Guaranty - Donald J. Trump and THCR Management Services LLC
GUARANTY
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THIS GUARANTY, dated as of November 2, 2001, (as amended, restated,
supplemented or otherwise modified from time to time, the "Guaranty") is made by
Donald J. Trump, an individual (the "Guarantor"), in favor of the Lenders party
to the Loan Agreement described below.
RECITALS
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WHEREAS, concurrently herewith, THCR Management Services, LLC, a
Delaware limited liability company (the "Borrower"), is entering into a Loan
Agreement, dated as of November __, 2001 (as amended, restated, supplemented or
otherwise modified, the "Loan Agreement") among the Borrower, the Lenders party
thereto (the "Lenders"), pursuant to which the Lenders will make Loans to the
Borrower in the aggregate principal amount not to exceed $18,800,000;
WHEREAS, the Guarantor has an indirect beneficial ownership interest in
the Borrower;
WHEREAS, the Borrower has agreed to use the Loans under the Loan
Agreement for the purposes described in Section 2.5 thereof, including providing
a portion of the financing for the construction of a proposed expansion of the
29 Spotlight Casino;
WHEREAS, the Guarantor is executing this Guaranty to induce the Lenders
to make Loans to the Borrower under the Loan Agreement; and
WHEREAS, Lenders have required as a condition to their entering into
the Loan Agreement the execution and delivery of this Guaranty;
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to enter into the Loan Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Guarantor hereby agrees with Lenders as follows:
1. Defined Terms. All terms not otherwise defined herein shall have
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for the purposes hereof the meanings set forth in the Loan Agreement.
2. The Guaranty. The Guarantor hereby absolutely, unconditionally and
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irrevocably guarantees the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the Borrower's obligations to pay
principal, accrued interest, fees and expenses under the Loan Documents,
including all reasonable costs of collection and enforcement thereof and
interest thereon which would be owing by the Borrower but for the effect of the
Bankruptcy Code, 11 U.S.C. (S) 101 et. seq. (the "Guaranteed Obligations").
Notwithstanding the foregoing, from and after the date on which the Borrower has
made prepayments under Section 2.4(b)(iv)(l) of the Loan Agreement aggregating
$1,000,000 or more, the Guaranteed Obligations shall be reduced to an amount
equal to the excess of the outstanding principal amount of the Notes over the
outstanding principal amount owed to the Borrower under the Bank Loan. The
Guarantor understands, agrees and confirms that the Lenders may enforce this
Guaranty up to the full
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amount guaranteed hereunder without proceeding against the Borrower, against any
security for the Guaranteed Obligations or against any guarantor under any other
guarantee covering the Guaranteed Obligations. The Guarantor agrees that if, for
any reason, the Borrower shall fail or be unable to pay punctually and fully,
any of the Guaranteed Obligations, the Guarantor shall pay such Guaranteed
Obligations to Lenders in full immediately upon demand. The Guarantor agrees
that one or more successive actions may be brought against the Guarantor, as
often as Lenders deem advisable, until all of the Guaranteed Obligations are
paid and performed in full. This Guaranty constitutes a guarantee of payment and
not of collection.
