Exhibit 10.2
Loan No. 1201-P-01-01
GUARANTY AGREEMENT
(MV ROYAL STAR)
This Guaranty Agreement (this "Guaranty"), made by INTERNATIONAL
THOROUGHBRED BREEDERS, INC., a Delaware corporation ("Guarantor"), whose address
for purposes hereof is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in
favor of CRUISE HOLDINGS IV, LLC, a Nevada limited liability company ("Lender"),
whose address for purposes hereof is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, is dated and shall be effective as of December 15, 2004.
R E C I T A L S
A. Lender has agreed to make to ROYAL STAR ENTERTAINMENT, LLC, a Delaware
limited liability company ("Borrower"), whose address for purposes hereof is ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, a loan in the
original principal amount of US$2,850,000.00 (the "Loan").
B. As security for the Loan, Borrower has (i) delivered, as maker, that
certain Promissory Note of even date herewith for the benefit of Lender in the
principal amount of US$2,850,000.00 ("Note") and (ii) granted, as mortgagor,
that certain Preferred Mortgage of even date herewith ("Mortgage") to and for
the benefit of Lender with respect to that certain Maritime Vessel named the
Royal Star (St. ▇▇▇▇▇▇▇ and the Grenadines Official Number 6695, IMO Number
8409056) ("Vessel") and general improvements (the Note and the Mortgage are
hereinafter collectively referred to as, the "Loan Documents").
C. In consideration of and as a condition and inducement to Lender to make
the Loan to Borrower and enter into the Loan Documents, Lender has required that
Guarantor execute and deliver to Lender a guaranty of the Loan Documents in the
form of this Guaranty.
D. Capitalized terms not otherwise defined herein shall have the meaning
given to them in the Loan Documents, and Guarantor acknowledges that it fully
understands the terms, provisions, covenants, conditions and obligations of
Borrower under the Loan Documents.
NOW, THEREFORE, incorporating the above Recitals by reference, and in
consideration of, and as an inducement for, the execution and delivery to
Borrower of the Loan Documents by Lender, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
agreed, Guarantor hereby agrees as follows:
1. Obligations Guaranteed.
1.1 Obligations. Guarantor hereby absolutely and unconditionally
guarantees, without deduction by reason of setoff, defenses or counterclaim, to
Lender and its legal representatives, successors and assigns, and independently
assumes liability to Lender and its representatives, successors and, without any
requirement whatsoever of resort by Lender to any other party for (i) the
payment of all principal and interest, other charges, premiums or fees and any
and all other payments, costs or expenses (including but not limited to
indemnifications, interest charges and attorneys' fees), however designated,
required to be paid by Borrower pursuant to the terms of the Loan Documents so
long as any principal and interest remains outstanding under the Note, and (ii)
the performance of each and every other term, provision, covenant, condition or
obligation of Borrower under the Loan Documents in accordance with their
respective terms (collectively, the payment and performance obligations set
forth in (i) and (ii) above are hereafter called the "Obligations").
1.2 Default. Upon any default or breach by Borrower of any of its duties
or obligations under the Loan Documents, Lender may, but need not, at its sole
option, proceed directly against Guarantor, without proceeding against Borrower
or any other person (as used herein, the phrase "any other person" includes
without limitation any other guarantor of the Loan Documents) or entity and
without foreclosing upon, selling or otherwise disposing of or collecting or
applying any collateral or other property, real or personal, which Borrower may
have theretofore delivered to Lender as security for the payment and performance
of the Obligations. Guarantor hereby waives the right to require Lender to
proceed against Borrower or any other person or entity, or to pursue any other
remedy, and Guarantor further waives the right to have any other property of
Borrower or any other person or entity first applied to the discharge of any
rent or other obligations of Borrower under the Loan Documents.
2. Nature of Guarantor's Liability; No Exoneration or Subrogation Until All
Obligations Fully Satisfied.
2.1 Guaranty Unconditional. The guaranty by Guarantor provided for in
this Guaranty is an absolute and unconditional guaranty of payment and
performance, and is not a guaranty of collection, regardless of (i) the absence
of any action to enforce the same by Lender, or (ii) Lender's obtaining any
judgment against Borrower or taking any action to enforce same. The liability of
Guarantor under this Guaranty is independent of the obligations which are hereby
guaranteed and of the liabilities of any other guarantors of the Obligations.
2.2 Waiver of Formalities. Guarantor hereby fully waives all
requirements, if any, of notice, demand for payment, diligence, filing of claims
with a court in the event of the bankruptcy of Borrower, and all other notices
of every kind or nature (including those of any action or inaction on the part
of Borrower or Lender or anyone else) in respect of the Obligations.
