EXHIBIT 10.12
SURETY AGREEMENT
This Surety Agreement ("Agreement") is made and executed this 29th
day of October, 2003 by Empire Resorts, Inc. ("Surety") in favor of The
Berkshire Bank ("Lender") having a place of business at 0 Xxxx 00xx Xxxxxx, Xxx
Xxxx, XX 00000.
The undersigned Surety undertakes and agrees as follows:
1. OBLIGATIONS GUARANTEED. To induce Lender to establish and/or
continue financing arrangements with and consider making or continuing certain
loans and extending or continuing to extend credit from time to time to
Monticello Raceway Management, Inc. ("Borrower"), and for other good and
valuable consideration, the Surety, intending to be legally bound, hereby
absolutely and unconditionally guarantees and becomes surety for the payment and
performance when due (at maturity, upon acceleration, or otherwise) of all of
the Obligations of Borrower of every kind or nature, whether joint or several,
due or to become due, absolute or contingent, now existing or hereafter arising,
and whether principal, interest, fees, costs, expenses or otherwise (including
without limitation any interest and/or expenses accruing following the
commencement of any insolvency, receivership, reorganization or bankruptcy case
or proceeding relating to Borrower, whether or not a claim for post-petition
interest and/or expenses is allowed in such case or proceeding). The Surety
shall also pay or reimburse Lender on demand for all costs and expenses,
including without limitation attorneys' fees, incurred by Lender at any time to
enforce, protect, preserve, or defend Lender's rights hereunder and with respect
to any property securing this Agreement. All payments hereunder shall be made in
lawful money of the United States, in immediately available funds. Unless
otherwise defined herein, all capitalized terms shall have the respective
meanings given to such terms in that certain Loan and Security Agreement dated
the date hereof between Borrower and Lender (as it may hereafter be amended,
supplemented, restated or replaced from time to time, the "Loan Agreement").
2. REPRESENTATIONS AND WARRANTIES. The Surety represents and
warrants that:
2.1. CORPORATE ORGANIZATION AND VALIDITY:
(a) Surety (i) is a corporation, duly organized and validly
existing under the laws of the state of Delaware, (ii) has the appropriate power
and authority to operate its business and to own its Property and (iii) is duly
qualified, is validly existing and in good standing and has lawful power and
authority to engage in the business it conducts in each state where the nature
and extent of its business requires qualification, except where the failure to
so qualify does not and could not have a Material Adverse Effect. A list of all
states and other jurisdictions where Surety is qualified to do business is shown
on Schedule "2.1" attached hereto and made part hereof.
(b) The making and performance of this Agreement and the
other Loan Documents will not violate any law, government rule or regulation,
court or administrative order or other such order, or the charter, minutes or
bylaw provisions of the Surety, or violate or result in a default (immediately
or with the passage of time) under any contract, agreement or instrument to
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which Surety is a party, or by which Surety is bound. Surety is not in violation
of any term of any material agreement or instrument to which it is a party or by
which it may be bound, or of its charter, minutes or bylaw provisions.
(c) Surety has all requisite power and authority to enter
into and perform this Agreement and to incur the obligations herein provided
for, and has taken all proper and necessary action to authorize the execution,
delivery and performance of this Agreement.
(d) No consent, license or approval of, or filing or
registration with, any governmental authority is necessary for the execution and
performance hereof by the Surety.
(e) This Agreement is valid and binding upon Surety and
enforceable in accordance with its respective terms except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
2.2. PLACES OF BUSINESS: The only places of business of Surety,
and the places where Surety keeps and intends to keep its Property, are at the
addresses shown on Schedule "2.2" attached hereto and made part hereof.
2.3. PENDING LITIGATION: There are no judgments or judicial or
administrative orders or proceedings pending, or to the knowledge of Surety,
threatened, against Surety in any court or before any Governmental Authority
except as shown on Schedule "2.3" attached hereto and made part hereof. To the
knowledge of Surety, there is no investigation (civil or criminal) pending or
threatened against Surety in any court or before any Governmental Authority.
Surety is not in default with respect to any order of any Governmental
Authority. Surety and, to the knowledge of Surety, no current executive officer
of Surety, has not been indicted in connection with or convicted of engaging in
any criminal conduct, or is currently subject to any lawsuit or proceeding or
under investigation in connection with any anti-racketeering or other conduct or
activity which, in each case may result in the forfeiture of any Property to any
Governmental Authority.
2.4. TITLE TO PROPERTIES: Surety has good and marketable title
in fee simple (or its equivalent under applicable law) to all the other Property
it purports to own, free from Liens and free from the claims of any other
Person, except for Permitted Liens.
