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”).

       

      RECITALS

       

      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 Pierce, Florida Jai Alai 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.

       

      AGREEMENTS

       

      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 

       

      
        
          
          

        

        
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      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

         
        

      
        
          
          

        

        
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       (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.

       

      
        
          
          

        

        
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      (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

       

      
        
          
          

        

        
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      6.Security.

       

      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;

       

      
        
          
          

        

        
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      (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.

       

      
        
          
          

        

        
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      (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 FLOYD, 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.

       

      
        
          
          

        

        
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      IN
        WITNESS WHEREOF,
        the
        undersigned has executed this Guaranty as of the date and year
        aforesaid.

       

      
        
          	 	 	GUARANTOR:
	 	 	 
	 	 	FLORIDA GAMING
                  CORPORATION
	 	 	 
	 	 	By:	/s/
                  W. Bennett Collett .
	 	 	 	W. Bennett Collett
	 	 	 	Chairman of the Board and
	 	 	 	Chief Executive Officer
	 	 	 	 
	ATTEST:	 	 	 
	 	 	 	 
	/s/
                  Kimberly R. Tharp	 	 	 
	Kimberly R. Tharp	 	 	 
	Secretary	 	 	 


        

      

                                                                     
        

            

       

      
        
          
          

        

        
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