2.3 Guarantor's Consent. Guarantor hereby consents to, and the liability
of Guarantor under this Guaranty shall in no way be affected by, the following:
(a) any and all future changes, modifications, amendments,
alterations, renewals, extensions or assignments to the Loan Documents,
including without limitation, any increases, reductions or cancellations which
may hereafter be made to, of or under the Loan Documents or of any of the
Obligations (collectively, the "Modifications");
(b) any and all alterations, impairments, suspensions, terminations
and expirations (including, without limitation, all such as might result from
the Modifications or from any action or inaction of the type described in
paragraph (c) below) of the remedies or rights of Lender against Borrower or any
other person in respect of any of the Obligations;
(c) any and all action or inaction on the part of Lender (including,
without limitation, election of remedies, amendment, substitution, surrender,
release, forfeiture, enforcement, foreclosure and sale, under power of sale or
otherwise), in its sole and unfettered discretion, in respect of any security
(or any part thereof) now held or hereafter acquired by Lender securing the
performance of the Obligations; and
(d) The foregoing consent by Guarantor is knowingly given even though
any rights or defenses which Guarantor may otherwise have, by subrogation,
reimbursement, indemnification or otherwise, against Borrower, Lender or others
may be diminished, destroyed or otherwise adversely affected by any such
alteration, action or inaction, all to the end that Guarantor shall not be
exonerated, released or discharged from its absolute, unconditional and
independent liability hereunder by any such alteration, Modification,
impairment, suspension, termination, expiration action or inaction.
2.4 Further Waivers. Guarantor waives any right pursuant to any law,
rule, arrangement or relationship now or hereafter existing, to require or
compel Lender to (a) proceed against Borrower or any other guarantor; (b)
proceed against or exhaust any security for the Obligations; (c) pursue any
other remedy in Lender's power whatsoever; and failure of Lender to do any of
the foregoing shall not exonerate, release or discharge Guarantor from its
absolute, unconditional and independent liability to Lender hereunder, or (d) in
the event that any property of Guarantor is or may be hypothecated with property
of Borrower as security for any of the Obligations, to have such property of
Borrower first applied to the discharge of such Obligations.
2.5 Separate Action. Lender may bring and prosecute a separate action
against Guarantor to enforce Guarantor's liability hereunder, whether or not any
action is brought against Borrower or any other person and whether or not
Borrower or any other person is joined in such action or actions. Nothing shall
prohibit Lender from exercising its rights against Guarantor, Borrower, the
security, if any, for the Obligations, and any other person simultaneously,
jointly and/or severally. Guarantor shall be bound by each and every ruling,
order and judgment obtained by Lender against Borrower in respect of the
obligations, whether or not Guarantor is a party to the action or proceeding in
which such ruling, order or judgment is issued or rendered.
2.6 No Exoneration. Guarantor shall not be discharged, released or
exonerated, in any way, from its absolute, unconditional and independent
liability hereunder, even though any rights or defenses which Guarantor may have
against Borrower, Lender or others may be destroyed, diminished or otherwise
affected by any of the following:
a) Any declaration by Lender of a default in respect of any of the
Obligations.
b) The exercise by Lender of any rights or remedies against Borrower or any
other person.
c) The failure of Lender to exercise any rights or remedies against
Borrower or any other person.
d) The sale or enforcement of, or realization upon (through judicial
foreclosure, seizure, power of sale or any other means) any security for any of
the Obligations, even though (i) recourse may not thereafter be had against
Borrower for any deficiency or (ii) Lender fails to pursue any such recourse
which might otherwise be available, whether by way of deficiency judgment
following judicial foreclosure or otherwise.
2.7 No Subrogation. Until all the Obligations have been performed in
full, Guarantor shall have no right to subrogation, and Guarantor waives (a) any
right pursuant to any law, rule, arrangement or relationship now or hereafter
existing, or otherwise, to enforce any remedy which Lender now has or may
hereafter have against Borrower and (b) any benefit of, and any right to
participate in, any security now or hereafter held by Lender.
2.8 No Discharge. Guarantor shall not be discharged, released or
exonerated, in any way, from its absolute, unconditional and independent
liability hereunder by the voluntary or involuntary participation by Borrower in
any settlement or composition for the benefit of Borrower's creditors, either in
liquidation, readjustment, receivership, bankruptcy or otherwise.
