EXHIBIT 10.7
LESSEE GUARANTY AGREEMENT
THIS LESSEE GUARANTY AGREEMENT made and entered into as of December 1, 1994
(the "Lessee Guaranty"), from MIDWAY-CTS BUFFALO, LTD., a New York corporation
(the "Lessee"), having its principal office located c/▇ ▇▇▇▇▇ International
Enterprises Corp., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, to KEY BANK OF
NEW YORK, a domestic corporation formed under the laws of the State of New York
(together with any subsequent holder of the Bond referred to below, the
"Bondholder"), having its principal office at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, the Erie County Industrial Development agency, a corporate
governmental agency constituting a body corporate and politic and public benefit
corporation duly organized and existing under the laws of the State of New York
and established pursuant to the Act hereinafter mentioned by Chapter 293 of the
1970 Laws of New York, as amended (the "Agency"), intends to issue its
Industrial Development Revenue Bond (1994 Midway-CTS Buffalo, Ltd. Project) in
the aggregate principal amount not to exceed $2,600,000 (the "Bond"); and
WHEREAS, the Bond are to be issued pursuant to the New York State
Industrial Development Agency Act, being Title 1 of Article 18-A of the General
Municipal Law of the State of New York, constituting Chapter 24 of the
Consolidated Laws of the State of New York, as amended, a resolution of the
Agency adopted on August 11, 1993, September 15, 1993 and October 12, 1994, and
under and pursuant to a Mortgage Agreement dated as of December 1, 1994, between
the Agency and the Bondholder (the "Mortgage Agreement"); and
WHEREAS, the proceeds derived from the issuance of the Bond are to be
advanced to the Lessee pursuant to a certain Building Loan Contract dated as of
December 1, 1994 by and between the Lessee and the Bondholder (the "Building
Loan Contract"), and such proceeds are to be used to finance a portion of the
cost of the acquisition and construction of a commercial facility within the
City of Buffalo consisting of the acquisition of a parcel of land consisting of
approximately 4.7 acres and the construction of an approximately 69,265 square
foot building thereon, all for sublease to tenants (the "Facility"), which
Facility is to be leased to the Lessee pursuant to a Lease Agreement dated as of
December 1, 1994 between the Agency and the Lessee (the "Lease Agreement"); and
WHEREAS, unless otherwise defined herein, capitalized terms shall have the
meaning ascribed in the Mortgage Agreement; and
WHEREAS, the Lessee is desirous that the Agency issue, sell and deliver the
Bond and apply the proceeds as aforesaid and enter into the Lease Agreement with
the Lessee and is willing to enter into this Lessee Guaranty in order to
enhance the marketability of the Bond and thereby achieve interest cost and
other savings to the Lessee as an inducement to the purchase of the Bond by all
who shall at any time become the Bondholder.
NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration received, the Lessee does hereby represent, warrant,
covenant and agree with the Bondholder as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE LESSEE
Section 1.1. Lessee Representations and Warranties. The Lessee represents
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and warrants that:
(a) The Lessee (1) is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation, without
limitation on the duration of its existence, (2) has the corporate power and
authority to own its properties and assets and to carry on its business as now
being conducted, (3) is duly qualified to do business in the State of New York,
and (4) has the corporate power and authority to execute, enter into, deliver
and perform this Lessee Guaranty as required hereunder.
(b) The Lessee has the corporate power and authority to execute,
deliver and perform this Lessee Guaranty as required hereunder and to guarantee
the payment of the principal of, redemption premium, if any, and interest on the
Bond pursuant to the provisions hereof and this Lessee Guaranty is the legal,
valid and binding obligation of the Lessee enforceable in accordance with its
terms.
(c) The execution, delivery and performance of this Lessee Guaranty
by the Lessee, including the performance of the obligations to guarantee the
payment of the Bond by the Lessee and the borrowing evidenced thereby, and all
other actions contemplated by this Lessee Guaranty (1) have been duly authorized
by all requisite corporate action by the Lessee, (2) will not violate (i) any
provision of law, any order of any court or other agency of government or any
governmental rule or regulation, the Certificate of Incorporation or By-laws of
the Lessee, or (ii) any provision of any indenture, agreement or other
instrument to which the Lessee or any of its properties or assets are bound, and
(3) will not be in conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument, will not accelerate any debt or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of the Lessee other than as permitted by the terms
of this Lessee Guaranty, the Mortgage Agreement and the Lease Agreement.
