UNCONDITIONAL AND CONTINUING GUARANTY
EXHIBIT
10.25
UNCONDITIONAL
AND CONTINUING GUARANTY
THIS
UNCONDITIONAL AND CONTINUING GUARANTY AGREEMENT (this "Guaranty") is made
this 1st day of May, 2006, by Xxxxxxx
Xxxxx,
an
adult individual, (“Xxxxx”) with a mailing address of c/o Newmark & Company
Real Estate, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Nevada
Gold & Casinos, Inc.,
a
Nevada corporation with a mailing address of 0000 Xxxx Xxx Xxxxxxxxx, Xxxxx
000,
Xxxxxxx, Xxxxx 00000 (“Nevada Gold”) (Nevada Gold and Xxxxx are sometimes
collectively referred to herein as the "Guarantors"), to and for the benefit
of
Vestin
Mortgage, Inc.,
a
Nevada corporation, having
an
address of 0000 X. Xxxxxx Xxxx, Xxx Xxxxx, XX 00000-0000
(the
“Payee”).
WHEREAS,
Guarantors have requested from Payee and another creditor the restructuring
of a
loan in the aggregate principal amount of $27,565,784 (the “Loan”) for the
purpose of acquiring and restructuring the financial affairs of Mid-State
Raceway, Inc., a New York corporation and Mid-State Development Corporation,
a
New York corporation (collectively, the “Borrowers”) in accordance with the
terms and conditions of the Third Modified Amended Joint Plan Of Reorganization
Proposed By the Borrowers and Xxxxxx Xxxxx Acquisition, LLC dated September
13,
2005 (the “Plan”); and
1)
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As
used in this Guaranty:
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a) Capitalized
and defined terms not otherwise defined herein shall have the meanings ascribed
to them in the Plan;
b) “Obligations”
shall mean and include:
i) All
indebtedness, liabilities and obligations of the Borrowers to the Payee of
every
kind, nature and description in connection with or related to the Note or other
Loan Documents, including but not limited to any obligations to pay principal,
interest, default interest, late charges, fees, attorney’s fees, premiums and
any other sums from time to time outstanding under the Note and other Loan
Documents, and including but not limited to any obligations which are as to
environmental, ADA or ERISA indemnity obligations, direct
or
indirect, absolute or contingent, now existing or hereafter arising and any
extensions, renewals and modifications thereof;
and
ii) The
performance by Borrowers of their obligations to duly, promptly and completely
observe, perform and discharge each and every obligation, duty, covenant and
agreement contained in the Note and other Loan Documents, including but not
limited to any obligations which are as to environmental, ADA or ERISA indemnity
obligations, direct
or
indirect, absolute or contingent, now existing or hereafter arising and any
extensions, renewals and modifications thereof;
c) “Collateral”
shall mean all property, real, personal (including both tangible and intangible
personal property), and mixed, wheresoever located, now owned or hereafter
acquired, upon which there has been conveyed or will be conveyed a security
interest, pledge or mortgage to secure the payment of the Obligations,
including
but not limited to the collateral as defined in the Loan Documents, but
excluding any Excluded Assets as defined in the Mortgage and Security Agreement
and, if applicable, any Conditionally Excluded Assets as defined in the
Mortgage
and Security Agreement.
d) “Guarantor”
or “guarantor” shall mean any maker, drawer, acceptor, endorser, guarantor,
surety, accommodation party or other person liable upon or for any of the
Obligations in any capacity whatsoever, including but not limited to, the
Guarantors; and
e) “Event
of
Default” shall mean any of the items listed in paragraph 5 of this
Guaranty.
2) The
Guarantors, both jointly and severally, agree that:
a) Xxxxx
does hereby unconditionally guarantee the punctual payment to the Payee of
each
and all of the Obligations, without limitation, strictly in accordance with
all
the terms and provisions of the Obligations and subject to all rights of the
Payee arising from or relating to the Obligations.
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b) Nevada
Gold does hereby unconditionally guarantee the punctual payment to the Payee
of
each and all of the Obligations, up to a maximum of 50% of the total amount
which may be due and owing and guaranteed in connection with this Guaranty,
strictly in accordance with all the terms and provisions of the Obligations
and
subject to all rights of the Payee arising from or relating to the Obligations.
c) The
duty,
liability and obligation of the Guarantors pursuant to this Guaranty shall
not
be diminished, altered, terminated, or changed in any respect, notwithstanding
any law, regulation, decree, action, proceeding, equitable doctrine or other
circumstances whatsoever which would otherwise diminish, alter, terminate,
void
or change the liability or obligation of the Borrowers, any other guarantor
or
any other entity or person to pay any or all of the Obligations. Any payments
required to be made pursuant to this Guaranty shall be made in United States
dollars in immediately available funds at such place and time as shall be
designated by the Payee.