2.5. TAXES: All tax returns required to be filed by Surety in
any jurisdiction have been filed, and all taxes, assessments, fees and other
governmental charges upon Surety, or upon any of its Property, income or
franchises, which are shown to be due and payable on such returns have been
paid, except for those taxes being contested in good faith with due diligence by
appropriate proceedings for which appropriate reserves have been maintained
under GAAP and as to which no Lien has been entered. Surety is not aware of any
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proposed additional tax assessment or tax to be assessed against or applicable
to Surety.
2.6. FINANCIAL STATEMENTS: The unaudited balance sheet of Surety
as of June 30, 2003, and the related statements of profit and loss,
stockholder's equity and cash flow as of such date have been prepared in
accordance with GAAP and present fairly in all material respects the financial
position of Surety as of such dates and the results of its operations for such
periods (except for absence of footnotes and year end adjustments). The fiscal
year for Surety currently ends on December 31. Surety's federal tax
identification number and state organizational identification number for UCC
purposes are as shown on Schedule "2.6" attached hereto and made part hereof.
2.7. FULL DISCLOSURE: The financial statements referred to in
Section 2.6 of this Agreement do not, nor does any other written statement of
Surety to Lender in connection with the negotiation of the Loan, contain any
untrue statement of a material fact. Such statements do not omit a material
fact, the omission of which would make the statements contained therein
misleading. There is no fact known to Surety which has not been disclosed in
writing to Lender which had or could reasonably be expected to have a Material
Adverse Effect.
2.8. SUBSIDIARIES: Surety does not have any Subsidiaries or
Affiliates, except as shown on Schedule "2.8" attached hereto and made part
hereof.
2.9. INVESTMENTS, GUARANTEES, CONTRACTS, ETC.:
(a) Surety has not entered into any leases for real or
personal Property (whether as landlord or tenant or lessor or lessee), except as
shown on Schedule "2.9(a)," attached. hereto and made part hereof.
(b) Surety is not party to any contract or agreement, or
subject to any charter or other corporate restriction, which has or could have a
Material Adverse Effect.
2.10. GOVERNMENT REGULATIONS, ETC.:
(a) Surety has obtained all licenses, permits, franchises
or other governmental authorizations necessary for the ownership of its Property
and for the conduct of its business.
(b) As of the date hereof, no employee benefit plan
("Pension Plan"), as defined in Section 3(2) of ERISA, maintained by Surety or
under which Surety could have any liability under ERISA (i) has failed to meet
the minimum funding standards established in Section 302 of ERISA, (ii) has
failed to comply in a material respect with all applicable requirements of ERISA
and of the Internal Revenue Code, including all applicable rulings and
regulations thereunder, (iii) has engaged in or been involved in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue
Code which would subject Surety to any material liability, or (iv) has been
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terminated if such termination would subject Surety to any material liability.
Surety has not assumed, or received notice of a claim asserted against Surety
for, withdrawal liability (as defined in Section 4207 of ERISA) with respect to
any multi employer pension plan and is a member of any Controlled Group (as
defined in ERISA). Surety has timely made all contributions when due with
respect to any multi employer pension plan in which it participates and no event
has occurred triggering a claim against Surety for withdrawal liability with
respect to any multi employer pension plan in which Surety participates. All
Employee Benefit Plans and multi employer pension plans in which Surety
participates are shown on Schedule "2.10(b)" attached hereto and made part
hereof.
(c) Surety is not in violation of or receipt of written
notice that it is in violation of any applicable statute, regulation or
ordinance of the United States of America, or of any state, city, town,
municipality, county or of any other jurisdiction, or of any agency, or
department thereof, (including, without limitation, Environmental Laws or
government procurement regulations), a violation of which causes or could cause
a Material Adverse Effect.
(d) Surety is current with all reports and documents
required to be filed with any state or federal securities commission or similar
agency and is in full compliance in all material respects with all applicable
rules and regulations of such commissions.
2.11. BUSINESS INTERRUPTIONS: Within two (2) years prior to the
date hereof, none of the business, Property or operations of Surety has been
materially and adversely affected in any way by any casualty, strike, lockout,
combination of workers, order of the United States of America, or any state or
local government, or any political subdivision or agency thereof, directed
against Surety. There are no pending or, to Surety's knowledge, threatened labor
disputes, strikes, lockouts or similar occurrences or grievances affecting
Surety. Except as set forth on Schedule 2.11, no labor contract of Surety is
scheduled to expire prior to the Maturity Date.
2.12. NAMES AND INTELLECTUAL PROPERTY:
(a) Within five (5) years prior to the Closing Date, Surety
has not conducted business under or used any other name (whether corporate or
assumed) except for the names shown on Schedule "2.12(a)" attached hereto and
made part hereof. Surety is the sole owner of its names listed on such Schedule
"2.12(a)" and any and all business done and all invoices issued in such trade
names are Surety's sales, business and invoices. Each trade name of Surety
represents a division or trading style of Surety and not a separate Subsidiary
or Affiliate or independent entity.
