which time Guarantor shall be diligently pursuing
a
cure;
(c)the
Collateral or any other of Guarantor’s assets are attached, seized, subjected to
a writ of distress warrant, or are levied upon, or become subject to any
lien,
or come within the possession of any receiver, conservator, trustee, custodian
or assignee for the benefit of creditors;
6
(d)Guarantor
becomes insolvent or generally fails to pay, or admits in inability to pay,
debts as they become due;
(e)a
petition under Title 11 of the United States Code or any similar law or
regulation shall be filed by Guarantor or Guarantor makes an assignment for
the
benefit of creditors or any case or proceeding is filed by Guarantor for
its
dissolution or liquidation;
(f)a
petition under Title 11 of the United States Code or any similar law or
regulation is filed against Guarantor or a case of proceeding is filed against
Guarantor for its dissolution or liquidation and such proceeding shall not
be
dismissed within thirty (30) days of its filing, during which time Guarantor
shall diligently contest such action or proceeding;
(g)Guarantor
is enjoined, restrained or in any way prevented by court order from conducting
all of any material part of its business affairs and such injunction or
restraint shall not be voided, removed or dismissed within thirty (30) days
of
the court’s order, during which time Guarantor shall diligently contest such
action or proceeding;
(h)a
notice of lien, levy or assessment is filed of record or given to Guarantor
with
respect to all of any of Guarantor’s assets by any federal, state, or local
government agency;
(i)Guarantor
is in default in the payment or performance of any material obligation,
indebtedness or other liability to any third party and such default is not
cured
within any cure period specified in any agreement or instrument governing
the
same.
(j)any
material statement, report or certificate made or delivered to Lender by
Guarantor is not true and correct;
(k)the
occurrence of any material adverse change in Guarantor’s financial condition and
the failure of Guarantor to remedy such within thirty (30) days of being
served
with written notice from Lender;
(l)
the
occurrence of a default under any other agreement, instrument and /or document
executed and delivered by Guarantor to Lender which is not cured by Guarantor
within any applicable cure period set forth in such agreement, instrument
and/or
document; or
8.
Miscellaneous.
(a)All payments received by Lender from any source on account of Borrower’s
Liabilities shall be applied by Lender in it sole discretion and this Guaranty
shall apply to and secure the balance which may be owed to Lender on account
of
Borrower’s Liabilities.
7
(b)If
any
provision of this Guaranty or the application thereof to any party or
circumstance is held invalid or unenforceable, the remainder of this
Guaranty and the application of such provision to other parties or
circumstances will not be affected thereby, the provisions of this Guaranty
being severable in any such instance. This Guaranty shall be binding upon
Guarantor and inure to the benefit of Guarantor and Lender and their successors
and assigns.
(c)This
Guaranty shall continue in full force and effect until Borrower’s Liabilities
are fully paid, performed and discharged.
(d)This
Guaranty is submitted to Lender at Lender’s principal place of business and
shall be deemed to have been made at such address. This Guaranty shall be
governed by and controlled as to interpretation, enforcement, validity,
construction, effect and in all other respects by the laws, statutes and
decisions of the State of Indiana. No modification, waiver, estoppel, amendment
discharge or change of this Guaranty or any related instrument shall be valid
unless the same is in writing and signed by the party against which the
enforcement of such modification, waiver, estoppel amendment, discharge or
change is sought.
(e)Guarantor
warrants and represents to Lender that Guarantor has read this Guaranty and
understands the contents hereof and that this Guaranty is enforceable against
Guarantor in accordance with its terms.
(f)GUARANTOR
AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING DIRECTLY, INDIRECTLY OR OTHERWISE
IN CONNECTION WITH, OR OUT OF, RELATED TO OR FROM THIS GUARANTY MAY BE LITIGATED
IN COURTS HAVING SITUS WITHIN THE COUNTY OF XXXXX, STATE OF INDIANA.
GUARANTOR CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR
FEDERAL COURT LOCATED WITHIN SAID COUNTY AND STATE. GUARANTOR HEREBY WAIVES
ANY
RIGHT GUARANTOR MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION
BROUGHT AGAINST GUARANTOR IN ACCORDANCE WITH THIS
PARAGRAPH.
(g)GUARANTOR
AND LENDER IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING(I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH
THIS
GUARANTY OR ANY AGREEMENT DELIVERED IR WHICH MAY IN THE FUTURE BE DELIVERED
IN
CONNECTION HEREWITH, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN
CONNECTION WITH OR RELATED TO THIS GUARANTY OR ANY SUCH AGREEMENT, AND AGREE
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE
A JURY.
8
IN
WITNESS WHEREOF,
the
undersigned has executed this Guaranty as of the date and year
aforesaid.
GUARANTOR: | |||
FLORIDA GAMING CORPORATION | |||
By: | /s/ X. Xxxxxxx Xxxxxxx . | ||
X. Xxxxxxx Xxxxxxx | |||
Chairman of the Board and | |||
Chief Executive Officer | |||
ATTEST: | |||
/s/ Xxxxxxxx X. Xxxxx | |||
Xxxxxxxx X. Xxxxx | |||
Secretary |
9