(d) The assumption by the Lessee of its obligations hereunder will
result in a direct financial benefit to the Lessee.
(e) No registration with or consent or approval of, or other action
by, any Federal, state or other governmental authority or regulatory body in the
United States is required as of the Closing Date in connection with the
execution, delivery and performance of this Lessee Guaranty,
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or if so required, such registration has been made or such consent or approval
given or such other appropriate action taken and the same is in full force and
effect, and notice as to the nature of such has heretofore been given to the
Bondholder.
(f) Since the Last Financial Statement Date there has been no
material adverse change in the business, properties or financial condition of
the Lessee.
(g) The Lessee has good and marketable title to all of its real and
personal properties and tangible assets, and the real and personal properties
and tangible assets reflected on the financial statements referred to in the
Lease Agreement and this Lessee Guaranty (except for such real and personal
properties and tangible assets as have been disposed of since the dates of such
financial statements because no longer used or useful in the conduct of its
business or as have been disposed of in the ordinary course of business), and
all such real and personal properties and tangible assets are free and clear of
mortgage, pledges, liens, charges and other encumbrances of any nature
whatsoever, except such as are not expressly prohibited by the terms hereof.
(h) There are no actions, suits or proceedings (whether or not
purportedly on behalf of the Lessee) at law or in equity or by or before any
Federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, now pending or
threatened against or affecting it, which involve any of the transactions herein
contemplated or the possibility which, if adversely determined, would materially
impair the right of the Lessee to carry on its business substantially as now
conducted or would materially adversely affect the financial condition of the
Lease.
(i) The Lessee has filed or caused to be filed all Federal, state and
local tax returns that are required to be filed and has paid or caused to be
paid all taxes required in connection with such returns or pursuant to any
assessment received by it, to the extent that such taxes have become due, except
for any tax or assessment the validity of which is being contested in good faith
by appropriate proceedings, and the Lessee has set aside on its books adequate
reserves with respect to any such tax or assessment so contested.
(j) The Lessee is not (i) a party to any agreement, indenture, lease
or instrument, or (ii) subject to any charter or other corporate restriction or
any judgment, order, writ, injunction, decree, rule or regulation which
materially adversely affects its business, properties, assets, operations or
financial condition.
(k) The Lessee is not in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party and which materially affects its
business, properties or assets, operations or financial condition.
(l) The Lessee enjoys peaceful and undisturbed possession in all
respects under all leases as to which it is a lessee and all such leases are
valid and subsisting and in full force and
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effect on the date hereof.
(m) The Lessee is in compliance in all material respects with the
applicable provisions of ERISA and the regulations and published interpretations
thereunder. No Reportable Event has occurred with respect to any Plan (as
defined in ERISA) administered by the Lessee.
(n) The financial statements furnished to the Bondholder fairly
present the financial condition and the results of operations of the Lessee as
of the dates and for the periods indicated therein and the balance sheets
furnished to the Bondholder show all known material liabilities, direct or
contingent, of the Lessee as of the respective dates thereof. Each financial
statement referred to in this paragraph was prepared in accordance with
generally accepted accounting principles applied on a consistent basis.
(o) The Lessee agrees to furnish Bondholder within ninety (90) days
from the end of each fiscal year a consolidated financial statement for ▇▇▇▇▇
International Enterprises Corp. inclusive of the Lessee, which shall include a
balance sheet, statement of operations and reconciliation of surplus for each
fiscal year; to furnish Bondholder within ninety (90) days from the end of each
fiscal year a financial statement. All of the aforesaid shall be prepared in
accordance with generally accepted accounting practices by accountants
satisfactory to Bondholder.
