Document:

Filed by Bowne Pure Compliance

Exhibit 10.4

Guaranty

This Guaranty (this “Guaranty”) is made as of the 3rd day of December, 2008, by UT Gaming,
Inc., a Delaware corporation (“Guarantor”), in favor of National City Bank, a national banking
association (“Lender”).

1. Background.

A. Guarantor’s affiliates, Youbet.com, 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”), have requested that Lender provide certain loans,
extensions of credit and other financial accommodations (collectively the “Financial
Accommodations”) to Borrowers evidenced by, among other things, (i) that certain Loan and Security
Agreement of even date herewith by and between Borrowers and Lender (as amended, renewed or
restated from time to time, the “Loan Agreement”), (ii) that certain Revolving Note of even date
herewith executed and delivered by Borrowers to Lender in a maximum aggregate principal amount not
to exceed Five Million and no/100 Dollars ($5,000,000.00) (as amended, renewed or restated from
time to time, the “Revolving Note”), (iii) that certain Term Note A of even date herewith executed
and delivered by Borrowers to Lender in a maximum aggregate principal amount not to exceed Ten
Million and no/100 Dollars ($10,000,000.00) (as amended, renewed or restated from time to time, the
“Term Note A”), and (iv) the other documents, agreements and instruments referenced in any of the
foregoing or otherwise executed and delivered by Borrowers to Lender (the “Other Agreements”) (the
Other Agreements, together with the Loan Agreement, the Revolving Note and the Term Note A are
collectively the “Loan Documents”). Except as expressly set forth in this Guaranty, all terms
which have an initial capital letter where not required by the rules of grammar are defined in the
Loan Agreement.

B. Lender is willing to provide the Financial Accommodations to Borrowers pursuant to the Loan
Agreement and the other Loan Documents provided, among other things, Guarantor executes and
delivers this Guaranty to Lender.

C. Guarantor acknowledges and agrees that (i) Guarantor has a financial interest in each
Borrower, (ii) Guarantor is benefited by the Financial Accommodations made by Lender to Borrowers,
(iii) Guarantor’s execution and delivery of this Guaranty is a material inducement to Lender
providing the Financial Accommodations to Borrowers, and (iv) without this Guaranty, Lender would
not have provided the Financial Accommodations to Borrowers.

D. In consideration of the foregoing, and other good and valuable consideration, the receipt
and sufficiency of such consideration is hereby acknowledged by Guarantor, Guarantor hereby
covenants unto and agrees with Lender as set forth in this Guaranty.

2. Definitions.

A. “Borrowers’ Liabilities” shall mean, individually and collectively, all debts, liabilities,
indebtedness, Rate Management Obligations, fees, costs, expenses, covenants, duties, obligations
and agreements of any kind, nature or description whatsoever of Borrowers or any Borrower to
Lender, heretofore, now or hereafter made, incurred, evidenced or created, whether voluntary or
involuntary,
and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, direct or indirect, insured or uninsured, foreseeable or unforeseeable,
including, but not limited to, the indebtedness owed by Borrowers to Lender pursuant to (i) the
Loan Agreement, (ii) the Revolving Note, (iii) the Term Note A, (iv) the other Loan Documents, and
(v) any Rate Management Agreement.

 

 

 

B. “Covenants” shall mean all now existing or hereafter arising covenants, duties, obligations
and agreements of Borrowers or any Borrower to and with Lender.

C. “Event of Default” shall mean the occurrence of any one of the following events: (i)
Guarantor fails or neglects to perform, keep or observe any term, provision, condition, warranty,
representation or covenant contained in this Guaranty or any other agreement, document or
instrument executed and delivered by Guarantor to Lender, and such failure continues for thirty
(30) days after the occurrence thereof; or (ii) an “Event of Default” as defined in the Loan
Agreement.

D. “Guarantor’s Liabilities” shall mean all of Guarantor’s now existing and hereafter arising
debts, liabilities, covenants, duties, obligations and agreements to and with Lender, whether
pursuant to this Guaranty or otherwise.

3. Guaranty.

A. Guarantor hereby (i) unconditionally guaranties the full and timely payment of Borrowers’
Liabilities when due or declared due, whether by acceleration, maturity or otherwise; (ii)
unconditionally guaranties the full and timely performance of the Covenants; (iii) agrees to pay
all reasonable costs, expenses and fees, including, but not limited to, attorneys’ fees, costs and
expenses (including without limitation, those fees, costs and expenses of attorneys and paralegals
who may be employees of Lender, its parent or affiliates), incurred by Lender in connection with
this Guaranty, Guarantor’s Liabilities or any collateral or security securing Guarantor’s
Liabilities or any collection or enforcement thereof; (iv) agrees to pay to Lender the amount of
any payments made to Lender in full or partial satisfaction of Borrowers’ Liabilities, and which
are subsequently invalidated, declared to be preferential or fraudulent, set aside or required to
be repaid by Lender to Borrowers, a trustee, a receiver or any other party under the United States
Bankruptcy Code or any similar federal, state or local law, statute or regulation; and (v) interest
on any of the foregoing from and after demand from Lender to Guarantor for payment until such time
as Guarantor’s Liabilities hereunder are paid in full, at a floating per annum rate of interest
equal to the Default Rate as set forth in the Loan Agreement.

