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EXHIBIT C
GUARANTY
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GUARANTY, dated as of July 31, 1996, made by Xxxxxxx X.
Xxxxxx, an individual (the "Guarantor"), in favor of Xxxxxxx X. Xxxxxx, an
individual (the "Lender").
W I T N E S S E T H :
WHEREAS, the Lender has entered into a Credit Agreement, of
even date herewith (as amended or supplemented from time to time, the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined), with Diversified Opportunities Group Ltd., a
limited liability company organized and existing under the laws of the State of
Ohio (the "Borrower"), pursuant to which the Lender has agreed to lend to the
Borrower up to $30,000,000 on a revolving credit basis on the terms and
conditions contained in the Credit Agreement (the "Loan");
WHEREAS, the Guarantor owns a 99% membership interest in
Xxxxxx Entertainment Ltd., an Ohio limited liability company;
WHEREAS, Xxxxxx Entertainment Ltd. owns a 50% membership
interest in Borrower; and
WHEREAS, it is a condition precedent to the making of the Loan
by the Lender that the Guarantor shall have executed and delivered this
Guaranty.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Bank to make the Loan in accordance with the Credit Agreement, the
Guarantor hereby agrees as follows:
1. GUARANTY. The Guarantor hereby unconditionally and
absolutely (i) guarantees the full and prompt payment, when due, of the
principal and interest and other sums payable from time to time, and the
performance, when due, of Borrower's Obligations (as defined below), including,
without limitation, the duties, obligations and undertakings of the Borrower now
or hereafter existing pursuant to the Borrower Loan Documents (as defined in the
Credit Agreement) (all of the foregoing, collectively the "Obligations"), and
(ii) agrees to pay any and all expenses incurred by the Lender in enforcing any
rights under this Guaranty. The Obligations, together with the obligations of
the Guarantor set forth in clause (ii) of the foregoing sentence, are sometimes
collectively referred to herein as the "Guaranteed Obligations."
2. GUARANTY ABSOLUTE. The Guarantor guarantees that the
Obligations will be paid or performed, as the case may be, strictly in
accordance with the terms of the Credit Agreement and the other applicable
Borrower Loan Documents, regardless of any
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law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Lender with respect thereto.
The liability of the Guarantor under this Guaranty shall be absolute,
unconditional and irrevocable irrespective of:
(a) Any illegality, irregularity, invalidity or
unenforceability of the Credit Agreement or the other Borrower Loan Documents or
any other agreement or instrument relating to Borrower's Obligations or any
legal or equitable defenses or rights available to the Borrower under or with
respect thereto, or by any modification, release, or other alteration of any of
the Obligations or of any other security therefor, or by any agreements or
arrangements whatever with the Borrower or anyone else;
(b) Any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to departure from the Credit Agreement or any other
Borrower Loan Document, with or without notice to the Guarantor (including,
without limitation, the granting to the Borrower of any indulgences or extension
of time for any payment or payments or for performance of any Obligation, the
acceptance of partial performance, payment or payments by the Borrower, the
exchange, release or replacement of any security or collateral, and the
agreement to any modifications or amendments thereof);
(c) Any release or amendment or waiver of or consent to
departure from any other guaranty for all or any of the Obligations; or
(d) Any other circumstance which might otherwise constitute a
defense (other than payment) available to, or a discharge of, the Borrower in
respect of the Obligations or the Guarantor in respect of this Guaranty.
3. SUBROGATION.
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(a) The Guarantor shall be subrogated to all rights of the
Lender against the Borrower in respect of any amounts paid by the Guarantor
pursuant to the provisions of this Guaranty. Notwithstanding the foregoing, the
Guarantor agrees that it will never have, and hereby waives and disclaims, any
claim or right against the Borrower by way of subrogation or otherwise in
respect of any payment that the Guarantor may be required to make hereunder, to
the extent that such claim or right would cause the Guarantor to be a "creditor"
of the Borrower for purposes of Title 11 of the United States Code, as now or
hereafter amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, during the period of one year prior to filing of a
petition thereunder by or against the Borrower.
