Exhibit 10.10
AGREEMENT OF GUARANTY AND SURETYSHIP
(PAYMENT)
(STANSLEY RACING CORP.)
THIS AGREEMENT OF GUARANTY AND SURETYSHIP (PAYMENT) (this "Agreement")
is made as of the 26th day of June, 1997 by STANSLEY RACING CORP., a Virginia
corporation ( "Guarantor") to and for the benefit of PNC BANK, NATIONAL
ASSOCIATION, a national banking association (the "Lender").
W I T N E S S E T H:
WHEREAS, as more fully set forth in a certain Construction Loan
Agreement (the "Construction Loan Agreement") of even date herewith by and
between Colonial Downs, L.P., a Virginia limited partnership, (the "Borrower"),
and Lender, Lender has agreed to make a construction loan (the "Construction
Loan") to Borrower in the principal amount of $10,000,000; and
WHEREAS, as more fully set forth in a certain Revolving Line of Credit
Agreement (the "Credit Agreement") of even date herewith between Borrower and
Lender, Lender has agreed to make a revolving line of credit (the "Line of
Credit") available to Borrower in a maximum principal amount not to exceed
$5,000,000; and
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to Lender's making of the Construction Loan and extending the Line of
Credit (the Construction Loan and the Line of Credit are hereinafter
collectively referred to as the "Loans").
NOW, THEREFORE, to induce the Lender to make the Loans and for other
good and valuable consideration, receipt of which is hereby acknowledged, and
intending to be legally bound hereby, Guarantor hereby covenants and agrees as
follows:
1. Unless otherwise defined herein, all capitalized terms used herein
shall have the meanings ascribed to such terms in the Loan Agreements (as
hereinafter defined).
2. Guarantor unconditionally guarantees and becomes surety for the full
and timely payment, whether by declaration, acceleration or otherwise, by
Borrower of the principal of and interest on all the following (hereinafter
collectively referred to as the "Guaranteed Obligations"):
(i) all principal, interest and other sums due or to become
due under that certain Deed of Trust Note, of even date
herewith, given by Borrower to Lender in the principal
amount of $10,000,000, as the same may be amended,
supplemented, renewed or replaced from time to time
(the "Deed of Trust Note"); and
(ii) all principal, interest and other sums due or to become
due under that certain Revolving Credit Note of even
date herewith, given by Borrower to Lender in a maximum
principal amount of $5,000,000, as the same may be
amended, supplemented, renewed or replaced from time to
time (the "Credit Note") (the Deed of Trust Note and
the Credit Note are hereinafter collectively referred
to as the "Notes"); and
(iii) the prompt and punctual payment of all sums due or to
become due under the Construction Loan Agreement and
the Credit Agreement, as the same may be amended,
supplemented, renewed, extended or replaced from time
to time (collectively, the "Loan Agreements"); and
(iv) all sums now or hereafter to be paid to Borrower under
all other agreements, instruments and documents given
to Lender to evidence, secure or otherwise support the
indebtedness evidenced by the Notes (all such
agreements, instruments and documents, including the
Notes and the Loan Agreements as the same may be
amended, supplemented, renewed or replaced from time to
time, being hereinafter referred to as the "Loan
Documents").
3. Guarantor agrees to pay the Guaranteed Obligations immediately when
due, irrespective of whether or not any one or more of the following events have
occurred: (i) Lender has made any demand on Borrower; (ii) Lender has taken any
action of any nature against Borrower; (iii) Lender has pursued any rights which
Lender has against any other person who may be liable for any of the Guaranteed
Obligations; (iv) Lender holds or has resorted to any security for any of the
Guaranteed Obligations; or (v) Lender has invoked any other remedies or rights
Lender has available with respect to any of the Guaranteed Obligations. The
liability of Guarantor as surety and guarantor is unconditional. Guarantor
therefore agrees to pay the Guaranteed Obligations even if any of the Loan
Documents, or any part thereof, are for any reason invalid or unenforceable.
Guarantor further agrees to make full payment to Lender even if circumstances
exist which otherwise constitute an equitable discharge of Guarantor as surety
or guarantor.