ARTICLE II
AGREEMENT TO GUARANTEE
Section 2.1. Obligations Guaranteed. (a) The Lessee hereby
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unconditionally guarantees to the Bondholder (1) the full and prompt payment of
the principal of the Bond and the indebtedness represented thereby, and the
redemption premium, if any, on the Bond when and as the same shall become due
and payable, whether at the stated maturity thereof, by acceleration, call for
redemption or otherwise; (2) the full and prompt payment of interest on the Bond
when and as the same shall become due and payable; (3) the full and prompt
payment of an amount equal to each and all of the rental payments and other sums
when and as the same shall become due, required to be paid by the Lessee under
the terms of the Lease Agreement; and (4) the full and prompt performance and
observance by the Lessee of all of the obligations, covenants and agreements
required to be performed and observed by the Lessee under the terms of the Lease
Agreement, the Building Loan Contract and the other Security Documents. The
Lessee hereby irrevocably and unconditionally agrees that upon any default by
the Agency in the payment, when due, of any principal of, any redemption premium
on, or any interest on the Bond, the Lessee will promptly pay the same. The
Lessee further hereby irrevocably and unconditionally agrees that (i) upon any
default by the Lessee in the rental payments and other sums, when due and
payable, under the Lease Agreement the Lessee will promptly pay the same, and
(ii) upon any default by the Lessee in any of the obligations, covenants and
agreements required to be performed and observed by the Lessee under the Lease
Agreement, the Building Loan Contract and the other Security Documents, the
Lessee will effect the observance of such obligations, covenants and agreements.
All payments by the Lessee shall be paid in lawful money of the United States of
America. Each and every default (x) in the payment of the
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principal of, redemption premium, if any, or interest on the Bond, (y) in the
payments of the rental payments and other sums required to be paid by the Lessee
under the terms of the Lease Agreement, or (z) in the prompt performance and
observance by the Lessee of all of the obligations, covenants and agreements
required to be performed and observed by the Lessee under the terms of the Lease
Agreement, the Building Loan Contract and the other Security Documents, shall
give rise to a separate cause of action hereunder, and separate suits may be
brought hereunder as each cause of actions arises.
(b) The Lessee further agrees that this Lessee Guaranty constitutes
an absolute, unconditional, present and continuing guarantee of payment and not
of collection, and waives any right to require that any resort be had by the
Bondholder to (1) any security held by or for the benefit of the Bondholder for
payment of the principal of, redemption premium, if any, or interest on the
Bond, (2) the Bondholder's rights against any other person, or (3) any other
right or remedy available to the Bondholder by contract, applicable law or
otherwise. The obligations of the Lessee under this Lessee Guaranty are direct,
unconditional and completely independent of the obligations of any other person
of entity, and a separate cause of action or separate causes of action may be
brought and prosecuted against the Lessee without the necessity of joining the
Agency or any other party or previously proceeding with or exhausting any other
remedy against any other person who might have become liable for the
indebtedness or of realizing upon any security held by or for the benefit of the
Bondholder.
Section 2.2. Obligations Unconditional. The obligations of the Lessee
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under this Lessee Guaranty shall be absolute and unconditional, and shall remain
in full force and effect until the entire principal of, redemption premium, if
any, and interest on the Bond and all payments, obligations, covenants and
agreements of the Lessee under the Lease Agreement, the Building Loan Contract
and other Security Documents, shall have been paid in full or provided for, and
all costs, Bondholder's fees and commissions and expenses, if any, referred to
in Section 2.5 hereof shall have been paid in full, and, to the extent permitted
by law, such obligations shall not be affected, modified, released, or impaired
by any state of facts or the happening from time to time of any event, including
without limitation, any of the following whether or not with notice to, or the
consent of the Lessee:
(a) the invalidity, irregularity, illegality or unenforceability of,
or any defect in, any of the Security Documents, the Bond or any collateral
security for any thereof;
(b) any present or future law or order of any government (de jure or
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de facto) or of any agency thereof purporting to reduce, amend or otherwise
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affect the Bond or any other obligation of the Agency, the Lessee, or any other
obligor or to vary any terms of payment;
(c) any claim of immunity on behalf of the Agency, the Lessee or any
other obligor or with respect to any property of the Agency or the Lessee or any
other obligor;
(d) the compromise, settlement, release, extension, indulgence,
change, modification or termination of any or all of the obligations, covenants
or agreements of any obligor
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under any of the Security Documents;
(e) the failure to give notice to any obligor under any of the
