(M & T BANK LOGO) [a17281a1728100.gif]   Exhibit 10.2

CONTINUING GUARANTY
(Business Organization)
Maryland

     
GUARANTOR:
  Youbet.com, Inc.
 
 
 
Name
 
   
 
  5901 DeSoto Avenue, Woodland Hills, California 91367
 
 
 
Address of Chief Executive Office
 
   
 
  A corporation organized under the laws of the State of Delaware
 
   
BORROWER:
  United Tote Company
 
 
 
Name
 
   
 
  11505 Susquehanna Trail, Glen Rock, Pennsylvania 17327
 
 
 
Address
 
   
BANK:
  Manufacturers and Traders Trust Company, a New York banking corporation, with
banking offices located at One M&T Plaza, Buffalo, New York 14240 Attention:
Office of General Counsel.

     1. Guaranty.
          (a) Guarantor, intending to be legally bound, hereby unconditionally
guarantees the full and prompt payment and performance of any and all of
Borrower’s Obligations (as defined below) to the Bank when due, whether at
stated maturity, by acceleration or otherwise. As used in this Guaranty, the
term “Obligations” shall mean any and all obligations, indebtedness and other
liabilities of Borrower to the Bank now or hereafter existing, of every kind and
nature and all accrued and unpaid interest thereon and all Expenses (as defined
below) including without limitation, whether such obligations, indebtedness and
other liabilities (i) are direct, contingent, liquidated, unliquidated, secured,
unsecured, matured or unmatured; (ii) are pursuant to a guaranty or surety in
favor of the Bank; (iii) were originally contracted with the Bank or with
another party (including obligations under a guaranty or surety originally in
favor of such other party); (iv) are contracted by Borrower alone or jointly
with one or more other parties; (v) are or are not evidenced by a writing;
(vi) are renewed, replaced, modified or extended; and (vii) are periodically
extinguished and subsequently reincurred or reduced and thereafter increased.
Guarantor will pay or perform its obligations under this Guaranty upon demand.
This Guaranty is and is intended to be a continuing guaranty of payment (not
collection) of the Obligations (irrespective of the aggregate amount thereof and
whether or not the Obligations from time to time exceeds the amount of this
Guaranty, if limited), independent of, in addition and without modification to,
and does not impair or in any way affect, any other guaranty, indorsement, or
other agreement in connection with the Obligations, or in connection with any
other indebtedness or liability to the Bank or collateral held by the Bank
therefor or with respect thereto, whether or not furnished by Guarantor.
Guarantor understands that the Bank can bring an action under this Guaranty
without being required to exhaust other remedies or demand payment first from
other parties.
          (b) Guarantor acknowledges the receipt of valuable consideration for
this Guaranty and acknowledges that the Bank is relying on this Guaranty in
making a financial accommodation to Borrower, whether a commitment to lend,
extension, modification or replacement of, or forbearance with respect to, any
Obligation, cancellation of another guaranty, purchase of Borrower’s assets, or
other valuable consideration.
     2. Continuing, Absolute, Unconditional. This Guaranty is irrevocable,
absolute, continuing, unconditional and general without any limitation. This
Guaranty is unlimited in amount.
     3. Guarantor’s Waivers & Authorizations.
          (a) Guarantor’s obligations shall not be released, impaired or
affected in any way including by any of the following, all of which Guarantor
hereby waives (i) any bankruptcy, reorganization or insolvency under any law of
Borrower or that of any other party, or by any action of a trustee in any such
proceeding; (ii) any new agreements or obligations of Borrower or any other
party with the Bank; (iii) any adjustment, compromise or release of any
Obligations of Borrower, by the Bank or any other party; the existence or
nonexistence or order of any filings, exchanges, releases, impairment or sale
of, or failure to perfect or continue the perfection of a security interest in
any collateral for the Obligations; (iv) any failure of Guarantor to receive
notice of any intended disposition of such collateral; (v) any fictitiousness,
incorrectness, invalidity or unenforceability, for any reason, of any instrument
or other agreement which may evidence any Obligation; (vi) any composition,
extension, stay or other statutory relief granted to Borrower including, without
limitation, the expiration of the period of any statute of limitations with
respect to any lawsuit or other legal proceeding against Borrower or any person
in any way related to the Obligations or a part thereof or any collateral
therefor; (vii) any change in form of organization, name, membership or
ownership of Borrower or Guarantor; (viii) any refusal or failure of the Bank or
any other person prior to the date hereof or hereafter to grant any additional
loan or other credit accommodation to Borrower or the Bank’s or any other
party’s receipt of notice of such refusal or failure; (ix) any setoff, defense
or counterclaim of Borrower with respect to the obligations or otherwise
arising, either directly or indirectly, in regard to the Obligations; or (x) any
other circumstance that might otherwise constitute a legal or equitable defense
to Guarantor’s obligations under this Guaranty.
          (b) The Guarantor waives acceptance, assent and all rights of notice
or demand including without limitation (i) notice of acceptance of this
Guaranty, of Borrower’s default or nonpayment of any Obligation, and of changes
in Borrower’s financial condition; (ii) presentment, protest, notice of protest
and demand for payment; (iii) notice that any Obligations has been incurred or
of the reliance by the Bank upon this Guaranty; and (iv) any other notice,
demand or condition to which Guarantor might otherwise be entitled prior to the
Bank’s reliance on or