B. This Guaranty and the full and timely performance of the Covenants and the full and timely
payment of Borrowers’ Liabilities by Guarantor pursuant to this Guaranty shall be a continuing,
absolute and unconditional guaranty of payment and not of collection, irrespective of (i) the
validity or enforceability of any instrument, agreement or document evidencing all or any part of
Borrowers’ Liabilities; (ii) the absence of any attempt to collect or enforce Borrowers’
Liabilities from or against Borrowers or other action to enforce the full and timely performance of
the Covenants and the full and timely payment of Borrowers’ Liabilities, and the absence of any
such attempt shall in no way preclude or be a condition precedent to proceeding against Guarantor;
(iii) any waiver or consent by Lender with respect to any term or provision of any instrument,
agreement or document executed and delivered by Borrowers or Guarantor to Lender; (iv) Lender
obtaining any additional guaranties or any collateral to secure Borrowers’ Liabilities from
Borrowers or any other person or entity; (v) any failure by Lender to take any steps to preserve
its rights to any security or collateral securing Borrowers’
Liabilities or the Covenants or to utilize any of its remedies, which failure shall in no way
preclude or be a condition precedent to Lender proceeding against Guarantor; or (vi) any other
fact, event, act, omission or circumstance which might otherwise constitute a legal or equitable
discharge of liability or performance by Guarantor.

 

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C. Lender shall not be required or obligated to (i) take any action to collect from, or to
file any claim of any kind against, Borrowers, any other guarantor or any other person or entity
liable, jointly or severally, for the full and timely performance of any of the Covenants or the
full and timely payment of any of Borrowers’ Liabilities, prior to pursuing any rights or remedies
Lender may have against Guarantor; (ii) take any steps to protect, enforce, take possession of,
perfect any interest in, foreclose or realize on any collateral or security, if any, securing the
Covenants or Borrowers’ Liabilities; or (iii) in any other respect, exercise any diligence
whatsoever in enforcing, collecting or attempting to collect any of Borrowers’ Liabilities by any
means.

4. Negative Pledge.

Guarantor hereby represents, warrants and covenants unto Lender that none of such Guarantor’s
real and personal property is currently subject to any liens, security interests, mortgages or
other encumbrances and at all times prior to the indefeasible payment and satisfaction in full of
the Borrowers’ Liabilities and the Guarantor’s Liabilities (except, in each case, indemnification
obligations which expressly survive the termination of the Loan Documents), Guarantor shall not
encumber, assign, mortgage or otherwise pledge any of its assets or any proceeds thereof to any
person or entity other than Lender.

5. Waivers.

A. Guarantor unconditionally and irrevocably waives each and every defense which would
otherwise impair, restrict, diminish or affect any of Guarantor’s Liabilities, except for the
defense of the indefeasible payment and satisfaction in full of the Guarantor’s Liabilities.
Without limiting the foregoing, Lender shall have the exclusive right from time to time without
impairing, restricting, diminishing or affecting any of Guarantor’s Liabilities, and without notice
of any kind to Guarantor, to (i) provide additional loans, extensions of credit and other financial
accommodations to Borrowers; (ii) renew, extend, accelerate, modify or otherwise change the terms
of any of the Covenants or any of Borrowers’ Liabilities, or any instrument, agreement or document
between Lender and Borrowers; (iii) accept partial payments on Borrowers’ Liabilities; (iv) take
and hold collateral or security to secure the Covenants or Borrowers’ Liabilities, or take any
other guaranty to secure the Covenants and Borrowers’ Liabilities; (v) in its sole discretion,
apply any such collateral or security, and direct the order or manner of sale thereof, and the
application of the proceeds thereof; and (vi) settle, release, compromise, collect or otherwise
liquidate Borrowers’ Liabilities or exchange, enforce, sell, lease, use, maintain and release any
collateral or security therefor in any manner, without affecting or impairing any of Guarantor’s
Liabilities hereunder. Nothing contained in this Guaranty, except the full and timely performance
of the Covenants and the full and timely payment of Borrowers’ Liabilities to Lender, shall operate
to discharge any of Guarantor’s Liabilities.

B. Guarantor hereby unconditionally waives (i) notice of acceptance of this Guaranty; (ii)
notice of any default by Borrowers in the full and prompt performance of the Covenants or the full
and prompt payment of Borrowers’ Liabilities; (iii) presentment, notice of dishonor, protest,
demand for
payment and any other notices of any kind; and (iv) any rights of set-off or counterclaim
against Lender which would otherwise impair Lender’s rights against Guarantor hereunder.

 

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6. Information.

Guarantor assumes responsibility for keeping informed of (A) the financial condition of
Borrowers; (B) Borrowers’ Liabilities; and (C) all other circumstances bearing upon Borrowers or
the risk of nonpayment of Borrowers’ Liabilities. Guarantor agrees that Lender shall have no duty
or obligation to advise, furnish or supply Guarantor of or with any information known to Lender,
including, but not limited to, Borrowers’ Liabilities, the financial condition of Borrowers, any
other circumstances relating to nonpayment of Borrowers’ Liabilities or otherwise. If Lender, in
its sole discretion, provides any advice or information to Guarantor, Lender shall be under no
obligation to investigate the matters contained in such advice or information, or to correct such
advice or information if Lender thereafter knows or should have known that such advice or
information is misleading or untrue, in whole or in part, or to update or provide any other advice
or information in the future.

