--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
GUARANTY
Dated as of February 7, 1991
made by
KUMAGAI CARIBBEAN, INC.
and
XXXXXXXX HOSPITALITY
MANAGEMENT CORPORATION
as GUARANTORS
in favor of
THE MITSUBISHI BANK, LIMITED
acting through its New York Branch
Relating to Termination
Payments as Defined in the
Letter of Credit
and Reimbursement Agreement
dated as of February 7, 1991 between
EL CONQUISTADOR PARTNERSHIP L.P.
and THE MITSUBISHI BANK, LIMITED
acting through its New York Branch
GUARANTY
THIS GUARANTY (this GUARANTY), dated as of February 7, 1991, made by
KUMAGAI CARIBBEAN, INC., a Texas Corporation, and XXXXXXXX HOSPITALITY
MANAGEMENT CORPORATION, a Delaware Corporation, each having an address at 000
Xxxx Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxx Xxxx 00000 (collectively, the
GUARANTORS), in favor of THE MITSUBISHI BANK LIMITED, a banking corporation
organized under the laws of Japan, acting through its New York Branch and having
an address at Two World Financial Center, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the BANK).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Letter of Credit and Reimbursement
Agreement (as the same may be amended, modified, supplemented or replaced from
time to time, the Letter of Credit Agreement), dated as of the date hereof,
between El Conquistador Partnership L.P., a Delaware limited partnership (the
COMPANY) and the Bank, the Bank has agreed to issue its Letter of Credit to
provide security for the payment of principal of, and interest accrued on the
Bonds (such term and all other capitalized terms used and not otherwise defined
herein having the respective meanings set forth or referred to in the Letter of
Credit Agreement); and
WHEREAS, pursuant to the terms of the Letter of Credit Agreement, the
Company and the Bank have entered in an Interest Rate and Currency Agreement
dated the date hereof (the BOND SWAP AGREEMENT); and
WHEREAS, the Letter of Credit Agreement requires the Company to provide
to the Bank certain security for Termination Payments which may become due
pursuant to the Bond Swap Agreement, including this Guaranty; and
WHEREAS, Kumagai Caribbean, Inc. is a general partner of the Company;
and
WHEREAS, Xxxxxxxx Hospitality Management Corporation is providing
technical advisory services and will act as the manager of the El Conquistador
Resort pursuant to a Development Services and Management Agreement dated January
12, 1990; and
WHEREAS, as a condition to the Bank issuing the Letter of Credit the
Bank is requiring that the Guarantors execute and deliver to the Bank this
Guaranty; and
WHEREAS, the Guarantors hereby acknowledge that the Guarantors will
materially benefit from the Bank issuing the Letter of Credit;
NOW, THEREFORE, in consideration of the premises set forth herein and
as an inducement for and in consideration of the agreement of the Bank to enter
into the Letter of
-2-
Credit Agreement, the Guarantors hereby, jointly and severally, agree, covenant,
represent and warrant to the Bank, as follows:
SECTION 1. Guaranty.
(a) The Guarantors hereby absolutely and unconditionally
guarantee the due and punctual payment of the Termination Payments due to the
Bank pursuant to the Letter of Credit Agreement, to the extent, but only to the
extent that such Termination Payments exceed $20,000,000 (THE GUARANTEED
OBLIGATIONS), when and as the same shall be due and payable in accordance with
the terms of the Bond Swap Agreement and the Letter of Credit Agreement. The
Guarantors hereby agree that if the Company fails to pay the Guaranteed
Obligations when and as the same shall be due and payable in accordance with the
terms of the Bond Swap Agreement and the Letter of Credit Agreement, on receipt
of demand from the Bank the Guarantors will forthwith pay to the Bank an amount
equal to the amount of the Guaranteed Obligations which are the subject of such
demand.
(b) The Guarantors hereby agree that, notwithstanding any
provision to the contrary in the Letter of Credit Agreement or the Operative
Documents limiting the recourse of the Bank to assets of the Company, the
Guarantors shall be fully and personally liable with respect to the covenants,
representations, warranties and agreements of the Guarantors under this
Guaranty.
(c) All sums payable to the Bank hereunder shall be payable on
demand.
(d) The obligations of the Guarantors hereunder shall
terminate upon the termination of the Bond Swap Agreement and the actual and
irrevocable receipt by the Bank of payment in full of any Termination Payments
which may have become due and payable.
