AFFILIATE GUARANTEE
THIS AFFILIATE GUARANTEE (this "Guarantee"), dated as of May __,
1998, is made by Fidelity Holdings, Inc. with an office at 00-00 Xxx Xxxxxxx
Xxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxx Xxxx 00000 (the "Guarantor"), in favor of
Falcon Financial, LLC, a Delaware limited liability company (together with its
successors and assigns, the "Secured Party").
PRELIMINARY STATEMENT
Major Acquisition Corp., a New York corporation and its existing
subsidiaries, Major Chrysler Plymouth Jeep Eagle, Inc., Major Chevrolet, Inc.,
Xxxxx Xxxxx, Inc., Major Subaru, Inc. and Major Automotive Realty Corp., each a
New York corporation, each a Borrower, and collectively and jointly and
severally the Borrower ("Borrower") with an office at 00-00 Xxx Xxxxxxx Xxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxx Xxxx 00000 has requested that Secured Party make
the Loan (as defined in the Security Agreement (the "Security Agreement"), dated
the date hereof, between the Secured Party and the Borrower). Capitalized terms
used but not otherwise defined in this Guarantee shall have the same meanings
ascribed to such terms in the Security Agreement.
NOW, THEREFORE, in consideration of the foregoing, the benefits
accruing to the Borrower, to satisfy an express condition to Secured Party's
making of the Loan and to induce the Secured Party to make the Loan, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Guarantor hereby agrees as follows:
1. Guarantee of Xxxxxxxx's Obligations to Secured Party. The
Guarantor hereby irrevocably, absolutely and unconditionally guarantees to the
Secured Party the full and punctual payment and performance, when due, and in
accordance with their terms (at maturity, upon acceleration following default,
or otherwise) of all of the Obligations, whether now existing or subsequently
arising, including without limitation payment of all principal, interest, yield
maintenance amounts, prepayment premiums, indebtedness, fees, charges, expenses
(including attorneys' fees and expenses) and other monetary obligations arising
under or in connection with the Note, the Security Agreement or any of the other
Loan Documents, and compliance with the terms, conditions, covenants and other
obligations arising under or in connection with the Note, the Security Agreement
or any of the other Loan Documents. Notwithstanding the foregoing, except as
specifically set forth herein, in no event will the liability of the Guarantor
hereunder exceed the amount of the Obligations.
2. Nature of Obligations; Interest.
(a) This Guarantee is a guarantee of payment and performance.
The obligations of the Guarantor under this Guarantee are direct and primary
obligations. The liability of the Guarantor hereunder is independent of the
Obligations, and a separate action or actions may be brought and prosecuted
against the Guarantor irrespective of whether action is brought against Borrower
or any other guarantor of the Obligations or whether Borrower or any other
guarantor of the Obligations is joined in any such action or actions. The
Guarantor understands and agrees that the Secured Party may, but is not required
to, proceed against the Guarantor under this Guarantee without first or ever
proceeding against any other person or party. Without limiting the generality of
the foregoing, the obligations of the Guarantor shall remain in force
irrespective of (a) any defect in, or invalidity, illegality or unenforceability
of the Obligations or the Loan Documents, (b) the existence or absence of any
legal action to enforce the Obligations or the Loan Documents or any security
therefor, the issuance of any judgment therefor or the execution of any such
judgment, (c) any claim, defense or offset which the Guarantor or Borrower may
have, (d) any other circumstance which might otherwise constitute a defense
available to or discharge of a guarantor or surety of any type or (e) the death,
or the bankruptcy, dissolution, liquidation, winding up or termination of the
Borrower.
(b) The obligations of the Guarantor hereunder shall not be
released, diminished, impaired, reduced, dependent upon or affected by any one
or more of the following: (i) the genuineness, validity, regularity or
enforceability of, or the existence of any default with respect to, the
Obligations, any security therefor, or any related instrument, documents,
obligation, transaction or matter; (ii) the nature, extent, condition, value or
continued existence of any security given in connection with the Obligations;
(iii) any action or failure to take action by any holder of the Obligations
under or with respect to this Guaranty or the Obligations, any security
therefor, or any related documents, transaction or matter; (iv) any other
dealings between any holder of the obligations and Secured Party; (v) any
exculpatory language or provisions limiting or restricting Secured Party's
rights or remedies against Borrower under the Loan Documents; or (vi) any claim
by or on behalf of Borrower of any credit or right of setoff with respect to the
Note or any of the Obligations. This Guaranty is irrevocable and the obligations
of the Guarantor hereunder shall terminate and cease only at the time Secured
Party receives payment in full of all of the Obligations or the Guarantor pays
the Obligations to the full and maximum extent of its liability hereunder.