(b) All trademarks, service marks, patents or copyrights
which Surety uses, plans to use or has a right to use are shown on Schedule
"2.12(b)" attached hereto and made part hereof and Surety is the sole owner of
such Property except to the extent any other Person has claims or rights in such
Property, as such claims and rights are shown on Schedule "2.12(b)". Surety is
not in violation of any rights of any other Person with respect to such
Property.
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(c) Except as shown on Schedule "2.12(c)" attached hereto
and made part hereof, (i) Surety does not require any copyrights, patents,
trademarks or other intellectual property, or any license(s) to use any patents,
trademarks or other intellectual property in order to provide services to its
customers in the ordinary course of business; and (ii) Lender will not require
any copyrights, patents, trademarks or other intellectual property or any
licenses or consents to use the same in order to provide such services after the
occurrence of an Event of Default.
2.13. REGULATION 0: No director, executive officer or principal
shareholder of Surety is a director, executive officer or principal shareholder
of Lender. For the purposes hereof the terms "director" "executive officer" and
"principal shareholder" (when used with reference to Lender), have the
respective meanings assigned thereto in Regulation 0 issued by the Board of
Governors of the Federal Reserve System.
2.14. SOLVENCY: After giving effect to the transactions
contemplated under this Agreement, Surety is solvent, is able to pay its debts
as they become due, and has capital sufficient to carry on its business and all
businesses in which it is about to engage, and now owns Property having a value
both at fair valuation and at present fair salable value greater than the amount
required to pay Surety's debts. Surety will not be rendered insolvent by the
execution and delivery of this Agreement or by the transactions contemplated
hereunder.
3. SURETY'S AFFIRMATIVE COVENANTS. The Surety covenants as follows,
so long as any Obligations remain outstanding:
3.1. PAYMENT OF TAXES AND CLAIMS: Surety shall pay, before it
becomes delinquent, all taxes, assessments and governmental charges, or levies
imposed upon it, or upon Surety's Property, and all claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and other Persons,
entitled to the benefit of statutory or common law Liens which, in any case, if
unpaid, would result in the imposition of a Lien upon its Property; provided,
however, that Surety shall not be required to pay any such tax, assessment,
charge, levy, claim or demand if the amount, applicability or validity thereof,
shall at the time, be contested in good faith and by appropriate proceedings by
Surety, and if Surety shall have set aside on its books adequate reserves in
respect thereof, if so required in accordance with GAAP; which deferment of
payment is permissible so long as no Lien other than a Permitted Lien has been
entered and Surety's title to, and its right to use, its Property are not
materially adversely affected thereby.
3.2. MAINTENANCE OF PROPERTIES AND CORPORATE EXISTENCE:
(a) PROPERTY-Surety shall maintain its Property in good
condition (normal wear and tear excepted) make all necessary renewals,
replacements, additions, betterments and improvements thereto and will pay and
discharge when due the cost of repairs and maintenance to its Property, and will
pay all rentals when due for all real estate leased by Surety.
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(b) PROPERTY INSURANCE, PUBLIC AND PRODUCTS LIABILITY
INSURANCE--(i) Surety shall maintain insurance on all insurable tangible
Property against fire, flood, casualty and such other hazards (including,
without limitation, extended coverage, workmen's compensation, boiler and
machinery, with inflation coverage by endorsement) and against public liability,
product liability and business interruption, in each case in such amounts, with
such deductibles and with such insurers as are customarily used by companies
operating in the same industry as Surety. (ii) Surety further covenants that all
insurance premiums owing under its current policies have been paid. Surety shall
notify Lender, immediately, upon Surety's receipt of a notice of termination,
cancellation, or non-renewal from its insurance company of any such policy.
(c) CORPORATE EXISTENCE AND RIGHTS-Surety shall do (or
cause to be done) all things necessary to preserve and keep in full force and
effect its existence, good standing, rights and franchises.
(d) COMPLIANCE WITH LAWS-Surety shall be in compliance with
any and all laws, ordinances, governmental rules and regulations, and court or
administrative orders or decrees to which it is subject, whether federal, state
or local, (including, without limitation, Environmental Laws and government
procurement regulations) and shall obtain any and all licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
its Property or to the conduct of its businesses, which violation or failure to
obtain causes or could reasonably be expected to cause a Material Adverse
Effect. Surety shall timely satisfy all assessments, fines, costs and penalties
imposed (after exhaustion of all appeals, provided a stay has been put in effect
during such appeal) by any Governmental Authority against Surety or any Property
of Surety.
3.3. LITIGATION: Surety shall give prompt notice to Lender of
any litigation claiming in excess of Five Hundred Thousand Dollars ($500,000),
or which may otherwise have a Material Adverse Effect.