1

--------------------------------------------------------------------------------

 

enforcement of this Guaranty. Guarantor further authorizes the Bank, without
notice, demand or additional reservation of rights against Guarantor and without
affecting Guarantor’s obligations hereunder, from time to time: (i) to renew,
refinance, modify, subordinate, extend, increase, accelerate, or otherwise
change the time for payment of, the terms of or the interest on the Obligations
or any part thereof;(ii) to accept and hold collateral from any party for the
payment of any or all of the Obligations, and to exchange, enforce or refrain
from enforcing, or release any or all of such collateral; (iii) to accept any
indorsement or guaranty of any or all of the Obligations or any negotiable
instrument or other writing intended to create an accord and satisfaction with
respect to any or all of the Obligations; (iv) to release, replace or modify the
obligation of any indorser or guarantor, or any party who has given any
collateral for any of all of the Obligations, or any other party in any way
obligated to pay any or all of the Obligations, and to enforce or refrain from
enforcing, or compromise or modify, the terms of any obligation of any such
indorser, guarantor or party; (v) to dispose of any and all collateral securing
the Obligations in any manner as the Bank, in its sole discretion, may deem
appropriate, and to direct the order and the enforcement of any and all
indorsements and guaranties relating to the Obligations in the Bank’s sole
discretion; and (vi) to determine the manner, amount and time of application of
payments and credits, if any, to be made on all or any part of the Obligations.
          (c) Notwithstanding any other provision in this Guaranty, Guarantor
irrevocably waives, without notice, any right he or she may have at law or in
equity (including without limitation any law subrogating Guarantor to the rights
of the Bank) to seek contribution, indemnification or any other form of
reimbursement from Borrower or any other obligor or guarantor of the Obligations
for any disbursement made under this Guaranty or otherwise.
     4. Termination. This Guaranty shall remain in full force and effect as to
each Guarantor until actual receipt by the Bank officer responsible for
Borrower’s relationship with the Bank of written notice of Guarantor’s intent to
terminate (or Guarantor’s death or incapacity) plus the lapse of a reasonable
time for the Bank to act on such notice (the “Receipt of Notice”); provided,
however, this Guaranty shall remain in full force and effect thereafter until
all Obligations outstanding, or contracted or committed for (whether or not
outstanding), before such Receipt of Notice by the Bank, and any extensions,
renewals or replacements thereof (whether made before or after such Receipt of
Notice), together with interest accruing thereon after such Receipt of Notice,
shall be finally and irrevocably paid in full. Discontinuance of this Guaranty
as to one Guarantor shall not operate as a discontinuance hereof as to any other
guarantor. Payment of all of the Obligations from time to time shall not operate
as a discontinuance of this Guaranty, unless a Receipt of Notice as provided
above has been received by the Bank. Guarantor agrees that, to the extent that
Borrower makes a payment or payments to the Bank on the Obligations, or the Bank
receives any proceeds of collateral to be applied to the Obligations, which
payment or payments or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or otherwise are required to be
repaid to Borrower, its estate, trustee, receiver or any other party, including,
without limitation, under any bankruptcy law, state or federal law, common law
or equitable cause, then to the extent of such repayment, the obligation or part
thereof which has been paid, reduced or satisfied by such amount shall be
reinstated and continued in full force and effect as of the date such initial
payment, reduction or satisfaction occurred, notwithstanding any contrary action
which may have been taken by the Bank in reliance upon such payment or payments.
As of the date any payment or proceeds of collateral are returned, the statute
of limitations shall start anew with respect to any action or proceeding by the
Bank against Guarantor under this Guaranty. Likewise, any acknowledgment,
