GUARANTY AGREEMENT
Exhibit
99.7
THIS GUARANTY ("Agreement") is made and
entered into as of the 22nd day of February, 2010, by Lightning Gaming, Inc. a
Nevada corporation (the "Guarantor") in favor of The Co-Investment Fund II, L.P.
(the "Lenders' Agent") on behalf of the Co-Investment Fund II, L.P. and Xxxxxxx
X. Xxxxxxxxxx, LLC (collectively, the "Lenders" and individually a
"Lender").
WITNESSETH:
WHEREAS, the Guarantor is the owner of
all of the issued and outstanding capital stock of Lightning Poker, Inc., a
Pennsylvania corporation (the "Company"); and
WHEREAS, pursuant to a Loan Agreement
of even date herewith, the Lenders have agreed to loan the aggregate principal
amount of $2,000,000 to the Company (the "Loans"), which loans are evidenced by
Promissory Notes of even date herewith (the "Notes"); and
WHEREAS, it is a condition to the
making of the Loans by the Lenders that the Guarantor guarantees the Loans;
and
WHEREAS, the Guarantor will benefit
from the indebtedness provided by the Lenders to the Company, and desires to
guarantee the Loans and any and all obligations thereunder (the
"Obligations").
NOW THEREFORE, for and in consideration
of the Obligations and other good and valuable considerations paid by Lenders to
the Company, the receipt and legal sufficiency of which are hereby acknowledged
by the Guarantor, and intending to be legally bound hereby, the parties hereto
covenant and agree as follows:
ARTICLE I
Section 1.1. The
Guarantor represents and warrants to the Lenders that:
(a) Neither
the execution and delivery of this Agreement, or any other instrument or
document to which the Guarantor is a party, the consummation of the transactions
herein or therein contemplated nor compliance with the terms and provisions
hereof or thereof will conflict with or result in a breach of any of the terms,
conditions or provisions of any law or of any regulation, order, writ,
injunction or decree of any court or governmental instrumentality or of any
agreement or instrument to which the Guarantor is a party or by which the
Guarantor is bound or to which the Guarantor is subject, or constitute a default
thereunder or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property of the Guarantor
pursuant to the terms of any such agreement or instrument.
(b) The
Guarantor is not a party to any contract, agreement, claim, suit or litigation
which materially and adversely affects the Guarantor's property, assets or
financial conditions.
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(c) This
Agreement is a valid and legally binding agreement of the Guarantor and is
enforceable against the Guarantor in accordance with its terms.
(d) The
Guarantor has had an opportunity to review and approves of the
Loans.
(e) The
Guarantor has the full power, authority and legal right to execute, deliver and
perform this Agreement.
ARTICLE II
Section 2.1. Without
limitation or restriction upon any of the other covenants of the Guarantor in
this Agreement, the Guarantor hereby, (a) unconditionally guarantees and
become surety for the due and punctual payment of the Obligations and every part
thereof as and when due, whether at stated maturity, by acceleration or
otherwise, in accordance with the terms of the Notes, (b) covenants with
the Lenders to pay punctually the Obligations stated in (a) above in United
States currency as and when the same become payable, and to pay all reasonable
expenses which may be incurred by the Lenders in their efforts, required or
otherwise, to collect and/or enforce performance of any or all of such
Obligations or in enforcing any right hereunder, and (c) unconditionally
guarantees and becomes surety for the performance and discharge of all
obligations of the Company under the Notes.
ARTICLE III
Section 3.1. The
Guarantor hereby waives (a) any presentment for payment, notice of
nonpayment, demand, protest, or notice of acceptance of this Agreement and
(b) any notice or notices of any matters described or referred to in the
next succeeding paragraph hereof.
Section 3.2. The
obligations of the Guarantor under this Agreement shall be absolute and
unconditional and shall remain in full force and effect without regard to and
shall not be released, discharged or in any way affected by (1) any amendment or
modification of or supplement to the Notes or any other instrument or agreement
made at any time in respect of the indebtedness evidenced by the Notes, (2) any
exercise or nonexercise of or delay in exercising any right, remedy, power or
privilege under or in respect of this Agreement, the Notes, or any of the other
documents in connection therewith (even if any such right, remedy, power or
privilege shall be lost thereby), or any waiver, consent, indulgence or other
action or inaction in respect thereof; (3) any bankruptcy, insolvency,
arrangement, composition, assignment for the benefit of creditors or similar
proceeding commenced by or against the Company or the Guarantor; (4) any failure
to perfect or continue perfection of, or release or waiver of, any rights given
to the Lenders in any property as security for the performance of the Company's
obligations under the Notes; (5) any extension of time for payment of the Notes
or performance of any of the obligations contained in this Agreement;
(6) the genuineness, validity or enforceability of the Notes; (7) any
limitation of liability of the Company or any other person other than the
Guarantor; (8) any defense that may arise by reason of the failure of the
Lenders to file or enforce a claim against the Company or any other person or
estate in any bankruptcy or other proceeding; (9) the voluntary or involuntary
liquidation, dissolution, sale of all or substantially all of the property
described in the Notes, marshalling of assets and liabilities, or other similar
proceeding affecting the Company or any of its assets; (10) the release of
Company or of any other person, including, but not limited to, any other
sureties, from performance or observance of any of the agreements, covenants,
terms or conditions contained in the Notes by operation of law; or (11) any
other circumstances which might otherwise constitute a legal or equitable
discharge of a guarantor or surety.