2.9 Bankruptcy. Guarantor understands and acknowledges that by virtue of
this Guaranty, it has specifically assumed any and all risks of a bankruptcy or
reorganization case or proceeding with respect to Borrower. As an example and
not by way of limitation, a subsequent modification of the Loan Documents in any
reorganization case concerning Borrower shall not affect the obligation of
Guarantor to discharge the Obligations in accordance with the original terms of
the Loan Documents.
2.10 Separate Actions Against Separate Guarantors. Lender may bring and
prosecute a separate action against separate, individual Guarantors to enforce
any one or more Guarantors' liability hereunder, whether or not any action is
brought against Borrower, any other Guarantor or any other person and whether or
not Borrower, other Guarantor or any other person is joined in such action or
actions. Nothing shall prohibit Lender from exercising its rights against any
separate Guarantors, Borrower, the security, if any, for the Obligations, and
any other person simultaneously, jointly and/or severally. Each Guarantor shall
be bound by each and every ruling, order and judgment obtained by Lender against
Borrower or other Guarantor in respect of the obligations, whether or not such
Guarantor is a party to the action or proceeding in which such ruling, order or
judgment is issued or rendered.
3. Subordination of Guarantor's Claims. Any indebtedness of Borrower now or
hereafter held by Guarantor is hereby subordinated to the Obligations; and such
indebtedness of Borrower to Guarantor, if any material default occurs under any
of the Obligations and Lender so requests from and after the material default,
shall be collected, enforced and received by Guarantor as trustee for Lender and
be paid over to Lender on account of the Obligations but without reducing or
affecting in any manner the absolute, unconditional and independent liability of
Guarantor under this Guaranty.
4. Costs of Enforcement. Guarantor shall reimburse Lender for all costs and
expenses, including, without limitation, all attorneys' fees whether or not
legal action be instituted, incurred or paid by Lender in enforcing this
Guaranty.
5. Benefit. This Guaranty may be assigned or transferred in whole or in
part by Lender in connection with, and the benefit of this Guaranty shall
automatically pass with, a transfer or assignment of the Note, other than at
foreclosure or otherwise as a result of the exercise of any right or remedy, to
any subsequent owner thereof, if the assignee or transferee is a permitted
assignee under the Loan Documents. All references to Lender herein shall be
deemed to include any successors or assignees or any subsequent holders of the
Note or any of them. This Guaranty is also made for the benefit of any person
claiming by, through or under Lender.
6. Notices. All notices and other communications, demands or payments
required or permitted under this Guaranty shall be in writing, served personally
on, or mailed by certified or registered United States mail to, the party to be
charged with receipt thereof. Notices and other communications given by personal
service shall be deemed given upon receipt and if served by mail shall be deemed
given hereunder seventy-two (72) hours after deposit of such notice or
communication in a United States post office as certified or registered mail
with postage prepaid and duly addressed to the party to whom such notice or
communication is to be given, to the applicable address set forth above. Any
party may change its address for purposes of this Section 6 by giving to the
party intended to be bound thereby, in the manner provided hereon, a written
notice of such change.
7. Successors. All of the terms and provisions of this Guaranty shall be
binding upon, and inure to the benefit of, and be enforceable by, the respective
heirs, representatives, successors and assigns of the parties hereto, whether so
expressed or not. Nothing contained in this Guaranty shall be deemed to in any
way alter or modify the terms and conditions of the Loan Documents.
8. Entire Agreement. This Guaranty embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings related to the subject matter hereof.
9. Headings. The headings in this Guaranty are for the purpose of reference
only and shall not limit or otherwise affect the terms or provision hereof.
10. Changes, Waivers, Etc. Neither this Guaranty not any term or provision
thereof may be changed, waived, discharged or terminated except by an instrument
in writing executed by the party against which enforcement of the change,
waiver, discharge or termination is sought.
11. Disclosure. Guarantor assumes full responsibility for being and
remaining informed of the financial condition of Borrower and all other
circumstances bearing upon the risk of nonpayment or nonperformance of any of
the Obligations, and Lender shall have no duty to advise Guarantor of
information known to Lender regarding such condition or any such circumstances.
12. Governing Law. The substantive and procedural laws of the State of
Nevada shall govern the validity, construction, interpretation, performance and
enforcement of this Guaranty and the parties agree to jurisdiction in Nevada
without reference to its conflict of laws provisions regardless of the location
of the Vessel. The parties also hereby agree that any action and/or proceeding
in connection with this Guaranty shall only be brought in the venue of ▇▇▇▇▇
County, Nevada.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed as of
the day and year first above written.
"GUARANTOR"
INTERNATIONAL THOROUGHBRED BREEDERS, INC., a Delaware corporation
By: s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
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