7. Waiver of Guarantor’s Right of Indemnification, Subrogation, Contribution and
Reimbursement.

Guarantor acknowledges and agrees that Guarantor may have a right of indemnification,
subrogation, contribution and reimbursement from Borrowers based upon the execution of this
Guaranty. Guarantor understands the benefits of having such rights, including, but not limited to,
(a) Guarantor’s right to reimbursement from Borrowers of all monies expended for the payment of
Borrowers’ Liabilities by Guarantor; and (b) Guarantor’s subrogation to the rights of Lender after
payment of Borrowers’ Liabilities. Guarantor knowingly and voluntarily waives, releases and
relinquishes its rights of indemnification, subrogation, contribution and reimbursement from
Borrowers, Guarantor and each other Obligor, until the indefeasible payment and satisfaction in
full of Borrowers’ Liabilities (except, in each case, indemnification obligations which expressly
survive the termination of the Loan Documents).

8. Remedies Upon a Default.

Upon the occurrence of an Event of Default, Guarantor’s Liabilities shall be immediately due
and payable by Guarantor, whether or not Borrowers’ Liabilities are then due and payable or
declared due and payable. Upon the occurrence and during the continuance of an Event of Default,
Lender may, in its sole discretion, exercise any of its rights or remedies provided in this
Guaranty, at law, in equity or otherwise. All of Lender’s rights and remedies are cumulative and
non-exclusive, and the exercise by Lender of any right or remedy shall not preclude Lender from
subsequently exercising any other right or remedy, in any other respect or at any other time.

9. Term of Guaranty.

This Guaranty and Guarantor’s Liabilities shall apply to all transactions between Borrowers
and Lender. This Guaranty may only be terminated by Guarantor giving notice of such termination to
Lender in accordance with Paragraph 9 hereof. Such notice of termination, however, shall not
release or affect any of Guarantor’s Liabilities existing as of the effective date of such
termination.

 

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10. Notice.

Any and all notices, demands, requests, consents, designations, waivers and other
communications required or desired hereunder shall be in writing and shall be deemed effective upon
personal delivery, upon confirmed facsimile transmission, upon receipted delivery by overnight
carrier, or three (3) days after mailing if mailed by registered or certified mail, return receipt
requested, postage prepaid, to Guarantor or Lender at the following addresses or facsimile numbers
or such other address as Guarantor or Lender specify in like manner; provided, however, that
notices of termination of this Guaranty and notices of a change of address or facsimile number
shall be effective only upon receipt thereof.

	 	 	 	 	 	 	 
	If to Guarantor, then to:	 	If to Lender, then to:
	 
	 	 	 	 	 	 
	 

	 	UT Gaming, Inc.

5901 De Soto Avenue 

Woodland Hills, California 91367

Attention: James Burk

Facsimile No.: (818) 668-2179
	 	 	 	National City Bank

One North Franklin, 20th Floor

Chicago, Illinois 60606

Attention: Mr. Brian F. Hewett

Facsimile No.: (312) 384-4666
	 
	 	 	 	 	 	 
	with a copy to:	 	with a copy to:
	 
	 	 	 	 	 	 
	 

	 	Kirkland & Ellis LLP

200 E. Randolph 

Chicago, IL 60601 

Attention: Amy Peters

Facsimile No.: (312) 861-2200
	 	 	 	Thompson Coburn LLP

55 East Monroe Street, 37th Floor

Chicago, Illinois 60603

Attention: Victor A. Des Laurier, Esq.

Facsimile No.: (312) 782-1746

11. Application of Payments.

Guarantor hereby agrees that all payments to Lender made by or on behalf of Borrowers,
including, without limitation, payments from Guarantor, may be applied and reapplied, in whole or
in part, to any of Borrowers’ Liabilities, whether principal, interest, costs, fees, expenses or
otherwise, as Lender sees fit in its sole discretion. Lender’s books and records shall constitute
prima face proof of the amount of Borrowers’ Liabilities.

12. Financial Information.

Guarantor covenants unto Lender that Guarantor will deliver to Lender all financial and other
information and data regarding Guarantor as Lender, from time to time, may reasonably request.

 

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13. Construction.

A. This Guaranty shall be interpreted, construed and governed by and under the laws of the
State of Illinois. Wherever possible, each provision of this Guaranty shall be interpreted in such
manner as to be valid and enforceable under applicable law, but if any provision of this Guaranty
is held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall
be severed herefrom and such invalidity or unenforceability shall not affect any other provision of
this Guaranty, the balance of which shall remain in and have its intended full force and effect.
Provided, however, if such provision may be modified so as to be valid and enforceable as a matter
of law, such provision shall be deemed to be modified so as to be valid and enforceable to the
maximum extent permitted by law.

B. The Paragraph headings contained in this Guaranty are solely for the purpose of reference,
are not part of the agreement between Guarantor and Lender, and shall not in any way affect the
meaning or interpretation of this Guaranty or any Paragraph.

