EXHIBIT 10.6
GUARANTY
THIS GUARANTY, made and executed as of this 31st day of July, 2002, by
the Undersigned, Concorde Gaming Corporation (the "Undersigned" or the
"Guarantor") to First National Bank, a national bank (the "Lender").
PRELIMINARY RECITALS
A. Concorde Cripple Creek, Inc., a Colorado corporation ("Borrower") is
the owner in fee simple of certain real property situate in Xxxxxx County,
Colorado ("Premises").
B. The Borrower is acquiring the Premises and competing certain
improvements to the gaming facility located thereon (the "Project").
C. The Borrower has made application to and the Lender has agreed to
make a loan to the Borrower in the sum of up to $7,600,000.00 (the "Loan") to
finance the cost of acquiring the Project and completing said improvements.
D. The Borrower and Lender had entered into a certain Loan Agreement
dated of even date wherein Lender has agreed to lend the Loan to Borrower and
Borrower has agreed to borrow the Loan ("Loan Agreement").
E. To evidence the Loan the Borrower is executing and delivering to the
Lender its Promissory Note of even date herewith in the amount of the Loan
(herein the "Note").
F. As security for the repayment of the Note, the Borrower is executing
and delivering to the Public Trustee of Xxxxxx County, as trustee, for the
benefit of the Lender its Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing of even date herewith (the "Deed of
Trust") conveying and granting a security interest in the Premises and other
security instruments (the Note, Deed of Trust and other security instruments
being herein collectively referred to as the "Loan Documents"). Capitalized
terms not otherwise defined herein shall have the definitions given such terms
in the Loan Documents.
G. The Borrower is a wholly owned subsidiary of the Undersigned and is
financially interested in the Project.
H. Lender requires as a condition to the making of the Loan that the
Undersigned execute and deliver this Guaranty.
NOW, THEREFORE, FOR VALUE RECEIVED, and in order to induce Lender to
make the Loan to Borrower the Undersigned absolutely and unconditionally
guarantees to Lender:
(i) the due and prompt payment of the indebtedness evidenced by
the Note; and
(ii) the due and prompt performance and observance by the Borrower
of all of the terms and conditions of the Loan Documents; and
(iii) the payment of any and all claims, losses, liabilities
(including without limitation strict liability), suits,
obligations, fines, damages, judgments, injuries,
administrative orders, consent agreements and orders,
penalties, actions, causes of action, charges, costs and
expenses, including without limitation reasonable attorneys'
fees and consultants' fees which the Lender may sustain as a
result of or in connection with any attempt by the Undersigned
or the Borrower to materially delay any foreclosure or sale
under the Deed of Trust or exercise of any other remedies
available to the Lender under the Loan Documents or if the
Undersigned or Borrower shall claim that the Loan Documents
are invalid or unenforceable to an extent that such claim
would preclude any such foreclosure, sale or other exercise of
remedies. Such attempt shall include, but not be limited to a
Bankruptcy Action (as later defined); and
(iv) all costs incurred, including reasonable attorneys' fees, in
enforcing payment and performance of this Guaranty, the Loan
Agreement, and the Loan Documents;
the aforesaid being herein collectively referred to as the "Indebtedness
Guaranteed". All payments received by the Lender from whatever source and
whether by voluntary payment, exercise of remedies, or otherwise, shall be
applied:
(1) First, to any amounts payable to the Lender under the Loan
Documents not guaranteed hereunder;
(2) Second, to any late charges accrued on the Note; and
(3) Third, to the accrued Interest on the Note; and
(4) Fourth, to Principal of the Note.
Payments on the Principal of the Note from application of insurance proceeds,
condemnation awards, foreclosure or exercise of other remedies upon default,
other than this Guaranty, shall be applied first to the Principal of the Note
which is not guaranteed and thereafter to the Indebtedness Guaranteed.