SECTION 2. Unconditional Character of Obligations of Guarantors.
(a) The obligations of each Guarantor hereunder shall be joint
and several and absolute and unconditional, irrespective of the validity,
regularity or enforceability in whole or in part of the Bond Swap Agreement, the
Letter of Credit Agreement or the other Operative Documents (other than this
GUARANTY) or any provision thereof, or the absence of any action to enforce the
same, any waiver or consent with respect to any provision thereof, the recovery
of any judgment against the Company, the Guarantors or any other Person or any
action to enforce the same, any failure or delay in the enforcement of the
obligations of the Company under the Letter of Credit Agreement and Operative
Documents or of either Guarantor under this Guaranty, or any setoff,
counterclaim, recoupment, limitation or termination, and irrespective of any
other circumstances which might otherwise limit recourse against either
Guarantor by the Bank or constitute a legal or equitable discharge or defense of
a guarantor or surety. The Bank may enforce the obligations of the Guarantors
under this Guaranty by a
-3-
proceeding at law, in equity or otherwise, independent of any loan foreclosure
or similar proceeding or any deficiency action against the Company or any other
Person at any time, either before or after an action against the Company or any
other Person. This Guaranty is a guarantee of payment and not of collection. The
Guarantors waive diligence, notice of acceptance of this Guaranty, filing of
claims with any court, any proceeding to enforce any provision of the Letter of
Credit Agreement and Operative Documents against the Company or any other
Person, any right to require a proceeding first against the Company or any other
Person, or to exhaust any security (including, without limitation, the Premises
or any part thereof) for the performance of the obligations of the Company, or
any other person, or any protest, presentment or notice whatsoever (except to
the extent expressly provided to the contrary in this GUARANTY), and the
Guarantors hereby covenant and agree that this Guaranty shall not be discharged
except as set forth in Section 1(d) hereof.
(b) The obligations of the Guarantors under this Guaranty, and
the rights of the Bank to enforce the same by proceedings, whether by action at
law, suit in equity or otherwise, shall not be in any way affected by (i) any
insolvency, bankruptcy, liquidation, reorganization, readjustment, composition,
dissolu- tion, receivership, conservatorship, winding up or other similar
proceeding involving or affecting either the Company, the Premises, either
Guarantor or any other Person, (ii) any failure of the Bank, or any other
Person, whether or not without fault on its part, to perform or comply with any
of the terms of the Bond Swap Agreement, the Letter of Credit Agreement or the
other Operative Documents (other than this Guaranty), (iii) the sale, transfer
or conveyance of the Premises and the Improvements or any interest therein to
any person, whether now or hereafter having or acquiring an interest in the
Premises and the Improvements, whether or not pursuant to any foreclosure,
trustee sale or similar proceeding against the Company or the Premises and the
Improvements or any part thereof; (iv) the conveyance to the Bank of the
Premises and the Improve-ments or any part thereof by a deed in lieu of
foreclosure; (v) the release of the Company from the performance or observance
of any of the agreements, covenants, terms or conditions contained in the Bond
Swap Agreement, the Letter of Credit Agreement or any of the other Operative
Documents by operation of law or otherwise; or (vi) the release in whole or in
part of any Collateral. Subject to Section 1(d) hereof the Guarantors agree that
they shall be and will remain liable for their obligations hereunder after
foreclosure of the mortgages on the Premises and the Improvements or other
security interest securing any indebtedness notwithstanding any provision of
applicable law that might prevent the Bank from enforcing any deficiency
judgment against the Company.
(c) Except as otherwise specifically provided in this Guaranty
and except to the extent claims of payment and performance of the Guaranteed
Obligations by the Company, either or both of the Guarantors or any other Person
are raised as a defense to a demand hereunder, the Guarantors hereby expressly
and irrevocably waive all claims of waiver, release, surrender, alteration or
compromise and all setoffs, counterclaims, recoupments, reductions, limitations,
impairments or terminations, whether arising hereunder or otherwise.
-4-
(d) The Bank may deal with the Company in the same manner and
as freely as if this Guaranty did not exist and shall be entitled, among other
things, to grant the Company or any other Person such extension or extensions of
time to perform any act or acts as may be deemed advisable by the Bank, at any
time and from time to time, without terminating, affecting or impairing the
validity of this Guaranty or the obligations of the Guarantors hereunder.