3.4. EMPLOYEE BENEFIT PLANS: Employee Benefit Plans: Surety
shall (a) fund all of its Pension Plan(s) in a manner that will satisfy the
minimum funding standards of Section 302 of ERISA, (b) furnish Lender, promptly
upon Lender's request, with copies of all reports or other statements filed with
the United States Department of Labor, the PBGC or the IRS with respect to all
Pension Plan(s), or which Surety, or any member of a Controlled Group, may
receive from the United States Department of Labor, the IRS or the PBGC, with
respect to all such Pension Plan(s), and (c) promptly advise Lender of the
occurrence of any reportable event (as defined in Section 4043 of ERISA, other
than a reportable event for which the thirty (30) day notice requirement has
been waived by the PBGC) or prohibited transaction (under Section 406 of ERISA
or Section 4975 of the Internal Revenue Code) with respect to any such Pension
Plan(s) and the action which Surety proposes to take with respect thereto.
Surety will make all contributions when due with respect to any multi employer
pension plan in which it participates and will promptly advise Lender upon (x)
its receipt of notice of the assertion against Surety of a claim for withdrawal
liability, (y) the occurrence of any event which, to the best of Surety's
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knowledge, would trigger the assertion of a claim for withdrawal liability
against Surety, and (z) upon the occurrence of any event which, to the best of
each Surety's knowledge, would place Surety in a Controlled Group as a result of
which any member (including Surety) thereof may be subject to a claim for
withdrawal liability, whether liquidated or contingent.
3.5. FINANCIAL AND BUSINESS INFORMATION: Surety shall deliver or
cause to be delivered to Lender the following:
(a) FINANCIAL STATEMENTS AND COLLATERAL REPORTS-such data,
reports, statements and information, financial or otherwise, as Lender may
reasonably request, including, without limitation:
(i) within forty-five (45) days after the end of each
calendar quarter, the income and cash flow statements of Surety and its
Subsidiaries for such quarter and for the expired portion of the fiscal year
ending with the end of such quarter, setting forth in comparative form the
corresponding figures for the corresponding periods of the previous fiscal year,
and the balance sheet of Surety and its Subsidiaries as at the end of such
quarter, setting forth in comparative form the corresponding figures as at the
end of the corresponding periods of the previous fiscal year, all in reasonable
detail and certified by Surety's chief financial officer to have been prepared
from the books and records of Surety;
(ii) within one hundred twenty (120) days after the end
of each fiscal year of Surety, the income and cash flow statements of Surety and
its Subsidiaries for such year, and the balance sheet of each Surety and its
Subsidiaries as at the end of such fiscal year, setting forth in each case in
comparative form the corresponding figures as at the end of and for the previous
fiscal year, all in reasonable detail, including all supporting schedules, and
audited by an independent public accounting firm acceptable to Lender, and
unqualifiedly certified to have been prepared in accordance with GAAP;
(b) NOTICE OF EVENT OF DEFAULT - promptly upon becoming
aware of the existence of any condition or event which constitutes an Event of
Default under this Agreement, a written notice specifying the nature and period
of existence thereof and what action Surety is taking (and proposes to take)
with respect thereto;
(c) NOTICE OF CLAIMED DEFAULT - promptly upon receipt by
Surety, notice of default, oral or written, given to either Surety by any
creditor for Indebtedness for borrowed money, otherwise holding long term
Indebtedness of Surety in excess of Five Hundred Thousand Dollars ($500,000);
and
(d) SECURITIES AND OTHER REPORTS-if Surety shall be
required to file reports with the Securities and Exchange Commission pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended,
promptly upon its becoming available, one copy of each financial statement,
report, notice or proxy statement sent by Surety, if any, to stockholders
generally, and, a copy of each regular or periodic report, and any registration
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statement, or prospectus in respect thereof, filed by Surety with any securities
exchange or with federal or state securities and exchange commissions or any
successor agency.
3.6. AUDITS AND INSPECTION: Surety shall permit any of Lender's
officers or other representatives to visit and inspect upon reasonable notice
during business hours any of the locations of Surety, to examine and audit all
of Surety's books of account, records, reports and other papers, to make copies
and extracts therefrom and to discuss its affairs, finances and accounts with
its officers, employees and independent certified public accountants all at
Surety's expense at the standard rates charged by Lender for such activities,
plus Lender's reasonable outof-pocket expenses.
3.7. TAX RETURNS, FINANCIAL STATEMENTS AND OTHER REPORTS:
Promptly after each calendar year (but in any event no later than September 15),
Surety shall promptly furnish, or shall cause to be furnished, to Lender copies
of the annual federal and state income tax returns of Surety for the immediately
preceding year. Surety further agrees that, if requested by Lender, it shall
promptly furnish Lender with copies of all material reports filed with any
federal, state or local Governmental Authority.