(c) The Guarantor agrees that this Guarantee shall continue to
be effective or be reinstated, as the case may be, if at any time, payment of
the Obligations or any part thereof is rescinded or must otherwise be restored
by Secured Party upon or as a result of the bankruptcy or reorganization of
Borrower or otherwise. If after receipt of any payment of, or the proceeds of
any collateral for, all or any part of the Obligations, Secured Party is
compelled to surrender or voluntarily surrenders such payment or proceeds to any
person because such payment or application of proceeds is or may be avoided,
invalidated, recaptured or set aside as a preference, fraudulent conveyance,
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impermissible setoff, or for any other reason, whether or not such surrender is
the result of: (i) any judgment, decree or order of any court or administrative
body having jurisdiction over Secured Party; or (ii) any settlement or
compromise by Secured Party of any claims as to any of the foregoing, with any
person (including Borrower), then the Obligations or affected part thereof shall
be reinstated and continue and this Guarantee shall be reinstated and continue
in full force as to such Obligations or part thereof as if such payment or
proceeds had not been received, notwithstanding any previous cancellation of any
instrument delivered to evidence the satisfaction thereof. The provisions hereof
shall survive the termination of this Guarantee and any satisfaction and
discharge by Borrower by virtue of any payment, court order, or any federal or
state law.
(d) Interest. If the Guarantor fails to make when due any
payment required to be made by it under this Agreement (a "Payment"), then, to
the extent permitted by law and subject to the limitations set forth in Section
15.12 of the Security Agreement, such Payment shall bear interest from the due
date thereof until paid at the Default Rate, compounded monthly. The Guarantor
agrees to pay interest accrued hereunder on demand. All calculations of interest
hereunder will be made on the actual number of days elapsed on the basis of a
360-day year of twelve 30-day months, but in no event shall calculations result
in the Secured Party contracting for, charging or receiving interest in excess
of the maximum amount permitted by applicable law.
3. Additional Agreements and Waivers of the Guarantor. WITHOUT
LIMITING PARAGRAPHS 1 AND 2 HEREOF, THE GUARANTOR HEREBY ACKNOWLEDGES RECEIPT OF
COPIES OF THE LOAN DOCUMENTS AND AS THE GUARANTOR OF THE BORROWER'S OBLIGATIONS
THEREUNDER, HEREBY CONFIRMS AND MAKES ALL OF THE STATEMENTS, ACKNOWLEDGMENTS,
WAIVERS AND AGREEMENTS SET FORTH THEREIN (WHICH ARE HEREBY INCORPORATED BY
REFERENCE AS IF SET FORTH HEREIN IN THEIR ENTIRETY) BOTH WITH RESPECT TO THE
BORROWER'S AND THE GUARANTOR'S OBLIGATIONS (BUT ONLY TO THE EXTENT MADE BY THE
BORROWER) AND ACKNOWLEDGES THAT IT MAKES ALL OF THE WAIVERS AND SPECIAL
AGREEMENTS ("WAIVERS") SET FORTH IN THIS GUARANTEE, AND THAT EACH AND ALL SUCH
WAIVERS ARE BEING MADE KNOWINGLY, INTENTIONALLY, VOLUNTARILY, WITHOUT DURESS,
AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF SUCH WAIVERS BY
THE GUARANTOR IN CONSULTATION WITH ITS LEGAL COUNSEL; THE GUARANTOR FURTHER
ACKNOWLEDGES THAT THE GUARANTOR'S GUARANTEE AND SUCH WAIVERS ARE A MATERIAL
INDUCEMENT TO THE SECURED PARTY TO ENTER INTO THE LOAN DOCUMENTS, AND THAT THE
SECURED PARTY WOULD NOT MAKE THE LOAN WITHOUT SUCH GUARANTEES AND WAIVERS. THE
GUARANTOR ACKNOWLEDGES AND AGREES THAT NEITHER THE SECURED PARTY NOR THE
BORROWER, NOR ANY OF THEIR RESPECTIVE AFFILIATES, AGENTS OR REPRESENTATIVES HAS
MADE AND NO SUCH PERSON IS MAKING OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE GUARANTEE (OTHER THAN THOSE
REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR HEREUNDER).
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(a) The Guarantor understands and agrees that the Secured
Party may (and hereby authorizes Secured Party to) take the following actions,
at any time or from time to time, without the consent of but with prior notice
to the Guarantor, without incurring any responsibility to the Guarantor, and
without impairing, reducing, modifying, amending, releasing, discharging or in
any way affecting the obligations of the Guarantor or giving the Guarantor any
recourse or defense against the Secured Party:
(i) Accept or create new, modify, amend, accelerate,
increase, extend or renew any of the Obligations or any security therefor, or
provisions of the Note, the Security Agreement or any other Loan Document, and
this Guarantee will apply to the Obligations as so accepted, created, modified,
amended, accelerated, increased, extended or renewed;
(ii) Change the manner, place or terms of payment of the
Obligations, release, surrender, substitute, settle or compromise, or otherwise
alter or modify all or any of the Obligations, any security therefor, any Person
liable thereon, including any endorsers, accommodation parties or guarantors, or
any liability incurred directly or indirectly in respect thereof or in
connection with this Guarantee;
(iii) Subordinate the payment of all or any part of the
Obligations or any security therefor to the payment of or security for any other
liability (whether due or not) of the Borrower to its creditors, including the
Secured Party;
(iv) Exercise or refrain from exercising any rights or
remedies against the Guarantor, the Borrower or any other Person (including any
guarantor) or otherwise act or refrain from acting or take or fail to take any
action of any type whatsoever, and generally deal with the Borrower, the
Guarantor, endorser, accommodator, any other person, any indebtedness of the
Borrower to the Secured Party, or any security for any such indebtedness or
obligation, as the Secured Party sees fit;
(v) Consent to or waive any breach of any act, omission
or default, or reinstate following a default, under the Note, the Security
Agreement or any other Loan Documents in accordance with the terms thereof;
(vi) Grant to the Borrower any other indulgence,
concession or compromise with respect to all or any part of any of the
Obligations;
(vii) Apply any sums by whomsoever paid or howsoever
realized to any Obligations or other liabilities of Borrower or the Guarantor to
the Secured Party regardless of what Obligations, liability or liabilities
remain unpaid, provided that payments by the Guarantor pursuant to this
Guarantee shall be applied to the Obligations or its obligations or liabilities
hereunder, but in such order as the Secured Party may determine; or
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(viii) Fail to record or file against or possess any
collateral or property or Person whatsoever, or to perfect or protect any lien
or encumbrance, or sell, exchange, purchase, foreclose, realize upon or
otherwise deal with in any manner or order any property or Person at any time
securing or guaranteeing the Obligations or liabilities incurred directly or
indirectly in respect thereof or in connection with this Guarantee, the
Obligations or liabilities.