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Section 3.3. The
Guarantor hereby waives any and all notice of every kind to which the Guarantor
might otherwise be entitled with respect to the incurring of any further
obligation or liability by the Company to the Lenders, the demand for payment or
the payment of all or any obligations or liabilities of the Company to the
Lenders (whether now existing or hereafter arising) or the presentment of any
instrument for payment at any time in connection with any obligation or
liability of the Company or the protest or nonpayment thereof. The
Guarantor hereby waives, surrenders and agrees not to claim or enforce, unless
and until the Obligations are fully paid and performed, (i) any right to be
subrogated in whole or in part to any right or claim of the Lenders against the
Company arising under the Notes or any other collateral given to the Lenders as
security for the payment or performance of the Obligations and (ii) any right to
require the marshalling of any assets of the Company, which right of subrogation
or marshalling might otherwise arise from any partial or full payment of the
Obligations by the Guarantor.
Section 3.4. No
set-off, claim, reduction or diminution of any obligation, or any defense of any
kind or nature, which the Guarantor or the Company has or may have against the
Lenders shall be available hereunder to the Guarantor against the Lenders;
provided, however, that the Guarantor may assert as defenses against Lenders:
(1) the full payment or performance of the Obligations, and/or (2) any
defenses of the Guarantor arising under the provisions of this
Agreement.
ARTICLE IV
Section 4.1. If
any one or more of the following Events of Default shall occur and be
continuing, that is to say:
(a) Default
shall be made in the payment of any Obligations when due; or
(b) Any
representation or warranty herein made by the Guarantor, or in order to induce
the Lenders to enter into the Notes shall prove to have been false or misleading
in any material respect as of the time made or furnished; or
(c) The
Guarantor shall default in the performance or observance of any other
non-monetary covenant, condition or provision contained in this Agreement and
such default in not cured within ten (10) days after written notice thereof;
or
(d) An
Event of Default as defined in the Notes shall have occurred and be continuing
beyond any period of grace provided with respect thereto;
then, and
in any such event, the Lender's Agent shall be entitled, by written, telephonic,
telegraphic or personal delivery notice to the Guarantor and the Company, to
declare the outstanding Obligations of the Company and all liabilities of the
Guarantor hereunder and under the Notes to be forthwith due and payable, and the
same shall thereupon become immediately due and payable without presentment,
demand, protest or other notice of any kind to the Guarantor, all of which are
hereby expressly waived.
Section 4.2. If
any one or more of the following Events of Default shall occur and be
continuing, that is to say:
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(a) A
decree or order by a court having jurisdiction shall have been entered
designating the Guarantor insolvent, or approving as properly filed a petition
seeking reorganization under Federal or state law, and such decree or order
shall have continued undischarged or unstayed for a period of thirty (30) days;
or a decree or other order of a court having jurisdiction for the appointment of
a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of
the Guarantor or of a substantial part of the Guarantor's property, or for the
winding up or liquidation of the Guarantor’s affairs, shall have been entered,
and such decree or order shall have remained in force undischarged or unstayed
for a period of thirty (30) days; or
(b) The
Guarantor shall institute proceedings to be designated a voluntary debtor, or
shall consent to the filing of a bankruptcy proceeding against the Guarantor, or
shall file a petition or answer or consent seeking reorganization under the
Federal bankruptcy laws or any other similar applicable Federal or state law, or
shall consent to the filing of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency, or shall make an assignment for the benefit of creditors or shall
admit in writing its inability to pay its debts generally as they become due, or
action shall be taken by the Guarantor in furtherance of any of the aforesaid
purposes;
then, and
in any such event, the outstanding Obligations of the Company and all
liabilities of the Guarantor hereunder shall thereupon become and be immediately
due and payable without presentment, demand, protest or notice of any kind to
the Guarantor, all of which are hereby expressly waived.
ARTICLE V
Section 5.1. In
addition to all liens upon and rights of set-off against moneys, securities, or
other property of the Guarantor given to the Lenders by law or equity, the
Lenders shall have a lien upon, security interest in and right of set-off
against all moneys, securities and other property of the Guarantor now or
hereafter in the possession of the Lenders, whether held for safe-keeping or
otherwise. Upon the maturity of the Obligations, whether as a result
of acceleration as provided in Article IV hereof or otherwise, the Lenders shall
have the right, in addition to all other rights and remedies available to them,
to set off against the unpaid balance of the Obligations any funds owing by the
Lenders to the Guarantor.
