1
EXHIBIT 10.32
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Guaranty") is given by LEISURE TIME
CASINOS & RESORTS, INC., a Colorado corporation (the "Guarantor"), for the
benefit of GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("GE
Capital"), with respect to the obligations of LEISURE BELLE CRUISE L.L.C.
("Borrower") to GE Capital. The Borrower has applied to GE Capital for a loan in
the original principal amount of $1,500,000 ("Loan"). The Guarantor has
requested GE Capital to make the Loan to the Borrower and, in consideration
therefor and of the substantial direct and indirect benefits which it will
derive therefrom, gives the following guaranty and indemnification to GE
Capital.
Section 1. The Guaranty. The Guarantor hereby UNCONDITIONALLY AND
IRREVOCABLY GUARANTEES: (a) the full and punctual payment when due of any and
all sums now or hereafter owing by the Borrower to GE Capital as a result of or
in connection with the Loan and all renewals, refinancings, extensions,
substitutions, amendments, and modifications thereof, including, but not
limited to, all amounts of principal, interest, penalties, reimbursements,
advancements, escrows, and fees; (b) the timely, complete, continuous, and
strict performance and observance by the Borrower of any and all of the terms,
covenants, agreements and conditions contained in any and all existing or
future documents, instruments, agreements, and writings of every kind, nature,
type, and variety which evidence, reflect, embody, give rise to or secure any
and all existing and future indebtedness, liabilities, and obligations of any
kind of the Borrower to GE Capital as a result of or in connection with the
Loan and (c) the payment upon demand of all costs and expenses incurred by GE
Capital in connection with its enforcement of this Guaranty. As used in this
Guaranty, the term "Obligations" shall refer to the obligations of payment,
performance, and indemnification which the Guarantor has undertaken and assumed
pursuant to this Guaranty, both as described in this Section and in other
Sections of this Guaranty and the term "Loan Documents" shall refer to the Loan
and Security Agreement dated the date hereof between GE Capital and the
Borrower and all other documents executed and/or delivered in connection
therewith evidencing, securing or guaranteeing the Loan.
Section 2. Nature of the Guaranty. This Guaranty: (a) is (i)
irrevocable; (ii) absolute and unconditional; (iii) direct, immediate and
primary; and (iv) one of payment and not just collection; and (b) makes the
Guarantor a surety to GE Capital and primarily liable with the Borrower.
Section 3. Accuracy of Representations. The Guarantor hereby
guaranties that each and every representation and warranty made by the Borrower
or by the Guarantor to GE Capital, both before and after the date of this
Guaranty, are and will continue to be true,
2
correct, accurate, and complete, in all respects, and not knowingly misleading,
and the Guarantor shall indemnify and hold GE Capital, its agents and
employees, harmless from any and all losses, costs, or expenses which GE
Capital may suffer, sustain or incur as a result of any representation or
statement of the Borrower or of the Guarantor being false, incorrect,
inaccurate, incomplete, or knowingly misleading.
Section 4. Foreclosure Indemnification. In the event that any real or
personal property secures either the Loan or the Obligations, and GE Capital or
any affiliate of GE Capital acquires the same after a default by the Borrower
or the Guarantor in full or partial satisfaction of the obligations of the
Borrower to GE Capital or the Obligations, the Guarantor shall indemnify and
hold GE Capital, its agents and employees, harmless from any and all losses,
costs, or expenses which GE Capital, may sustain as a result of: (a) selling
the real or personal property so acquired for less than the total sums owed
with respect to the obligations of the Borrower to GE Capital or the
Obligations, as the case may be; provided, however, that any such sale by GE
Capital is done in a commercially reasonable manner, or (b) any action brought
against GE Capital under ss. 548 or ss. 544(b) of the United States Bankruptcy
Code, as amended, or other similar statutory provision, on the ground that the
consideration paid by GE Capital for the real or personal property was not
"reasonably equivalent value," within the contemplation of ss. 548 or ss.
