Exhibit 10.7
GUARANTY
GUARANTY, dated this day of April 10, 2004 by International
Housing Development Group, Corp., a Florida corporation ("Guarantor") in favor
of Vestin Mortgage, Inc. ("Vestin").
WITNESSETH
WHEREAS, Messrs. Xxxxxx X. Xxxxx, Xxxxxxx Xxxxx and Xxxxx X.
Xxx (collectively the "Members") own (a) all of the membership and/or equity
interests in Raceway Ventures, LLC ("Ventures") and (b) more than a majority of
the issued and outstanding capital stock of the Guarantor; and
WHEREAS, Guarantor and the Members desire Ventures to acquire
19,549 shares of the Common Stock (the "Common Stock") of Mid-State Raceway,
Inc. ("Raceway") and warrants (the "Warrants") to purchase 1,250,000 shares of
Common Stock from All Capital LLC ("All Capital") and 450,000 shares of Common
Stock from Xxxxxxxx Xxxxx respectively; and
WHEREAS, Raceway and Mid-State Development Corporation
("Development" and Raceway and Development collectively referred to herein as
Borrower") are indebted to Vestin in the amount of up to $26,000,000 ("Existing
Indebtedness") as evidenced by a Consolidated Secured Promissory Note (the
"Note"); and
WHEREAS, All Capital is wholly owned by Xxxxx Xxxxx ("Xxxxx")
and Xxxxx has personally guaranteed the payment of principal and interest on the
Existing Indebtedness ("Xxxxx Guaranty"); and
WHEREAS, the Members have executed a joint and several
guaranty of up to $10,000,000.00 of the Existing Indebtedness ("Member
Guaranty"); and Ventures has executed a guaranty of the Existing Indebtedness
("Ventures' Guaranty"); and
WHEREAS, as a condition precedent to the sale by All Capital
of its shares of Common Stock and Warrants to Ventures the Xxxxx Guaranty must
be terminated and rendered null and void and of no further force and effect and
Xxxxx released from any and all liability thereunder; and
WHEREAS, the Guarantor and the Members desire to have Vestin
execute and deliver (a) to Xxxxx a termination and release of the Xxxxx Guaranty
("Release") rendering the Xxxxx Guaranty null and void and of no further force
and effect and (b) its consent to the acquisition by Ventures of the Common
Stock and Warrants (the "Consent"); and
WHEREAS, as a condition to Vestin executing and delivering the
Release and the Consent, Vestin has requested that the Guarantor execute and
deliver this Guaranty.
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained the parties hereto agree as follows:
1. Guaranty of Payment and Performance.
(a) Subject to and in accordance with the provisions of
subparagraphs 1 (b) and (c) hereof, the Guarantor does hereby, absolutely,
unconditionally and irrevocably guaranty to Vestin the full and punctual payment
and performance of the Obligations (as defined). For purposes of this Guaranty
the term "Obligations" shall be and mean the Borrower's obligations under the
Note solely and exclusively for the payment of principal and interest thereon
computed at the rate of 11% per annum, whether now existing or hereafter
arising, when the same shall become due and payable, in accordance with the
terms of the Note.
(b) If any of the Obligations shall not be paid in full as the
same shall become due and payable, either at stated maturity or otherwise, in
accordance with the terms of the Note, then and in that event:
(i) Vestin shall take and perform such reasonable
efforts (collectively "Collection Efforts") as shall be reasonably necessary to
cause the Borrower to make payment of the Obligations then due and payable; and
(ii) Vestin shall, following the completion of the
Collection Efforts transmit to the Guarantor written notice ("Vestin Notice")
setting forth: (A) the continued existence of the Borrower's default in payment
of the Obligations, (B) the amount of the Obligations which are at such time the
subject of Borrower's payment default prior to any acceleration and/or
imposition of Default Interest ("Current Default"), (C)the amount of the costs
incurred by Vestin in performing the Collection Efforts (the "Collection
Costs"), (D)the total amount of the Obligations and (E) the sum of the
Collection Costs and the Obligations (the "Buy Out Amount"); and
(iii) Subject to the rights of the Members under
the Member Guaranty and the rights of Ventures under the Ventures' Guaranty,
Guarantor shall have the right during the seven day period following transmittal
by Vestin of the Vestin Notice to either (A) cure the Borrower's payment default
by making payment to Vestin of the full amount of the Current Default prior to
the expiration of such seven day period, or (B) purchase, for cash, 100% of the
payees interest in and to the Note and the proceeds thereof and all collateral
securing the same (the "Property") for the Buy-Out Amount. If the Guarantor
elects to exercise the purchase right described above it shall (C) give Vestin
written notice of such election ("Purchase Notice") prior to the expiration of
such seven day period; which Purchase Notice shall specify a closing date for
such purchase within 14 days following the transmittal of the Purchase Notice to
Vestin and (D) have the right to transfer, sell assign and convey their rights
to acquire the Property and/or any agreements with respect to the acquisition of
the Property to any third party.