C. This Guaranty shall be binding on Guarantor and upon the successors and heirs of Guarantor,
and shall inure to the benefit of Lender, its successors, assigns, affiliates, divisions, parents
and shareholders, and may be assigned by Lender without notice to Guarantor. This Guaranty may not
be assigned by Guarantor.

D. No failure to exercise, and no delay in exercising, any right, power or privilege hereunder
shall operate as a waiver thereof. No waiver of any breach of any provision shall be deemed to be
a waiver of any preceding or succeeding breach of the same or any other provision. No extension of
time for performance of Guarantor’s Liabilities or any other obligation or act hereunder or under
any other agreement shall be deemed to be an extension of the time for performance of any other
obligation or any other act. This Guaranty may not be altered, changed, amended or modified except
by an agreement in writing signed by Lender and Guarantor.

E. Guarantor authorizes all of its officers, from time to time, on behalf and in the name of
Guarantor from time to time in the discretion of such officer to take or omit to take any and all
action and to execute and deliver any and all documents and instruments which such officer may
determine to be necessary or desirable in relation to, and perform any obligations arising in
connection with, this Guaranty and any of the transactions contemplated hereby, and, without
limiting the generality of the foregoing, hereby gives to such officer the power and right on
behalf of Guarantor, without notice to or assent by Guarantor, to do the following: (A) to execute
and deliver any amendment, waiver, consent, supplement, other modification or reaffirmation of this
Guaranty or any document covering any of the security for this Guaranty, and to perform any
obligation arising in connection herewith or therewith; (B) to sell, transfer, assign, encumber or
otherwise deal in or with the security for this Guaranty or any part thereof; (C) to grant liens,
security interests or other encumbrances on or in respect of any property or assets of Guarantor,
whether now owned or hereafter acquired, in favor of Lender; (D) to send notices, directions,
orders and other communications to any Person relating to this Guaranty, or the security for all or
any part of the Borrowers’ Liabilities; (E) to take or omit to take any other action contemplated
by or referred to in this Guaranty or any document covering any of the security for all or any part
of the Borrowers’ Liabilities; and (F) to take or omit to take any action with respect to this
Guaranty, any of the security for all or any part of the Borrowers’ Liabilities or any document
covering any such security, all as such officer may determine in his or her sole discretion. Each
of the
undersigned hereby certifies that he/she has all necessary authority to grant and execute this
Guaranty on behalf of Guarantor.

 

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14. Service of Process; Consent to Jurisdiction.

A. GUARANTOR 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 GUARANTOR
AS SET FORTH IN SECTION 10 ABOVE IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT
OR OTHERWISE.

B. GUARANTOR 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 LITIGATION, ACTIONS OR
PROCEEDINGS ARISING FROM, RELATING TO OR IN CONNECTION WITH BORROWERS’ LIABILITIES, THE COVENANTS,
GUARANTOR’S LIABILITIES, THIS GUARANTY OR ANY COLLATERAL OR SECURITY THEREFOR. GUARANTOR HEREBY
WAIVES ANY RIGHT GUARANTOR MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION, ACTIONS OR
PROCEEDINGS FILED IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, OR THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION.

15. Waiver of Jury Trial.

GUARANTOR AND LENDER HEREBY ABSOLUTELY AND UNCONDITIONALLY WAIVES ITS RESPECTIVE RIGHT TO A
TRIAL BY JURY IN CONNECTION WITH ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER OR
RELATING TO THIS GUARANTY, GUARANTOR’S LIABILITIES OR BORROWERS’ LIABILITIES, OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED AND DELIVERED IN CONNECTION THEREWITH OR RELATED
THERETO.

[signature page follows]

 

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In Witness Whereof, Guarantor has duly executed this Guaranty on the day and year
first above written.

	 	 	 	 	 
	 	UT Gaming, Inc.,

a Delaware corporation

 	 
	 	By:  	/s/ James Burk
 	 
	 	 	Name:  	James Burk 	 
	 	 	Title:  	Chief Financial Officer 	 

[Signature Page to Guaranty]

 

8Filed by Bowne Pure Compliance

Exhibit 10.5

Stock Pledge Agreement

This Stock Pledge Agreement (this “Pledge Agreement”) dated as of December 3, 2008, is
executed and delivered by UT Gaming, Inc., a Delaware corporation (“Pledgor”), to National City
Bank, a national banking association (“Lender”).

1. Background.

A. Contemporaneously herewith, Lender is providing certain loans, extensions of credit and
other financial accommodations (collectively the “Financial Accommodations”) to Youbet.com, 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”), evidenced by,
among other things, (i) that certain Loan and Security Agreement of even date herewith by and
between Borrowers and Lender (as amended, renewed or restated from time to time, the “Loan
Agreement”), (ii) that certain Revolving Note of even date herewith executed and delivered by
Borrowers to Lender in a maximum aggregate principal amount of up to Five Million and no/100
Dollars ($5,000,000.00) (as amended, renewed or restated from time to time, the “Revolving Note”),
(iii) that certain Term Note A of even date herewith executed and delivered by Borrowers to Lender
in the original principal amount of up to Ten Million and no/100 Dollars ($10,000,000.00) (as
amended, renewed or restated from time to time, “Term Note A”), and (iv) the other documents,
agreements and instruments referenced in any of the foregoing or otherwise executed and delivered
from time to time by or on behalf of one or more Borrowers to Lender (the “Other Agreements”; the
Other Agreements, together with the Loan Agreement, the Revolving Note and Term Note A are
collectively the “Loan Documents”).