Security Documents of the occurrence of any default or Event of Default under
the terms and provisions of any of the Security Documents (except as may be
specifically provided in any such Security Document);
(f) the actual or purported assignment, subleasing or mortgaging of
all or any part of the interest of the Agency in the Lease Agreement or the
Facility or any failure of title with respect to the Agency's interest in the
Facility;
(g) the actual or purported assignment, subleasing or mortgaging of
all or any part of the interest of any obligor under any of the Security
Documents;
(h) the actual or purported assignment, subleasing or mortgaging of
all or any of the obligations, covenants and agreement contained in this Lessee
Guaranty or in any other Security Document;
(i) the waiver of the payment, performance or observance by any
obligor under any of the Security Documents of any of the obligations,
conditions, covenants or agreements of any or all of them contained in any such
Security Document;
(j) the receipt and acceptance by the Bondholder or the Agency of
notes, checks or other instruments for the payment of money made by any obligor
under any of the Security Documents and any extensions and renewals thereof;
(k) the extension of the time for payment of the principal of,
redemption premium, if any, or interest on the Bond or any other amounts that
are due or may become due under any of the Security Documents or of the time for
performance of any other obligations, covenants or agreements under or arising
out of the Bond or any of the Security Documents or any extension or renewal
thereof;
(l) the modification or amendment (whether material or otherwise) of
any duty, obligation, covenant or agreement set forth in the Bond or in any of
the Security Documents;
(m) the taking of or the omission to take any action referred to in
the Bond or in any of the Security Documents;
(n) any failure, omission, delay or lack on the part of the Agency,
the Bondholder or any other person to enforce, assert or exercise any right,
power or remedy conferred on the Agency, the Bondholder or such other person in
this Lessee Guaranty or in any of the Security Documents or any other act or
acts on the part of the Agency or the Bondholder;
(o) the voluntary or involuntary liquidation, dissolution, merger,
consolidation,
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sale or other disposition of all or substantially all the assets, marshaling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition with creditors or
readjustment of, or other similar proceedings affecting the Lessee, the Agency,
or any other obligor under any of the Security Documents or any or all of the
assets of any of them, or any allegation or contest of the validity of this
Lessee Guaranty or any other Security Document in any such proceeding; it is
specifically understood, consented and agreed to that this Lessee Guaranty shall
remain and continue in full force and effect and shall be enforceable against
the Lessee to the same extent and with the same force and effect as if such
proceedings had not been instituted; and it is the intent and purpose of this
Lessee Guaranty that the Lessee shall and does hereby waive all rights and
benefits which might accrue to the Lessee by reason of any such proceedings;
(p) to the extent permitted by law, the release or discharge of the
Lessee from the performance or observance of any obligation, covenant or
agreement contained in this Lessee Guaranty by operation of law;
(q) the default or failure of the Lessee fully to perform any of its
obligations set forth in this Lessee Guaranty;
(r) any release or impairment of the security pledged under the
Mortgage Agreement or under any other Security Document;
(s) the release, substitution or replacement in accordance with the
terms of the Lease Agreement of any property subject thereto or any delivery,
repossession, surrender or destruction of such property, in whole or in part;
(t) any limitation on the liability or obligations of the Bondholder,
the Agency, or the Lessee or any other obligor under any of the Security
Documents, or any termination, cancellation, frustration, invalidity or
unenforceability, in whole or in part, of the Lease Agreement, the Building Loan
Contract, the Mortgage Agreement or any other Security Document or any term
thereof, or the Bond;
(u) any failure of the Agency or the Bondholder to mitigate damages
resulting from any default by any Obligor under any of the Security Documents;
(v) the merger or consolidation of any corporate obligor under any of
the Security Documents into or with any other person, or any sale, lease or
transfer of any or all of the assets of any such obligor to any person;
(w) any other circumstances which might otherwise constitute a legal
or equitable discharge or defense of a surety or a guarantor; or
(x) any other occurrence whatsoever, whether similar or dissimilar to
the
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foregoing.
Section 2.3. No Waiver or Set-Off. No act or commission or omission of
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any kind or at any time upon the part of the Agency or the Bondholder, or their
successors and assigns, in respect of any matter whatsoever shall in any way
impair the rights of the Bondholder to enforce any right, power or benefit under
this Lessee Guaranty and no set-off, counterclaim, reduction, or diminution of
any obligation, or any defense of any kind or nature (other than performance by
the Lessee of its obligations hereunder), which the Lessee, or any other obligor
under any of the Security Documents has or may have against the Agency or the
Bondholder or any assignee or successor thereof shall be available hereunder to
the Lessee.