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(b) Notwithstanding the foregoing, the Guarantor shall not
exercise any rights which it may acquire by way of subrogation under this
Guaranty, by any payment made hereunder or otherwise, until all the Obligations
shall have been paid in full and Borrower shall have no further obligation under
the Credit Agreement to make Revolving Loans (as defined in the Credit
Agreement). If any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all the Obligations shall not have been paid
in full and the Lender's obligation to make Revolving Loans under the Credit
Agreement shall not have terminated, such amount shall be held in trust for the
benefit of the Lender and shall forthwith be paid to the Lender to be credited
and applied against the Obligations in accordance with the terms of the Credit
Agreement or the other Borrower Loan Documents, as the case may be. If (i) the
Guarantor shall make payment to the Lender of all or any part of the Obligations
and (ii) all the Obligations shall be paid in full and the Lender's obligation
to make Revolving Loans under the Credit Agreement shall have terminated, the
Lender will, at the request of Guarantor, execute and deliver to the Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Guarantor of an
interest in the Obligations resulting from such payment by the Guarantor.
4. ACCELERATION OF LIABILITIES. If the Borrower or the
Guarantor should at any time become insolvent or if a petition in bankruptcy or
any insolvency or reorganization proceeding shall be filed or commenced by,
against or in respect of the Borrower or the Guarantor, any and all liabilities
and obligations of the Guarantor shall not be released, mitigated or otherwise
affected thereby, and shall, at the option of the Lender, forthwith become due
and payable without notice.
5. CONTINUING GUARANTY; TRANSFER OF NOTES. This Guaranty is a
continuing guaranty and shall (i) remain in full force and effect until payment
in full of the Guaranteed Obligations and all other amounts payable to the
Lender under this Guaranty, (ii) be binding upon the Guarantor and its
successors, transferees and assigns, and (iii) inure to the benefit of and be
enforceable by the Lender and successors, transferees and assigns. Without
limiting the generality of the foregoing clause (iii), the Lender may assign or
otherwise transfer the Revolving Note (as defined in the Credit Agreement) or
any participation therein separately or together with any security, to any other
person or entity, and such other person or entity shall thereupon become vested
with all the rights in respect thereof granted to the Lender herein or
otherwise.
6. REPRESENTATIONS AND WARRANTIES. In addition to and
independent of any other obligation or liability under this
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Guaranty, the Guarantor hereby represents and warrants to the Lender as follows:
(a) No consent, approval or authorization of, or registration
or declaration with, any governmental authority of the United States or the
State of Ohio is required in connection with the execution, delivery and
performance by the Guarantor of this Guaranty;
(b) The Guarantor owns a 99% membership interest in Xxxxxx
Entertainment Ltd. and such membership interest is validly issued, fully paid
and nonassessable;
(c) The execution and delivery of and performance under this
Guaranty by the Guarantor and the consummation of the transactions contemplated
thereby: (a) do not and will not breach or contravene or result in a default
under (i) any material written agreement or instrument to which the Guarantor is
a party or by which he or any of his assets are bound, or (ii) any judgment,
decree, or order of any court or of any federal, state, or other regulatory
authority or other governmental body having jurisdiction over the Guarantor, any
law, rule, regulation of the United States or the State of Ohio applicable to
him or his properties; and (b) do not and will not result in or cause the
creation of any lien, security interest or other charge or encumbrance upon or
with respect to any of his properties or accelerate the maturity of any
indebtedness of the Guarantor under any document referred to in clause (a)(i)
above;
(d) This Guaranty constitutes the legal, valid and binding
obligation of the Guarantor, enforceable against the Guarantor in accordance
with its terms;
(e) Guarantor is not, and by the execution and delivery of
this Guaranty will not be, (i) in default under any indenture, contract or
agreement to which he is a party or by which he is bound or for which a waiver
or consent has not been obtained, (ii) in default with respect to any order,
writ, injunction or decree of any court, or (iii) in default under any order or
license of any federal or state governmental department, which default or
violation in any of the aforesaid cases materially and adversely affects his
business or property;
(f) Any and all balance sheets, net worth statements and other
financial data with respect to the Guarantor which have heretofore been given to
Lender by or on behalf of the Guarantor fairly and accurately present the
financial condition of the Guarantor as of the respective dates thereof, and,
since the respective dates thereof, there has been no materially adverse change
in the financial condition of the Guarantor; and
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(g) There are no facts or circumstances of any kind or nature
whatsoever of which the Guarantor is aware which could in any way impair or
prevent the Borrower from performing Borrower's Obligations or the Guarantor
from performing his obligations under this Guaranty.