4. Guarantor waives and agrees not to enforce any of the rights of
Guarantor against Borrower unless and until Borrower is no longer liable in any
respect to Lender, including, but not limited to: (i) any right of Guarantor to
be subrogated in whole or in part to any right or claim with respect to any of
the Guaranteed Obligations or any portion thereof to Lender which might
otherwise arise from partial payment or performance by Guarantor to Lender on
account of the Guaranteed Obligations or any portion thereof; and (ii) any right
of Guarantor to require the marshalling of assets of Borrower which might
otherwise arise from partial payment or performance by Guarantor to Lender on
account of the Guaranteed Obligations or any portion thereof.
5. Guarantor waives any and all notice with respect to: (i) acceptance
by Lender of this Agreement or any of the Loan Documents; and (ii) the
provisions of any of the Loan Documents or any other instrument or agreement
relating to the Guaranteed Obligations.
6. Guarantor waives any presentment, demand, notice of dishonor or
nonpayment, protest, notice of protest and notice of non-payment in connection
with the Guaranteed Obligations.
7. Guarantor agrees that Lender may do any of the following without
notice to Guarantor and without adversely affecting the validity or
enforceability of this Agreement or any other agreement, document or instrument
given by Guarantor to Lender in connection with this Agreement or that certain
Agreement of Guaranty and Suretyship (Completion) of even date herewith given by
Guarantor to Lender: (i) release, surrender, exchange, compromise or settle the
Guaranteed Obligations, or any part thereof; (ii) change, renew or waive the
terms of the Guaranteed Obligations, or any part thereof; (iii) change, renew or
waive the terms of any of the Loan Documents or any other note, instrument or
agreement relating to the Guaranteed Obligations, such rights of Lender to
include, without limitation, the right to change the rate of interest charged to
Borrower (in which event the Guaranteed Obligations shall be deemed also to
include all interest at such changed rate); (iv) grant any extension or
indulgence with respect to the payment or performance of the Guaranteed
Obligations or any part thereof; (v) enter into any agreement of forbearance
with respect to the Guaranteed Obligations or any part thereof; (vi) release,
surrender, exchange or compromise any security held by Lender for any of the
Guaranteed Obligations; (vii) release any person who is a guarantor or surety or
who has agreed to purchase the Guaranteed Obligations or any part thereof; and
(viii) release, surrender, exchange or compromise any security or lien held by
Lender for the liabilities of any person who is guarantor or surety for the
Guaranteed Obligations or any part thereof. Guarantor agrees that Lender may do
any of the above as Lender deems necessary or advisable, in Lender's sole
discretion, without giving any notice to Guarantor, and that Guarantor will
remain liable for full payment of the Guaranteed Obligations. If at any time all
or any part of any payment theretofore applied by Lender to any of the
liabilities is or must be rescinded or returned by Lender for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of Borrower), such liability shall, for the purposes of this
Agreement, to the extent that such payment is or must be rescinded or returned,
be deemed to have continued in existence, notwithstanding such application by
Lender, and this Agreement shall continue to be effective or be reinstated, as
the case may be, as to such liabilities, all as though such application by
Lender had not been made.
8. Guarantor agrees that no failure on the part of Lender to exercise
any of its rights under this Agreement shall be a waiver of such rights or a
waiver of any default by Guarantor. Guarantor further agrees that no waiver or
modification of any rights of Lender under this Agreement shall be effective
unless in writing and signed by an authorized officer of Lender. Guarantor
further agrees that each written waiver shall extend only to the specific
instance actually recited in such written waiver and shall not impair the rights
of Lender in any other respect.
9. Guarantor agrees to pay all costs and expenses, including reasonable
attorneys' fees, incurred by Lender in successfully enforcing this Agreement
against Guarantor. Guarantor further agrees to pay all reasonable costs and
expenses, including reasonable attorneys' fees, incurred by Lender in collecting
or enforcing the Guaranteed Obligations.