THE UNDERSIGNED FURTHER COVENANTS AND AGREES:
1. The Lender may from time to time without notice to or consent of the
Undersigned and upon such terms and conditions as the Lender may deem
advisable without affecting this Guaranty or impairing the rights of
the Lender hereunder:
a. release any maker (other than Borrower), surety or other
person liable for payment of all or any part of the
Indebtedness Guaranteed;
b. make any agreement extending or otherwise altering the time
for or the terms of payment of all or any part of the
Indebtedness Guaranteed;
c. modify, waive, compromise, release, subordinate, resort to,
exercise or refrain from exercising any right the Lender may
have hereunder, under the Loan Documents;
d. accept additional security or guarantees of any kind;
e. endorse, transfer or assign the Note, Deed of Trust, or any
other security to any other party;
f. accept partial payment or payments on account of the
Indebtedness Guaranteed;
g. from time to time hereafter further loan monies or give or
extend credit to or for the benefit of the Borrower; or
h. release, settle or compromise any claim of the Lender against
the Borrower, or against any other person, firm or corporation
whose obligation is held by the Lender as collateral security
for the Indebtedness Guaranteed.
2. The Undersigned unconditionally and absolutely waives:
a. any obligation on the part of the Lender to protect, secure or
insure any of the security given for the payment of the
Indebtedness Guaranteed;
b. any right to participate in any of the security given for the
payment of the Note;
c. notice of acceptance of this Guaranty by the Lender;
d. notice of presentment, demand for payment, notice of
non-performance, protest, notices of protest and notices of
dishonor, notice of non-payment or partial payment;
e. notice of any defaults under the Loan Documents in the
performance of any of the covenants and agreements contained
therein or in any instrument given as security for the Note;
f. any defense, offset or claim the Borrower may have against the
Lender;
g. any limitation or exculpation of liability on the part of the
Borrower whether contained in the Note or otherwise;
h. the transfer or sale by the Borrower or the diminution in
value thereof of any security given for the Indebtedness
Guaranteed;
i. any failure, neglect or omission on the part of the Lender to
realize or protect the Indebtedness Guaranteed or any security
given therefor;
j. any right to insist that the Lender prosecute collection of
the Note or resort to any instrument or security given to
secure the Indebtedness Guaranteed or to proceed against the
Borrower or against any other guarantor or surety prior to
enforcing
this Guaranty or any right to participate in or direct such
proceeding and provided, however, at its sole discretion the
Lender may either in a separate action or an action pursuant
to this Guaranty pursue its remedies against the Borrower or
any other guarantor or surety, without affecting its rights
under this Guaranty;
k. notice to the Undersigned of the existence of or the extending
to the Borrower of the Indebtedness Guaranteed; or
l. any right to insist Lender disburse the full principal amount
of the Loan to Borrower or the order, method, manner or
amounts disbursed under the Note.
3. The Undersigned will not assert against the Lender any defense of
waiver, release, discharge in bankruptcy, statute of limitations, res
judicata, statute of frauds, anti-deficiency statute, fraud, merger of
clauses under this Guaranty with the Indebtedness Guaranteed, ultra
xxxxx acts, usury, illegality or unenforceability which may be
available to the Borrower in respect of the Indebtedness Guaranteed, or
any setoff available against the Lender to the Borrower whether or not
on account of a related transaction, and the Undersigned shall be and
remain liable for any deficiency remaining after foreclosure of,
enforcement of, judicial sale, sale pursuant to a power of sale in the
Deed of Trust, execution upon or otherwise of the Deed of Trust or any
security interest security the Note notwithstanding provisions of law
that may prevent the Lender from enforcing such deficiency against the
Borrower.
4. In the event of the filing of a petition in bankruptcy or a petition or
answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the
bankruptcy laws of the United States or any other similar federal,
state or other statute relating to relief from indebtedness whether
involuntary or voluntary or should a receiver, trustee or liquidator be
approved or upon a voluntary or involuntary dissolution, sale or other
disposition of all or substantially all the assets, marshalling of
assets and liabilities, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other
similar event or proceeding ("Bankruptcy Action") affecting the
Borrower or any of its assets, the Undersigned's' obligations shall
become due and payable and enforceable against the Undersigned, whether
or not the Indebtedness Guaranteed is then due and payable. The
Undersigned and Lender specifically intend that the Lender will be able
to enforce this Guaranty notwithstanding any such Bankruptcy Action
even if the Borrower files a petition in bankruptcy and is discharged.