ARTICLE VI
Section 6.1. Each
and every right, remedy and power hereby granted to the Lenders or allowed it by
law or other agreement shall be cumulative and not exclusive of any other, and
may be exercised by the Lenders at any time and from time to time.
Section 6.2. This
shall be an agreement of suretyship as well as of guaranty and the Lenders may
proceed directly against the Guarantor, whenever any payment or performance
required pursuant to the Obligations is not made or rendered to the Lenders
without being required to proceed first against the Company or any other person
or entity, or against any security for the Company's or the Guarantor’s
obligations hereunder.
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Section 6.3. If
the Lenders employ counsel to enforce this Agreement by suit or otherwise, the
Guarantor will reimburse the Lenders, upon demand, for all expenses incurred in
connection therewith (including, without limitation, reasonable attorneys'
fees), whether or not suit is actually instituted.
Section 6.4. Any
notice, demand or request by the Lenders to the Guarantor or by the Guarantor to
the Lenders shall be in writing and shall be deemed to have been duly given or
made if either delivered personally or if mailed by certified mail or registered
mail, postage prepaid, return receipt requested, addressed to the Lenders' Agent
at Five Radnor Corporate Center, Xxxxx 000, 000 Xxxxxxxxxx Xxxx, Xxxxxx,
XX 00000 and in the case of the Guarantor, addressed to 000 Xxxxxxx
Xxxxxxx, Xxxxxxxx, XX 00000 or in accordance with the latest
unrevoked written direction from either party to the other party
hereto.
Section 6.5. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 6.6. This
Agreement constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, between the Guarantor and the
Lenders' Agent with respect to the subject matter hereof. If any
clause or provision of this Agreement shall be held to be illegal or invalid by
any court, the invalidity of such clause or provision shall not affect any of
the remaining clauses, provisions or sections hereof, and this Agreement shall
be construed and enforced as if such illegal or invalid clause or provision had
not been contained herein.
Section 6.7. Each
and every default on account of the Obligations shall give rise to a separate
cause of action hereunder.
Section 6.8. Any
waiver, consent or approval of any kind or character of any breach or default by
the Guarantor under this Agreement, or any waiver of any provision or condition
herein contained, shall be effective only if evidenced by a writing signed by
the Guarantor and by the Lenders' Agent, and shall be effective only to the
extent in such writing specifically set forth.
Section 6.9. The
provisions of this Agreement may from time to time be modified or amended, but
only by a writing signed by the Guarantor and by the Lenders'
Agent.
Section 6.10. No
delay or failure of the Lenders in exercising any right, remedy, power or
privilege hereunder shall affect such right, remedy, power or privilege; nor
shall any single or partial exercise thereof or any abandonment or
discontinuance of steps to enforce such a right, remedy, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights and remedies of the
Lenders shall be cumulative and not exclusive of any rights or remedies which
the Lenders would otherwise have.
Section 6.11. All
accounting terms used in this Agreement and not specifically defined herein
shall be construed in accordance with generally accepted accounting principles
consistently applied.
Section 6.12. All
representations, warranties, covenants and agreements of the Guarantor contained
herein or made in writing in connection herewith shall survive the execution and
delivery of this Agreement.
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Section 6.13. The
Guarantor agrees to pay and save the Lenders' Agent harmless against liability
for the payment of all out-of-pocket expenses arising in connection with this
Agreement, the delivery and enforcement of the Notes and the transactions
contemplated herein and therein.
Section 6.14. This
Agreement is and shall be deemed made under, governed by and construed and
enforced in accordance with the internal law of the Commonwealth of
Pennsylvania, and the Guarantor hereby waives any claim that Philadelphia, PA is
an inconvenient forum and any claim that any action or proceeding arising out of
or relating to this Agreement and commenced in the courts of such state lacks
proper venue.
Section 6.15. This
Agreement shall be binding upon and shall inure to the benefit of the Lenders
and the Guarantor and their respective personal representatives, heirs,
successors and assigns, except that the Guarantor may not assign or transfer any
of the Guarantor’s rights or obligations hereunder except with the prior written
consent of the Lenders.
Section 6.16. Whenever
used herein, the singular number shall include the plural, the plural the
singular, and the use of any gender shall be applicable to all
genders.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement, intending the same to be a sealed instrument, as
of the day and year first above written.
GUARANTOR:
By:
/s/ Xxxxxx
Ciunci____________________
Title:
Chief Financial
Officer________________
LENDERS
AGENT:
The
Co-Investment Fund II, L.P.
By: Co-Invest
Management II, L.P.
its
general partner
By: Co-Invest
Capital Partners, Inc.
its
general partner
By:
/s/ Xxxxx
Adamsky___________________
Title:
CFO &
Treasurer____________________
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