(c) If the Guarantor shall fail or refuse to either pay the
full amount of the Current Default or transmit the Purchase Notice within the
seven day period following the transmittal of the Vestin Notice and/or having
transmitted the Purchase Notice failed and/or refused to fully and timely
perform its obligations thereunder, then and in any such event the Guarantor
shall, upon
demand, immediately pay to Vestin any such Obligations without presentment,
diligence, protest or other notice of any kind, all of which are hereby
expressly waived. In addition to the foregoing, the Guarantor agrees to pay any
and all reasonable expenses (including without limitation, reasonable attorney's
fees and expenses) which may be paid or incurred by Vestin in connection with
the enforcement by Vestin of the obligations of the Guarantor with respect to
the Obligations. All payments under this Guaranty shall be made in the place,
currency and manner specified for the Obligations as provided in the Note.
(d) Without limiting the generality of the provisions of
subparagraph 1(a) hereof but expressly subject to the provisions of
subparagraphs 1(b) and (c) hereof:
(i) The liability of the Guarantor under this
Guaranty is primary, absolute, direct and immediate, and not conditional or
contingent upon pursuit by Vestin of any remedies it may have against the
Borrower or any other person or entity, whether pursuant to the terms hereof or
at law, in equity or by statute;
(ii) The Guarantor hereby waives any right it
otherwise might have to require Vestin to make any demand upon and/or proceed
against the Borrower or any other person or entity before seeking enforcement of
this Guaranty, or to pursue any legal, equitable or statutory remedy otherwise
available to Vestin in any particular manner or order;
(iii) The Guarantor hereby expressly authorizes
Vestin, in its sole and absolute discretion, without notice to or further assent
of the Guarantor and without in any way discharging, terminating, releasing,
affecting or impairing the obligations and liabilities of the Guarantor
hereunder, from time to time or at any one or more times to: (A) amend, modify,
renew, extend, accelerate or otherwise change the time or manner of payment for
or performance of, or otherwise change, modify or amend any of the other terms
and conditions of the Obligations, (B) release, discharge or compromise or
settle with the Borrower, (C) waive compliance with or any default under,
forbear from, delay or only partially enforce, or grant any other indulgences
with respect to the Obligations, (D) assign, transfer, pledge, hypothecate,
grant a security interest in or otherwise transfer its interest in this
Guaranty, and (E) otherwise deal in all respects with the Borrower with respect
to the Note as if this Guaranty were not in effect;
(iv) The Guarantor: (A) agrees that the validity and
enforceability of its obligations hereunder shall be unaffected by the
genuineness, validity, regularity or enforceability of the Note or by any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, (B) expressly waives any defense arising by
reason of laches, the statute of limitations or any incapacity, lack of
authority, or other defense of the Borrower (including, without limitation, the
bankruptcy, reorganization, liquidation, dissolution, release or discharge of
the Borrower or any arrangement, compromise, settlement or other action with
respect to the Borrower's creditors or by reason of the cessation from any cause
whatsoever (other than payment or performance in full) of the liability of the
Borrower), and (C) hereby releases Vestin from any requirement of looking into
such matters.