544(b) of the United States Bankruptcy Code, as amended, or other similar
statutory provision or "fair consideration," within the contemplation of any
applicable state fraudulent conveyance or transfer law or was otherwise
inadequate.
Section 5. Reporting Requirements. The Guarantor shall deliver, or
cause the Borrower to deliver, to GE Capital (a) as soon as available but in no
event more than one hundred twenty (120) days after the end of each fiscal year
of the Guarantor, the consolidated and consolidating financial statements of
the Guarantor and its subsidiaries, prepared in accordance with generally
accepted accounting principles ("GAAP"), all in reasonable detail and certified
by independent certified public accountants of recognized standing selected by
the Guarantor and acceptable to GE Capital; (b) as soon as available but in no
event more than sixty (60) days after the end of each quarter of the
Guarantor's fiscal year, the consolidated financial statements of the Guarantor
and its subsidiaries for such quarter, prepared in accordance with GAAP and
certified by the chief financial officer of the Guarantor; (c) as soon as
available, all other statements filed with the Securities and Exchange
Commission or any successor agency thereof; and (d) such other financial
information as GE Capital may reasonably request from time to time.
Section 6. GE Capital Need Not Pursue Other Rights Before Enforcing
Guaranty. GE Capital shall be under no obligation to pursue its rights against
the Borrower or any of the collateral of
2
3
the Borrower securing the Loan or against any other guarantor or any other
person that is now or hereafter liable upon or in connection with any of the
obligations of the Guarantor or the Borrower to GE Capital or that has granted
any lien or security interest to or for the benefit of GE Capital to secure any
of the obligations of the Guarantor or the Borrower to GE Capital ("Other
Obligor") or any collateral of any Other Obligor before pursuing its rights
against the Guarantor.
Section 7. Right of GE Capital to Act With Respect to the Borrower,
Other Obligors, and Collateral. The Guarantor hereby assents to any and all
terms and agreements between GE Capital and the Borrower or between GE Capital
and any Other Obligor, and all amendments and modifications thereof, whether
presently existing or hereafter made and whether oral or in writing. GE Capital
may, without compromising, impairing, diminishing, or in any way releasing the
Guarantor from the Obligations and without notifying or obtaining the prior
approval of the Guarantor, at any time or from time to time: (a) waive or
excuse any default by the Borrower or any Other Obligor, or delay in the
exercise by GE Capital of any or all of GE Capital's rights or remedies with
respect to such default; (b) grant extensions of time for payment or
performance by the Borrower or any Other Obligor; (c) release, substitute,
exchange, surrender, or add collateral of the Borrower or of any Other Obligor,
or waive, release, or subordinate, in whole or in part, any lien or security
interest held by GE Capital on any real or personal property securing payment
or performance, in whole or in part, of the obligations of the Borrower or of
any Other Obligor to GE Capital; (d) release the Borrower or any Other Obligor;
(e) apply payments made by the Borrower, or by any Other Obligor, to any sums
owed by the Borrower or any Other Obligor to GE Capital, in any order or
manner, or to any specific account or accounts, as GE Capital may elect; and
(f) modify, change, renew, extend, or amend, in any respect GE Capital's
agreement with the Borrower or any Other Obligor, or any document, instrument,
or writing embodying or reflecting the same.
Section 8. Waivers by the Guarantor. The Guarantor hereby waives: (a)
any and all notices whatsoever with respect to this Guaranty or with respect to
any of the obligations of the Borrower to GE Capital, including, but not
limited to, notice of: (i) GE Capital's acceptance hereof or GE Capital's
intention to act, or GE Capital's action, in reliance hereon; (ii) the present
existence or future incurring of any of the obligations of the Borrower to GE
Capital or any terms or amounts thereof or any change therein; (iii) any
default by the Borrower or any Other Obligor; and (iv) the obtaining or release
of any guaranty or surety agreement, pledge, assignment, or other security for
any of the obligations of the Borrower to GE Capital; (b) presentment and
demand for payment of any sum due from the Borrower or any Other Obligor and
protest of nonpayments; and (c) demand for performance by the Borrower or any
Other Obligor.
