GUARANTY
As of December 21, 1995
Brazos Beltline Development, Inc. (the "LESSOR")
0000 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Re: Ground Lease Agreement (the "AGREEMENT") among Brazos Beltline
Development, Inc. and Vari-Lite, Inc., Showco, Inc., Showco Creative
Services, Inc., Concert Production Lighting, Inc. and Irideon, Inc.
effective as of December 21, 1995
Gentlemen:
1. GUARANTY. For value received, and in consideration of your
entering into the Agreement with VARI-LITE, INC., SHOWCO, INC., SHOWCO
CREATIVE SERVICES, INC., CONCERT PRODUCTION LIGHTING, INC. and IRIDEON, INC.,
each a Delaware corporation (collectively, the "LESSEE"), and each a
wholly-owned subsidiary of VARI-LITE HOLDINGS, INC., a Texas corporation (the
"GUARANTOR"), Guarantor does hereby unconditionally, irrevocably, and
absolutely guarantee (a) the full payment when due, whether at stated due
date, by acceleration or otherwise, of any and all rent, indebtedness and
other amounts of every kind; howsoever created, arising, or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing
or owing to you by the Lessee pursuant to the Agreement including, without
limitation, the payment obligations under Article XI thereof, and (b) the
performance by the Lessee of its obligations under the Agreement pursuant to
the terms of the Agreement (all such obligations being hereinafter
collectively called the "LIABILITIES"). The Guarantor, as the parent
corporation of the Lessee, hereby agrees that upon any default by the Lessee
in the payment of any of the Liabilities when and as due or in the
performance of its other obligations thereunder, it will forthwith pay the
same immediately upon demand or perform or cause Lessee to perform such
obligations.
2. GUARANTY CONTINUING, ABSOLUTE, UNLIMITED. This Guaranty is a
continuing, irrevocable, absolute and unlimited Guaranty of payment as a
primary obligor and not as a surety. This Guaranty shall apply to all
Liabilities, without limitation as to either amount or period of time. The
Liabilities shall be conclusively presumed to have been created in reliance
on this Guaranty. You shall not be required to proceed first against the
Lessee or any other person, firm or corporation or against any property
securing any of the Liabilities before resorting to the Guarantor for
payment. This Guaranty shall be construed as a guarantee of payment without
regard to the enforceability of any of the Liabilities, the rejection of the
Agreement in bankruptcy, OR any limitation of claims against the Lessee, and
notwithstanding any claim, defense (other than payment or performance by the
Guarantor) or right of set-off which the Lessee or the Guarantor may have
against you, including any such claim, defense or right of set-off based on
any present or future law or order of any government (DE JURE or DE FACTO),
or of any agency thereof or court of law purporting to reduce, amend or
otherwise affect any obligations of the Lessee, or any other obligor, or to
vary any terms of payment, and without regard to any other circumstances
which might otherwise constitute a legal or equitable discharge of a surety
or a guarantor. The Guarantor agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time payment to you
of the Liabilities or any part thereof is rescinded or must otherwise be
returned by you upon the insolvency, bankruptcy or reorganization of the
Lessee, or otherwise, as though such payment to you had not been made. The
Guarantor's obligation to fully pay or perform the Liabilities and any remedy
for the enforcement thereof shall not be impaired, modified, released, or
limited in any way by any impairment, modification, release, or limitation of
the liability of Lessee or its bankruptcy estate, resulting from the
operation of any present or future provision of the Bankruptcy Code or any
Debtor Relief Law or from the decision of any court interpreting the same.
3. GUARANTY NOT AFFECTED BY CHANGE IN SECURITY OR OTHER ACTIONS. You
may, from time to time, without the consent of or notice to the Guarantor,
take any or all of the following actions without impairing or
GUARANTY - Page 1
Brazos Beltline Development, Inc.
As of December 21, 1995
Page 2
affecting the Guarantor's obligations under this Guaranty or releasing or
exonerating the Guarantor from any of its liabilities hereunder:
a. retain or obtain a security interest in any property to secure
any of the Liabilities or any obligation hereunder;
b. retain or obtain the primary or secondary liability of any
party or parties, in addition to the Guarantor, with respect to any of the
Liabilities;
c. extend the time or change the manner, place or terms of
payment of, or renew or amend any note or other instrument evidencing the
Liabilities or any part thereof, or amend in any manner any agreement
relating thereto;
d. release or compromise, in whole or in part, or accept full or
partial payment for, any of the Liabilities hereby guaranteed, or any
liability of any nature of any other party or parties with respect to the
Liabilities or any security therefor;
e. subordinate the payment of all or any part of the Liabilities
to the payment of any liability of the Lessee to creditors of the Lessee
other than you or the Guarantor;
f. enforce your security interest, if any, in all or any
properties securing any of the Liabilities or any obligations hereunder in
order to obtain full or partial payment of the Liabilities then outstanding;
or
g. release or fail to perfect, protect, or enforce your security
interest, if any, in all or any properties securing any of the Liabilities or
any obligation hereunder, or permit any substitution or exchange for any such
property.