B. Lender is willing to provide the Financial Accommodations to Borrowers provided, among
other things, Pledgor executes and delivers this Pledge Agreement to Lender.

C. Pledgor acknowledges and agrees that (i) Pledgor is a Guarantor and owns one hundred
percent (100%) of the outstanding capital stock of United Tote, and is thus benefitted by the
Financial Accommodations made by Lender to Borrowers, (ii) Pledgor’s execution and delivery of this
Pledge Agreement is a material inducement to Lender providing the Financial Accommodations to
Borrowers, and (iii) without this Pledge Agreement, Lender would not have provided the Financial
Accommodations to Borrowers.

D. In consideration of the foregoing, and other good and valuable consideration, the receipt
and sufficiency of such consideration is hereby acknowledged by Pledgor, Pledgor hereby covenants
unto and agrees with Lender as set forth in this Pledge Agreement.

2. Defined Terms. Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth in the Loan Agreement.

 

 

 

3. Pledge. Pledgor hereby pledges to Lender and grants to Lender a first position priority
security interest and lien in and to the following (collectively the “Pledged Collateral”):

(a) All of the shares of capital stock of United Tote, now or at any time or
times hereafter owned by Pledgor or held beneficially for Pledgor, and the
certificates representing the shares of such capital stock (such now-owned shares
being identified on Exhibit “A” attached hereto and made a part hereof), all options
and warrants for the purchase of shares of the capital stock of United Tote now or
hereafter held in the name of Pledgor or held
beneficially for Pledgor (said capital stock, options and warrants and all
capital stock held in the name of or beneficially for Pledgor as a result of the
exercise of such options or warrants being hereinafter collectively referred to as
the “Pledged Stock”), herewith delivered to Lender accompanied by stock powers in
form and substance acceptable to Lender (the “Powers”) duly executed in blank, and
all dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of, or in exchange for, any or all of
the Pledged Stock;

(b) One hundred percent (100%) of all additional shares of stock of United Tote
acquired by Pledgor in any manner, and the certificates representing such additional
 shares (any such additional shares shall constitute part of the Pledged Stock and
Lender is irrevocably authorized to amend Exhibit “A” from time to time to reflect
such additional shares), and all options, warrants, dividends, cash, instruments and
other rights and options from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares;

(c) The property and interests in property described in Section 5 below; and

(d) All proceeds of the foregoing.

4. Security for the Liabilities. The Pledged Collateral secures the full and timely
payment and performance of the Liabilities and the Covenants, including, without limitation, the
Liabilities and Covenants referenced in or evidenced by the Loan Documents.

5. Pledged Collateral Adjustments. If, during the term of this Pledge Agreement:

(a) Any stock dividend, reclassification, readjustment, split or other change
is declared or made in the capital structure of United Tote or any option included
within the Pledged Collateral is exercised, or both, or

(b) Any subscription warrants or any other rights or options shall be issued in
connection with the Pledged Collateral,
then such shares, warrants, rights, options or other securities shall be immediately
delivered to and held by Lender under the terms of this Pledge Agreement and shall
constitute Pledged Collateral hereunder; provided, however, that
nothing contained in this Section 5 shall be deemed as Lender’s consent to any stock
dividend, issuance of additional stock, warrants, rights or options,
reclassification, readjustment, split or other change in the capital structure of
United Tote except as set forth in the Loan Agreement.

 

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6. Subsequent Changes Affecting Pledged Collateral. Pledgor represents, warrants and
covenants unto Lender that it has made its own arrangements for keeping itself informed of changes
or potential changes affecting the Pledged Collateral (including, but not limited to, rights to
convert, rights to subscribe, payment of dividends, reorganization or other exchanges, tender
offers and voting rights), and Pledgor agrees that Lender shall not have any obligation to inform
Pledgor of any such changes or potential changes or to take any action or omit to take any action
with respect thereto. Lender may, after the occurrence and continuance of an Event of Default,
without notice and at its option, transfer or register the Pledged Collateral or any part thereof
into its or its nominee’s name with or without any indication that such Pledged Collateral is
subject to the security interest hereunder. In addition, upon the occurrence and continuance of an Event of
Default, Lender may at any time exchange certificates or instruments representing or evidencing
Pledged Shares for certificates or instruments of smaller or larger denominations.