3
4
Section 9. Unenforceability of Obligations of the Borrower. This
Guaranty shall be valid, binding, and enforceable even if the obligations of
the Borrower to GE Capital which are guaranteed hereby are now or hereafter
become invalid or unenforceable for any reason.
Section 10. No Conditions Precedent. This Guaranty shall be effective
and enforceable immediately upon its execution. The Guarantor acknowledges that
no unsatisfied conditions precedent to the effectiveness and enforceability of
this Guaranty exist as of the date of its execution and that the effectiveness
and enforceability of this Guaranty are not in any way conditioned or
contingent upon any event, occurrence, or happening, or upon any condition
existing or coming into existence either before or after the execution of this
Guaranty.
Section 11. Information Concerning the Borrower, Collateral, or Other
Obligors. GE Capital shall have no present or future duty or obligation to
discover or to disclose to the Guarantor any information, financial or
otherwise, concerning the Borrower, any Other Obligor, or any collateral
securing the obligations of the Borrower to GE Capital or of any Other Obligor
to GE Capital. The Guarantor waives any right to claim or assert any such duty
or obligation on the part of GE Capital. The Guarantor agrees to obtain all
information which the Guarantor considers either appropriate or relevant to
this Guaranty from sources other than GE Capital to the extent they exist and
to become and remain at all times current and continuously apprised of all
information concerning the Borrower, Other Obligors, and any collateral which
is material and relevant to the Obligations of the Guarantor under this
Guaranty.
Section 12. Cumulative Liability. The liability of the Guarantor under
this Guaranty shall be cumulative to, and not in lieu of, the Guarantor's
liability under any other Loan document or in any capacity other than as the
Guarantor hereunder.
Section 13. Obligations Unconditional. The payment and performance of
the Obligations shall be the absolute and unconditional duty and obligation of
the Guarantor, and shall be independent of any defense or any rights of
set-off, recoupment or counterclaim which the Guarantor might otherwise have
against GE Capital, and the Guarantor shall pay and perform the Obligations,
free of any deductions and without abatement, diminution or set-off; and until
such time as the Obligations have been fully paid and performed, the Guarantor:
(a) shall not suspend or discontinue any payments provided for therein; (b)
shall perform and observe all of the covenants and agreements contained in this
Guaranty; and (c) shall not terminate or attempt to terminate this Guaranty for
any reason. No delay by GE Capital in making demand on the Guarantor for
satisfaction of the Obligations shall prejudice or in any way impair GE
Capital's ability to enforce this Guaranty.
4
5
Section 14. Defenses Against Debtor. The Guarantor waives any right to
assert against GE Capital any defense (whether legal or equitable), claim,
counterclaim, or right of set-off or recoupment which the Guarantor may now or
hereafter have against the Borrower or any Other Obligor.
Section 15. Covenants of Guarantor. Until all sums due by the Borrower
and the Guarantor have indefeasibly been paid in full, the Guarantor hereby
covenants that it will at all times maintain a ratio of Debt to Net Worth of
not more than 5.5 to 1. For purposes hereof, "Debt" means total debt and other
liabilities and "Net Worth" means shareholder equity, in each case as defined
by general acceptable accounting principles applied on a consistent basis.