(b) The Guarantor understands and agrees that its obligations
under this Guarantee, and Secured Party's's rights to enforce this Guarantee,
shall not in any way be affected, diminished or impaired by the following
actions:
(i) Any insolvency, bankruptcy, liquidation,
reorganization, readjustment, composition, death, dissolution, winding up,
assignment for the benefit of creditors, receivership or trusteeship involving
the Borrower, the Guarantor, any of their respective Affiliates or any other
Person liable in respect of the Obligations as an obligor, endorser, guarantor,
pledgor or otherwise;
(ii) Any merger, consolidation, or sale of all or
substantially all of the assets, or of a controlling interest in, the Borrower,
the Guarantor, any of their respective Affiliates or any other person liable in
respect of the Obligations as an obligor, endorser, guarantor, pledgor or
otherwise;
(iii) The settlement by the Secured Party with Borrower
or the Guarantor, or the release or compromise by the Secured Party of any
claims against Borrower or the Guarantor; or
(iv) The existence of any other circumstances which
might constitute a legal or equitable discharge of a surety or guarantor under
applicable Law.
(c) Waiver of Claims and Set-Offs. With respect to all
Obligations and any other liabilities or obligations hereunder, the Guarantor
hereby waives and agrees not to assert or take advantage of any of the
following:
(i) Any right to require the Secured Party to proceed
against the Borrower or any other person or to resort to, proceed against or
exhaust any security obtained from the Borrower at any time or to pursue any
other remedy in its power before proceeding against any security obtained from
the Guarantor;
(ii) The defense of the statute of limitations in any
action hereunder or for the collection of any indebtedness or the performance of
any Obligation;
(iii) Any defense that may arise by reason of the
incapacity, lack of authority, death or disability of, insolvency or bankruptcy
of Borrower or any other Person, or revocation, illegibility or unenforceability
hereof or of any of the Obligations or Loan Documents, or the failure of the
Secured Party to file or enforce a
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claim against the estate (either in administration, bankruptcy, or any other
proceeding) of the Borrower or any other Person;
(iv) Demand, diligence presentment, protest, notice of
dishonor, nonpayment or default, suit or taking of any action and notice of any
other kind to any Person, including, without limiting the generality of the
foregoing, notice of acceptance of this Guarantee and notice of liability to
which may apply, notice under the Uniform Commercial Code (including Section
9-504(3) thereof) of any jurisdiction, and notice of the existence, creation or
incurring of any new or additional indebtedness or obligation or of any action
or non-action on the part of the Borrower, the Secured Party, any endorser or
guarantor under any instrument, or creditor of the Borrower, or any other Person
whomsoever, in connection with any Obligation or evidence of indebtedness or in
connection with any Obligation or any security therefor;
(v) All rights and defenses arising out of an election
of remedies by the Secured Party, even though that election of remedies, such as
but not limited to a non-judicial foreclosure under the Uniform Commercial Code
with respect to security for any Obligations, has destroyed or otherwise
impaired, the Guarantor's rights (including rights of subrogation and
reimbursement against the Borrower) or recourse against Borrower, any other
Person or any property;
(vi) Any right to be informed by Secured Party or any
other Person of the financial condition of Borrower or any other guarantor of
the Obligations or any change therein or any other circumstances bearing upon
the risk of nonpayment or nonperformance of the Obligations, or any duty on the
part of the Secured Party to disclose to the Guarantor or any other Person any
facts the Secured Party may now or hereafter know about the Borrower or any
other Person or the Obligations or any security therefor, regardless of whether
the Secured Party knows or has reason to believe that any such facts materially
increase the risk beyond that which the Guarantor intends to assume or knows or
has reason to believe that such facts are unknown to the Guarantor or has a
reasonable opportunity to communicate such facts to the Guarantor, it being
understood and agreed that the Guarantor represents, acknowledges and agrees
that the Guarantor has the ability and assumes the responsibility for keeping
informed of the financial condition of Borrower and any other guarantors of the
Obligations and of other circumstances affecting such nonpayment and
nonperformance risks and the Guarantor is fully responsible for being and
keeping informed of the financial condition of the Borrower, the condition of
the Collateral and of all circumstances bearing on the risk of nonpayment or
nonperformance of any Obligations; and
(vii) Any and all surety defenses, including any defense
based on lack of due diligence by the Secured Party in collection, protection or
realization upon any Collateral.