3. Guaranty Unconditional. The obligations of the Guarantor hereunder
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shall be primary obligations, unconditional, absolute, and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any Obligation of the Borrower under the Loan
Documents, by operation of law, or otherwise;
(b) any release or discharge by operation of law of the Borrower, the
Guarantor, or any other guarantor of the Obligations from any
obligation or agreement contained in any of the Loan Documents;
(c) any termination, modification or amendment of or supplement to the
Loan Agreement or any of the other Loan Documents;
(d) any release, exchange, substitution, non-perfection or invalidity
of any direct or indirect security for, or any other guaranty of,
any of the Guaranteed Obligations;
(e) any change in the limited liability company existence, structure or
ownership of the Borrower, or any insolvency, bankruptcy,
reorganization, arrangement, readjustment, assignment for the
benefit of creditors, composition, receivership, liquidation,
marshaling of assets and liabilities or other similar events or
proceedings affecting the Borrower or its assets or any resulting
release or discharge of any Obligation of the Borrower under the
Loan Documents;
(f) any merger or consolidation of the Borrower into or with any
Person, or any sale, lease or transfer of any of the assets of the
Borrower or the Guarantor to any other Person;
(g) the existence of any claim, set-off, or other rights which the
Guarantor may have at any time against the Borrower or any other
Person, whether in connection herewith or with any unrelated
transactions;
(h) any invalidity or unenforceability of the Loan Agreement relating
to or against the Borrower for any reason, or any provision of
applicable law or regulation purporting to prohibit the payment by
the Borrower of its Obligations under the Loan Agreement or the
other Loan Documents;
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(i) the failure of any financing source, including without limitation
the Lenders or the Borrower, to obtain or maintain any required
Permits (including a license or exemption issued pursuant to
Section 6.4.6 of the Compact) or the termination or revocation of
any such license or exemption, or any finding of the Borrower or
the Lenders as unsuitable by any California State gaming agency,
regardless of whether any of the foregoing results in the
Twenty-Nine Palms Enterprises Corporation not being required to pay
interest under the Bank Loan or otherwise impairs or invalidates
the Twenty-Nine Palms Enterprises Corporation's obligations under
the Bank Loan; or
(j) any other act or omission to act or delay of any kind by the
Lenders or the Borrower or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
Section 3, constitute a legal or equitable discharge of the
Guarantor's obligations hereunder.
4. Waiver by Guarantor. The Guarantor expressly waives in respect of
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the Guaranteed Obligations any and all defenses now or hereafter arising or
asserted by reason of:
(a) any disability or other defense of the Borrower or any other Person
with respect to the Guaranteed Obligations;
(b) the unenforceability or invalidity of any security or guaranty for
the Guaranteed Obligations or the lack of perfection or continuing
perfection or failure of priority of any security for the
Guaranteed Obligations;
(c) the cessation for any cause whatsoever of the liability of the
Borrower or any other Person (other than by reason of the full
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payment and performance of all Obligations);
(d) any failure of any Lender to marshal assets in favor of the
Borrower or any other Person;
(e) any amendment, modification or waiver of any provision of the Loan
Documents or lack of notice thereof;
(f) any incapacity, lack of authority, death or disability of the
Borrower or any other Person;
(g) any failure of the Lenders to give notice of the existence,
creation or incurring of any new or additional indebtedness or
other obligation (other than increases in the principal amount of
the Lenders' commitments from those in effect on the Closing Date)
or of any action or nonaction on the part of any other Person in
connection with the Loan Documents, including the waiver of any
conditions to the making of any advance of proceeds of any Loan;
(h) any notice of Default or Event of Default or intention to
accelerate any of the Obligations or any notice of acceleration of
the Obligations;
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(i) any lack of acceptance or notice of acceptance of this Agreement by
the Lenders;
(j) notice of any of the matters referred to in Section 3 above;
(k) any lack of presentment, demand, protest, or notice of dishonor,
demand, protest or nonpayment with respect to any indebtedness or
obligations under any of the Loan Documents;
(l) any lack of other notices to which the Borrower, or any other
Person, might be entitled;
(m) any invalidity or irregularity, in whole or in part, of any one or
more of the Loan Documents;
(n) any direct or indirect sale, transfer, or other disposition of the
Guarantor's indirect equity interest in the Borrower;
(o) any sale or assignment by the Borrower of any assets of such