Section 16. Events Authorizing Acceleration of the Obligations. If any
of the following shall happen or occur, GE Capital, without notice or demand,
may accelerate and call due the Obligations, even if GE Capital has not
accelerated and called due the sums owed to GE Capital by the Borrower: (a) a
default by the Borrower or any Other Obligor of any existing or future
obligation owed by the Borrower or Other Obligor to GE Capital; (b) the failure
of the Guarantor to perform any covenant or agreement contained in this
Guaranty; (c) a default in any other agreement, instrument or document between
the Guarantor, the Borrower or Other Obligor and GE Capital, or any corporate
affiliate of GE Capital, whether previously, simultaneously, or hereafter
entered into; (d) a material adverse change in the financial condition of the
Guarantor, the Borrower or Other Obligor from that expressed in the financial
statement most recently submitted to GE Capital prior to the date of this
Guaranty, as determined in good faith by GE Capital in its sole discretion; (e)
institution of bankruptcy, insolvency, reorganization or receivership
proceedings by or against the Guarantor, the Borrower or Other Obligor in any
state or federal court; (f) the appointment of a receiver, assignee, custodian,
trustee or similar official under any federal or state insolvency or creditors'
rights law for any property of the Guarantor, the Borrower or Other Obligor;
(g) any warranty, representation, or statement to GE Capital by or on behalf of
the Guarantor, the Borrower or Other Obligor proving to have been incorrect in
any material respect when made or furnished; (h) the occurrence of any event
which is, or would be in the passage of time or the giving of notice or both, a
default under any indebtedness of the Guarantor, the Borrower or Other Obligor
to any person other than GE Capital; (i) any material loss, theft or
substantial damage, not fully insured for the benefit of GE Capital, to any of
the assets of the Guarantor, the Borrower or Other obligor, or the transfer or
encumbrance of any material part of the assets of the Guarantor, the Borrower
or Other Obligor other than in the ordinary course of business; (j) the entry
of any final judgment against the Guarantor, the Borrower or Other Obligor for
the payment of money in excess of $250,000 (to the extent not covered by
insurance) and such judgment is not satisfied or, if
5
6
appealed, bonded off within thirty (30) days thereafter; (k) the levy upon or
attachment of any assets of the Guarantor, the Borrower or Other Obligor and
such levy or attachment is not released or bonded off within thirty (30) days
of the date thereof; (l) the recordation of any federal, state or local tax
lien against the Guarantor, the Borrower or Other Obligor that is not satisfied
or bonded over within thirty (30) days thereafter; (m) a change of ownership,
merger or consolidation of the Borrower or Other Obligor or the dissolution,
liquidation or reorganization of the Guarantor, the Borrower or any Other
Obligor; or (n) the failure of the Guarantor, the Borrower or Other Obligor to
furnish to GE Capital such financial information as GE Capital may reasonably
request from time to time and such failure shall continue unremedied for a
period of ten (10) days thereafter.
Section 17. Expenses of Collection and Attorney's Fees. The Guarantor
shall pay all reasonable costs and expenses incurred by GE Capital in
collecting sums due under this Guaranty, including, without limitation, the
costs of any lien, judgment or other record searches, appraisals, travel
expenses and the like. In addition, if this Guaranty is referred to an attorney
for collection, whether or not judgment has been confessed or suit has been
filed, the Guarantor shall pay all of GE Capital's costs, fees (including, but
not limited to, GE Capital's reasonable attorneys' fees, charges and expenses)
and all other expenses resulting from such referral (to the extent not
prohibited by law).
Section 18. Interest Rate After Judgment. If judgment is entered
against the Guarantor on this Guaranty, the amount of such judgment (which may
include principal, interest, charges, fees and costs) shall bear interest to
the extent permitted by applicable law at the higher of the default interest
rate set forth in the Loan Documents, as determined on the date of the entry of
the judgment, or the legal rate of interest then applicable to judgments in the
jurisdiction in which judgment was entered.
Section 19. Enforcement During Bankruptcy. Enforcement of this
Guaranty shall not be stayed or in any way delayed, as a result of the filing
of a petition under the United States Bankruptcy Code, as amended, or other
similar statutory scheme, by or against the Borrower. Should GE Capital be
required to obtain an order of the United States Bankruptcy Court or other
court of competent jurisdiction to begin enforcement of this Guaranty after the
filing of a petition under the United States Bankruptcy Code, as amended, or
other similar statutory scheme, by or against the Borrower, the Guarantor
hereby consents to this relief and agrees to file or cause to be filed all
appropriate pleadings to evidence and effectuate such consent and to enable GE
Capital to obtain the relief requested.