3) This
Guaranty is a continuing agreement and applies to all present and future
Obligations, notwithstanding that at any particular time all of the Obligations
then outstanding shall have been paid in full. This Guaranty shall be construed
at all times to be a guaranty of payment and not a guaranty of
collection.
4) The
Payee, in its sole discretion and without notice to or further assent from
Guarantors at any time or from time to time, either before or after the
occurrence of an Event of Default, and without diminishing, altering,
terminating or changing in any respect the liability and obligation of
Guarantors pursuant to this Guaranty, may:
a) increase
or decrease the amount of, extend, change, or amend the time, manner, place,
amount, or terms of payment of any or all of the Obligations or any other terms
or provisions of the Obligations, including those relating to any guarantor
or
the Collateral;
b) exchange,
release, surrender, substitute, or sell any Collateral, or fail unintentionally
or otherwise to perfect its interest or create a valid security interest in
any
of the Collateral;
c) waive,
fail to exercise, or delay in exercising any right or remedy granted to the
Payee by any agreement or by law with respect to the Borrowers, any of the
Obligations, any guarantor, or any of the Collateral;
d) release,
agree not to xxx, settle or compromise with the Borrowers, any guarantor, or
any
other entity or person who is otherwise obligated to pay any or all of the
Obligations;
e) subordinate
the payment of any or all of the Obligations to the payment of any other debt
owed by the Borrowers to any other entity or person;
f) sell
or
purchase all or any part of the Collateral at any public or private sale, and
after deduction of all expenses incurred therefore, including attorneys’ fees,
apply the proceeds to the Obligations in such manner as it deems appropriate;
g) apply
any
payments or proceeds relating to the Obligations in such manner and order as
it
deems appropriate; or
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h) act
or
refuse to act in any other manner which might constitute a legal or equitable
discharge or defense of a guarantor.
5) It
shall
be an Event of Default for purposes of this Guaranty if:
a) the
Borrowers default in the payment when due, subject to any applicable grace
period, of any of the Obligations;
b) the
Borrowers otherwise default, subject to any applicable grace period, in the
performance of any of the other terms of any of the Obligations other than
those
set forth in (a) above, or the payment of any of the Obligations is demanded
in
full or is accelerated pursuant to the terms and provisions of the
Obligations;
c) any
representation or warranty made by the Borrowers to the Payee in connection
with
any of the Obligations or any representation or warranty made by the Guarantors
to the Payee in connection with this Guaranty proves to be incorrect or
misleading in any material respect;
d) the
Guarantors fail to pay when due any other obligation for borrowed money and
as a
result, the maturity of any such obligation is accelerated;
e) any
person or entity challenges or institutes any proceedings to challenge the
validity, binding effect or enforceability of this Guaranty or any of the
Obligations;
f) a
judgment in the amount of $25,000 or more is, or judgments which aggregate
$25,000 or more are rendered against any one of the Borrowers or Xxxxx and
are
not timely bonded or otherwise discharged within thirty (30) days from the
date
of filing, or an attachment or levy is made upon or lien filed against any
assets of the Borrowers or Guarantors;
g) a
judgment in the amount of $25,000 or more is, or judgments which aggregate
$50,000 or more are rendered against Nevada Gold and are not timely bonded
or
otherwise discharged within thirty (30) days from the date of
filing;
h) the
Borrowers or Guarantors make any payment on account of any indebtedness
subordinated to any of the Obligations in contravention of the terms of such
subordination or of the Obligations;
i) Nevada
Gold is dissolved, or loses its franchise or charter or is a party to any merger
or consolidation, or there is a change in control of Nevada Gold whether by
contract, change in the ownership of the majority of the holders of Nevada
Gold’s shares of voting stock or otherwise, or any one of the Guarantors sells,
transfers or otherwise disposes of (or attempts to do any of the foregoing)
a
substantial portion of their assets without the prior written consent of the
Payee;
j) Guarantors
fail to furnish the Payee by May 31 of each year with a Financial Statement
and
balance sheet for each of the Guarantors, in form and substance satisfactory
to
the Payee, certified to as correct by an authorized representative of
Guarantors, together with a copy of Guarantors’
local,
state and federal tax or information returns filed or to be filed for such
previous year; provided,
however, that in the event Nevada Gold is a reporting company under the
Securities Exchange Act of 1934, as amended, and Nevada Gold is in substantial
compliance with all of its reporting requirements under that statute and the
related rules and regulations, it shall not be necessary for the Guarantors
to
furnish a financial statement or other financial information for Nevada Gold.