(d) Waiver of Deficiency; Appraisement, Etc. The Guarantor
hereby expressly waives: (i) any defense to the recovery of a deficiency against
the
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Borrower after any non-judicial sale of collateral under any mortgage or
security agreement, notwithstanding that such sale may result in a loss by the
Guarantor of the right to recover the deficiency from Borrower, (ii) any
appraisement, valuation, stay, extension, moratorium redemption or similar law
or similar rights for marshalling; and (iii) the benefit of all principles or
provisions of law, statutory or otherwise, which are or might be in conflict
with the terms of this Guarantee, and agrees that the obligations of the
Guarantor shall not be affected by any circumstances, whether or not referred to
in this Guarantee, which might otherwise constitute a legal or equitable
discharge of guarantors. Without limiting the generality of any of the
foregoing, the Guarantor hereby waives any right to be reimbursed by Borrower or
any other guarantor of the Obligations for any payment of the Obligations made
directly or indirectly by the Guarantor or from any property of the Guarantor,
whether arising by way of any statutory, contractual or other right of
subrogation, contribution, indemnification or otherwise. Without limiting the
foregoing, the Guarantor understands that in the absence of the waivers made in
this paragraph 3, the Guarantor might have a defense against an action by the
Secured Party to recover a deficiency from the Guarantor following a
non-judicial foreclosure sale of real property or other collateral securing the
Obligations, and the guarantor is specifically waiving those defenses and all
other defenses. The Guarantor expressly agrees to remain liable for any
deficiency remaining after foreclosure of any mortgage or security interest
securing any of the Obligations, whether or not the liability of the Borrower
with respect to any of the Obligations for such deficiency is discharged
pursuant to statute or judicial decision.
4. Subordination. The Guarantor hereby subordinates any
indebtedness, liabilities or obligations incurred by Borrower as a result of a
payment under this Guarantee ("Guaranty Debt") to, but only to, the Guarantor,
to the Obligations. The Guarantor agrees that Secured Party shall be entitled to
receive payment of all Obligations, other than liabilities incurred in the
ordinary course of business, before the Guarantor receives payment of any
Guaranty Debt. Any payments on Guaranty Debt to the Guarantor, if Secured Party
so requests, shall be collected, enforced and received by the Guarantor as
trustee for Secured Party and be paid over to Secured Party on account of the
Obligations, but without reducing or affecting in any manner the liability of
the Guarantor under the other provisions of this Guarantee.
5. Setoff; Non-Waiver.
(a) Setoff. In addition to any rights and remedies of any
Secured Party provided by law, Secured Party shall have the right, with prior
notice to the Guarantor, upon the occurrence and during the continuance of a
Default or an Event of Default, to set-off and apply against the Obligations,
whether matured or unmatured, any amount owing from Secured Party to the
Guarantor with respect to the Guaranty Debt, including all deposits, accounts
and moneys of the Guarantor then or thereafter maintained with Secured Party, at
or at any time after, the happening of any of the above mentioned events.
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(b) Non-waiver. No security interest or right of setoff shall
be deemed to have been waived by any act or conduct on the part of Secured Party
or by any failure to exercise such right of setoff or to enforce such security
interest, or by any delay in so doing; and every right of setoff and security
interest shall continue in full force and effect until such right of setoff or
security interest is specifically waived or released by an instrument in writing
executed by Secured Party.
6. Amounts Reclaimed.
(a) In the event that, any payments made to the Secured Party
with respect to the Obligations are required to be rescinded or must otherwise
be restored or surrendered by the Secured Party in the event of the bankruptcy,
insolvency, reorganization or similar event involving the Borrower, the
Guarantor, any of its respective Affiliates, or any other Person who may be
liable in respect of the Obligations as obligor, endorser, guarantor or pledgor
or otherwise, agrees that this Guarantee shall continue in effect or shall be
reinstated, as the case may be, and that the Guarantor shall remain liable under
this Guarantee for the payment and performance in full of the Obligations,
including without limitation, any portion so required to be rescinded, restored
or surrendered by the Secured Party.
(b) In the event that, pursuant to any proceeding before any
court, administrative body or trustee in bankruptcy having jurisdiction, or any
settlement or compromise of such a proceeding, a claim is made upon the Secured
Party for repayment or recovery of any amount received in payment of the
Obligations, the Guarantor agrees that such proceeding or settlement or
compromise shall be binding upon the Guarantor, and that in addition to the
other obligations of the Guarantor under this Guarantee, the Guarantor shall be
liable to the Secured Party for the entire amount so repaid or recovered, to the
same extent as if such amount had never been received by the Secured Party.
