GUARANTY
This GUARANTY (this GUARANTY), dated as of May 5, 1992 made by
WMS INDUSTRIES INC., having an address at 0000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000 (WMS), XXXX X. XXXXXXX, having an address at 000 Xxxx Xxxx Xxxxx
Xxxx, Xxxx Xxxxx, Xxxxxx Xxxx 00000 (XXXXXXX), and XXXXXX X. XXXXXXX and XXXXXXX
X. XXXXXXX, each having an address at 000 Xxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxx
00000 (collectively, the KOFFMANS) (WMS, Xxxxxxx and the Koffmans are
collectively referred to herein as 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 has been or may be amended, modified,
supplemented or replaced from time to time, the Letter of Credit Agreement),
dated February 7, 1991, between El Conquistador Partnership L.P., a Delaware
limited partnership (the COMPANY) and the Bank, the Bank has issued 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, the Borrower has requested that the Bank extend the
last date for the Initial Disbursement from February 7, 1992 to the date hereof;
and
WHEREAS, in connection with such extension, the Bank and the
Borrower are, on the date hereof, entering into a First Amendment of Letter of
Credit Agreement (the AMENDMENT), which amends certain of the terms and
conditions of the Letter of Credit Agreement; and
WHEREAS, pursuant to Paragraph 4 of the Amendment, WKA has
agreed, under certain circumstances, to make additional loans to the Borrower at
the Bank's request; and
WHEREAS, as a condition of entering into the Amendment, the
Bank has required 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 entering into the Amendment;
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 Amendment, the Guarantors hereby 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 and performance of the obligations of WKA
to make additional loans pursuant to Paragraph 4 of the Amendment (the
GUARANTEED OBLIGATIONS) to the extent provided in Section 1(c) hereof. The
Guarantors hereby agree that if WKA fails to perform the Guaranteed Obligations
when and as the same shall be required in accordance with the terms of the
Amendment, on receipt of demand from the Bank the Guarantors will forthwith
perform the Guaranteed Obligations which are the subject of such demand to the
extent provided in Section 1(c) hereof.
(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) The obligations of each of the Guarantors hereunder with
respect to the Guaranteed Obligations shall be several in accordance with the
following respective percentages: WMS - 46.54%; Xxxxxx X. Xxxxxxx - 18.615%;
Xxxxxxx X. Xxxxxxx - 18.615%; and Xxxxxxx - 16.23%; and the liabilities of the
Guarantors shall in all events be limited to the aggregate amount of $1,396,200
in the case of WMS, $558,450 in the case of Xxxxxx X. Xxxxxxx, $558,450 in the
case of Xxxxxxx X. Xxxxxxx, and $486,900 in the case of Xxxxxxx.
(d) The obligations of the Guarantors hereunder shall
terminate upon the earliest to occur of (i) termination of the Letter of Credit
Agreement and the actual and irrevocable receipt by the Bank of payment in full
of any amounts which may have become due and payable, (ii) the advance by WKA of
additional loans to the Company, pursuant to Paragraph 4 of the Amendment, in
the aggregate amount of $3,000,000, and (iii) the Coverage Date.
SECTION 2. UNCONDITIONAL CHARACTER OF OBLIGATIONS OF
GUARANTORS.
(a) The obligations of each Guarantor hereunder shall be
absolute and unconditional, irrespective of the validity, regularity or
enforceability in whole or in part of the Letter of
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Credit Agreement, the Amendment 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 WKA, 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 WKA under the Amendment or of any Guarantor
under this Guaranty, or any setoff, counterclaim, recoupment, limitation or
termination, and irrespective of any other circumstances which might otherwise
limit recourse against the Guarantors 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 proceeding at law, in
equity or otherwise, or after an action against WKA. THIS GUARANTY IS A GUARANTY
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 Amendment against WKA or any other Person, any
right to require a proceeding first against WKA or any other Person, or to
exhaust any security for the performance of the obligations of WKA, 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
insol vency, bankruptcy, liquidation, reorganization, readjustment, composition,
dissolution, receivership, conservatorship, winding up or other similar
proceeding involving or affecting either WKA, any Guarantor or any other Person,
(ii) any failure of the Bank or any other Person, whether or not without default
on its part, to perform or comply with any of the terms of the Letter of Credit
Agreement, the Amendment or any other Operative Document (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 Improvements or any part thereof
by a deed in lieu of foreclosure, or (v) the release of WKA from the performance
or observance of any of the agreements, covenants, terms or conditions contained
in the Letter of Credit Agreement, the Amendment or any of the Operative
Documents by operation of law or otherwise; or (vi) the release in whole or in
part of any Collateral.