7. INDEMNIFICATION. The Guarantor hereby indemnifies the
Lender and agrees to defend and hold harmless the Lender from and against (a)
any loss, cost, damage or expense occurring by reason of the inaccuracy of any
representation or warranty contained herein or the breach or nonfulfillment of
any of the Guarantor's obligations contained herein and (b) the loss,
mitigation, subordination or other consequences adverse to the Lender by reason
of any payment or other performance of the Guaranteed Obligations or this
Guaranty being challenged as a preference or suffering any other subjugation
under any bankruptcy or other law, whether state or federal, affecting debtors,
creditors and/or the relationship between and among them.
8. NO ADVANCES OR ENFORCEMENT. The Guarantor shall make no
loan or advance to the Borrower nor take any steps to enforce any obligation of
the Borrower to the Guarantor so long as this Guaranty remains in effect.
Nothing in the foregoing sentence, however, is intended or shall be deemed to
preclude a contribution to capital, equity investment or other infusion of
at-risk funds in the Borrower which is not a loan or other priority repayment
obligation of the Borrower.
9. NO RESORT TO OTHER REMEDIES. The Lender shall have no
obligation to resort to any other party or to any other security or collateral
held by the Lender and shall not have any obligation to exhaust any remedies the
Lender might have against the Borrower before calling upon the Guarantor for
performance hereunder, and the Guarantor hereby waives any right he may have to
require the Lender to proceed against the Borrower or to require the Lender to
pursue any other remedy or enforce any other right.
10. NOTICES. All demands, notices and other communications
provided for hereunder shall be addressed as follows: if to the Guarantor,
addressed to him at 0000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000; if to the Lender,
addressed to him at 00000 Xxxxxx Xxxxx Xxxx, Xxxxxxxxx, Xxxx 00000; or as to
each party at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section. All such demands, notices and other communications shall be
addressed as aforesaid, mailed, delivered or otherwise sent as set forth in the
Credit Agreement and shall be deemed effective as of the times prescribed
therefor as set forth in the Credit Agreement.
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11. CERTAIN WAIVERS. The Guarantor hereby waives promptness,
diligence, demand, presentment and protest of any instrument, and notice
thereof, notice of acceptance, default and any other notice with respect to any
of the Obligations and this Guaranty and any requirement that the Lender
protect, secure, perfect or insure any security interest or lien or any property
subject thereto or exhaust any right or take any action against the Borrower or
any other person or entity.
12. EFFECTIVENESS; REINSTATEMENT. This Guaranty shall continue
to be effective or be reinstated, as the case may be, if at any time any whole
or partial payment or performance of any Guaranteed Obligation is or is sought
to be rescinded or must otherwise be restored or returned by the Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Borrower, all as though
such payments and performance had not been made. Without limiting the generality
of the foregoing, this Guaranty shall remain in full force and effect until
thirteen calendar months have elapsed since the full payment and performance of
all Guaranteed Obligations and, in such case, thereafter if and so long as there
is pending at the end of such thirteen month period against the Borrower or
against the Guarantor a proceeding under any federal or state bankruptcy or
insolvency law. Notwithstanding anything to the contrary contained herein, if
following any payment of the Obligations to the Lender it is determined by a
final decision of a court of competent jurisdiction that such payment shall be
avoided by a trustee in bankruptcy (including any debtor-in-possession) as a
preference under 11 U.S.C. Section 547 and such payment is repaid by the Lender
to such trustee in bankruptcy, then and to the extent of such repayment, the
Guaranteed Obligations with respect to such payment shall be reinstated and this
Guaranty shall remain in full force and effect.