For purposes of determining the Indebtedness Guaranteed under this
provision notwithstanding any such Bankruptcy Action interest will be
deemed to continue to accrue on the Note as though no such Bankruptcy
Action had been taken.
5. Intentionally Omitted.
6. No act or thing, except for payment in full, which but for this
provision might or could in law or in equity act as a release of the
liabilities of the Undersigned shall in any way affect or impair this
Guaranty and this shall be a continuing, absolute and unconditional
Guaranty and shall be in full force and effect until the Indebtedness
Guaranteed has been paid in full.
7. If any payment applied to the Indebtedness Guaranteed is thereafter set
aside, recovered, rescinded or required to be returned for any reason
(including a Bankruptcy Action), the Indebtedness Guaranteed to which
such payment was applied shall for the purpose of this Guaranty be
deemed to have continued in existence notwithstanding such application,
and this Guaranty shall be enforceable as to such Indebtedness
Guaranteed as fully as if such application had never been made. If any
payment is reclaimed in a Bankruptcy Action, the Undersigned shall pay
to the Lender the dollar amount so reclaimed.
8. Notwithstanding any other provision herein to the contrary, the
Undersigned agrees that the Undersigned shall have no right of
subrogation, indemnity, exoneration, contribution or reimbursement
whatsoever or any right of recourse to the security given by the
Borrower to the Lender for the debts and obligations of the Borrower to
the Lender. The Undersigned understands that the Undersigned may have
rights under applicable law to be subrogated to such security and
knowingly waives and relinquishes such rights and any claim that any
subrogation rights were abrogated by any acts of Lender.
9. This Guaranty is executed in order to induce the Lender to make and
disburse the Loan with the intent that it be relied upon by the Lender
in making and disbursing the Loan with the knowledge that the Lender
would not disburse the Loan but for this Guaranty. Disbursement of any
part of the Loan, without any further action or notice, shall
constitute conclusive evidence of the reliance hereon by the Lender.
10. While this Guaranty remains in effect, the Undersigned agrees to
provide to the Lender as soon as available, and within one hundred
twenty (120) days after the end of each calendar year, a current
financial statement which statement shall include an itemization of all
assets and liabilities scheduled by item and type, all investments and
contingent liabilities and adequate to disclose the net worth at such
point in time. Such financial statement shall be certified and shall be
accompanied by the annual federal income tax return, including all
schedules, for the preceding taxable year as filed with the Internal
Revenue Service.
11. The Undersigned is a Colorado corporation, in good standing and has the
full legal right and power to execute, deliver and perform this
Guaranty. This Guaranty constitutes the valid and binding obligation of
the Undersigned, enforceable in accordance with its respective terms.
The execution and delivery of this Guaranty (a) will not violate any
law or regulation, or any order or decree of any court or governmental
instrumentality binding on the Undersigned; (b) will not conflict with
or result in the breach or termination of, constitute a default under
or accelerate any performance required by, any indenture, mortgage,
deed of trust, lease, agreement or other instrument to which the
Undersigned is a party or by which the Undersigned or any of its
property is bound; (c) will not result in the creation or imposition of
any Lien upon any of the property of the Undersigned; and (d) does not
require the consent or approval of any governmental body, agency,
authority or any other person, except in the case of clauses (b), (c)
and (d), such conflicts, breaches or terminations, creations or
impositions which would not individually or in the aggregate reasonably
be expected to have a material adverse effect on the Company's ability
to perform its obligations under this Guaranty.
12. No right or remedy herein conferred upon or reserved to the Lender is
intended to be exclusive of any other available remedy or remedies but
each and every remedy shall be cumulative and shall be in addition to
every other remedy given under this Guaranty, the Loan Documents, or as
may now or hereafter exist at law or in equity. No waiver, amendment,
release or modification of this Guaranty shall be established by
conduct, custom or course of dealing, but only by an instrument in
writing duly executed by the Lender.