(e) No compromise, alteration, amendment, modification,
extension, renewal, release or other change of, or waiver, consent, delay,
omission, failure to act or other action with respect to, any liability or
obligation under or with respect to, or of any of the terms, covenants or
conditions of, the Bond Swap Agreement, the Letter of Credit Agreement or any of
the other Operative Documents shall in any way alter or affect any of the
obligations of the Guarantors hereunder.
(f) The Bank may proceed to protect and enforce any or all of
its rights under this Guaranty by suit in equity or action at law, whether for
the specific performance of any covenants or agreements contained in this
Guaranty or otherwise, or to take any action authorized or permitted under
applicable law, and shall be entitled to require and enforce the performance of
all acts and things required to be performed hereunder by the Guarantors. Each
and every remedy of the Bank shall, to the extent permitted by law, be
cumulative and shall be in addition to any other remedy given hereunder or now
or hereafter existing at law or in equity.
(g) No waiver shall be deemed to have been made by the Bank of
any rights hereunder unless the same shall be in writing and signed by the Bank
and any such waiver shall be a waiver only with respect to the specific matter
involved and shall in no way impair the rights of the Bank or the obligations of
the Guarantors to the Bank in any other respect or at any other time.
(h) At the option of the Bank, either Guarantor may be joined
in any action or proceeding commenced by the Bank against the Company in
connection with or based upon the Bond Swap Agreement, the Letter of Credit
Agreement or any of the other Operative Documents, and recovery may be had
against such Guarantor to the extent of the Guarantors' liability hereunder,
without any requirement that the Bank first assert, prosecute or exhaust any
remedy or claim against the Company, any other Guarantor or any other Person, or
any security for the obligations of the Company or any other Person.
(i) The Guarantors agree that this Guaranty shall continue to
be effective or shall be reinstated, as the case may be, if at any time payment
of any Guaranteed Obligation is made by the Company or either Guarantor to the
Bank and such payment is rescinded or must otherwise be returned by the Bank
upon insolvency, bankruptcy, liquidation, reorganization, readjustment,
composition, dissolution, receivership, conservatorship, winding up or other
similar proceeding involving or affecting the Company or either Guarantor, all
as though such payment had not been made.
-5-
(j) In the event that the Guarantors shall become obligated to
pay any sums under this Guaranty, the Guarantors agree that: (i) the amount of
such sums and of such indebtedness and all interest thereon shall at all times
be subordinate as to lien, the time of payment and in all other respects to all
sums, including principal and interest and other amounts, at any time owed to
the Bank under the Bond Swap Agreement, the Letter of Credit Agreement or any of
the other Operative Documents; and (ii) the Guarantors shall not be entitled to
enforce or receive payment thereof until all such sums owed to the Bank have
been paid in full. Nothing herein contained is intended or shall be construed to
give the Guarantors any right of subrogation in or under the Bond Swap
Agreement, the Letter of Credit Agreement or any of the other Operative
Documents or any right to participate in any way therein, or in the right, title
or interest of the Bank in or to the Collateral, notwithstanding any payments
made by either Guarantor under this Guaranty, all such rights of subrogation and
participation being hereby expressly waived and released until the actual and
irrevocable receipt by the Bank of payment in full of all principal, interest
and other sums due with respect to the Bond Swap Agreement, the Letter of Credit
Agreement and the other Operative Documents. If any amount shall be paid to
either Guarantor on account of such subrogation rights at any time when any such
sum shall not have been fully paid, such amount shall be paid by such Guarantor
to the Bank for credit and application against such sums; provided, however, the
foregoing shall not prohibit such Guarantor from filing a lawsuit and proceeding
to judgment (but not executing on such judgment) against the Company for any
sums owed the Guarantor by the Company.
(k) Subject to Section 1(d) hereof, the Guarantors'
obligations hereunder shall continue notwithstanding a foreclosure or similar
proceeding involving the Premises and/or the Improvements.
SECTION 3. Representations, Warranties and Agreement.
Each Guarantor represents and warrants to and agrees with the
Bank as follows (which representations, warranties and agreements shall survive
the execution and delivery of this GUARANTY):
(a) This Guaranty is the legal, valid and binding obligation
of such Guarantor, enforceable against such Guarantor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally, general equitable principles, but such
limitations do not make such rights or remedies, taken as a whole, inadequate
for the practical realization of the benefits thereof.