Person, or any portion thereof, whether or not consented to by the
Lenders;
(p) the dissolution or termination of existence of the Borrower or any
other Person or the voluntary or involuntary liquidation, sale or
other disposition of all or substantially all of the assets of the
Borrower;
(q) any failure or delay of the Lenders to commence an action against
the Borrower, to assert or enforce any remedies against the
Borrower under the Notes or the Loan Documents, or to realize upon
any security;
(r) the compromise, settlement, release or termination of any or all of
the obligations of the Borrower under the Notes or the Loan
Documents;
(s) any act or omission of any Lender or others that directly or
indirectly results in or aids the discharge or release of the
Borrower or any other Person or any other security or guaranty for
the Guaranteed Obligations by operation of law or otherwise;
(t) any law which provides that the obligation of a surety or guarantor
must neither be larger in amount nor in other respects more
burdensome than that of the principal or which reduces a surety's
or guarantor's obligation in proportion to the principal
obligation;
(u) any failure of any Lender to file or enforce a claim in any
bankruptcy or other proceeding with respect to any Person;
(v) the election by any Lender, in any bankruptcy proceeding of any
Person, of the application or non-application of Section 1111(b)(2)
of the United States Bankruptcy Code;
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(w) any extension of credit or the grant of any lien under Section 364
of the United States Bankruptcy Code or any use of cash collateral
under Section 363 of the United States Bankruptcy Code;
(x) any agreement or stipulation with respect to the provision of
adequate protection in any bankruptcy proceeding of any Person;
(y) the avoidance of any Lien in favor of the Lenders for any reason;
(z) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding
commenced by or against any Person, including any discharge of, or
bar or stay against collecting, all or any of the Guaranteed
Obligations (or any interest thereon) in or as a result of any such
proceeding; or
(aa) to the fullest extent permitted by law, any other legal, equitable
or surety defenses whatsoever to which the Guarantor might
otherwise be entitled with respect to the Guaranteed Obligations.
5. Subrogation of Guarantor. Upon making any payment with respect to
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the Guaranteed Obligations hereunder, the Guarantor shall be subrogated to the
rights of the Lenders against the Borrower with respect to such payment;
provided that the Guarantor shall not enforce any payment by way of subrogation
until all Obligations under the Loan Agreement have been paid in full.
6. Representations and Warranties. The Guarantor represents and
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warrants that:
(a) This agreement is the valid and binding obligation of the
Guarantor, enforceable in accordance with its terms;
(b) The execution, delivery and performance of this Guaranty do not and
will not (i) constitute a default or cause an acceleration of any
obligation under, or result in the imposition or creation of (or
the obligation to create or impose) any Lien with respect to, any
material bond, note, debenture or other evidence of Indebtedness or
any indenture, mortgage, deed of trust or other agreement or
instrument to which the Guarantor is a party or bound, or to which
any properties of the Guarantor may be subject, (ii) contravene any
order of any court or governmental agency (including, without
limitation, any gaming authority in any state of the United States
or foreign country or body having jurisdiction over the Guarantor
or any of his properties), (iii) violate or conflict with any
statute, rule or regulation or administrative or court decree or
Permit applicable to the Guarantor or to which any of his
properties may be subject, or (iv) require any approval or consent
of any Tribunal.
7. Stay of Acceleration. In the event that acceleration of the time
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for payment of any of the Guaranteed Obligations is stayed upon insolvency,
bankruptcy or reorganization of the Borrower, all such amounts shall nonetheless
be payable by the Guarantor forthwith on demand by any Lender.
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8. Termination. This Guaranty shall automatically terminate and the
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Guarantor shall thereafter have no further liability or obligations hereunder on
the earlier of (i) the first date that each of the following have occurred: (x)
the outstanding principal amount under the Notes is reduced to an amount equal
to or less than the outstanding principal amounts owed to the Borrower under the
Bank Loan and (y) no Default or Event of Default (other than pursuant to Section
7.19 of the Loan Agreement) has occurred and is continuing and (ii) the full
satisfaction of the Guaranteed Obligations. Upon the termination of this
Guaranty, the Lenders shall, promptly upon the request of the Guarantor, execute
and deliver to the Guarantor an acknowledgment of the termination of this
Guaranty and a release of the Guarantor from all claims of any nature arising
under this Guaranty.