Section 2.4 Events of Default. An "Event of Default" shall exist if any
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of the following occurs and is continuing:
(a) The Lessee defaults in any guarantee referred to in Section 2.1
hereof or in any agreement contained in Section 2.8 hereof;
(b) The Lessee fails to observe and perform any covenant, condition
or agreement of this Lessee Guaranty and continuance of such failure for more
than thirty (30) days after written notice (which shall be deemed given when set
by registered or certified mailing) of such failure has been given to the Lessee
by the Bondholder;
(c) Any warranty, representation or other statement by or on behalf
of the Lessee contained in this Lessee Guaranty is false, misleading or
incorrect in any material respect as of the date made;
(d) The Lessee shall (i) apply for or consent to the appointment of
or the taking of possession by a receiver, liquidator, custodian or trustee of
itself or of all or a substantial part of its property, (ii) admit in writing
its inability to pay its debts as such debts become due, (iii) make general
assignment for the benefit of its creditors, (iv) commence a voluntary case
under the Federal Bankruptcy Code (as now or thereafter in effect), (v) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding up, or composition or adjustment of debts,
(vi) fail to controvert in a timely or appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under such
Bankruptcy Code, or (vii) take any action for the purpose of effecting any of
the foregoing;
(e) A proceeding or case shall be commenced, without the application
or consent of the Lessee in any court of competent jurisdiction, seeking (i)
liquidation, reorganization, dissolution, winding-up or composition or
adjustment of debts, (ii) the appointment of a trustee, receiver, liquidator,
custodian or the like of the Lessee or of all or any substantial part of its
assets, or (iii) similar relief under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts or
any order for relief against the Lessee shall be entered in an involuntary case
under such Bankruptcy Code.
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(f) Final judgment for the payment of money in excess of an aggregate
uninsured liabilities of $100,000 shall be rendered against the Lessee and the
same shall remain undischarged for a period of thirty (30) consecutive days
during which execution shall not be effectively stayed;
(g) There shall be a default in respect of any evidence of
indebtedness for money borrowed by the Lessee (or with respect to the
performance of any obligations of the Lessee incurred in connection with any
indebtedness for money borrowed) where the effect of such default is to
accelerate the maturity of such indebtedness or to permit the holders thereof
(or a trustee on behalf of such holders) to cause such indebtedness to become
due prior to its stated maturity, or any such indebtedness shall not be paid as
and when due and payable; or
(h) An Event of Default under the Mortgage Agreement, the Building
Loan Contract or under any other Security Document shall occur and be
continuing.
Upon an Event of Default the Bondholder shall have the right to proceed
first and directly against the Lessee under this Lessee Guaranty without
proceeding against or exhausting any other remedies which it may have and
without proceeding against or exhausting any other remedies which it may have
and without resorting to any security held by the Bondholder or by any obligor
under any of the Security Documents. All moneys recovered by the Bondholder
pursuant to this Lessee Guaranty shall be used and applied in accordance with
Section 8.04 of the Mortgage Agreement.
Section 2.5. Waiver of Notice; Expenses. The Lessee hereby expressly
--------------------------
waives notice from the Bondholder of its acceptance and reliance on this Lessee
Guaranty or of any action taken or omitted in reliance hereon. The Lessee
further expressly waives diligence, presentment, demand for payment, protest,
any requirement that any right or power be exhausted or any action be taken
against the Agency or the Lessee or against any collateral security for the
Bond. The Lessee agrees to pay all costs, Bondholder's fees and commissions and
expenses (including all court costs and reasonable attorneys' fees) which may be
incurred by the Bondholder in enforcing or attempting to enforce this Lessee
Guaranty following any default on the part of any Lessee hereunder, whether the
same shall be enforced by suit or otherwise.