10. [RESERVED]
11. Guarantor shall furnish quarterly to the Bank a certificate signed
by Guarantor that to the best of its knowledge, Guarantor has kept, observed,
complied with, fulfilled and performed in all material respects every term,
covenant and condition in this Agreement on its part to be kept and performed;
that no Conditional Default or Event of Default exists under this Agreement or
under any unsecured Indebtedness of Guarantor (or if one exists, specifying the
nature thereof); that no event has occurred or is threatened which if continued
would permit the holder of any unsecured Indebtedness of Guarantor to accelerate
the maturity thereof; that no material litigation or administrative proceeding
has been instituted by or against the Guarantor (or, if such should not be the
fact, then the facts and circumstances relating to such event or litigation in
detail) and covering such other matters relating to the Guarantor, the Loan or
the Collateral as the Lender may reasonably require.
12. [RESERVED]
13. Guarantor represents and warrants to Lender that:
(a) the Guarantor is duly organized, validly existing and in good
standing under the laws of the State of jurisdiction of its formation and
Guarantor has full power and authority to own or lease and operate its
properties, and to conduct its affairs as now being conducted and as proposed to
be conducted;
(b) Guarantor has full corporate power and Guarantor has full authority
to enter into, execute, deliver and carry out this Agreement and the other Loan
Documents and the Construction and Development Documents to which it is a party,
and to perform its obligations hereunder and thereunder and all such actions
have been duly authorized by all necessary corporate proceedings on each such
corporate Guarantor's part;
(c) this Agreement, the other Loan Documents and the Construction and
Development Documents which are required to be executed and delivered prior to
the Closing Date pursuant to the terms of the Loan Agreements, have been duly
and validly executed and delivered by Guarantor, to the extent Guarantor is a
party thereto, and, to the best knowledge of Guarantor, by all other parties
thereto. This Agreement, the Environmental Indemnity Agreement and the
Completion Guaranty executed by it constitute legal, valid and binding
obligations of Guarantor, enforceable against it in accordance with their
respective terms;
(d) neither the execution and delivery of this Agreement, or the
execution of the Completion Guaranty executed by it, nor the consummation of the
transactions herein or therein contemplated, nor compliance with the terms and
provisions hereof or thereof, will conflict with, constitute a default under or
result in any breach of (i) the terms and conditions of the formation
documents relating to Guarantor or (ii) any Governmental Approval, any
applicable Law or any material agreement or instrument to which Guarantor is a
party or by which it is bound;
(e) Guarantor is not a party to any agreement or instrument that
materially and adversely affects its present or proposed business, properties or
assets, operation or conditions, financial or otherwise and Guarantor is not in
default of the performance, observance, or fulfillment of any of the material
obligations, covenants or conditions set forth in any material agreement or
instrument to which it is a party;
(f) except as previously disclosed to the Lender in writing, there is
no pending or, to Guarantor's knowledge, threatened litigation or governmental
investigation (or any basis therefor known to Guarantor) which questions the
capacity, ability or authority of Guarantor to execute, deliver and perform the
provisions of this Agreement or the other Loan Documents or the Construction and
Development Documents to which it is a party, or if determined adversely to
Guarantor, would reasonably be expected to cause a Material Adverse Change;
(g) the information, financial statements and other financial data
furnished by Guarantor to the Lender are true and correct in all material
respects and present fairly the financial condition of Guarantor as of the date
of such statements or data. All other information given to the Lender by and
with respect to the Guarantor is accurate, correct and complete in all material
respects, as of the date such information is given; and
(h) Guarantor is Solvent as of the Closing Date and will be Solvent
after giving effect to the transactions contemplated by this Agreement.
14. Guarantor covenants and agrees that, until the Guaranteed
Obligations are paid in full, Guarantor:
(a) shall not sell, assign, give, mortgage, pledge, transfer
or otherwise dispose of a material portion of its assets for less than adequate
consideration;
(b) shall maintain its existence and its license or
qualification and goodstanding in each jurisdiction in which the nature of its
business make such licensing or qualification necessary or appropriate;
(c) shall not amend or modify, or permit the amendment or
modification of, in any material respect, its organizational documents without
providing prior written notice of to the Lender and obtaining the prior written
consent of the Lender, which prior written consent shall not be unreasonably
withheld or delayed;
(d) shall not liquidate, dissolve, consolidate or merge with
or into any other corporation, partnership or other entity or permit any other
corporation, partnership or other entity to consolidate or merge with or into it
without the prior written consent of the Lender; and
(e) shall not permit any final judgment obtained against it in
excess of $50,000 to remain unpaid for a period of thirty (30) days following
the entry thereof without obtaining a stay of execution or bonding or causing
such judgment to be bonded.