7. Representations, Warranties and Covenants. As of the date hereof, Pledgor further
represents, warrants and covenants unto Lender as follows:

(a) Pledgor is the sole legal and beneficial owner of all the shares of the
common stock of United Tote set forth on Exhibit “A” free and clear of any lien or
encumbrance, except for the security interest created by this Pledge Agreement, and
that such stock constitutes one hundred percent (100%) of the issued and
outstanding capital stock of United Tote as of the date of this Pledge Agreement;

(b) All of the Pledged Stock has been duly authorized, validly issued and is
fully paid and non-assessable;

(c) Pledgor has full legal capacity to enter into this Pledge Agreement;

(d) There are no restrictions upon the voting rights associated with, or upon
the transfer of, any of the Pledged Collateral (except as may be required in
connection with such disposition by laws affecting the offering and sale of
securities generally);

(e) Pledgor has the right to vote, pledge and grant a security interest in or
otherwise transfer such Pledged Collateral free of any liens or encumbrances;

(f) No authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body or any other person or entity is
required either (i) for the pledge of the Pledged Collateral pursuant to this Pledge
Agreement or for the execution, delivery or performance of this Pledge Agreement by
Pledgor, or (ii) for the exercise by Lender of the voting or other rights provided
for in this Pledge Agreement or the remedies in respect of the Pledged Collateral
pursuant to this Pledge Agreement (except as may be required in connection with such
disposition by laws affecting the offering and sale of securities generally and
except for those authorizations and approvals already obtained or notices already
provided);

(g) The pledge of the Pledged Collateral pursuant to this Pledge Agreement,
together with the delivery to Lender of the Pledged Collateral as required
hereunder, creates a valid and perfected first position priority security interest
in the Pledged Collateral, in favor of Lender securing the full and timely payment
of the Liabilities and performance of the Covenants; and

(h) The Powers are duly executed and give Lender the authority they purport to
confer.

The representations, warranties and covenants set forth in this Section 7 shall survive the
execution and delivery of this Pledge Agreement.

 

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8. Voting Rights. During the term of this Pledge Agreement, and except as provided in the
next sentence of this Section 8, Pledgor shall have the right to vote the Pledged Collateral on all
corporate questions in a manner not inconsistent with the terms of this Pledge Agreement. Upon the
occurrence and continuance of an Event of Default, Lender may, at Lender’s option and following
written notice from Lender to Pledgor, exercise all voting powers pertaining to the Pledged
Collateral, including the right to initiate and take shareholder action by written consent, and
Pledgor hereby irrevocably constitutes and appoints Lender as Pledgor’s proxy and attorney-in-fact,
with full power of substitution, to do so at such time. This proxy is coupled with an interest and
is irrevocable and shall continue until the termination of this Pledge Agreement in accordance with
Section 15.

9. Dividends and Other Distributions.

(a) So long as no Event of Default has occurred or would result therefrom:

(i) Subject to Section 5 hereof, Pledgor shall be entitled to
receive and retain any and all dividends and interest paid in respect
of the Pledged Collateral; and

(ii) Lender shall execute and deliver (or cause to be executed
and delivered) to Pledgor all such proxies and other instruments as
Pledgor may reasonably request for the purpose of enabling Pledgor to
receive the dividends or interest payments which it is authorized to
receive and retain pursuant to Section 9(a)(i) above.

(b) After the occurrence and during the continuance of an Event of Default and
upon prior written notice to Pledgor:

(i) All rights of Pledgor to receive the dividends and interest
payments in respect of the Pledged Collateral shall cease, and all
such rights shall thereupon become vested in Lender, which shall
thereupon have the sole right to receive as Pledged Collateral apply
such dividends and interest payments to the Liabilities; and

(ii) All proceeds of this Section 9(b) shall be received in trust
for Lender, shall be segregated from other funds of Pledgor and shall
be paid over immediately to Lender as Pledged Collateral in the same
form as so received (with any necessary endorsements).

10. Transfers and Other Liens. Pledgor agrees that it will not (a) sell or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral or any other shares
of stock, warrants, options or other equity interests of United Tote, or (b) create or permit to
exist any lien or encumbrance upon or with respect to any of the Pledged Collateral or any other
shares of stock, warrants, options or other equity interests of United Tote, except, in each case.

 

4

 

11. Remedies.

(a) Lender shall have, in addition to any other rights and remedies given under
this Pledge Agreement or by law, upon the occurrence and during the continuance of
an Event of Default, all of the rights and remedies with respect to the Pledged
Collateral of a secured party under the laws of the State of Illinois. In addition,
after the occurrence and during the continuance of an Event of Default, Lender shall
have such powers of sale and other powers as may be conferred by applicable law.
With respect to the Pledged Collateral or any part thereof which shall then be in or
shall thereafter come into the possession or custody of Lender or which Lender shall
otherwise have the ability to transfer under applicable law, Lender may, in its sole
discretion and without notice, except as specified below in Section 11(b) or as
specifically required by the Loan Documents, after the occurrence and during the
continuance of an Event of Default, sell or cause the same to be sold at any
exchange, broker’s board or at public or private sale, in one or more sales or lots,
at such price as Lender may deem best, for cash or on credit or for future delivery,
without assumption of any credit risk, and the purchaser of any or all of the
Pledged Collateral so sold shall thereafter own the same, absolutely free from any
claim, encumbrance or right of any kind whatsoever. Lender may, in its own name, or
in the name of a designee or nominee, buy the Pledged Collateral at any public sale
and, if permitted by applicable law, buy the Pledged Collateral at any private sale.
Pledgor will pay to Lender all reasonable expenses (including, without limitation,
court costs and reasonable attorneys’ and paralegals’ fees and expenses) of, or
incidental to, the enforcement of any of the provisions hereof.