(b) The execution, delivery and performance of this Guaranty
by such Guarantor do not and will not violate any law, regulation, order, writ,
injunction or decree of any court or governmental body, agency or other
instrumentality applicable to such Guarantor, or result in a material breach of
any of the terms, conditions or provisions of, or constitute a
-6-
material default under, or result in the creation or imposition of, any
mortgage, lien, charge or encumbrance of any nature whatsoever upon any of the
assets of such Guarantor pursuant to the terms of any mortgage, indenture,
agreement or instrument to which such Guarantor is a party or by which he or any
of this properties is bound.
(c) There are no actions, suits, proceedings, inquiries or
investigations before or by any court, public board or body pending, or to a
Guarantor's best knowledge, threatened against or affecting such Guarantor or
which involve or might involve the validity or enforceability of this Guaranty
or wherein an unfavorable decision, ruling or finding might have a material
adverse effect on the properties, business or financial condition of such
Guarantor or the transactions contemplated by this Guaranty.
(d) All consents, approvals, orders or authorizations of,
registrations, declarations or filings with, all Governmental Authorities that
are required in connection with the execution, delivery and performance by such
Guarantor of this Guaranty have been duly obtained, given or taken and are in
full force and effect.
SECTION 4. Entire Agreement/Amendments.
This instrument represents the entire agreement between the
parties. The terms of this Guaranty shall not be waived, altered, modified,
amended, supplemented or terminated in any manner whatsoever except by written
instrument signed by the Bank and the Guarantors.
SECTION 5. Successors and Assigns.
This Guaranty shall be binding upon the Guarantors, may not be
assigned or delegated by any Guarantor except with the prior written consent of
the Bank and shall inure to the benefit of the Bank and its successors and
assigns.
SECTION 6. Applicable Law.
This Guaranty shall be governed by, and construed in
accordance with, the substantive law of the State of New York.
SECTION 7. Section Headings.
The headings of the sections of this Guaranty have been
inserted for convenience of reference only and shall in no way define, modify,
limit or amplify any of the terms or provisions hereof.
-7-
SECTION 8. Severability.
Any provision of this Guaranty which may be determined by any
competent authority to be prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the Guarantors hereby waive any provision of law
which renders any provision hereof prohibited or unenforceable in any respect.
SECTION 9. Waiver of Trial by Jury.
The Guarantors hereby waive the right of trial by jury in any
litigation arising hereunder.
SECTION 10. Notices. All notices, requests, demands, documents or other
communications which are required or permitted to be given or served hereunder
shall be in writing and mailed (registered or certified mail, return receipt
requested), hand-delivered, with signed receipt, or sent by
nationally-recognized overnight courier (such as Federal Express) as follows:
To the Guarantors:
Kumagai Caribbean, Inc.
c/x Xxxxxxxx Hospitality
Management Corporation
000 Xxxx Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxx Xxxx 00000
Attention: Xx. Xxxxxxxx Xxxxxx
Telecopy No. (000)-000-0000
Xxxxxxxx Hospitality Management Corporation
000 Xxxx Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxx Xxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
Telecopy No. (000) 000-0000
-8-
With a copy to:
Xxxxxxx Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No. (000) 000-0000
To the Bank:
The Mitsubishi Bank, Limited
000 Xxxxxxx Xxxxxx,
Xxx World Financial Center,
New York, New York 10281
Attention: Real Estate (Mr. Xxxxx Xxxxx or
Finance Group Xx. Xxxx Xxxxxxx)
Telecopy No. (000) 000-0000
With a Copy to:
Xxxx, Scholer, Fierman,
Xxxx & Handler
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telecopy No. (000) 000-0000
All such notices, requests, demands, documents or other communications shall be
effective when received at the address specified as aforesaid. Such addresses
may be changed from time to time by the addressee by serving notice as
heretofore provided. Service of notice or demand by telecopier with telephonic
confirmation of receipt shall constitute personal delivery for purposes of this
Section 10.
SECTION 11. The Guarantors' Receipt of Documents. The Guarantors, by
their execution hereof, acknowledge receipt of true copies of the Bond Swap
Agreement, the Letter of Credit Agreement and the other Operative Documents.