reaffirmation or payment, by Borrower or any third party, of any portion of the
Obligations, shall be deemed to be made as agent for the Guarantor, strictly for
the purposes of tolling the running of (and/or preventing the operation of) the
applicable statute of limitations with respect to any action or proceeding by
the Bank against Guarantor under this Guaranty.
     5. Expenses. Guarantor agrees to reimburse the Bank on demand for all the
Bank’s expenses, damages and losses of any kind or nature, including without
limitation costs of collection and actual attorneys’ fees and disbursements for
external counsel incurred by the Bank in attempting to enforce this Guaranty,
collect any of the Obligations including any workout or bankruptcy proceedings
or other legal proceedings or appeal, realize on any collateral, defense of any
action under the prior paragraph or for any other purpose related to the
Obligations (collectively, “Expenses”).
     6. Financial and Other Information. Guarantor shall promptly deliver to the
Bank copies of all annual reports, proxy statements and similar information
distributed to shareholders, partners or members and of all filings with the
Securities and Exchange Commission and the Pension Benefit Guaranty Corporation
and shall provide in form satisfactory to the Bank: (i) within sixty days after
the end of each of its first three fiscal quarters, consolidating and
consolidated statements of income and cash flows for the quarter, for the
corresponding quarter in the previous fiscal year and for the period from the
end of the previous fiscal year, with a consolidating and consolidated balance
sheet as of the quarter end; and (ii) within ninety days after the end of each
fiscal year, consolidating and consolidated statements of Guarantor’s income and
cash flows and its consolidating and consolidated balance sheet as of the end of
such fiscal year, setting forth comparative figures for the preceding fiscal
year and to be audited by an independent certified public accountant; all such
statements shall be certified by Guarantor’s chief financial officer or partner
to be correct, not misleading and in accordance with Guarantor’s records and to
present fairly the results of Guarantor’s operations and cash flows and if
annual its financial position at year end in conformity with generally accepted
accounting principles. Guarantor authorizes the Bank from time to time to
obtain, verify and review all financial data deemed appropriate by the Bank in
connection with this Guaranty and the Obligations, including without limitation
credit reports from agencies. Guarantor understands this Guaranty and has
satisfied itself as to its meaning and consequences and acknowledges that it has
made its own arrangements for keeping informed of changes or potential changes
affecting the Borrower including the Borrower’s financial condition.
     7. Security; Right of Setoff. As further security for payment of the
Obligations, Expenses and any other obligations of Guarantor to the Bank,
Guarantor hereby grants to the Bank a security interest in all money, securities
and other property of Guarantor in the actual or constructive possession or
control of the Bank or its affiliates including without limitation all deposits
and other accounts owing at any time by the Bank or any of its affiliates in any
capacity to Guarantor in any capacity (collectively, “Property”). The Bank shall
have the right to set off Guarantor’s Property against any of Guarantor’s
obligations to the Bank. Such set-off shall be deemed to have been exercised
immediately at the time the Bank or such affiliate elect to do so. The Bank
shall also have all of the rights and remedies of a secured party under the
Uniform Commercial Code, as the same may be in effect in the State of Maryland,
as amended from time to time, in addition to those under this Guaranty and other
applicable law and agreements.
     8. No Transfer of Assets. Guarantor shall not transfer, reinvest or
otherwise dispose of its assets in a manner or to an extent that would or might
impair Guarantor’s ability to perform its obligations under this Guaranty.
     9. Nonwaiver by the Bank; Miscellaneous. This Guaranty is intended by
Guarantor to be the final, complete and exclusive expression of the agreement
between Guarantor and the Bank. This Guaranty may be assigned by the Bank, shall
inure to the benefit of the Bank and