(b) Unless any of the Pledged Collateral threatens to decline speedily in value
or is or becomes of a type sold on a recognized market, Lender will give Pledgor
reasonable notice of the time and place of any public sale thereof, or of the time
after which any private sale or other intended disposition is to be made. Any sale
of the Pledged Collateral conducted in conformity with reasonable commercial
practices of banks, commercial finance companies, insurance companies or other
financial institutions disposing of property similar to the Pledged Collateral shall
be deemed to be commercially reasonable. Notwithstanding any provision to the
contrary contained herein, Pledgor agrees that any requirements of reasonable notice
shall be met if such notice is received by Pledgor as provided in Section 23 below
at least ten (10) business days before the time of the sale or disposition;
provided, however, that Lender may give any shorter notice that is commercially
reasonable under the circumstances. Any other requirement of notice, demand or
advertisement for sale is waived, to the extent permitted by law.

(c) If, at the original time or times appointed for the sale of the whole or
any part of the Pledged Collateral, the highest bid, if there be but one sale, shall
be inadequate to discharge in full all the Liabilities, or if the Pledged Collateral
be offered for sale in lots, if at any of such sales, the highest bid for the lot
offered for sale would indicate to Lender, in its discretion, the unlikelihood of
the proceeds of the sales of the whole of the Pledged Collateral being sufficient to
discharge all the Liabilities, or if applicable law would permit postponement or
postponements of sale for any other reason, then Lender may, on one or more
occasions and in its discretion, postpone any of said sales by public announcement
at the time of sale or the time of previous postponement of sale, and no other
notice of such postponement or postponements of sale need be given, any other notice
being hereby waived; provided,
however, that any sale or sales made after such postponement shall be
after ten (10) days’ notice to Pledgor.

 

5

 

(d) Pledgor agrees that, upon the occurrence and during the continuance of an
Event of Default, it will not at any time plead, claim or take the benefit of any
appraisal, valuation, stay, extension, moratorium or redemption law now or hereafter
in force in order to prevent or delay the enforcement of this Pledge Agreement, or
the absolute sale of the whole or any part of the Pledged Collateral or the
possession thereof by any purchaser at any sale hereunder, and Pledgor waives the
benefit of all such laws to the extent it lawfully may do so. Pledgor agrees that
it will not interfere with any right, power or remedy of Lender provided for in this
Pledge Agreement or now or hereafter existing at law or in equity or by statute or
otherwise, or the exercise or beginning of the exercise by Lender or any one or more
of such rights, powers, or remedies. No failure or delay on the part of Lender to
exercise any such right, power or remedy and no notice or demand which may be given
to or made upon Pledgor by Lender with respect to any such remedies shall operate as
a waiver thereof, or limit or impair Lender’s right to take any action or to
exercise any power or remedy hereunder, without notice or demand, or prejudice its
rights as against Pledgor in any respect.

(e) Pledgor further agrees that a breach of any of the terms or provisions
contained in this Pledge Agreement will cause irreparable injury to Lender, that
Lender has no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every term and provision contained in this Pledge
Agreement shall be specifically enforceable against Pledgor.

12. Consent. Pledgor hereby consents that from time to time, before and after the
occurrence of an Event of Default, with or without notice to or assent from Pledgor, any other
security at any time held by or available to Lender for any of the Liabilities or any security at
any time held by or available to Lender for any obligation of any other person or entity
secondarily or otherwise liable for any of the Liabilities, may be exchanged, surrendered or
released, and any of the Liabilities may be changed, altered, renewed, extended, continued,
surrendered, compromised, waived or released, in whole or in part, as Lender may see fit, and
Pledgor shall remain bound under this Pledge Agreement notwithstanding any such exchange,
surrender, release, alteration, renewal, extension, continuance, compromise, waiver or inaction or
other dealing.

13. Bank Appointed Attorney-in-Fact. Pledgor hereby appoints Lender as its
attorney-in-fact, with full authority, in the name of Pledgor or otherwise, upon the occurrence and
during the continuance of an Event of Default, from time to time in Lender’s sole discretion, to
take any action and to execute any instrument which Lender may deem necessary or advisable to
accomplish the purposes of this Pledge Agreement, including, without limitation, to receive,
endorse and collect all instruments made payable to Pledgor representing any dividend, interest
payment or other distribution in respect of the Pledged Collateral or any part thereof and to give
full discharge for the same and to arrange for the transfer of all or any part of the Pledged
Collateral on the books of United Tote to the name of Lender or Lender’s nominee, to exercise all
voting powers pertaining to the Pledged Collateral, and to execute proxies enabling Lender and its
representatives to exercise such powers and execute written consents and waivers in connection with
the taking of any shareholder action, whether in the name of Pledgor or in the name of Lender;
provided, however, that Lender shall have no duty to exercise any such right or to
preserve the same and shall not be liable for any failure to do so or for any delay in doing so.
This appointment shall be irrevocable and shall continue until the termination of this Pledge
Agreement in accordance with Section 15. Lender may exercise any of its rights and execute any of
its duties hereunder by or through agents or employees and shall be entitled to advice of counsel
concerning all matters pertaining to its rights and duties hereunder.

 

6

 

14. Waivers. Pledgor waives presentment and demand for payment, performance or observance
of any of the Liabilities, protest and notice of dishonor or an Event of Default with respect to
any of the Liabilities and all other notices to which Pledgor might otherwise be entitled except as
otherwise expressly provided herein.