3.8. INFORMATION TO PARTICIPANT: Lender may divulge to any
participant, assignee or co-lender or prospective participant, assignee or
co-lender it may obtain in the Loan or any portion thereof, all information, and
furnish to such Person copies of any reports, financial statements,
certificates, and documents obtained under any provision of this Agreement, or
related agreements and documents.
4. SURETY'S NEGATIVE COVENANTS.
Surety covenants as follows, so long as the Obligations remain
outstanding:
4.1. MERGER, CONSOLIDATION, DISSOLUTION OR LIQUIDATION:
(a) Except as provided in the Consolidation Transaction,
Surety shall not engage in any Asset Sale other than: (i) Inventory sold in the
ordinary course of Surety's business, or (ii) disposition in the ordinary course
of business of obsolete or nonworking equipment, which, if reasonably necessary,
shall be promptly replaced by other equipment of comparable or superior quality
and value.
(b) Except with respect to the Consolidation Transaction,
Surety shall not merge or consolidate with any other Person or engage in a
division, conversion, dissolution or liquidation. Surety shall give Lender
written notice of the completion of the transactions contemplated by the
Consolidation Transaction promptly following completion thereof and provide
Lender, upon request, with copies of all material agreements related thereto.
4.2. ACQUISITIONS: Except with respect to the Consolidation
Transactions, Surety shall not acquire all or a material portion of the Capital
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Stock or assets of any Person in any transaction or in any series of related
transactions or enter into any sale and leaseback transaction.
4.3. LIENS AND ENCUMBRANCES: Surety shall not: (i) execute or
permit to exist a negative pledge agreement with any Person covering any of its
Property, or (ii) cause or permit or agree or consent to cause or permit in the
future (upon the happening of a contingency or otherwise), its Property
(including, without limitation, the Collateral), whether now owned or hereafter
acquired, to be subject to a Lien or be subject to any claim except for
Permitted Liens.
4.4. TRANSACTIONS WITH AFFILIATES OR SUBSIDIARIES: Except with
respect to the Consolidation Transaction, Surety shall not enter into any
transaction with any Subsidiary or other Affiliate, including, without
limitation, the purchase, sale, or exchange of Property, or the loaning or
giving of funds to any Affiliate or any Subsidiary unless: (i) such Subsidiary
or Affiliate is engaged in a business substantially related to the business
conducted by Surety, and the transaction is in the ordinary course of and
pursuant to the reasonable requirements of Surety's business and upon terms
substantially the same and no less favorable to Surety as it would obtain in a
comparable arm's length transaction with any Person not an Affiliate or a
Subsidiary, or if not on any arm's length basis then such transaction would not
have a Material Adverse Effect, and in any event so long as such transaction is
not prohibited hereunder and any obligations incurred by Surety as a result
thereof are subordinated to the Obligations under agreements acceptable to
Lender; or (ii) such transaction is intended for incidental administrative
purposes.
4.5. GUARANTEES: Excepting the endorsement in the ordinary
course of business of negotiable instruments for deposit or collection, Surety
shall not become or be liable, directly or indirectly, primary or secondary,
matured or contingent, in any manner, whether as guarantor, surety,
accommodation maker, or otherwise, for the existing or future Indebtedness of
any kind of any Person.
4.6. INDEBTEDNESS: Surety shall not incur or be liable at any
time for any Indebtedness except for Permitted Indebtedness.
4.7. LOANS AND INVESTMENTS: Surety shall not make or have
outstanding loans, advances, extensions of credit or capital contributions to,
or investments in, any Person other than Permitted Investments.
4.8. USE OF PARTY'S NAME: Neither Party hereto shall use the
other party's name in connection with any of its business operations. Nothing
herein contained is intended to permit or authorize either party to make any
contract on behalf of the other.
4.9. MISCELLANEOUS COVENANTS:
(a) Surety shall not become or be a party to any contract
or agreement which at the time of becoming a party to such contract or agreement
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materially impairs Surety's ability to perform under this Agreement, or under
any other instrument, agreement or document to which Surety is a party or by
which it is or may be bound.
(b) Surety shall not carry or purchase any "margin stock
within the meaning of Regulations U, T or X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II.
4.10. JURISDICTION OF ORGANIZATION: Surety shall not change its
jurisdiction of organization.
4.11. CHANGE OF CONTROL: There shall not occur a Change of
Control.