2

--------------------------------------------------------------------------------

 

its successors and assigns, and shall be binding upon Guarantor and his or her
legal representative, successors and assigns and any participation may be
granted by the Bank herein in connection with the assignment or granting of a
participation by the Bank in the Obligations or any part thereof. All rights and
remedies of the Bank are cumulative, and no such right or remedy shall be
exclusive of any other right or remedy. This Guaranty does not supersede any
other guaranty or security granted to the Bank by Guarantor or others (except as
to Guarantor’s Waiver of Subrogation rights above). No single, partial or
delayed exercise by the Bank of any right or remedy shall preclude exercise by
the Bank at any time at its sole option of the same or any other right or remedy
of the Bank without notice. Guarantor expressly disclaims any reliance on any
course of dealing or usage of trade or oral representation of the Bank
including, without limitation, representations to make loans to Borrower or
enter into any other agreement with Borrower or Guarantor. No course of dealing
or other conduct, no oral agreement or representation made by the Bank or usage
of trade shall operate as a waiver of any right or remedy of the Bank. No waiver
or amendment of any right or remedy of the Bank or release by the Bank shall be
effective unless made specifically in writing by the Bank. Each provision of
this Guaranty shall be interpreted as consistent with existing law and shall be
deemed amended to the extent necessary to comply with any conflicting law. If
any provision nevertheless is held invalid, the other provisions shall remain in
effect. Guarantor agrees that in any legal proceeding, a copy of this Guaranty
kept in the Bank’s course of business may be admitted into evidence as an
original. Captions are solely for convenience and not part of the substance of
this Guaranty.
     10. Joint and Several. If there is more than one Guarantor, each Guarantor
jointly and severally guarantees the payment and performance in full of all
obligations under this Guaranty and the term “Guarantor” means each as well as
all of them. Guarantor also agrees that the Bank need not seek payment from any
source other than the undersigned Guarantor. This Guaranty is a primary
obligation. Guarantor’s obligations hereunder are separate and independent of
Borrower’s, and a separate action may be brought against Guarantor whether or
not action is brought or joined against or with Borrower or any other party.
     11. Authorization. Guarantor certifies that it is an entity in the form
described above duly organized and in good standing under the laws of the State
of its organization and duly authorized to do business in each State material to
the conduct of its business. Guarantor has determined that the execution of this
Guaranty will be in its best interests, to its direct benefit, incidental to its
powers, and in furtherance of its duly acknowledged purposes and objectives.
Execution of this Guaranty by the persons signing below has been authorized by
all necessary corporate action, including directors’ and shareholder consent or
(as appropriate) is authorized by its partnership agreement or governing
instrument. Guarantor’s chief executive office is located at the above address.
     12. Notices. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Guarantor
(at its address on the Bank’s records) or to the Bank (at the address on page
one and separately to the Bank officer responsible for Borrower’s relationship
with the Bank). Such notice or demand shall be deemed sufficiently given for all
purposes when delivered (i) by personal delivery and shall be deemed effective
when delivered, or (ii) by mail or courier and shall be deemed effective three
(3) business days after deposit in an official depository maintained by the
United States Post Office for the collection of mail or one (1) business day
after delivery to a nationally recognized overnight courier service (e.g.,