-9-
SECTION 12. Interest; Expenses. (a) If any Guarantor fails to pay all
or any portion of its obligations hereby undertaken or other payments due from
it hereunder, upon demand of the Bank, the amount of such obligations and all
other sums payable by the Guarantors to the Bank hereunder shall bear interest
from the date of demand at the Prime Rate plus 2% per annum, but in no event
greater than the maximum amount permitted by applicable law.
(b) The Guarantors hereby agree to pay all costs, charges and
expenses, including, without limitation, reasonable attorneys' fees and actual
out-of-pocket expenses and costs of collection, that may be incurred by the Bank
in enforcing the covenants and agreements of the Guarantors under this Guaranty.
Notwithstanding anything to the contrary contained above, in the event of a
final adjudication of an action commenced by the Bank for the collection of any
amount due under or the performance of any obligations of the Guarantors with
respect to this Guaranty which final adjudication is in its entirety in favor of
the Guarantors, the Guarantors shall not be obligated to pay any such fees and
expenses of the Bank in connection with such action.
SECTION 13. Consent to Jurisdiction. Each of the Guarantors irrevocably
(a) agrees that any suit, action or other legal proceeding arising out of or
relating to this Guaranty may be brought in a court of record in the City and
State of New York or in the Courts of the United States of America located in
the Southern District of New York, (b) consents to the jurisdiction of each such
court in any such suit, action or proceeding, and (c) waives any objection which
it may have to the laying of venue of any such suit, action or proceeding in any
of such courts and any claim that any such suit, action or proceeding has been
brought in an inconvenient forum. Each of the Guarantors irrevocably consents to
the service of any and all process in any such suit, action or proceeding by
service of copies of such process to such Guarantor at its address provided in
Section 10 hereof or by personal service on any partner of Xxxxxxx & Xxxxxx.
Nothing in this Section 13, however shall affect the right of the Bank to serve
legal
-10-
process in any other manner permitted by law or affect the right of the Bank to
bring any suit, action or proceeding against any Guarantor or its property in
the courts of any other jurisdictions.
SECTION 14. Defined Instruments. All of the agreements or instruments
defined in this Guaranty shall mean such agreements or instruments as the same
may, from time to time, be supplemented or amended or the terms thereof waived
or modified in accordance with or as permitted by the letter of Credit Agreement
and any other Operative Document.
SECTION 15. Personal Liability. No exculpatory provisions contained in
the Bond Swap Agreement, the Letter of Credit Agreement, the Loan Agreement, or
in any other Operative Document shall in any event or under any circumstances be
deemed or construed to modify, qualify, or affect in any manner whatsoever the
personal recourse obligations and liabilities of the Guarantors under this
Guaranty.
SECTION 16. Other Guaranties. The obligations and liabilities of each
of the Guarantors under this Guaranty are in addition to the obligations and
liabilities of each of the Guarantors under the Other Guaranties. The discharge
of either Guarantor's obligations and liabilities under any one or more of the
Other Guaranties by such Guarantor or by reason of operation of law or otherwise
shall in no event or under any circumstance constitute or be deemed to
constitute a discharge, in whole or in part, of the Guarantors' obligations and
liabilities under this Guaranty. Conversely, the discharge of any Guarantor's or
by reason of operation of law or otherwise shall in no event or under any
circumstance constitute or be deemed to constitute a discharge, in whole or in
part, of the Guarantor's obligations and liabilities under any of the Other
Guaranties. The term Other Guaranties as used herein shall mean any other
guaranty of payment, guaranty of performance, completion guaranty,
indemnification agreement or other guaranty or instrument of personal recourse
obligation or undertaking of any nature whatsoever (other than this GUARANTY)
now or hereafter executed and
-11-
delivered by either of the Guarantors in
connection with the Loan, the Letter of Credit Agreement or any other Operative
Document.
IN WITNESS WHEREOF, the Guarantors have duly executed this Guaranty as
KUMAGAI CARIBBEAN, INC.
By: Signed
------------ ------------------
Name: Shunsuke Nakane
Title: President
XXXXXXXX HOSPITALITY
MANAGEMENT CORPORATION
By: Signed
------------ ------------------
Name: Xxxxxx X. Xxxxxx
Title: Co-Chairman