5. EVENTS OF DEFAULT.
5.1. Each of the following events shall constitute an event of
default ("Event of Default"):
(a) PAYMENTS - Surety fails to make any monetary payment on
the date such payment is due and payable; or
(b) PARTICULAR COVENANT DEFAULTS - Surety fails to perform,
comply with or observe any covenant or undertaking contained in this Agreement
(other than with respect to the covenants contained in Section 3.5 and Section 4
for which no cure period shall exist) and such failure continues for thirty (30)
days after the occurrence thereof; or
(c) FINANCIAL INFORMATION - any statement, report,
financial statement, or certificate made or delivered by Surety or any of its
officers, employees or agents to Lender is not true and correct, in all material
respects, when made; or
(d) WARRANTIES OR REPRESENTATIONS - any warranty,
representation or other statement by or on behalf of Surety contained in or
pursuant to this Agreement or in any document, agreement or instrument furnished
in compliance with, relating to, or in reference to this Agreement, is false,
erroneous, or misleading in any material respect when made; or
(e) AGREEMENTS WITH OTHERS - The holder of any Indebtedness
of Surety in excess of Two Hundred Fifty Thousand Dollars ($250,000) accelerates
the payment of Surety's obligations, which are the subject thereof, prior to the
maturity date or prior to the regularly scheduled date of payment;
(f) JUDGMENTS - any final judgment for the payment of money
in excess of Seven Hundred Fifty Thousand Dollars ($750,000) in the aggregate
(i) which is not fully and unconditionally covered by insurance or (ii) for
which Surety has not established a cash or cash equivalent reserve in the full
amount of such judgment, shall be rendered by a court of record against Surety
and such judgment shall continue unsatisfied and in effect for a period of
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thirty (30) consecutive days without being vacated, discharged, satisfied or
bonded pending appeal; or
(g) ASSIGNMENT FOR BENEFIT OF CREDITORS, ETC. - if Surety
makes or proposes in writing, an assignment for the benefit of creditors
generally, offers a composition or extension to creditors, or makes or sends
notice of an intended bulk sale of any business or assets now or hereafter owned
or conducted by Surety; or
(h) BANKRUPTCY, DISSOLUTION, ETC. - upon the commencement
of any action for the dissolution or liquidation of Surety, or the commencement
of any proceeding to avoid any transaction entered into by Surety, or the
commencement of any case or proceeding for reorganization or liquidation of
Surety's debts under the Bankruptcy Code or any other state or federal law, now
or hereafter enacted for the relief of debtors, whether instituted by or against
Surety; provided however, that Surety shall have thirty (30) days to obtain the
dismissal or discharge of involuntary proceedings filed against it, it being
understood that during such thirty (30) day period, Lender may seek adequate
protection in any bankruptcy proceeding; or
(i) RECEIVER - upon the appointment of a receiver,
liquidator, custodian, trustee or similar official or fiduciary for Surety or
for Surety's Property; or
(j) TERMINATION OF BUSINESS - if Surety ceases any material
portion of its business operations as presently conducted; or
(k) PENSION BENEFITS, ETC. - if Surety fails to comply with
ERISA so that proceedings are commenced to appoint a trustee under ERISA to
administer Surety's employee plans or the PBGC institutes proceedings to appoint
a trustee to administer such plan(s), or a Lien is entered to secure any
deficiency or claim or a "reportable event" as defined under ERISA occurs; or
(1) LOAN DOCUMENTS - if any breach or default occurs under
the Loan Agreement or any of the Loan Documents; or
(m) LIENS - if any Lien in favor of Lender shall cease to
be valid, enforceable and perfected and prior to all other Liens other than
Permitted Liens or if Surety or any Governmental Authority shall assert any of
the foregoing; or
(n) MATERIAL ADVERSE EFFECT - if there is any change in
Surety's financial condition which, in Lender's reasonable opinion, has or would
be reasonably likely to have a Material Adverse Effect.
5.2. CURE: Nothing contained in this Agreement or the Loan
Documents shall be deemed to compel Lender to accept a cure of any Event of
Default hereunder.
5.3. RIGHTS AND REMEDIES ON DEFAULT: To the extent permitted by
law, in addition to all other rights, options and remedies granted or available
to Lender under this Agreement, or otherwise available at law or in equity, upon
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or at any time after the occurrence and during the continuance of an Event of
Default, Lender may, in its discretion, declare the Obligations immediately due
and payable, all without demand, notice, presentment or protest or further
action of any kind (it also being understood that the occurrence of any of the
events or conditions set forth in Sections 5.1(g),(h) or (i) shall automatically
cause an acceleration of the Obligations).
6. SURETY ACKNOWLEDGEMENTS.
(a) The Surety hereby waives notice of (i) acceptance of
this Agreement, (ii) the existence or incurring from time to time of any
Obligations guaranteed hereunder, (iii) the existence of any Event of Default,
the making of demand, nonpayment, or the taking of any action by Lender, under
the Loan Agreement, and (iv) default and demand hereunder.
(b) The Surety further acknowledges that the Surety (i) has
examined or had the opportunity to examine the Loan Agreement and related
agreements and (ii) waives any defense which may exist resulting from the
Surety's failure to receive or examine at any time the Loan Documents or any
amendments, supplements, restatements or replacements therefor.