13. Whenever the context requires or permits the singular shall include the
plural, the plural shall include the singular and the masculine,
feminine and neuter shall be freely interchangeable.
14. This Guaranty and each and every part hereof, shall be binding upon the
Undersigned and any administrators, representatives, successors and
assigns and shall inure to the pro rata benefit of each and every
future holder of the Note. This Guaranty shall run with the Note and
without the need for any further assignment of this Guaranty to any
subsequent holder of the Note or the need for any notice to the
Undersigned thereof. Upon endorsement or assignment of the Note to any
subsequent holder, said subsequent holder of the Note shall be
substituted for the Lender and may enforce this Guaranty as if said
holder had been originally named as Lender hereunder.
15. The Undersigned submits and consents to personal jurisdiction of the
Courts of the State of South Dakota and Courts of the United States of
America sitting in such State for the enforcement of this instrument
and waives any and all rights under the laws of any state or the United
States of America to object to jurisdiction in the State of South
Dakota. Litigation may be commenced in any state court of general
jurisdiction for the State of South Dakota or the United States
District Court located in that state, at the election of the Lender.
Nothing contained herein shall prevent Lender from bringing any action
against any other party or exercising any rights against any security
given to Lender, or against the Undersigned personally, or against any
property of the Undersigned, within any other state. Commencement of
any such action or proceeding in any other state shall not constitute a
waiver of consent to jurisdiction or of the submission made by the
Undersigned to personal jurisdiction within the State of South Dakota.
16. Notwithstanding the place of execution of this instrument, the parties
to this instrument have contracted for South Dakota law to govern this
instrument and it is agreed that this instrument is made pursuant to
and shall be construed and governed by the laws of the State of South
Dakota without regard to the principles of conflicts of law.
17. Any notices and other communications permitted or required by the
provisions of this Guaranty (except for telephonic notices expressly
permitted) shall be in writing and shall be deemed to have been
properly given or served by depositing the same with the United States
Postal Service, or any official successor thereto, designated as
Certified Mail, Return Receipt Requested, bearing adequate postage, or
deposited with reputable private courier or overnight delivery service,
and addressed as hereinafter provided. Each such notice shall be
effective upon being deposited as aforesaid. The time period within
which a response to any such notice must be given, however, shall
commence to run from the
date of receipt of the notice by the addressee thereof. Rejection or
other refusal to accept or the inability to deliver because of changed
address of which no notice was given shall be deemed to be receipt of
the notice sent. By giving to the other party hereto at least ten (10)
days' notice thereof, either party hereto shall have the right from
time to time to change its address and shall have the right to specify
as its address any other address within the United States of America.
Each notice to Lender shall be addressed as follows:
First National Bank
000 Xx. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxx Xxxxxx 00000
Attention: Xxxx Xxxxxxxxxxx, Branch President
Each notice to the Undersigned shall be addressed as follows:
Concorde Gaming Corporation
0000 Xxxx Xxxxxx
Xxxxx Xxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxx Xxxx, President
18. This Guaranty is one of several guarantees given to Lender in
connection with the making of the Loan. The obligations of the
Undersigned under this Guaranty shall be joint and several. Neither the
death nor release of any person or party executing and delivering a
guaranty of the Loan to the Lender shall affect or release the joint
and several liability of any other guarantor including the Undersigned.
The Lender may at its option enforce this Guaranty against one or all
of any guarantors and the Lender shall not be required to resort to
enforcement against each and every guarantor of the Loan and the
failure to proceed against or join each and every guarantor of the Loan
shall not affect the joint and several liability of the Undersigned
hereunder.
IN FURTHERANCE WHEREOF, the Undersigned have executed this Guaranty as
of the date first above written.
CONCORDE GAMING CORPORATION,
a South Dakota corporation
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx
Its: President