(c) Any acknowledgment or new promise in respect of the
Obligations, whether by payment or otherwise, and whether made by Borrower, the
Guarantor, any of their respective Affiliates or any other Person liable in
respect of the Obligations as obligor, endorser, guarantor, pledgor or
otherwise, shall toll the running of any statute of limitations which may have
begun to run against the Secured Party in favor of the Guarantor or, if the
limitations period has expired, shall negate the operation of the statute of
limitations in favor of the Guarantor. The provisions of this Section 6 shall
survive indefinitely.
7. Representations and Warranties. The Guarantor makes the following
representations, warranties and covenants which survive the execution and
delivery of this Guarantee:
(a) Affiliate's Identity. Schedule A attached hereto correctly
and completely sets forth the Guarantor's: (i) legal name, (ii) type of entity,
(iii) jurisdiction of
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organization, (iv) other jurisdictions in which it is qualified to do business,
(v) tax identification number, (vi) chief executive office, (vii) mailing
address, and (viii) existing debt and current business purpose. Schedule A also
sets forth a correct and complete description of the relationship of the
Guarantor to the Borrower.
(b) Organizational Status and Power. The Guarantor is an
entity is duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and is duly qualified to do business and in
good standing in each jurisdiction where the conduct of its business or the
character of its assets makes such qualification necessary, except for any such
jurisdiction where the failure to so qualify or be licensed, individually and in
the aggregate for all such jurisdictions, would not reasonably be expected to
have a Material Adverse Effect upon the Guarantor. The Guarantor has all
requisite power to own its properties and to carry on its business as now being
conducted and as proposed to be conducted, and to execute, deliver and perform
its obligations under this Guarantee.
(c) Authority. The execution, delivery and performance by the
Guarantor of this Guarantee and any other Loan Document to which the Guarantor
is a party are within the powers of the Guarantor and have been duly authorized
by all necessary corporate and other actions and do not contravene any provision
of the Guarantor's Certificate of Incorporation, by-laws, or organizational
documents, or to its knowledge, any existing law or any legal order applicable
to, or license or permit granted to it or any material agreement or instrument
to which it is a party or to which it or any of its assets are subject, the
contravention of which would have a Material Adverse Effect on its ability to
perform its obligations hereunder.
(d) Binding Effect; Xxxxxxxx; Enforceability. The transactions
contemplated by this Guarantee are in furtherance of the Guarantor's ordinary
business purposes, with no contemplation of solvency and with no intent to
delay, hinder or defraud any present or future creditors. The Guarantor is (and,
after giving effect to this Guarantee, will be) solvent and will not have an
unreasonably small capital for the conduct of its business and the payments of
anticipated obligations. The Guarantor's assets and cash flow enable it to meet
its present obligations in the ordinary course of business as they become due,
and the Guarantor has not and does not believe that it will incur debts and
obligations beyond its ability to pay. This Guarantee has been duly authorized,
executed and delivered by the Guarantor and constitute the legal, valid and
binding obligations of the Guarantor, enforceable against the Guarantor in
accordance with their respective terms, except as enforceability may be limited
(i) by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally, and (ii) to the
extent that the remedies of specific performance and injunctive or other forms
of equitable relief are subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(e) Litigation; No Violation of Orders or Laws; Governmental
Approvals. Except as set forth on Schedule B attached hereto, there are no
material
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actions, suits, investigations or proceedings pending, or to the Guarantor's
knowledge, threatened or proposed, against or affecting the Guarantor, or any of
the properties or rights of the Guarantor. To the Guarantor's knowledge, there
is no basis for any claims being asserted against the Guarantor except to the
extent that any such claims have been fully disclosed in writing to the Secured
Party. The Guarantor is not, nor will the Guarantor be after or as a result of
giving effect to the transactions contemplated herein, in default under or in
violation of any Requirements of Law the result of which would have a Material
Adverse Effect on its ability to perform its obligations hereunder. To its
knowledge, neither any actions by or with any governmental or public body or
authority, or any subdivision thereof, nor any other legal formality is required
in connection with the entering into, performance, or enforcement of the
Guarantee by the Guarantor.
(f) No Conflicts with Agreements, Etc. Neither the execution
and delivery by the Guarantor of this Guarantee or any of the Loan Documents to
which the Guarantor is a party, nor the fulfillment of or compliance with the
terms and provisions hereof or thereof, will conflict with, or result in a
breach or violation of the terms of, or constitute a default under, or result in
the creation of any Lien (other than Liens created pursuant to the Loan
Documents) on any assets of the Guarantor pursuant to (i) the organizational
documents of the Guarantor which is an entity, or (ii) any material agreement to
which the Guarantor is a party or to which the Guarantor's assets are subject or
(iii) any Requirements of Law to which the Guarantor is subject.
(g) Consents, Etc. No consent, approval or authorization of or
registration or filing with any Person is required in connection with the
execution, delivery or performance by the Guarantor of this Guarantee or any of
the Loan Documents to which the Guarantor is a party, or as a condition to the
legality, validity or enforceability of this Guarantee, except as set forth in
the Loan Documents.
(h) The Guarantor has copies of and is fully familiar with
each of the Loan Documents executed and delivered to Secured Party by Borrower.