Section 20. Remedies Cumulative. All of GE Capital's rights and
remedies shall be cumulative and any failure of GE Capital to exercise any
right hereunder shall not be construed as a waiver of
6
7
the right to exercise the same or any other right at any time, and from time to
time, thereafter.
Section 21. Discharge of Guaranty. This Guaranty shall not be
discharged and the Guarantor shall not be released from liability until all
Obligations have been satisfied in full and the satisfaction of the Obligations
is not subject to challenge or contest. If all or any portion of the
Obligations are satisfied and GE Capital is required for any reason to pay to
any person the sums used to satisfy the Obligations, the Obligations shall
remain in effect and enforceable to the extent thereof.
Section 22. Termination. This Guaranty may be terminated only in
writing by GE Capital and upon such terms and conditions as GE Capital may
impose.
Section 23. Rights of Subrogation, Etc. In the event the Guarantor
pays any sum to or for the benefit of GE Capital pursuant to this Guaranty, the
Guarantor shall have no right of contribution, indemnification, exoneration,
reimbursement, subrogation or other right or remedy against or with respect to
the Borrower, any Other Obligor, or any collateral, whether real, personal, or
mixed, securing the obligations of the Borrower to GE Capital or the
obligations of any Other Obligor until such time as the Borrower and/or the
Guarantor have indefeasibly paid in full all sums due GE Capital.
Section 24. Subordination of Certain Indebtedness. If the Guarantor
has advanced or hereafter advances any sums to the Borrower or its successors
or assigns or if the Borrower or its successors or assigns is now or shall
hereafter become indebted to the Guarantor, such sums and indebtedness shall be
subordinate in all respects to the amounts now and hereafter due and owing to
GE Capital by the Borrower.
Section 25. Setoff. GE Capital shall have the right to setoff and
apply against the Obligations any sums of the Guarantor at any time on deposit
with GE Capital whether such deposits are general or special, time or demand,
provisional or final, and the Guarantor hereby pledges and grants to GE Capital
a security interest in all such deposits.
Section 26. Choice of Law. The laws of the State of New York
(excluding, however, conflict of law principles) shall govern and be applied to
determine all issues relating to this Guaranty and the rights and obligations
of the parties hereto, including the validity, construction, interpretation,
and enforceability of this Guaranty and its various provisions and the
consequences and legal effect of all transactions and events which resulted in
the issuance of this Guaranty or which occurred or were to occur as a direct or
indirect result of this Guaranty having been executed.
7
8
Section 27. Consent to Jurisdiction; Agreement as to Venue. The
Guarantor irrevocably consents to the non-exclusive jurisdiction of the federal
and state courts located in the State of New York. The Guarantor agrees that
venue shall be proper in any such courts. The Guarantor hereby consents to
process being served in any suit, action, or proceeding instituted in
connection with this Guaranty by the mailing of a copy thereof by certified
mail, postage prepaid, return receipt requested, to the Guarantor. The
Guarantor irrevocably agrees that such service shall be deemed to be service of
process upon the Guarantor in any such suit, action, or proceeding. Nothing in
this Section shall affect the right of GE Capital to serve process in any
manner otherwise permitted by law and nothing in this Section will limit the
right of GE Capital otherwise to bring proceedings against the Guarantor in the
courts of any jurisdiction or jurisdictions.
Section 28. Actions Against GE Capital. Any action brought by the
Guarantor against GE Capital which is based, directly or indirectly, on this
Guaranty or any matter in or related to this Guaranty, including, but not
limited to, the obligations of the Borrower to GE Capital, or the
administration, collection, or enforcement thereof, shall be brought only in
the federal or state courts of the State of New York. The Guarantor shall not
file a counterclaim against GE Capital in a suit brought by GE Capital against
the Guarantor in a state other than the State of New York unless under the
rules of procedure of the court in which GE Capital brought the action the
counterclaim is mandatory, and not merely permissive, and will be considered
waived unless filed as a counterclaim in the action instituted by GE Capital.
