Exhibit 10(pppp)
GUARANTY
THIS GUARANTY AGREEMENT (this "Agreement") is made as of December 30,
1997, by and between EQUUS MANAGEMENT COMPANY, a Delaware corporation
("EMC"), and INTERSTATE GENERAL COMPANY, L.P., a Delaware limited
partnership (the "Guarantor" of "IGC").
WHEREAS, EMC is the managing general partner of Equus Gaming Company
L.P. (the "Partnership") and the Guarantor is a general partner of the
Partnership;
WHEREAS, the Partnership is a publicly traded partnership which is
listed on the Nasdaq Market ("Nasdaq");
WHEREAS, Nasdaq approved the listing of the Partnership's Class A
Limited Partnership Stock Units ("Units") on Nasdaq on the condition that
the Guarantor retain certain liability with respect to the debts of the
Partnership;
WHEREAS, pursuant to a Stock Purchase Agreement dated as of December
31, 1996, (the "EMC Purchase Agreement") IGC sold all of the outstanding
capital stock of EMC to Interstate Business Corporation, a Delaware
Corporation ("IBC");
WHEREAS, pursuant to the EMC Purchase Agreement, IBC agreed to use its
best efforts to permit IGC to withdraw as a general partner of the
Partnership without affecting the continued listing of Units on Nasdaq;
WHEREAS, in connection with the foregoing obligation, IBC has
contributed certain assets to EMC to increase its net tangible assets and
EMC has caused the Partnership to redeem IGC's general partnership interest
pursuant to a Redemption Agreement between the Partnership and IGC of even
date;
WHEREAS, as partial inducement to EMC to cause the Partnership to
enter into the Redemption Agreement, the Guarantor has agreed to provide
the guaranty provided hereunder; and
WHEREAS, the Guarantor has determined that the Redemption Agreement
will result in direct and/or indirect financial benefits to the Guarantor
and is otherwise in Guarantor's interest;
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Guaranty. The Guarantor for itself, its successors and assigns,
guarantees to EMC (the "Guaranty"):
(a) in the case of the insolvency of the Partnership and the
insolvency of EMC, the payment of any and all liabilities of EMC which
exceed the assets of EMC, arising from EMC's status as a general partner of
the Partnership (the "Liabilities"), provided, however, that
(i) the Guarantor shall pay only that portion of the
Liabilities which exceed Two Hundred Thousand Dollars (US $200,000.00);
and
(ii) Notwithstanding any other provision of this Agreement,
the Guarantor shall not be required to pay more than Twenty Million Dollars
(U.S. $20,000,000.00) pursuant to this Guaranty.
2. Nasdaq Listing. Upon the execution of this Agreement, EMC shall
use its best efforts to obtain, as soon as reasonably practical, the
approval of Nasdaq to continue listing the Units without relying on this
Guaranty.
3. Termination.
(a) Guarantor may elect to terminate the Guaranty by written
notice to EMC upon the occurrence of any one of the following events:
(i) Nasdaq confirms the Partnership that Nasdaq will
continue the listing of the Units of this Guaranty;
(ii) The consolidated partners' equity of the Partnership,
as determined in accordance with generally accepted accounting principles
falls below negative Twenty Million Dollars (US $20,000,000.00); or
(iii) Ten (10) days following delivery of written notice to
EMC of non payment when due of the fee set forth in Section 4 hereof,
unless such payment is made before the expiration of the ten (10) days.
(b) EMC May elect to terminate the Guaranty at any time upon
written notice to Guarantor.
4. Guaranty Fee. If this Guaranty has not terminated by the
fourth anniversary of its inception, then beginning on the fourth
anniversary of this Guaranty and on each anniversary thereafter until this
Guaranty is terminated, EMC shall cause the Partnership to pay to the
Guarantor, a fee equal to 2% of the amount by which the Consolidated
partners' equity is less than Four Million Dollars ($4,000,000.00).
5. Representations and Warranties. The Guarantor represents and
warrants to EMC, effective as of the date of the execution by the Guarantor
of this Agreement, that:
(a) Good Standing. The Guarantor is a limited partnership duly
organized, validly existing and in good standing, under the laws of the
State of Delaware and has the power and authority to own its property and
to carry on its business and is duly qualified or registered in each
jurisdiction in which the character of the properties owned by it therein
or in which the transaction of its business makes such qualification
necessary.
(b) Authority. The Guarantor has full power and authority to
execute and deliver this Agreement and to incur the obligations provided
for herein, all of which have been duly authorized by all proper and
necessary action of its managing general partner. No consent or approval
of any public authority is required as a condition to the validity of this
Agreement.