(i) The Guarantor has derived or expects to derive a financial
advantage from the Loan and any other extension of credit and from each and
every renewal, extension, release of collateral or other relinquishment of legal
rights made or granted or to be made or granted by the Secured Party to the
Borrower in connection with the Obligations.
(j) Disclosure. Except as set forth in Schedule 7(j), the
financial statements of the Guarantor submitted to the Secured Party present
fairly the financial condition of the Guarantor. Neither this Guarantee nor any
other document, certificate or statement furnished to the Secured Party by or on
behalf of the Guarantor contains any misstatement of a material fact or omits to
state any material fact necessary in order to make the statements contained
herein and therein, in light of the circumstances under which they were made,
not misleading. The Guarantor is not aware of any facts (other than general
industry conditions) that individually or in the aggregate have a material
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adverse effect or, so far as the Guarantor can now reasonably foresee, are
likely to have a material adverse effect in the future.
(k) Restriction on New Automobile Dealership Locations. The
Guarantor hereby agrees that neither it nor any of its Affiliates will open a
new automobile dealership within the same Franchise System and engaged in the
business of selling the same brand of automobiles as the Borrower within five
(5) miles of any existing location which serves as Collateral for the Loan. The
foregoing shall not apply to the acquisition of an existing dealership.
8. Information. The Guarantor will promptly furnish to the Secured
Party, at the sole cost and expense of the Guarantor, all such information
regarding the Guarantor's business condition and financial condition as the
Secured Party may from time to time reasonably request. The Guarantor hereby
authorizes Secured Party and its agents and representatives at any time and from
time to time to obtain from, disclose to and discuss with any Franchisor,
creditor of the Guarantor or any other Person, information concerning or
relating to the financial condition, operations and other matters relating to
the Guarantor, its business, property and assets and hereby consents to the
release to Secured Party by any such Person, at any time and from time to time,
of information relating to the Guarantor, its business, financial condition,
prospects, property and assets upon request of Secured Party with prior written
notice to the Guarantor. The Secured Party hereby agrees that it will sign a
confidentiality agreement, if requested by the Guarantor, with respect to
confidential information it may obtain about the Guarantor. The Guarantor hereby
consents to the disclosure by the Secured Party of any and all public
information (financial or otherwise) concerning the Guarantor to any Person in
connection with the sale or other disposition of the Loan (including any
securitization thereof). The Guarantor hereby agrees to deliver to Secured Party
notice of any Default or Event of Default of the Borrower or of any other event
or condition which could have a Material Adverse Effect on the Borrower. The
Guarantor hereby agrees, to the extent failure to do so could have a Material
Adverse Effect, to pay all taxes and other charges imposed by any Government
Authority upon the Guarantor or its property as and when they become due. The
Guarantor hereby agrees, to the extent failure to do so could have a Material
Adverse Effect, to comply with all Requirements of Law and Contractual
Obligations.
9. Corporate Activity. Nothing contained herein shall prohibit,
restrict, prevent or otherwise bar the Guarantor from all and any lawful
corporate activity, including, without limitation, incurrence, creation,
assumption or the permitting to exist any indebtedness, or any lien on any of
its properties or assets (including the capital stock of its subsidiaries
including the Borrower), whether owned at the date hereof or hereafter acquired,
or assign or convey any rights to or security interest in any future revenues;
guaranteeing or otherwise in any way becoming or be responsible for indebtedness
for borrowed money or obligations of any other party, contingently or otherwise;
declaring or paying, directly and indirectly, any dividends or make any
distributions, whether in cash, property, securities or a combination thereof,
with respect to (whether by reduction of
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capital or otherwise) any shares of its capital stock or directly or indirectly
redeeming, purchasing, retiring or otherwise acquiring for value any shares of
any class of its capital stock or set aside any amount for any such purpose.
10. NO JURY TRIAL. EACH OF THE GUARANTOR AND, BY ITS ACCEPTANCE
HEREOF, SECURED PARTY HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
LITIGATION OR OTHER PROCEEDING RELATING TO OR ARISING OUT OF THIS GUARANTEE, OR
ANY OF THE OTHER LOAN DOCUMENTS. THE GUARANTOR COVENANTS AND AGREES NOT TO SEEK
TO CONSOLIDATE ANY SUCH LITIGATION OR PROCEEDING IN WHICH A JURY TRIAL HAS BEEN
WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN
WAIVED. THE GUARANTOR FURTHER WAIVES, TO THE FULL EXTENT PERMITTED BY LAW, ANY
RIGHT TO AN APPRAISAL OF ANY COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, ANY SUCH RIGHTS PROVIDED BY STATUTE.
