Exhibit 10.3
Transaction Xx. 0000-X00-00
Xxxxxxxxxxx Xx. 0000-X00-00
XXXXXXXX AGREEMENT
(GAMING EQUIPMENT)
This Guaranty Agreement (this "Guaranty"), made by PALM BEACH EMPRESS,
INC., a Delaware corporation ("PBE"), whose address for purposes hereof is Xxx
Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxx 00000, PALM BEACH MARITIME
CORPORATION, formerly named MJQ CORPORATION, a Delaware corporation ("MJQ"),
whose address for purposes hereof is Xxx Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx
Xxxxx, Xxxxxxx 00000, and INTERNATIONAL THOROUGHBRED BREEDERS, INC., a Delaware
corporation ("ITB"), whose address for purposes hereof is 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (PBE, MJQ and ITB are hereinafter
individually and collectively referred to as, "Guarantor"), in favor of PDS
GAMING CORPORATION, a Minnesota corporation ("Lessor"), whose address for
purposes hereof is 0000 XxXxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000-0000, is dated and
shall be effective as of July 6, 2004.
R E C I T A L S
A. Lessor and ITG VEGAS, INC., a Nevada corporation, and ITG PALM BEACH,
LLC, a Delaware limited liability company, jointly and severally as lessees,
whose address for purposes hereof is Xxx Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx
Xxxxx, Xxxxxxx 00000 (collectively, "Lessee") are parties to that certain Master
Lease Agreement (Empress II and Palm Beach Princess Gaming Equipment) ("Master
Lease") of even date herewith, as supplemented by Lease Schedule No. T3, Lease
Schedule No. T4 and Lease Schedule No. T5 as set forth and incorporated by
reference therein (the Master Lease, Lease Schedule No. T3, Lease Schedule No.
T4 and Lease Schedule No. T5 and any current or subsequently executed Lease
Schedules are hereinafter collectively referred to as the "Lease"), wherein
Lessor leases to Lessee and Lessee leases from Lessor certain gaming equipment
("Equipment") for use on that certain Maritime Vessel named the Empress II
Casino Cruise Ship (United States Official Number 998517) and that certain
Maritime Vessel Named the Palm Beach Princess (IMO Number: 8402937, Registration
Number: 14348-84-D (Panama), DNV Class Number: 02720), as further described in
the Lease.
B. In consideration of and as a condition and inducement to Lessor to enter
into the Lease with Lessee, Lessor has required that Guarantor execute and
deliver to Lessor a guaranty of the Lease in the form of this Guaranty.
C. Capitalized terms not otherwise defined herein shall have the meaning
given to them in the Lease, and Guarantor acknowledges that it fully understands
the terms, provisions, covenants, conditions and obligations of Lessee under the
Lease.
NOW, THEREFORE, incorporating the above Recitals by reference, and in
consideration of, and as an inducement for, the execution and delivery to Lessee
of the Lease by Lessor, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and agreed, Guarantor
hereby agrees as follows:
1. Obligations Guaranteed.
1.1 Obligations. Guarantor hereby absolutely and unconditionally
guarantees, without deduction by reason of setoff, defenses or counterclaim, to
Lessor and its legal representatives, successors and assigns, and independently
assumes liability to Lessor and its representatives, successors and, without any
requirement whatsoever of resort by Lessor to any other party for (i) the
payment of all Basic Rent and Additional Charges (as defined in the Lease) and
any and all other payments, costs or expenses (including but not limited to
indemnifications, interest charges and attorneys' fees), however designated,
required to be paid by Lessee pursuant to the terms of the Lease during the
entire Term of the Lease, and (ii) the performance of each and every other term,
provision, covenant, condition or obligation of Lessee under the Lease in
accordance with its respective terms (collectively, the payment and performance
obligations set forth in (i) and (ii) above are hereafter called the
"Obligations").