The Guarantor agrees that any forum other than the State of New York is an
inconvenient forum and that a suit brought by the Guarantor against GE Capital
in a court of any state other than the State of New York should be forthwith
dismissed or transferred to a court located in the State of New York by that
court.
Section 29. Invalidity of any Part. If any provision or part of any
provision of this Guaranty shall for any reason be held invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions or the remaining part of any effective
provisions of this Guaranty, and this Guaranty shall be construed as if such
invalid, illegal, or unenforceable provision or part thereof had never been
contained herein, but only to the extent of its invalidity, illegality, or
unenforceability.
Section 30. Amendment or Waiver. This Guaranty may be amended only be
a writing duly executed by the Guarantor and GE Capital. No waiver by GE
Capital of any of the provisions of this Guaranty or any of the rights or
remedies of GE Capital with respect hereto shall be effective or enforceable
unless in writing.
Section 31. Binding Nature. This Guaranty shall inure to the benefit
of and be enforceable by GE Capital and GE Capital's successors and assigns and
any other person to whom GE Capital may
8
9
grant an interest in the obligations of the Borrower to GE Capital, and shall
be binding upon and enforceable against the Guarantor and the Guarantor's
successors and permitted assigns.
Section 32. Assignability. This Guaranty or any interest herein may be
assigned by GE Capital, at any time or from time to time and upon the
Guarantor's receipt of notice thereof, the Guarantor shall acknowledge and
consent to the same in writing.
Section 33. Notices. Any notice or demand required or permitted by or
in connection with this Guaranty, without implying the obligation to provide
any notice or demand, shall be in writing at the address set forth below or to
such other address as may be hereafter specified by written notice to GE
Capital by the Guarantor. Any such notice or demand shall be deemed to be
effective as of the date of hand delivery or facsimile transmission, one (1)
day dispatch if sent by telegram, mailgram, overnight delivery, express mail or
federal express, or five (5) days after mailing if sent by first class mail
with postage prepaid.
Section 34. Final Agreement. This Guaranty contains the final and
entire agreement between GE Capital and the Guarantor with respect to the
guaranty by the Guarantor of the Borrower's obligations to GE Capital. There
are no separate oral or written understandings between GE Capital and the
Guarantor with respect thereto.
Section 35. Tense, Gender, Defined Terms, Captions. As used herein,
the plural shall refer to and include the singular, and the singular, the
plural, and the use of any gender shall include and refer to any other gender.
If more than one person has executed this Guaranty, the term "Guarantor" shall
mean all such persons collectively or any one or more of such persons
individually or collectively, as the case may be and as the context may
require. All captions are for the purpose of convenience only.
Section 36. Seal and Effective Date. This Guaranty is an instrument
executed under seal and is effective and enforceable as of the date set forth
below, independent of the date of actual execution.
SECTION 37. WAIVER OF TRIAL BY JURY. THE GUARANTOR HEREBY
UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS GUARANTY, ANY
AMOUNTS SECURED HEREBY, ANY DEALINGS BETWEEN THE GUARANTOR AND GE CAPITAL
RELATING TO THE SUBJECT MATTER OF THIS GUARANTY OR ANY RELATED TRANSACTIONS.
The scope of this waiver is intended to be all encompassing of any and all
disputes that may be filed in any court (including, without limitation,
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims). THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING,
9
10
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS GUARANTY, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. In
the event of litigation, this Guaranty may be filed as a written consent to a
trial by the court.
[Remainder of page intentionally left blank]
10
11
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed, under seal, by one of its duly authorized officers as of the 17 day
of December, 1998.
WITNESS: LEISURE TIME CASIONS & RESORTS, INC.
By: /s/ (SEAL)
--------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
Attn:
---------------------------
Facsimile No.:
-------------------
11