13. SERVICE OF PROCESS; WAIVER OF IMMUNITIES.
(a) The Guarantor irrevocably consents to the service of any
and all process in any action or proceeding arising out of or relating to this
Guaranty by the mailing of copies of such process to the Guarantor at his
address as specified in Section 10. The Guarantor agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.
(b) Nothing in this section shall affect the right of the
Lender to serve legal process in any other manner permitted by law or affect the
right of the Lender to bring any action or proceeding against the Guarantor or
his properties in the courts of any other jurisdictions.
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14. FINANCIAL STATEMENTS. Upon the request of Lender, the
Guarantor shall provide to the Lender, within 90 days following the end of each
calendar year while this Guaranty is in effect, a net worth statement of the
Guarantor in the form required by the Lender.
15. EVENT OF DEFAULT. The occurrence of any of the following
events shall constitute an Event of Default under this Agreement:
(a) An Event of Default (as defined in the Credit Agreement)
shall have occurred under the Credit Agreement;
(b) Any representation or warranty made by Guarantor in this
Guaranty shall prove to have been incorrect in any material respect when made;
(c) Guarantor shall fail to perform or observe any term,
covenant or agreement contained in this Guaranty on Guarantor's part to be
performed or observed, and such failure shall remain unremedied for 30 days
after written notice thereof shall have been given to Guarantor; or
(d) This Guaranty shall, at any time after its execution and
delivery and for any reason, cease to be in full force and effect or shall be
declared to be null and void, or the validity or enforceability thereof shall be
contested by Guarantor.
Upon the occurrence of an Event of Default hereunder, the
Lender may exercise any and all rights and remedies the Lender may have
hereunder or at law or in equity, including, without limitation, calling upon
the Guarantor for performance hereunder.
16. MISCELLANEOUS.
(a) In case one or more of the provisions contained in this
Guaranty 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 provisions of this Guaranty, but this Guaranty shall be construed as
if such invalid, illegal or unenforceable provision or provisions had not been
contained herein.
(b) This Guaranty may be assigned by the Lender, in whole or
in part, and shall be construed liberally in favor of the Lender and its
successors and assigns.
(c) No amendment or waiver of any provisions of this Guaranty
nor consent to any departure therefrom by the Guarantor shall in any event be
effective unless the same shall be in
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writing and signed by the Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(d) No failure or delay on the part of the Lender in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
(e) This Guaranty, all acts and transactions hereunder, and
the rights and obligations of the parties hereto shall be governed, construed
and interpreted according to the laws of the State of Ohio, shall be binding
upon the successors, heirs, legal representatives and assigns of the Guarantor
and shall inure to the benefit of the Lender and its successors and assigns and
any subsequent holder of the Revolving Note.
17. WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY, AND THE LENDER
BY ITS ACCEPTANCE HEREOF, WAIVES THE RIGHT OF A JURY TRIAL IN EACH AND EVERY
ACTION ON THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS, IT BEING
ACKNOWLEDGED AND AGREED THAT ANY ISSUES OF FACT IN ANY SUCH ACTION ARE MORE
APPROPRIATELY DETERMINED BY THE COURTS.
18. CONSENT TO JURISDICTION AND VENUE. THE GUARANTOR HEREBY
CONSENTS AND SUBJECTS HIMSELF TO THE JURISDICTION OF COURTS OF THE STATE OF OHIO
AND FEDERAL COURTS LOCATED IN OHIO, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, TO THE VENUE OF SUCH COURTS IN CUYAHOGA COUNTY, OHIO.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
at Cuyahoga County, Ohio as of July 31, 1996.
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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