1.2 Default. Upon any default or breach by Lessee of any of its duties
or obligations under the Lease, Lessor may, but need not, at its sole option,
proceed directly against Guarantor, without proceeding against Lessee or any
other person or entity (as used herein, the phrase "any other person or entity"
includes without limitation any other guarantor of the Obligations) and without
foreclosing upon, selling or otherwise disposing of or collecting or applying
any collateral or other property, real or personal, which Lessee may have
theretofore delivered to Lessor as security for the payment and performance of
the Obligations. Guarantor hereby waives the right to require Lessor to proceed
against Lessee or any other person or entity, or to pursue any other remedy, and
Guarantor further waives the right to have any other property of Lessee or any
other person or entity first applied to the discharge of any of the Obligations.
2. Nature of Guarantor's Liability; No Exoneration or Subrogation Until All
Obligations Fully Satisfied.
2.1 Guaranty Unconditional. The guaranty by Guarantor provided for in
this Guaranty is an absolute and unconditional guaranty of payment and
performance, irrespective of the validity, enforceability, avoidance or
subordination of any of the Obligations or the Lease, and is not a guaranty of
collection, regardless of (i) the absence of any action to enforce the same by
Lessor, or (ii) Lessor's obtaining any judgment against Lessee or taking any
action to enforce same. The liability of Guarantor under this Guaranty is
independent of the obligations which are hereby guaranteed and of the
liabilities of any other guarantors of the Obligations.
2.2 Waiver of Formalities. Guarantor hereby fully waives all
requirements, if any, of notice, demand for payment, diligence, filing of claims
with a court in the event of the bankruptcy of Lessee, and all other notices of
every kind or nature in respect of the Obligations (including those of any
action or inaction on the part of Lessee or Lessor or anyone else and of the
existence, creation or incurrence of new or additional obligations).
2.3 Guarantor's Consent. Guarantor hereby consents to, and the
liability of Guarantor under this Guaranty shall in no way be affected by, the
following:
(a) any and all future changes, modifications, amendments,
alterations, renewals, extensions, assignments, subleases, charters, subcharters
to or of the Lease or the Vessel, including without limitation, any increases,
reductions, releases or cancellations which may hereafter be made to, of or
under the Lease or of any of the Obligations (collectively, the
"Modifications");
(b) any and all alterations, impairments, suspensions,
terminations and expirations (including, without limitation, all such as might
result from the Modifications or from any action or inaction of the type
described in paragraph (c) below) of the remedies or rights of Lessor against
Lessee or any other person or entity in respect of any of the Obligations; and
(c) any and all action or inaction on the part of Lessor
(including, without limitation, election of remedies, amendment, substitution,
surrender, release, forfeiture, enforcement, foreclosure and sale, under power
of sale or otherwise), in its sole and unfettered discretion, in respect of any
security (or any part thereof) now held or hereafter acquired by Lessor securing
the performance of the Obligations or with respect to any other remedy.
(d) The foregoing consent by Guarantor is knowingly given even
though any rights or defenses which Guarantor may otherwise have, by
subrogation, reimbursement, indemnification or otherwise, against Lessee, Lessor
or others may be diminished, destroyed or otherwise adversely affected by any
such alteration, action or inaction, all to the end that Guarantor shall not be
exonerated, released or discharged from its absolute, unconditional and
independent liability hereunder by any such alteration, Modification,
impairment, suspension, termination, expiration, action or inaction.
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2.4 Further Waivers. Guarantor waives any right pursuant to any law,
rule, arrangement or relationship now or hereafter existing, to require or
compel Lessor to (a) proceed against Lessee or any other guarantor; (b) proceed
against or exhaust any security for the Obligations; (c) pursue any other remedy
in Lessor's power whatsoever; and failure of Lessor to do any of the foregoing
shall not exonerate, release or discharge Guarantor from its absolute,
unconditional and independent liability to Lessor hereunder, or (d) in the event
that any property of Guarantor is or may be hypothecated with property of Lessee
as security for any of the Obligations, have such property of Lessee first
applied to the discharge of such Obligations.
2.5 Separate Action. Lessor may bring and prosecute a separate action
against Guarantor to enforce Guarantor's liability hereunder, whether or not any
action is brought against Lessee or any other person or entity and whether or
not Lessee or such other person or entity is joined in such action or actions.