Section 2.6. Dissolution or Merger of Lessee; Restrictions on Lessee. The
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Lessee covenants that it will (i) maintain its corporation existence, (ii)
continue to be a corporation subject to service of process in the State of New
York and either organized under the laws of the State of New York, or organized
under the laws of any state of the United States and duly qualified to do
business as a foreign corporation in the State of New York, (iii) not liquidate,
wind-up or dissolve or otherwise dispose of all or substantially all of its
property, business or assets remaining after the execution and delivery of this
Lessee Guaranty, and (iv) not consolidate with or merge into another entity or
permit one or more entities to consolidate with or merge into it. The Lessee
may, however, without violating the foregoing, consolidate with or merge into
another entity, or permit one or more entities to consolidate with or merger
into it, or sell or otherwise transfer all or substantially all of its property,
business or assets to another such entity (and thereafter liquidate, wind-up or
dissolve or not, as the Lessee may elect) if (i) the Lessee is the surviving,
resulting or transferee entity, as the
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case may be, or (ii) in the event that the Lessee is not the surviving,
resulting or transferee entity, as the case may be, such entity is controlled by
▇▇▇▇▇ International Enterprises Corp. and (A) is a solvent entity subject to
service of process in the State of New York and either organized under the laws
of the State of New York, or organized under the laws of any other state of the
United States and duly qualified to do business as a foreign corporation in the
State of New York, (B) assumes in writing all of the obligations of the Lessee
contained in this Lessee Guaranty and all other Security Documents (as defined
in the Lease Agreement) to which the Lessee shall be a party and in the opinion
of counsel who is acceptable to the Bondholder, (x) such entity shall be bound
by all of the terms applicable to the Lessee of this Lessee Guaranty and all
other Security Documents to which the predecessor Lessee entity shall have been
a party, and (y) such action does not legally impair the security interest
afforded by the Security Documents for the Bondholder, and (C) has a net worth
(as determined in accordance with generally accepted accounting principles and
certified by an independent public accountant) after the merger, consolidation,
sale or transfer at least equal to that of the Lessee entity immediately prior
to such merger, consolidation, sale or transfer. The Lessee further covenants
and agrees that it is and will continue to be duly qualified to do business in
the State of New York and that any entity succeeding to the rights of the Lessee
under this Lessee Guaranty shall be and continue to be duly qualified to do
business in the State of New York.
Section 2.7. Benefit and Enforcement. This Lessee Guaranty is entered
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into by the Lessee for the benefit of the Agency and the Bondholder, all of whom
shall be entitled in the same manner as set forth in the Mortgage Agreement to
enforce performance and observance of this Lessee Guaranty to the same extent as
if they were parties signatory hereto.
Section 2.8. Survival of Guarantee Obligation. If the Bondholder receives
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any payment on account of the liability guaranteed hereunder, which payment or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be transferred or repaid to a
trustee, receiver, assignee for the benefit of creditors or any other party
under any bankruptcy act or code, state or Federal law or common law or
equitable doctrine, then to the extent of any sum not finally retained by the
Bondholder, this Lessee Guaranty shall remain in full force and effect until the
Lessee shall have made payment to the Bondholder of such sum, which payment
shall be due on demand.
ARTICLE III
NOTICE OF SERVICE OF PROCESS, PLEADINGS AND OTHER PAPERS
Section 3.1. Service of Process. The Lessee represents that it is subject
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to service of process in the State of New York and covenants that it will remain
so subject so long as the Bond is outstanding. If for any reason the Lessee
should cease to be so subject to service of process in the State of New York,
the Lessee hereby designates and appoints, without power of revocation, the law
firm of O'Hara & ▇▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Agent") as the agent of the Lessee upon whom may be served all process,
pleadings, notices or other papers which may be served upon the Lessee as a
result of any of its obligations under this Lessee Guaranty.
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Section 3.2. Notices. Any notice required to be sent to the Lessee, or
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any notice including process, pleadings or other papers served upon the
foregoing Agent shall at the same time be sent by registered or certified mail,
postage prepaid, to the Lessee at the address set forth above or to such other
address as may be furnished by the Lessee to the Bondholder in writing.