11. Miscellaneous.
(a) Payment of Expenses. The Guarantor hereby agrees to pay
for all reasonable expenses of the Secured Party arising in connection with this
Guarantee, including without limitation, the administration and enforcement of,
or preservation of rights under this Guarantee (including without limitation,
the reasonable fees and expenses of counsel for the Secured Party in connection
with costs of collection, and all other costs and expenses associated with court
and/or administrative proceedings through the appellate level, incurred by
reason of any action, suit, proceeding, hearing, motion or application before
any court or administrative body in which Secured Party may be or become a party
by reason of this Guarantee, including, but not limited to, bankruptcy and
administrative proceedings, as well as any other of the foregoing where a proof
of claim is by law required to be filed, or in which it becomes necessary to
defend or uphold the terms hereof (the "Costs"), in the event that (a) there
shall occur any default under this Guarantee; (b) Secured Party is made party to
any litigation merely because of the existence of this Guarantee; (c) it becomes
necessary, by reason of acts of or omissions of the Guarantor for Secured Party
to seek the advice of counsel with respect to this Guarantee; or (d) it becomes
necessary for Secured Party to seek the advice of or retain counsel by reason of
any request of the Guarantor. Said Costs shall be paid in addition to the
amounts guaranteed in accordance with the provisions hereof.
(b) Waiver of Notice of Acceptance. Notice of acceptance of
this Guarantee is hereby waived..
(c) Entire Agreement. This Guarantee and the other Loan
Documents to which the Guarantor is a party represents the entire understanding
between the Secured Party and the Guarantor. None of the terms or provisions of
this Guarantee may be waived, altered, modified, or amended except in each
instance by a specific written instrument duly executed by the Secured Party.
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(d) Notices. All notices and other communications given
pursuant to or in connection with this Guarantee shall be in duly executed
writing delivered to the parties at the addresses set forth below (or such other
address as may be provided by one party in a notice to the other):
If to the Guarantor: To it at its office set forth above;
with a copy to:
Xxxxxxx Xxxxxx Xxxx & Ball P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
If to the Borrower:
Major Acquisition Corp.
00-00 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
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with a copy to:
Xxxxxx Xxxxxxxxxx Xxxxxxx Syracuse & Hirchtritt LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
If to the Secured Party:
Falcon Financial, LLC
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Loan Administration Department
with a copy to:
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Structured Finance Group
Notice delivered in accordance with the foregoing shall be effective
(i) when delivered, if delivered personally or by receipted-for telex,
telecopier, or facsimile transmission, (ii) two days after being delivered in
the United States (properly addressed and all fees paid) for overnight delivery
service to a courier (such as Federal Express) which regularly provides such
service and regularly obtains executed receipts evidencing delivery or (iii)
five days after being deposited (properly addressed and stamped for first-class
delivery) in a daily serviced United States mail box.
(e) Binding Effect; Assignment; Benefit of Agreement. This
Guarantee shall be binding upon and inure to the benefit of parties hereto and
their respective successors in interest and assigns. This Guarantee (i) is
freely assignable by Secured Party, in whole or in part, at any time or from
time to time, without prior notice to or consent of the Guarantor or Borrower,
and (ii) is not assignable by the Guarantor or the Borrower without the prior
written consent of the Secured Party, which consent may be withheld or delayed
by the Secured Party in its sole discretion. The provisions of paragraph 11(j)
are for the benefit of and may be enforced by the Borrower.
(f) Interpretation; Construction; Severability.
(i) The terms of this Guarantee have been fully reviewed
and negotiated by the Borrower and the Guarantor in consultation with
independent legal counsel of their respective choice. The Guarantor represents
and warrants that it has personally reviewed this Guarantee, and that it has the
requisite experience and sophistication to understand its terms and conditions
and the consequences of the duties
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assumed and rights waived herein. In the event of an ambiguity in or dispute
regarding the interpretation of this Guarantee, the interpretation shall not be
resolved by any rule providing for interpretation against the party who cause
the uncertainty to exist or against the drafting party.
(ii) Except as may be otherwise noted in context, all
references to "paragraphs" shall be deemed to refer to the paragraphs or
subparagraphs, as appropriate, of this Guarantee. References to "Schedules" mean
the Schedules attached to and made a part of this Guarantee. The descriptive
headings used in this Guarantee are for convenience only and shall not be deemed
to affect the meaning or construction of any provision hereof.
(iii) Whenever possible this Guarantee and each
provision hereof shall be interpreted in such manner as to be effective, valid
and enforceable under applicable law. If and to the extent that any such
provision shall be held invalid and unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provisions hereof, and any determination that the application of any
provision hereof to any person or under any circumstance is illegal and
unenforceable shall not affect the legality, validity and enforceability of such
provision as it may be applied to any other person or in any other circumstance.
(g) Further Assurances. The Guarantor agrees at any time and
from time to time, at the Guarantor's sole cost and expense, to obtain, procure,
execute and deliver, file and affix or cause to be obtained, procured, executed,
delivered, filed and affixed such further agreements, instruments, documents,
powers (including stock powers, and powers of attorney) and information, and to
do or cause to be done all such further acts and things (including the
execution, delivery and filing of financing statements, payment of filing fees
and transfer, gains and recording taxes) and do and cause to be done all such
other acts as the Secured Party may reasonably request, from time to time, in
its sole discretion.
(h) Term; Survival. This Guarantee is in full force and effect
on the date hereof and shall continue until one year and one day after all
Obligations of the Guarantor hereunder have been indefeasibly paid or satisfied
in full. All representations, warranties, agreements and covenants contained in
this Guarantee shall survive the execution and delivery of this Guarantee, and
all of the waivers made and indemnification obligations undertaken by the
Guarantor and the provisions of paragraphs 2 through 11 shall survive the
termination, discharge or cancellation for any reason of this Guarantee until
the Obligations are paid in full.