Nothing shall prohibit Lessor from exercising its rights against Guarantor,
Lessee, the security, if any, for the Obligations, and any other person or
entity simultaneously, jointly and/or severally. Guarantor shall be bound by
each and every ruling, order and judgment obtained by Lessor against Lessee in
respect of the Obligations, whether or not Guarantor is a party to the action or
proceeding in which such ruling, order or judgment is issued or rendered.
2.6 No Exoneration. Guarantor shall not be discharged, released or
exonerated, in any way, from its absolute, unconditional and independent
liability hereunder, even though any rights or defenses which Guarantor may have
against Lessee, Lessor or others may be destroyed, diminished or otherwise
affected by any of the following:
a) Any declaration by Lessor of a default in respect of any of
the Obligations.
b) The exercise by Lessor of any rights or remedies against
Lessee or any other person or entity.
c) The failure of Lessor to exercise any rights or remedies
against Lessee or any other person or entity.
d) The sale or enforcement of, or realization upon (through
judicial foreclosure, seizure, power of sale or any other means) any security
for any of the Obligations, even though (i) recourse may not thereafter be had
against Lessee for any deficiency or (ii) Lessor fails to pursue any such
recourse which might otherwise be available, whether by way of deficiency
judgment following judicial foreclosure or otherwise.
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2.7 No Subrogation. Until all the Obligations have been performed in
full, Guarantor shall have no right to subrogation, and Guarantor waives (a) any
right pursuant to any law, rule, arrangement or relationship now or hereafter
existing, or otherwise, to enforce any remedy which Lessor now has or may
hereafter have against Lessee and (b) any benefit of, and any right to
participate in, any security now or hereafter held by Lessor.
2.8 No Discharge. Guarantor shall not be discharged, released or
exonerated, in any way, from its absolute, unconditional and independent
liability hereunder by the voluntary or involuntary participation by Lessee in
any settlement or composition for the benefit of Lessee's creditors, either in
liquidation, readjustment, receivership, bankruptcy or otherwise.
2.9 Bankruptcy. Guarantor understands and acknowledges that by virtue
of this Guaranty, it has specifically assumed any and all risks of a bankruptcy
or reorganization case or proceeding with respect to Lessee. As an example and
not by way of limitation, a subsequent modification of the Lease in any
reorganization case concerning Lessee shall not affect the obligation of
Guarantor to discharge the Obligations in accordance herewith and with the
original terms of the Lease.
2.10 Separate Actions Against Separate Guarantors. Lessor may bring
and prosecute a separate action against separate, individual Guarantors to
enforce any one or more Guarantors' liability hereunder, whether or not any
action is brought against Lessee, any other Guarantor or any other person or
entity and whether or not Lessee, any other Guarantor or any other person or
entity is joined in such action or actions. Nothing shall prohibit Lessor from
exercising its rights against any separate Guarantors, Lessee, the security, if
any, for the Obligations, and any other person or entity simultaneously, jointly
and/or severally. Each Guarantor shall be bound
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by each and every ruling, order and judgment obtained by Lessor against Lessee
or any other Guarantor in respect of the obligations, whether or not such
Guarantor is a party to the action or proceeding in which such ruling, order or
judgment is issued or rendered.
2.11 No Marshalling; Reinstatement. Guarantor consents and agrees that
neither Lessor nor any person or entity acting for or on behalf of Lessor shall
be under any obligation to xxxxxxxx any assets in favor of Guarantor or against
or in payment of any or all of the Obligations. Guarantor further agrees that,
to the extent that Lessee or any other guarantor of all or any part of the
Obligations makes a payment or payments to Lessor, or Lessor receives any
proceeds of any security granted in respect of the Obligations, which payment or
payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to any person
or entity, Guarantor, such other guarantor or any other person or entity, or
their respective estates, trustees, receivers or any other party, including,
without limitation, the Guarantor, under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment or
repayment, the part of the Obligations that had been paid, reduced or satisfied
by such amount shall be reinstated and continued in full force and effect as of
the time immediately preceding such initial payment, reduction or satisfaction.