15. Guarantor acknowledges that Lender may, in its sole discretion,
elect to enforce this Agreement for the Guaranteed Obligations or any part
thereof against Guarantor without any duty or responsibility to pursue any other
person or entity, and that such an election by Lender shall not be a defense to
any action Lender may elect to take against Guarantor.
16. Guarantor agrees that this Agreement shall be binding upon
Guarantor and Guarantor's respective heirs, executors, administrators,
successors or assigns and that the death or disability of any person shall in no
way impair or affect this Agreement, either with respect to the estate of the
person so dying, which shall continue to be bound, or otherwise. Guarantor
further agrees that this Agreement shall inure to the benefit of Lender, its
successors and assigns. This Agreement shall not be recorded by either the
Guarantor or the Lender.
17. Guarantor agrees that this Agreement shall be governed by and
construed in accordance with the Laws of the Commonwealth of Pennsylvania.
Guarantor agrees that the Court of Common Pleas of Allegheny County,
Pennsylvania and the United States District Court for the Western District of
Pennsylvania shall have nonexclusive jurisdiction and venue with respect to all
actions by or against Guarantor under or pursuant to this Agreement and
Guarantor hereby consents to the jurisdiction of such courts and to service of
process, effective upon receipt by personal service, overnight express delivery
or registered or certified mail to Guarantor at the address given below
Guarantor's signature hereto. Guarantor shall promptly notify Lender in writing
of any change in Guarantor's address.
18. Guarantor recognizes that this Agreement when executed constitutes
a sealed instrument and, as a result, the instrument will be enforceable as such
without regard to any statute of limitations which might otherwise be applicable
and without any consideration.
19. This Agreement may be executed in several counterparts, each of
which shall be an original and all of which together shall constitute but one
and the same instrument.
20. In the event that any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, and this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
21. GUARANTOR WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON OR RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS RELATED TO ANY OF THE
LOAN DOCUMENTS. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY
GUARANTOR, AND GUARANTOR ACKNOWLEDGES THAT NEITHER LENDER NOR ANY PERSON ACTING
ON BEHALF OF LENDER HAS OR HAVE MADE ANY REPRESENTATIONS OF
FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY
ITS EFFECT. GUARANTOR FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS
HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE
WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
GUARANTOR AGREES THAT THE OBLIGATIONS EVIDENCED BY THIS AGREEMENT ARE EXEMPTED
TRANSACTIONS UNDER THE TRUTH-IN-LENDING ACT, 15 U.S.C. SECTION 1061 ET SEQ.
22. In no event will the Guarantor's obligations and liabilities under
this Agreement be released or in any way affected by the exercise of any rights
of Chesapeake Forest Products Company ("Chesapeake") or Delmarva Properties,
Inc. ("Delmarva"), under the Deed, including, without limitation, any rights
which Chesapeake or Delmarva may have to cause a conveyance or reconveyance of
the Project to one or both of them or to assume the Loans.
IN WITNESS WHEREOF, Guarantor intending to be legally bound, has
executed this Agreement as of the 26th day of June, 1997.
ATTEST: STANSLEY RACING CORP.,
a Virginia corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Name: Xxxxxxx X. Xxxxxx
Title: Title: CEO
Address:
0000 X. Xxxxxxxxxx Xxxx
P.O. Box 456
Providence Forge, VA 23140
Attn: X. X. Xxxxxxxx
STATE OF OHIO )
)SS
COUNTY OF CUYAHOGA )
On this ____ day of _______________, 1997, before me, a notary public,
personally appeared , who acknowledged himself to be the of STANSLEY RACING
CORP., and that he, as such officer, executed the foregoing instrument on behalf
of such corporation for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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Notary Public
My Commission expires:
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