Section 3.3. Consent to Jurisdiction. The Lessee irrevocably and
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unconditionally (a) agrees that any suit, action or other legal proceeding
arising out of this Lessee Guaranty may be brought in the courts of record of
the State of New York in Erie County or the courts of the United States, Western
District of New York; (b) consents to the jurisdiction of each such court in any
such suit, action or proceeding; and (c) waives any objection which it may have
to the laying of venue of any such suit, action or proceeding in any of such
courts. For such time as any portion of the Bond shall be unpaid in whole, or
in part, the Agent shall accept and acknowledge in the Lessee's behalf service
of any and all process in any such suit, action or proceeding brought in any
such court. The Lessee agrees and consents that any such service of process
upon such Agent and written notice of such service to the Lessee in the manner
set forth in Section 3.2 hereof shall be taken and held to be valid personal
service upon the Lessee whether or not the Lessee shall then be doing, or at any
time shall have done, business within the State of New York and that any such
service of process shall be of the same force and validity as if service were
made upon it according to the laws governing the validity and requirements of
such service in the State of New York and waives all claim of error by reason of
any such service. Such Agent shall not have any power or authority to enter any
appearance or to file any pleadings in connection with any suit, action or other
legal proceedings against the Lessee or to conduct the defense of any such suit,
action or any other legal proceeding except as expressly authorized by the
Lessee.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Lessee Guaranty to Become Effective. The obligations of the
-----------------------------------
Lessee hereunder shall arise absolutely and unconditionally when the Bond shall
have been issued, sold and delivered by the Agency.
Section 4.2. Remedies Not Exclusive. No remedy herein conferred upon or
----------------------
reserved to the Bondholder is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given under this Lessee Guaranty or now or
hereafter existing at law or in equity. No delay or omission to exercise any
right or power accruing upon any Event of Default, default, omission or failure
of performance hereunder shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle
the Bondholder to exercise any remedy reserved to it in this Lessee Guaranty, it
shall not be necessary to give any notice, other than such notice as may be
expressly provided in this Lessee Guaranty. In the event any provision contained
in this Lessee Guaranty should be breached by any party and thereafter duly
waived by the other party so empowered to act, such waiver shall be limited to
the particular breach so waived and shall not be
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deemed to waive any other breach hereunder. No waiver, amendment, release or
modification of this Lessee Guaranty shall be established by conduct, custom or
course of dealing, but solely by an instrument in writing duly executed by the
parties thereunto duly authorized by this Lessee Guaranty.
Section 4.3. Entire Agreement; Counterparts. This Lessee Guaranty
------------------------------
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and may be executed simultaneously in several counter-
parts, each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
Section 4.4. Severability. The invalidity or unenforceability of any one
------------
or more phrases, sentences, clauses or sections in this Lessee Guaranty
contained, shall not affect the validity or enforceability of the remaining
portions of this Lessee Guaranty, or any part thereof.
Section 4.5. Release upon Repayment of Bond. Upon payment of the Bond and
------------------------------
the indebtedness represented thereby pursuant to and in accordance with the
Mortgage Agreement and the payment and satisfaction of all payments,
obligations, covenants and agreements of the Lessee under the Lease Agreement,
the Building Loan Contract and the other Security Documents, and, if applicable,
upon payment of the costs, fees, commissions and expenses required by Section
2.5 hereof, the Bondholder shall release in writing the Lessee from its
obligations hereunder except as provided in 2.8 hereof.
Section 4.6. Applicable Law. This Lessee Guaranty shall be governed by
--------------
and construed in accordance with the laws of the State of New York.
Section 4.7. Successors and Assigns. This Lessee Guaranty shall be
----------------------
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
Section 4.8. Date of Lessee Guaranty for Reference Purposes Only. The
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date of this Lessee Guaranty shall be for reference purposes only.
IN WITNESS WHEREOF, the Lessee has executed this Lessee Guaranty as of the
year and day first above written.
Midway-CTS Buffalo, Ltd.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Vice President
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS.:
COUNTY OF ERIE )
On this 14th day of December, 1994 before me personally came ▇▇▇▇▇▇▇ ▇.
▇▇▇▇ to me known and known to me to be the individual described in and who
executed the foregoing instrument, and who, being by me duly sworn, did depose
and say that he resides in Manlius, New York; that he is the Vice President of
Midway-CTS Buffalo, Ltd., a New York corporation and he executed the foregoing
instrument and that he signed his name thereto by order of the board of
directors of said corporation.
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Notary Public, State of New York No. 5010409
Qualified in Onondago County
Commission Expires
March 29, 1995
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