(i) Cumulative Rights of and No Waiver by Secured Party. The
Secured Party's rights, powers, privileges and remedies under this Guarantee,
any Loan Document, any other agreement or applicable law are cumulative and not
exclusive and may be exercised successively or concurrently and shall not be
waived, precluded or limited by any failure or delay in the exercise thereof or
by the Secured Party's exercise, or
-15-
partial exercise, of any thereof or by any course of dealing between the
Guarantor and the Secured Party. No notice to or demand on the Guarantor in any
case shall entitle the Guarantor to any other or further notice or demand in
similar or other circumstance or constitute a waiver of the right of the Secured
Party to any other or further action in any circumstance without notice or
demand.
(j) The Guarantor's Subordination of Claims; Rights of
Contribution; General Limitation . (i) Subordination. The Guarantor hereby
irrevocably subordinates, pursuant to paragraph 4 hereof, and agrees that until
such time as Secured Party has received indefeasible payment of all Obligations
in full, the Guarantor shall not assert any claim (as defined in 11 U.S.C.
Section 101), including, without limitation, any right or claim of subrogation,
payment or reimbursement, that the Guarantor now or hereafter may have against
any Borrower under any Loan Document or against any other security held by or
available to the Secured Party for any Obligations or the payment thereof
because, arising out of or on account of any payments or transfers made by the
Guarantor, or any payment or transfer which the Guarantor agreed to or is
obligated to make, for any reason, whether any such right or claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.
(ii) General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of the Guarantor, under its guarantee or
otherwise to Secured Party would, taking into account the provisions of Section
11(j) hereof, be held or determined to be void, invalid or enforceable, or
subordinated to the claims of any creditors other than the Secured Party, on
account of the amount of its liability under its guarantee or otherwise to the
Secured Party, then, notwithstanding any other provision hereof to the contrary,
the amount of such liability shall, without any further action by the Guarantor,
the Secured Party or any other Person, be automatically limited and reduced to
the highest amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding
(k) Time of the Essence. Time is of the essence with respect
to any payments to be made and obligations to be performed by the Guarantor
under this Guarantee.
(l) Governing Law. This Guarantee shall be governed by and
construed in accordance with the laws of the State of New York.
(m) Counterpart. This Guarantee may be signed in counterpart,
each of which shall be deemed an original and all of which taken together shall
constitute one and the same instrument.
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(n) Descriptive Headings. The descriptive headings used in
this Guarantee are for convenience only and shall not be deemed to affect the
meaning or construction of any provision hereof.
-17-
THIS GUARANTEE CONTAINS WAIVERS OF VARIOUS RIGHTS, INCLUDING
(WITHOUT LIMITATION) WAIVERS OF RIGHTS OF JURY TRIAL. THE GUARANTOR HEREBY MAKES
AND ACKNOWLEDGES THAT IT MAKES ALL OF THE WAIVERS SET FORTH IN THIS GUARANTEE
KNOWINGLY, INTENTIONALLY, VOLUNTARILY, WITHOUT DURESS, AND ONLY AFTER EXTENSIVE
CONSIDERATION OF THE RAMIFICATIONS OF SUCH WAIVERS WITH ITS ATTORNEY; THE
GUARANTOR FURTHER ACKNOWLEDGES THAT SUCH WAIVERS ARE A MATERIAL INDUCEMENT TO
THE SECURED PARTY TO MAKE THE LOAN TO THE BORROWER AND THAT THE SECURED PARTY
WOULD NOT HAVE ENTERED INTO THE SECURITY AGREEMENT AND ACCEPTED THE NOTE WITHOUT
SUCH WAIVERS.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to
be executed and delivered as of the date first above written.
ATTEST: GUARANTOR:
FIDELITY HOLDINGS, INC.
(SEAL) By:
------------------------------------
Name:
Title:
STATE OF NEW YORK )
) :ss.
COUNTY OF )
This instrument was acknowledged before me this _______ day of
________________,1998 by _____________________, the ________________________ of
Fidelity Holdings, Inc., a corporation formed under the laws of the State of
Nevada.
[NOTARIAL SEAL] Notary Public in and for said State
-------------------------------
Notary Public
SCHEDULE A
Legal Name of
Guarantor:
Fidelity Holdings, Inc.
Type of Entity:
"C" corporation
Jurisdiction of
Organization:
Nevada
Other Jurisdictions
Where Qualified:
None.
Chief Executive Office:
00-00 Xxx Xxxxxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxx Xxxx 00000
Mailing Address:
00-00 Xxx Xxxxxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxx Xxxx 00000
Relationship to
Borrower:
Owner
Equity Holders/
Controlling Persons:
N/A
Existing Debt and
Business Purpose:
As described in Form 10-K for the year ended December 31, 1997.
SCHEDULE B
Pending/Threatened Proceedings:
SCHEDULE 7(j)
Addendum to Financial Statements
The Form 10-K for the year ended December 31, 1997 in which the Borrower's
financial statements are contained will be subsequently amended to provide pro
forma financial information with respect to the acquisition of Major Acquisition
Corp.