9. Reinstatement. Notwithstanding anything to the contrary contained
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herein, the Guarantor covenants that this Guaranty shall be reinstated if and to
the extent that any payment of any of the Guaranteed Obligations made on or
prior to such termination is rescinded or otherwise must be restored or returned
by the Lenders upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower, all as though such payment had not been made.
10. Miscellaneous.
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(a) Successors and Assigns. This Guaranty shall be binding upon the
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Guarantor and his successors and assigns and shall inure to the
benefit of the Lenders. The Guarantor may not assign his
obligations hereunder.
(b) Notices. All notices, demands and other communications hereunder
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shall be given and shall be effective in accordance with Section
9.8 of the Loan Agreement, except that notices to the Guarantor
shall be given to his address set forth on the signature page
hereof, or to such other address as the Guarantor may specify in
writing from time to time to the Lenders.
(c) Amendments. Neither this Guaranty nor any provision hereof may be
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amended, modified, waived, discharged or terminated orally, but
only by a statement in writing signed by the Required Lenders.
(d) Governing Law; Waiver of Jury. This Guaranty shall be construed in
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accordance with and governed by the laws of the State of New York
including, without limitation Sections 5-1401 and 5-1402 of the New
York General Obligations Law. Any judicial proceeding brought
against the Guarantor with respect to this Guaranty may be brought
in any court of competent jurisdiction in the State of New York or
of the United States of America for the Southern District of New
York and, by execution and delivery of this Guaranty, the Guarantor
(a) accepts, generally and unconditionally, the nonexclusive
jurisdiction of such courts and any related appellate court, and
irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Guaranty, and (b) irrevocably waives any
objection the Guarantor may now or hereafter have as to the venue
of any such suit, action or proceeding brought in such a court or
that such court is an inconvenient forum. The Guarantor hereby
waives personal service of process
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and consents that service of process upon it may be made by
certified or registered mail, return receipt requested, at his
address specified or determined in accordance with the provisions
of Section 10(b), and service so made shall be deemed completed on
the fifth Business Day after such service is deposited in the mail
or, if earlier, when delivered. Nothing herein shall affect the
right to serve process in any other manner permitted by law or
shall limit the right of any Lender to bring proceedings against
the Guarantor in the courts of any other jurisdiction. EACH OF THE
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GUARANTOR AND THE LENDERS HEREBY WAIVE TRIAL BY JURY IN ANY
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JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
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(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY
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ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS GUARANTY, THE
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LOAN AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
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(e) Counterparts; Effectiveness. This Guaranty may be executed in any
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number of counterparts each of which shall be deemed an original
with the same effect as if the signatures thereto and hereto were
upon the same instrument. Delivery of an executed counterpart of a
signature page of this Guaranty by telecopy shall be effective as
delivery of a manually executed counterpart of this Guaranty.
(f) Severability. In case any provision in or obligation under this
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Guaranty or any other Loan Document shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not
in any way be affected or impaired thereby.
(g) Entire Agreement. This Guaranty embodies the entire agreement of
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the parties and supersedes all prior agreements and understandings,
if any, relating to the subject matter hereof and thereof.
(h) Failure or Indulgence Not Waiver. No failure or delay on the part
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of any Lender in the exercise of any power, right or privilege
hereunder or under any other Loan Document shall impair such power,
right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.
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IN WITNESS WHEREOF, the undersigned Guarantor has duly executed and
delivered this Guaranty as of the date first above written.
DONALD J. TRUMP
/s/ Donald J. Trump
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Address for Notices:
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Donald J. Trump
725 Fifth Avenue
New York, New York 10022
Facsimile: (XXX) XXX-XXXX
With a copy to:
The Trump Organization
725 Fifth Avenue
New York, New York 10022
Attention: Bernard R. Diamond, Esq.
Facsimile: (XXX) XXX-XXXX