Payee shall be required to hold such financial information in confidence and
shall agree not to disclose the same to any third party pursuant to a written
confidentiality agreement in form and substance reasonably satisfactory to
Payee
and Payor; or
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k) Guarantors
fail to comply with the terms and conditions of this Guaranty or any other
agreement executed and delivered by Guarantors to the Payee from time to
time.
6) Upon
the
occurrence of any Event of Default, or at any time thereafter:
a) Any
or
all of the Obligations, at the sole option and discretion of the Payee, shall
immediately become due and payable in full, together with interest and all
the
costs and expenses of enforcing this Guaranty or any of the Obligations,
including court costs and reasonable attorneys’ fees.
b) In
such
circumstances, the liability of Guarantors to the Payee shall be fixed and
absolute, with:
i) Xxxxx’x
liability being unlimited and for 100% of
the
total amount which may be due and owing and guaranteed in connection with this
Guaranty; and
ii) Nevada
Gold’s liability being limited to 50% of the total amount which may be due and
owing and guaranteed in connection with this Guaranty.
c) It
shall
not constitute a defense, counterclaim, setoff, or recoupment thereto that
the
Payee has not made any demand or protest or instituted any action or proceeding
against the Borrowers or against any other party who may be liable for all
or
any of the Obligations or that the Payee has not validly taken or perfected
a
security interest in the Collateral or has not or has improperly foreclosed
upon
the Collateral or any part of it, nor shall the Payee be required to perform
any
of the above acts against the Borrowers, any guarantor or the Collateral as
a
condition of enforcing its rights against the Guarantors in accordance with
the
terms of this Guaranty.
7) In
addition to any other rights granted to the Payee pursuant to this Guaranty
or
the Obligations, Guarantors hereby grant the Payee a lien upon any and all
of
their money, deposits, or other property whatsoever in the possession, custody
or control of the Payee. Upon the occurrence of an Event of Default, in addition
to any other rights of the Payee, the Payee may, in its sole discretion and
without prior notice to or further assent of Guarantors, set-off or otherwise
sell and/or purchase the same at any public or private sale and apply the
proceeds thereof to the Obligations in such manner and order as it deems
appropriate.
8) Unless
and until Borrowers are no longer liable in any respect to Payee, Guarantors
hereby irrevocably release and waive each and every claim or right either has
or
may have against Borrowers, any other guarantor, or against any Collateral,
which claim or right presently or hereafter arises from or relates to the
existence, performance, or enforcement of any of the Guarantors’ obligations
under the terms of this Guaranty, including but not limited to, any claim or
right of subrogation, contribution, indemnification, exoneration or
reimbursement or any right to participate in any claim or remedy of the Payee
against the Borrowers, any other guarantor or any Collateral, in each case
whether such claim or right is based upon any law, rule, regulation, contract
or
principles of equity. The release and waiver set forth in this paragraph shall
inure to the benefit of and bind any guarantor, the Payee, and the Borrowers
and
any agreement, payment or claim made in contravention of this release and waiver
shall be null and void.
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9) The
following miscellaneous provisions are applicable to this Guaranty:
a) If
this
Guaranty is executed by two or more persons or entities or two or more persons
or entities execute similar agreements to this Guaranty covering the Obligations
and all provisions of this Guaranty shall apply to each and all of them. The
termination of this Guaranty or similar agreement as to one or more of such
persons or entities shall not terminate this Guaranty or similar agreement
as to
any remaining persons or entities. All references in this Guaranty to joint
and
several liability, obligations or agreements of the Guarantors shall be limited,
in the case of the liability, obligations and agreements of Nevada Gold, to
the
maximum amounts for which Nevada Gold is liable pursuant to Paragraph 2(b)
of
this Guaranty;
b) This
Guaranty shall be binding upon the transferees, administrators, executors,
personal representatives, heirs, assigns and successors of Guarantors and shall
inure to the benefit of and be enforceable by the Payee, its successors,
transferees, principals and assigns;
c) Any
provision of this Guaranty which is 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 of the Guaranty in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction;
d) This
Guaranty constitutes the final, complete and exclusive agreement between the
Payee and Guarantors with respect to the guarantee by Guarantors of the
Obligations. It supersedes all other agreements and may not be supplemented
or
modified except as provided for in this Guaranty. No statements, agreements
or
representations have been made concerning this Guaranty which do not appear
in
writing in this Guaranty and Guarantors affirms that they have not relied upon
and have not been induced to execute this Guaranty based upon any such
statements, agreements or representations;
e) No
delay
by the Payee in exercising any right hereunder, or under any of the Obligations,
shall operate as a waiver thereof, nor shall any single or partial exercise
of
any right preclude other or further exercises thereof or the exercise of any
other right. No waiver, amendment, or termination of this Guaranty or any