(c) The Surety acknowledges that in entering into this
Agreement the Surety is not relying upon any statement, representation, warranty
or opinion of any kind from Lender as to the present or future financial
condition, performance, assets, liabilities or prospects of Borrower or as to
any other matter.
7. LENDER ACTIONS. The Surety hereby consents and agrees that Lender
may at any time or from time to time in Lender's discretion (a) extend or change
the time of payment and/or change the manner, place or terms of payment of any
or all Obligations, (b) amend, supplement, restate or replace the Loan Agreement
or any related agreements, (c) renew or extend any financing now or hereafter
reflected by the Loan Agreement or the maturity thereof or increase (without
limit of any kind and whether related or unrelated) or decrease loans and
extensions of credit to Borrower, (d) modify the terms and conditions under
which loans and extensions of credit may be made to Borrower, (e) settle,
compromise or grant releases for liabilities of Borrower, and/or any other
Person or Persons liable with Borrower for, any Obligations, (f) exchange,
compromise, release or surrender, or subordinate or release any lien on, any
property (including any collections therefrom or proceeds thereof) of Borrower
or any other Person or Persons now or hereafter securing any of the Obligations,
and (g) apply any and all payments and proceeds of any property of any Person
securing any or all of the Obligations received by Lender at any time against
the Obligations in any order as Lender may determine; all of the foregoing in
such manner and upon such terms as Lender may see fit, and without notice to or
further consent from the Surety, who hereby agrees to be and shall remain bound
upon this Agreement notwithstanding any such action on Lender's part.
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8. SCOPE OF GUARANTY. The Agreement is an agreement of suretyship
and a guaranty of payment and not of collection. The liability of the Surety
hereunder is absolute, primary, unlimited and unconditional and shall not be
reduced, impaired or affected in any way by reason of (a) any failure to obtain,
retain or preserve, or the lack of prior enforcement of, any rights against any
Person or Persons liable for the Obligations (including Borrower and the Surety)
or in any property, (b) the invalidity, unenforceability or voidability of any
Obligations or any liens or rights in any property pledged by any Person or
Persons, (c) any delay in making demand upon Borrower or any delay in enforcing,
or any failure to enforce, any rights against Borrower or any other Person or
Persons liable for any or all of the Obligations or in any property pledged by
any Person or Persons, even if such rights are thereby lost, (d) any failure,
neglect or omission on Lender's part to obtain, perfect or continue any lien
upon, protect, exercise rights against, or realize on, any property of Borrower,
the Surety or any other party securing the Obligations, (e) the existence or
nonexistence of any defenses which may be available to the Borrower with respect
to the Obligations, (f) the granting of any waiver or forbearance at any time
and for any period with respect to any performance by Borrower or any Event(s)
of Default under the Loan Agreement, (g) the commencement of any bankruptcy,
reorganization, liquidation, dissolution or receivership proceeding or case
filed by or against Borrower or any Surety or (h) any other fact, event,
condition or omission which may give rise to a suretyship defense. Surety
promises and undertakes to make all payments hereunder free and clear of any
deduction, offset, defense, claim or counterclaim of any kind.
9. REINSTATEMENT. If any or all payments or proceeds of property
securing any or all of the Obligations made from time to time to Lender with
respect to any obligation hereby guaranteed are at any time recovered from, or
repaid by, Lender in whole or in part in any bankruptcy, reorganization,
receivership, insolvency or similar case or proceeding instituted by or against
Borrower, this Agreement shall continue to be fully applicable to (or, as the
case may be, reinstated to be applicable to) such obligation to the same extent
as if the recovered or repaid payment(s) or proceeds had never been originally
paid to Lender.
10. CUMULATIVE REMEDIES. All rights and remedies hereunder and under
the Loan Documents, and related agreements, are cumulative and not alternative,
and Lender may proceed in any order from time to time against Borrower, the
Surety and/or any other Person or Persons liable for any or all of the
Obligations and their respective assets. Lender shall not have any obligation to
proceed at any time or in any manner against, or exhaust any or all of Lender's
rights against, Borrower or any other Person or Persons liable for any or all of
the Obligations prior to proceeding against the Surety hereunder.
11. SUBROGATION. Any and all rights of any nature of the Surety to
subrogation, reimbursement or indemnity and any right of the Surety to recourse
to any assets or property of, or payment from, Borrower or any other Person or
Persons liable for any or all of the Obligations as a result of any payments
made or to be made hereunder for any reason shall be unconditionally
subordinated to all of Lender's rights under the Loan Agreement and the Surety
shall not at any time exercise any of such rights unless and until all of the
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Obligations have been unconditionally paid in full. Any payments received by the
Surety in violation of this Section 7 shall be held in trust for and immediately
remitted to Lender
12. LENDER RECORDS. Lender's books and records of any and all of the
Obligations, absent manifest error, shall be prima facie evidence against the
Surety of the indebtedness owing or to become owing to Lender hereunder.