4. WAIVERS. The Guarantor hereby expressly waives:
a. notice of acceptance of this Guaranty;
b. notice of the existence or incurrence of any or all of the
Liabilities;
c. presentment, demand, notice of dishonor, protest, and all other
notices whatsoever;
d. any requirement that proceedings first be instituted by you
against the Lessee;
e. all diligence in collection or protection of or realization
upon the Liabilities or any part thereof, or any obligation hereunder, or any
collateral for any of the foregoing;
f. any rights or defenses based on the Lessor's election of
remedies, including any defense to the Lessor's action to recover any
deficiency after a non-judicial sale;
g. the occurrence of every other condition precedent to which the
Guarantor might otherwise be entitled; and
h. the benefit of division and discussion.
GUARANTY - Page 2
Brazos Beltline Development, Inc.
As of December 21, 1995
Page 3
5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF GUARANTOR. The
Guarantor hereby agrees and covenants that it will be bound by and comply
with all of the representations, warranties and covenants set forth in
Articles 8, 9, 10 and 11 of the Vari-Lite Credit Agreement as amended from
time to time. Guarantor hereby makes as of the date hereof all of the
representations and warranties set forth in Article 8 of the Vari-Lite Credit
Agreement except that (i) references contained in the Vari-Lite Credit
Agreement to "Loan Documents" shall be deemed to be references to this
Guaranty and (ii) references contained in Section 8.8 of the Vari-Lite Credit
Agreement to September 30, 1993 shall be deemed to be references to September
30, 1995.
6. DEFAULT. A "Default" shall exist hereunder if one of the following
events shall occur and be continuing:
a. Default shall be made in the payment of any amount due
hereunder, and such default shall continue for a period of three (3) days;
b. Default shall be made in the due observance or performance of
any covenants, conditions or agreements on the part of the Guarantor
referenced in SECTION 5 hereunder and such Default shall continue unremedied
for a period of fifteen (15) days;
c. Any representation or warranty contained herein shall have
been false as of the date it was made or deemed to have been made;
d. Any Event of Default occurs and is continuing under and as
defined in the Credit Agreement; or
e. Any Event of Default occurs or is continuing as defined in the
Vari-Lite Credit Agreement.
7. PAYMENTS. Each payment by the Guarantor to you under this Guaranty
shall be made by transferring the amount thereof in immediately available
funds without set-off or counterclaim.
8. COSTS AND EXPENSES. The Guarantor hereby agrees to pay you all
reasonable legal and other costs and expenses incurred by you in seeking to
protect or enforce any of your rights or remedies with respect to the
Liabilities or this Guaranty.
9. SUBROGATION. The Guarantor shall not be subrogated, in whole or in
part, to your rights or those of any subsequent assignee or transferee of any
of the Liabilities until all the Liabilities to you and every such subsequent
assignee or transferee shall have been paid in full, and Guarantor hereby
waives any and all such rights. The provisions of this SECTION 9 shall
survive the termination of this Guaranty and any satisfaction and discharge
of Lessee by virtue of any payment, court order, or law.
10. NO WAIVER. No delay on your part in the exercise of any right or
remedy shall preclude the other or further exercise thereof or the exercise
of any other right or remedy.
11. PARTIES. This Guaranty shall inure to the benefit of you and your
successors, assigns or transferees, and shall be binding upon the Guarantor
and its successors and assigns. The Guarantor may not delegate any of its
duties under this Guaranty without the prior written consent of Lessor, the
Agent and
GUARANTY - Page 3
Brazos Beltline Development, Inc.
As of December 21, 1995
Page 4
each of the Banks. You may assign your rights and benefits under this
Guaranty or the Agreement to any financial institution providing financing to
you in connection with the Agreement.
12. NOTICES. All notices, demands and other communications between you
and the Guarantor under this Guaranty shall be in writing (which may include
cable or telex) and shall be delivered or sent to the address or telex number
shown below, or to such other address or telex number as either of us may
designate by written notice to the other. Any such notice, demand or other
communication shall not be effective until actually received.
If to Brazos Beltline Development, Inc.:
Brazos Beltline Development, Inc.
0000 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to the Guarantor:
Vari-Lite Holdings, Inc.
000 Xxxxx Xxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
13. TERM. This Guaranty is not limited to any particular period of
time, but shall continue in full force and effect until all of the
Liabilities have been fully and finally paid or have been otherwise
discharged by you, and the Guarantor shall not be released from any
obligation or liability hereunder until such full payment or discharge shall
have occurred.