15. Term. This Pledge Agreement shall remain in full force and effect until the
Liabilities have been fully paid in cash and satisfied (except for contingent Liabilities which
expressly survive termination of the Loan Agreement).

16. Reinstatement. This Pledge Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against Pledgor for liquidation or
reorganization, should Pledgor become insolvent or make an assignment for the benefit of creditors
or should a receiver or trustee be appointed for all or any significant part of Pledgor’s assets,
and shall continue to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Liabilities, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all
as though such payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Liabilities shall be reinstated and
deemed reduced only by any amount paid and not so rescinded, reduced, restored or returned.

17. Definitions. The singular shall include the plural and vice versa and any gender shall
include any other gender as the context may require.

18. Successors and Assigns. This Pledge Agreement shall be binding upon and inure to the
benefit of Pledgor, Lender and their respective successors and assigns. Pledgor’s successors and
assigns shall include, without limitation, a receiver, trustee and debtor-in-possession of or for
Pledgor.

19. Governing Law. This Pledge Agreement shall be interpreted, and the rights and the
Liabilities of the parties hereto determined, in accordance with the internal laws (as opposed to
the conflict of law provisions) of the State of Illinois.

20. Severability. Whenever possible, each provision of this Pledge Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but, if any provision
of this Pledge Agreement shall be held to be prohibited or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Pledge Agreement;
provided, 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.

21. Further Assurances. Pledgor agrees that it will cooperate with Lender and will execute
and deliver, or cause to be executed and delivered, all such other assignments separate from
certificates, proxies, instruments and documents, and will take all such other actions, including,
without limitation, the execution and filing of financing statements, as Lender may reasonably
request from time to time in order to carry out the provisions and purposes of this Pledge
Agreement.

 

7

 

22. Lender’s Duty of Care. Lender shall not be liable for any acts, omissions, errors of
judgment or mistakes of fact or law including, without limitation, acts, omissions, errors or
mistakes with respect to the
Pledged Collateral, except for those arising out of or in connection with Lender’s (a) gross
negligence, bad faith or willful misconduct, or (b) failure to use reasonable care with respect to
the safe custody of the Pledged Collateral in Lender’s possession. Without limiting the generality
of the foregoing, Lender shall be under no obligation to take any steps necessary to preserve
rights in the Pledged Collateral against any other parties but may do so at its option. All
expenses incurred by or on behalf of Lender after an Event of Default in connection with this
Pledge Agreement shall constitute part of the Liabilities secured hereby.

23. Notices. Any and all notices, demands, requests, consents, designations, waivers and
other communications required or desired hereunder shall be in writing and shall be deemed
effective upon delivery as set forth in the notice provisions set forth in the Loan Agreement.

24. Amendments, Waivers and Consents. No amendment or waiver of any provision of this
Pledge Agreement nor consent to any departure by Pledgor herefrom, shall in any event be effective
unless the same shall be in writing and signed by Lender and Pledgor, and then such amendment,
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given.

25. Section Headings. The section headings herein are for convenience of reference only,
and shall not affect in any way the interpretation of any of the provisions hereof.

26. Execution in Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall together constitute one
and the same agreement.

27. Merger; Recitals. This Pledge Agreement represents the final agreement of Pledgor with
respect to the matters contained herein and may not be contradicted by evidence of prior or
contemporaneous agreements, or subsequent oral agreements, between Pledgor and Lender. The
recitals set forth at the beginning of this Pledge Agreement are hereby incorporated herein by
reference and made a part hereof.

[signature page follows]

 

8

 

In Witness Whereof, Pledgor and Lender have executed this Pledge Agreement as of the
date set forth above.

	 	 	 	 	 	 	 	 	 	 	 
	National City Bank, 

a national banking association	 	 	 	UT Gaming, Inc.,

a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By: 

	 	/s/ Brian F. Hewett
 

Name: Brian F. Hewett
	 	 
	 	By:

	 	/s/ James Burk
 

Name: James Burk
	 	 
	 

	 	Title: Senior Vice President
	 	 	 	 
	 	Title: Chief Financial Officer	 	 

[Signature Page to Stock Pledge Agreement]

 

 

 

Acknowledgment

The undersigned hereby acknowledges receipt of a copy of the foregoing Stock Pledge Agreement,
agrees promptly to note on its books the security interests granted under such Stock Pledge
Agreement, and waives any rights or requirement at any time hereafter to receive a copy of such
Stock Pledge Agreement in connection with the registration of any Pledged Collateral in the name of
Lender or its nominee or the exercise of voting rights by Lender.

	 	 	 	 	 
	 	United Tote Company,

a Montana corporation

 	 
	 	By:  	/s/ James Burk
 	 
	 	 	Name:  	James Burk 	 
	 	 	Title:  	Chief Financial
Officer 	 

[Acknowledgment Page to Stock Pledge Agreement]

 

 

 

Exhibit “A”

to

Stock Pledge Agreement

Pledged Stock

United Tote Company,

a Montana corporation

	 	 	 	 	 
	 	 	Percentage of	 	 
	 	 	Issued and Outstanding	 	Shares of Common
	Cert. Nos.	 	Capital Stock Owned	 	Stock Subject to Pledge
	 
	 	 	 	 
	24	 	100%	 	1,000 of Shares

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