13. CONTINUING SURETY. The liability of the Surety under this
Agreement may not be revoked or terminated and this Agreement shall constitute a
continuing surety obligation with respect to all Obligations from time to time
incurred or arising and shall continue in effect until all Obligations are
indefeasibly paid and satisfied.
14. SETOFF. The Surety agrees that Lender shall have a right of
setoff against any and all property of the Surety now or at any time in Lender's
possession, including without limitation deposit accounts, and the proceeds
thereof, as security for the obligations of the Surety hereunder.
15. ACCELERATION. If an Event of Default occurs and is continuing
under the Loan Agreement, then all of the Surety's liabilities of every kind or
nature to Lender hereunder shall, at Lender's option, become immediately due and
payable and Lender may at any time and from time to time, at Lender's option
(regardless of whether the liability of Borrower or any other Person or Persons
liable for any or all of the Obligations has matured or may then be enforced),
take any and/or all actions and enforce all rights and remedies available
hereunder or under applicable law to collect the Surety's liabilities hereunder.
16. ENFORCEMENT TIMING. Failure or delay in exercising any right or
remedy against the Surety hereunder shall not be deemed a waiver thereof or
preclude the exercise of any other right or remedy hereunder. No waiver of any
breach of any provision of this Agreement shall be construed as a waiver of any
subsequent breach or of any other provision.
17. SUCCESSORS AND ASSIGNS. This Agreement shall (a) be legally
binding upon the Surety, and the Surety's successors and assigns, provided that
the Surety's obligations hereunder may not be delegated or assigned without
Lender's prior written consent and (b) benefit any and all of Lender's
successors and assigns.
18. ENTIRE AGREEMENT. This Agreement embodies the whole agreement
and understanding of the parties hereto relative to the subject matter hereof.
No modification or waiver of any provision hereof shall be enforceable unless
approved by Lender in writing.
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19. GOVERNING LAW AND JURY TRIAL. THIS AGREEMENT SHALL IN ALL
RESPECTS BE INTERPRETED, CONSTRUED AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE
STATE OF NEW YORK. THE, SURETY IRREVOCABLY KNOWINGLY AND VOLUNTARILY (I) SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSES OF ANY LITIGATION OR PROCEEDING HEREUNDER OR CONCERNING THE TERMS
HEREOF AND (II) WAIVES THE RIGHT TO A JURY TRIAL WITH RESPECT TO ANY LITIGATION,
CLAIMS OR PROCEEDING HEREUNDER OR CONCERNING THE TERMS HEREOF OR OTHERWISE IN
CONNECTION WITH THE SURETY'S DEALINGS WITH LENDER.
20. NOTICES.
(a) In any action or proceeding brought by Lender to
enforce the terms hereof, the Surety waives personal service of the summons,
complaint, and any motion or other process, and agrees that notice thereof may
be served (i) in person, (ii) by registered or certified mail, return receipt
requested, or (iii) by nationally recognized overnight courier (in the case of
(i) above, on the date of delivery, in the case of (ii) above, on the 3rd day
after deposit in the U.S. mail, and in the case of (iii) above, on the Business
Day following delivery to the courier). Service may be made at the address of
the Surety on the signature page hereof or such other address at which Surety is
then located.
(b) Any and all notices which may be given to the Surety by
Lender hereunder shall be sent to the Surety at the address of the Surety set
forth on the signature page hereof (or such other address at which the Surety is
then located) and shall be deemed given to and received (on the date delivered)
by the Surety if sent by facsimile transmission or if sent in the manner
provided for service of process in paragraph 20(a) above.
21. MAXIMUM LIABILITY. To the extent that applicable law otherwise
would render any of the obligations of Surety hereunder invalid or
unenforceable, Surety's obligations hereunder shall be limited to the maximum
amount which does not result in such invalidity or unenforceability, provided,
however, that Surety's obligations hereunder shall be presumptively valid and
enforceable to their fullest extent in accordance with the terms hereof, as if
this Section 21 were not a part of this Agreement.
22. SEVERABILITY. The invalidity or unenforceability of any
provision hereof shall not affect the remaining provisions which shall remain in
full force and effect.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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DATED the date and year first above written.
EMPIRE RESORTS, INC.
By: /s/ Xxxxxx X. Xxx
---------------------
Name: Xxxxxx X. Xxx
Title: Executive Vice President
and Secretary
Address: x/x Xxxxxxxxxx Xxxxxxx
Xxxxx 00X
Xxxxxxxxxx, XX
(SIGNATURE PAGE TO SURETY AGREEMENT)
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