2. Guarantor's Obligations Not Affected. This Guaranty is an
absolute, unconditional, irrevocable, present and continuing guarantee of
payment and performance and not merely of collection or collectibility, and,
except as expressly provided herein to the contrary, is in
no way conditioned or contingent upon any attempt to collect from the Borrower
or any other person any of the Obligations or upon any other condition or
contingency. The obligations of the Guarantor under this Guaranty shall remain
in full force and effect without regard to, and shall not be impaired or
affected by:
(i) any change in the existence, structure or
ownership of the Borrower, or any insolvency, bankruptcy, reorganization,
arrangement, adjustment, composition, liquidation, receivership or similar
proceeding affecting the Borrower;
(ii) the existence of any claim or other rights that
the Guarantor may have at any time against the Borrower, whether in connection
herewith or in any unrelated transactions; provided however that nothing herein
shall prevent the assertion of any such claim by separate suit or compulsory
counterclaim;
(iii) any exercise or non-exercise by Vestin or any
other person of any right, power, privilege or remedy pursuant to or in respect
of this Guaranty, or any waiver of any such right, power, privilege or remedy;
or
(iv) any merger or consolidation of the Borrower with
or into any other person, or any sale, lease or transfer of any or all of the
assets of the Borrower to any other person or the dissolution, termination,
winding up or other discontinuation of the Borrower.
3. Waiver. Except as herein expressly provided to the
contrary, the Guarantor unconditionally waives (i) all notices which may be
required by statute, rule of law or otherwise, notice of acceptance of this
Guaranty as well as (a) presentment, demand for payment and/or performance and
protest of non-payment and/or non-performance, (b) notice of presentment, demand
and protest, (c) notice of any default hereunder and/or under the Note, and of
all indulgences, (d) demand for observance of performance of, or enforcement of,
any terms or provisions of this Guaranty, and (e) all other notices and demands
otherwise required by law or statute which Guarantor may lawfully waive.
Further, to the extent permitted by law, the Guarantor waives the rights to (f)
trial by jury, (g) implead the Borrower or assert a counterclaim against the
Borrower, (h) to consolidate any such action with any proceeding involving the
Borrower, and (ii) any requirement of diligence on the part of Vestin.
4. Termination. This Guaranty and the obligations of the
Guarantor hereunder shall terminate and be of no further force and effect on the
earlier to occur of (a) the date when the Obligations shall be have been
indefeasibly paid in full, (b) the VLT Commencement Date (as defined), or (c)
the date upon which the Borrower's obligations for the payment of principal and
interest under the Note is reduced, by payment (other than as a result of the
foreclosure and/or sale of the real and/or personal property securing the Note),
to $16,000,000.00 or less. The "VLT Commencement Date" shall be and mean the
date upon which video lottery terminals ("VLT's") installed on the premises of
Xxxxxx Xxxxx Race Track, Vernon New York, are first activated and available for
utilization on a pilot, temporary or permanent basis.
5. No Waivers. No failure or delay by Vestin in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided herein shall be cumulative and not exclusive of any rights or
remedies provided by law.
6. Notices. Any and all notices, requests or instructions
desired or required to be given to Vestin or to Guarantors shall be in writing
and shall either be hand delivered or mailed to the recipient first class,
postage prepaid, certified, return receipt requested at the following respective
addresses:
To: Guarantor
International Housing Development Group, Corp.
0000 XX 00xx Xxx Xxxxx 0
Xx. Xxxxxxxxxx, Xxxxxxx 00000
With a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
To: Vestin
0000 Xx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Or such other address as any party hereto shall designate in writing complying
with the provisions of this paragraph.
7. Savings Clause. If any provision of this Guaranty is held
to be invalid by any court or tribunal of competent jurisdiction, the remainder
hereof shall not be affected thereby, and such provisions shall be carried out
as nearly as possible according to its original terms and intent to eliminate
such invalidity or unenforceability.
8. General. This Agreement between the parties hereto with
respect to the subject matter hereincontained, shall be governed and construed
in accordance with the laws of the State of Nevada, cannot be altered, amended,
modified or terminated except by a writing executed by both parties hereto or as
herein expressly otherwise provided; and shall inure to the benefit of and be
binding upon the parties hereto and their respective successors, transferees,
heirs, assigns and beneficiaries.
IN WITNESS WHEREOF, the undersigned has caused this
Guaranty to be executed and delivered as of the say and year first written
above.
International Housing Development Group, Corp.
By: /s/ Xxxxxxx Xxxxxx
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