Federal Express). Notice by e-mail is not valid notice under this or any other
agreement between Guarantor and the Bank.
     13. Governing Law and Jurisdiction. This Guaranty has been delivered to and
accepted by the Bank and will be deemed to be made in the State of Maryland.
Except as otherwise provided under federal law, this Guaranty will be
interpreted in accordance with the laws of the State of Maryland excluding its
conflict of laws rules. GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF MARYLAND WHERE THE
BANK MAINTAINS A BRANCH AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF
PROCESS IN THE MANNER AND AT GUARANTOR’S ADDRESS SET FORTH ABOVE FOR PROVIDING
NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS GUARANTY WILL PREVENT
THE BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING
ANY RIGHTS AGAINST GUARANTOR INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY
PROPERTY OF GUARANTOR WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR
DOMESTIC JURISDICTION. Guarantor acknowledges and agrees that the venue provided
above is the most convenient forum for both the Bank and Guarantor. Guarantor
waives any objection to venue and any objection based on a more convenient forum
in any action instituted under this Guaranty.
     14. Waiver of Jury Trial. GUARANTOR AND THE BANK HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY GUARANTOR AND
THE BANK MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN
CONNECTION WITH THIS GUARANTY OR THE TRANSACTIONS RELATED HERETO. GUARANTOR
REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE BANK HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. GUARANTOR ACKNOWLEDGES THAT
THE BANK HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS,
THE PROVISIONS OF THIS SECTION.
     15. Power to Confess Judgment. GUARANTOR HEREBY EMPOWERS ANY ATTORNEY OF
ANY COURT OF RECORD TO APPEAR FOR GUARANTOR AND, WITH OR WITHOUT COMPLAINT
FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST GUARANTOR IN FAVOR OF
THE BANK OR ANY HOLDER HEREOF FOR ALL AMOUNTS DUE HEREUNDER, TOGETHER WITH COSTS
OF SUIT AND AN ATTORNEY’S COMMISSION OF THE GREATER OF TEN PERCENT (10%) OF SUCH
AMOUNTS OR $1,000 ADDED AS A REASONABLE ATTORNEY’S FEE, AND FOR DOING SO THIS
GUARANTY OR A COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT.
GUARANTOR HEREBY FOREVER WAIVES AND RELEASES ALL ERRORS IN SAID PROCEEDINGS AND
ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OR
EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED. INTEREST ON ANY
SUCH JUDGMENT SHALL ACCRUE AT THE DEFAULT RATE SET FORTH IN ANY OF THE DOCUMENTS
EVIDENCING THE OBLIGATIONS OF BORROWER. NO SINGLE EXERCISE OF THE FOREGOING
POWER TO CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST
THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE
INVALID, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY
BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE BANK SHALL ELECT UNTIL SUCH TIME
AS THE BANK SHALL HAVE RECEIVED PAYMENT IN FULL OF ALL AMOUNTS DUE HEREUNDER.
NOTWITHSTANDING THE FOREGOING, SOLELY WITH RESPECT TO ATTORNEYS’ FEES INCURRED
BY THE BANK IN CONNECTION WITH THIS NOTE, THE BANK AGREES THAT, IN COLLECTING
ANY JUDGMENT BY CONFESSION OBTAINED AGAINST THE

3

--------------------------------------------------------------------------------

 

BORROWER IN CONNECTION WITH THIS NOTE, THE BANK SHALL NOT COLLECT ANY AMOUNTS IN
EXCESS OF THE ACTUAL AMOUNT OF ATTORNEYS’ FEES CHARGED OR BILLED TO THE BANK.
     16. Guarantor acknowledges that it has read and understands all the
provisions of this Guaranty, including the Confession of Judgment, Governing
Law, Jurisdiction and Waiver of Jury Trial, and has been advised by counsel as
necessary or appropriate.
WITNESS the due execution hereof as a SEALED INSTRUMENT this 9th day of
February, 2006.

            GUARANTOR:

Youbet.com, Inc.
      By:   /s/ Gary W. Sproule   (L.S.)      Name:   Gary W. Sproule       
Title:   Chief Financial Officer     

 
FOR BANK USE ONLY

         
Authorization Confirmed:
       
 
 
Signature 

4