3. Subordination of Guarantor's Claims. Any indebtedness of Lessee now or
hereafter held by Guarantor is hereby subordinated to the Obligations; and such
indebtedness of Lessee to Guarantor, if any material default occurs under any of
the Obligations and Lessor so requests from and after the material default,
shall be collected, enforced and received by Guarantor as trustee for Lessor and
be paid over to Lessor on account of the Obligations but without reducing or
affecting in any manner the absolute, unconditional and independent liability of
Guarantor under this Guaranty.
4. Costs of Enforcement. Guarantor shall reimburse Lessor for all costs and
expenses, including, without limitation, all attorneys' fees, whether or not
legal action be instituted, incurred or paid by Lessor in enforcing this
Guaranty.
5. Benefit. This Guaranty may be assigned or transferred in whole or in
part by Lessor in connection with, and the benefit of this Guaranty shall
automatically pass with, a transfer or assignment of the Equipment (or any
portion thereof), other than at foreclosure or otherwise as a result of the
exercise of any right or remedy, to any subsequent owner thereof if the assignee
or transferee is a permitted assignee under Section 17 of the Master Lease. All
references to Lessor herein shall be deemed to include any successors or
assignees or any subsequent owners of the Equipment (or any portion thereof) or
any of them. This Guaranty is also made for the benefit of any person or entity
claiming by, through or under Lessor, including without limitation PDS Funding
2004-A, LLC.
6. Notices. All notices and other communications, demands or payments
required or permitted under this Guaranty shall be in writing, served personally
on, or mailed by certified or registered United States mail to, the party to be
charged with receipt thereof. Notices and other communications given by personal
service shall be deemed given upon receipt and if served by mail shall be deemed
given hereunder seventy-two (72) hours after deposit of such notice or
communication in a United States post office as certified or registered mail
with postage prepaid and duly addressed to the party to whom such notice or
communication is to be given, to the applicable address set forth above. Any
party may change its address for purposes of this Section 6 by giving to the
party intended to be bound thereby, in the manner provided hereon, a written
notice of such change.
7. Successors. All of the terms and provisions of this Guaranty shall be
binding upon, and inure to the benefit of, and be enforceable by, the respective
heirs, representatives, successors and assigns of the parties hereto, whether so
expressed or not. Nothing contained in this Guaranty shall be deemed to in any
way alter or modify the terms and conditions of the Lease.
8. Entire Agreement. This Guaranty embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings related to the subject matter hereof.
9. Headings. The headings in this Guaranty are for the purpose of reference
only and shall not limit or otherwise affect the terms or provision hereof.
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10. Changes, Waivers, Etc. Neither this Guaranty not any term or provision
thereof may be changed, waived, discharged or terminated except by an instrument
in writing executed by the party against which enforcement of the change,
waiver, discharge or termination is sought.
11. Disclosure. Guarantor assumes full responsibility for being and
remaining informed of the financial condition of Lessee and all other
circumstances bearing upon the risk of nonpayment or nonperformance of any of
the Obligations, and Lessor shall have no duty to advise Guarantor of
information known to Lessor regarding such condition or any such circumstances.
12. Governing Law. The substantive and procedural laws of the State of
Nevada shall govern the validity, construction, interpretation, performance and
enforcement of this Guaranty and the parties agree to jurisdiction in Nevada
without reference to its conflict of laws provisions regardless of the location
of the Vessel. The parties also hereby agree that any action and/or proceeding
in connection with this Guaranty shall only be brought in the venue of Xxxxx
County, Nevada.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed as of
the day and year first above written.
"GUARANTOR"
PALM BEACH EMPRESS, INC., a Delaware corporation
By:/S/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Its: President
INTERNATIONAL THOROUGHBRED BREEDERS, INC., a Delaware corporation
By:/S/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Its: President
PALM BEACH MARITIME CORPORATION, formerly named MJQ CORPORATION,
a Delaware corporation
By:/S/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Its: President
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