provision of this Guaranty or of any of the Obligations shall be enforceable
against the Payee unless it is in writing. In the case of a waiver or amendment,
the writing must also be signed by an officer of the Payee and expressly refer
to the provisions affected, and any waiver shall be limited solely to the
specific event waived. Any termination of this Guaranty shall not be effective
until written notice thereof is actually received by the Payee by mail or
personal delivery at the address identified in this Guaranty. Any such
termination shall not affect any existing Obligations owed by the Borrowers
as
well as any extension or continuation thereof, including but not limited to,
any
lines of credit whether or not fully used, or letters of credit issued on behalf
of the Borrowers whether or not called upon by the beneficiary of any said
letter of credit, and Guarantors’ liability with respect to all such Obligations
shall continue under the terms of this Guaranty subsequent to any
termination;
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f) All
rights granted the Payee pursuant to this Guaranty shall be cumulative and
shall
be in addition to those granted or available to the Payee with respect to the
Obligations or under applicable law and nothing herein shall be construed as
limiting any such other right;
g) Each
Guarantor represents and warrants that the execution, delivery and performance
of this Guaranty does not and will not contravene any law, any agreement,
charter, by-law or undertaking to which it is a party or by which it may in
any
way be bound;
h) In
all
respects, including, without limitation, matters of construction and performance
of this Guaranty and the obligations arising hereunder, this Guaranty shall
be
governed by, and construed in accordance with the, the internal laws of the
State of New York applicable to contracts and obligations made in such state
and
any applicable laws of the United States of America.
i) (a) Subject
to the provisions of subparagraph (b) immediately below; each party hereto
hereby unconditionally and irrevocably submits, for itself and its property,
to
the exclusive jurisdiction of the courts of the State of New York in and for
the
County of Onondaga and/or County of Oneida and the Federal Court in and for
the
Northern District of New York (collectively the “Designated Courts”), over any
action arising out of or relating to this Guaranty (a “Designated Action”). All
claims with respect to any Designated Action shall be heard and determined
in a
Designated Court. No party hereto shall commence any Designated Action except
in
a Designated Court. No party hereto shall, and each party hereto hereby waives
any right it may have to: (i) plead or make any objection to the venue of any
Designated Court; (ii) plead or make any claim that any Designated Action
brought in any Designated Court has been brought in an improper or otherwise
inconvenient forum; or (iii) plead or make any claim that any Designated Court
lacks personal jurisdiction over it; and
(b) Notwithstanding
the provisions of subparagraph (a) immediately above, Payee shall have the
right
to bring any Designated Action in the courts of any other jurisdiction to the
extent Payee deems it necessary, appropriate, or desirable (in its sole and
absolute discretion) in connection with any Designated Action based upon,
resulting from, arising out of, or relating to the this Guaranty;
j) Guarantors
waive notice of presentment, dishonor and protest of any or all of the
Obligations and of this Guaranty, and furthermore waive promptness in the
commencement of any action relating to this Guaranty or the Obligations and
in
the giving of notice or making of demand upon it or upon any other entity or
person;
k) In
the
event any payment is received by the Payee with respect to the Obligations
during the time that this Guaranty is effective and such payment is subsequently
or sought to be invalidated, declared fraudulent or preferential, or otherwise
set aside under the terms of any federal or state law or equitable doctrine,
then the Guarantors shall be responsible for such payment to the Payee under
the
terms of this Guaranty, as well as all interest, penalties, costs, expenses
and
attorneys’ fees incurred by the Payee in connection with any proceeding
attempting to set aside or to declare such payment invalid, fraudulent or
preferential whether or not such action is successful, notwithstanding the
fact
that this Guaranty was terminated voluntarily or by law at the time that the
payment was or sought to be set aside or invalidated as described
above;
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l) Words
of
the neutral gender shall mean and include correlative words of the masculine
and
feminine gender as appropriate and vice versa. Words noting the singular number
shall mean and include the plural number as appropriate and vice versa;
m) This
Guaranty shall be effective as of the date of execution even though it may
be
delivered to the Payee at a later date;
GUARANTORS
HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS GUARANTY. THIS WAIVER IS
KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY GUARANTORS, AND GUARANTORS
ACKNOWLEDGE THAT PAYEE HAS NOT MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS
WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.
GUARANTORS FURTHER ACKNOWLEDGE THAT GUARANTORS HAVE BEEN REPRESENTED (OR HAVE
HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS GUARANTY AND
IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED BY GUARANTORS,
AND THAT GUARANTORS HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.
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GUARANTOR:
/s/
Xxxxxxx
Xxxxx
Xxxxxxx
Xxxxx
NEVADA
GOLD & CASINOS, INC.
By:
/s/ H. Xxxxxx
Xxxx
Name: H.
Xxxxxx Xxxx
Title:
Chief Executive Officer