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(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, any of the Guarantors or any 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 here-under or otherwise.
(d) The Bank may deal with WKA in the same manner and as
freely as if this Guaranty did not exist and shall be entitled, among other
things, to grant WKA 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 Letter of Credit Agreement, the Amendment 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 at any other time.
(h) At the option of the Bank, any Guarantor may be joined in
any action or proceeding commenced by the Bank against WKA in connection with or
based upon the Guaranteed Obligations, and recovery may be had against such
Guarantor to the extent of that Guarantors' liability hereunder, without any
requirement that the Bank first assert, prosecute or exhaust any remedy or claim
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against WKA or any other Person or any security for the obligations of the
Borrower or any other Person.
(i) Subject to the provisions of Sections 1(c) and 1(d)
hereof, 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 any 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 WKA or any Guarantor, all as though such
payment had not been made.
(j) In the event that the Guarantors shall become obligated to
pay any sums under this Guaranty, the Guarantors agree that: the amount of such
sums and of the indebtedness of the Company to the Guarantors 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 Letter of Credit Agreement, the
Amendment or any of the Operative Documents. Nothing herein contained is
intended or shall be construed to give the Guarantors any right of subrogation
in or under the Letter of Credit Agreement, the Amendment 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 any 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 Letter of Credit
Agreement, the Amendment and the other Operative Documents. If any amount shall
be paid to any 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 WKA for
any sums owed the Guarantor by the Company.
(k) Subject to the provisions of Sections 1(c) and 1(d)
hereof, the Guarantors' obligations hereunder shall continue notwithstanding a
foreclosure or similar proceeding involving the Premises and/or the
Improvements.
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SECTION 3. REPRESENTATIONS, WARRANTIES AND AGREEMENT.
Each Guarantor represents and warrants to and agrees with the
Bank as follows (which representations and warranties shall survive the
execution and delivery of this Guaranty):
(a) This Guaranty is a 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 and general equitable principles, but such
limitations do not make such rights and 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 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 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 its 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 affect 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, or
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
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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 laws 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.
SECTION 8. SEVERABILITY. Any provision of this Guaranty which
may be determined by 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 Guarantor: WMS Industries Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxx Xxxxxxx
000 Xxxx Xxxx Xxxxx Xxxx
Xxxx Xxxxx, Xxxxxx XXxxx 00000
Xxxxxx X. Xxxxxxx and
Xxxxxxx X. Xxxxxxx
000 Xxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
With a Copy to: Xxxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No. 000-000-0000
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To the Bank: The Mitsubishi Bank, Limited
000 Xxxxxxx Xxxxxx,
Xxx World Financial Center,
New York, New York 10281
Attention: Real Estate
Finance Group
(Mr. Xxxxx Xxxxx or
Xx. Xxxxxxx Xxxxx)
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
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 GUARANTOR'S RECEIPT OF LOAN DOCUMENTS. The
Guarantors, by its execution hereof, acknowledge receipt of true copies of the
Letter of Credit Agreement, the Amendment and the other Operative Documents.
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) Each Guarantor hereby agrees 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 that Guarantor 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
amounts 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.
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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 process in any other manner permitted by law or
affect the right of the Bank to bring any suit, action or proceeding against the
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 Letter of Credit Agreement, the Amendment or 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.
This Guaranty may be executed in one or more counterparts.
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IN WITNESS WHEREOF, the Guarantors have duly executed this
Guaranty as of the date first above written.
WMS INDUSTRIES INC.
By:
______________________________
Name: Xxxxx X. Xxxxxxxx
Title: Chairman
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XXXX XXXXXXX
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XXXXXX X. XXXXXXX
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XXXXXXX X. XXXXXXX
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