(c) Binding Agreement. This Agreement constitutes the valid and
legally binding obligation of the Guarantor in accordance with its terms.
(d) No Conflicts. None of the execution, delivery or
performance of this Agreement will violate (i) any provision of law or of
the partnership agreement of the Guarantor, or any order of any court or
other agency of government to which the Guarantor or any affiliate thereof
is subject, or (ii) any indenture, agreement or other instrument to which
the Guarantor is a party or by which any of the property or assets of the
Guarantor is bound, or 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 or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon
any of the property or assets of the Guarantor.
6. Waivers. Except as expressly set forth below, the Guarantor
hereby waives notice of the following acts, events and/or conditions and
hereby agrees that the creation or existence of any such act, event or
condition or the performance thereof by the Partnership (in any number of
instances) shall in no way release or discharge the Guarantor from
liability hereunder, in whole or in part:
(a) the addition of or partial or entire release of any other
guarantor, maker, surety, endorser, indemnitor or other party or parties
primarily or secondarily liable for the payment of the Liabilities;
(b) the institution of any suit or the obtaining of any judgment
against any other guarantor, maker, surety, endorser, indemnitor or other
party primarily or secondarily
liable for the payment of the Liabilities;
(c) acceptance of this Guaranty;
(d) all rights to require the marshalling of assets of the
Partnership or any party or parties and all rights accorded by law to the
Guarantor which might impair the right
of action against the Guarantor;
(e) the taking or retaining of the primary or secondary
obligation of any party or parties, in addition to the Guarantor, with
respect to the Liabilities;
(f) the taking or retaining of a lien and security interest in
any property to secure the Liabilities or any of the liabilities of the
Guarantor hereunder or the impairment of any collateral therefor,
including, without limitation, the substitution, exchange, surrender or
release thereof,
(g) the failure of the Partnership at any time or times to
assert any claim or demand or to enforce any right or remedy against EMC,
or any other person or entity; or
(h) any lack of validity of the Redemption Agreement.
7. Conditional Guaranty. The Guaranty is a conditional guaranty on
the terms and conditions set forth herein. It guarantees the performance
of EMC as a general partner and it is conditioned upon the requirement that
the Partnership first attempt to collect any of its liabilities from the
assets of EMC. Payments by the Guarantor hereunder are immediately due and
payable upon the insolvency of EMC. Any such payments may be required by
EMC in any number of installments, and shall remain in full force and
effect until satisfaction in full of the Liabilities, notwithstanding any
intermediate or temporary payment or settlement of the whole or any part of
the Liabilities.
8. Notices. All notices and other communications provided for
hereunder shall be in writing (including telegraphic communication) and
mailed by certified mail, return receipt requested, or delivered by
overnight delivery, or telegraphed or deliver if to the Guarantor or to
EMC, at their address at 222 Smallwood Village Center, Waldorf, Maryland
20602, or sent by telecopier (telecopier number (301) 870-8481), as to each
party, at such other address as shall be designated by such party in a
written notice to the other party. All such notices and communications
shall, when mailed, be effective on the date received as indicated in the
receipt and, when sent by overnight delivery or telecopier or telegraphed,
be effective when delivered to the overnight delivery service company or
when sent by telecopier or telegraph, respectively, addressed as aforesaid.
9. Successors and Assigns. All obligations, covenants and
agreements of the Guarantor shall be binding on it and its successors and
assigns.
10. No Delay or Waiver Severability. No delay on the part of EMC in
the exercise of any right or remedy shall operate as a waiver thereof, and
no single exercise by EMC of any right or remedy shall preclude other or
further exercise thereof or the exercise of any right or remedy; no waiver
by EMC of any right or remedy shall be effective unless in writing nor, in
any event, operate as a waiver of any other or future right or remedy that
may accrue to EMC. If any part of this Guaranty shall be adjudged invalid,
then such partial invalidity shall not cause the remainder of the Guaranty
to be or to become invalid, and if a provision hereof is held invalid in
one or more of its applications, it is agreed that said provision shall
remain in effect in valid applications that are severable from the invalid
application or applications.
11. Governing Law. This Agreement shall be construed under the laws
of the Commonwealth of Virginia (excluding the conflicts of laws principles
thereof).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
INTERSTATE GENERAL COMPANY, L.P.
By: Interstate General Management Corporation
Its: Managing General Partner
By: /s/ Francisco Arrivi
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Name: Francisco Arrivi
Title: Executive Vice President
EQUUS GAMING COMPANY, L.P.
By: Equus Management Company
Its: Managing General Partner
By: /s/ Gretchen Gronau
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Name: Gretchen Gronau
Title: Vice President