14. GOVERNING LAW. This Guaranty shall be governed by and construed in
accordance with the laws of the State of Texas.
15. DEFINITIONS. Capitalized terms used in this Guaranty which are not
specifically defined herein shall have the meanings ascribed to them in the
Credit Agreement dated as of December 21, 1995, between Lessor and Xxxxx
Brothers Xxxxxxxx & Co., as agent; provided, however, that references
contained in the Credit Agreement definition to the "Borrower" shall be
deemed to be references to the Lessor for purposes of this Guaranty.
"VARI-LITE CREDIT AGREEMENT" means that certain $30,000,000 Multicurrency
Credit Facility for Vari-Lite Holdings, Inc., and its Worldwide Subsidiaries
dated March 31, 1994, as amended.
16. INDEMNIFICATION. The Guarantor shall indemnify the Borrower, the
Agent, the Banks, and each affiliate thereof and their respective directors,
officers, partners, employees and agents from, and discharge, release, and
hold each of them harmless against, any and all losses, liabilities, claims,
actions, suits or other legal proceedings and other expenses and penalties to
which any of them may become subject, sustain or incur, insofar as the
foregoing shall arise out of or because of or result from or in connection
with (i) any transaction, event or circumstance in any way connected with the
Credit Agreement, the Agreement or the Credit Documents, (ii) any breach by
the Guarantor of any provision of this Agreement or any other Credit
Document, (iii) any investigation, litigation or other proceeding (including
any threatened investigation or proceeding whether or not the Agent, any Bank
or affiliate thereof or any director, officer, partner, employee or agent
thereof is joined as a party therein) relating to the foregoing, or (iv) any
Environmental Claim or requirement of Environmental Laws concerning or
relating to the
GUARANTY - Page 4
Brazos Beltline Development, Inc.
As of December 21, 1995
Page 5
present or previously-owned or operated properties, or the operations or
business, of the Guarantor or the Lessee, or demolition, renovation,
construction, occupancy, operation, use and/or maintenance of the Property,
regardless of whether the act, omission, event or circumstance constitutes a
violation of any Environmental Laws at the time of its existence or
occurrence, and the Guarantor shall reimburse the Agent, each Bank, and each
affiliate thereof and their respective directors, officers, partners,
employees and agents, upon demand, for any reasonable out-of-pocket expenses
(including legal fees and expenses of attorneys and professional consultants)
incurred in connection with any such claim, action, suit, investigation,
litigation or other proceeding; AND SUCH INDEMNITY SHALL EXPRESSLY INCLUDE
ANY LOSSES, LIABILITIES, CLAIMS, ACTIONS, SUITS OR OTHER LEGAL PROCEEDINGS,
DAMAGES, EXPENSES AND/OR PENALTIES INCURRED BY REASON OF THE NEGLIGENCE OF
THE PERSON BEING INDEMNIFIED, but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified. Notwithstanding anything
contained in this SECTION 16 to the contrary, the foregoing indemnities shall
survive the payment in full the Notes and the termination of any or all of
the Agreement and/or the Credit Documents and shall include, without
limitation, any violation of any Environmental Law discovered after the date
of any such payment or termination, but attributable to a violation occurring
prior to such date. Nothing in this SECTION 16 or elsewhere in this Guaranty
shall limit or impair any rights or remedies of the Banks against any third
party under any Environmental Laws, including, without limitation any rights
of contribution or indemnification.
17. CONDITION PRECEDENT TO TRANCHE B. Guarantor acknowledges on its
own behalf and on behalf of the Lessee that any Advance under the Credit
Agreement to the Borrower constituting moneys available under Tranche B shall
be subject to a condition precedent, in addition to all other requirements of
the Credit Agreement, as provided in this paragraph. The Guarantor must
deliver to the Agent the Guarantor Certificate, a form of which is attached
hereto as Exhibit A, at least ten (10) days prior to any notice for the first
Advance under Tranche B. A "SUCCESSFUL IPO" shall mean a public offering in
which no more than thirty percent (30%) of Guarantor (including equity and
voting rights) is sold and shall be closed upon receipt by the Guarantor
(after payment of all expenses related to such offering) of a minimum of
$30,000,000 of new equity capital.
18. NEW GUARANTY. (a) In the event that (i) any Lease Document is
rejected by a trustee or debtor-in-possession in any bankruptcy or insolvency
proceeding involving the Borrower or (ii) any Lease Document is terminated as
a result of any bankruptcy or insolvency proceeding involving the Borrower
and, if within 60 days after such rejection or termination, the Agent or its
designee shall so request and shall certify in writing to the Lessee that it
intends to perform the obligations of the Borrower as and to the extent
required under such Lease Document, the Guarantor will, unless prohibited by
bankruptcy law, execute and deliver to the Agent or such designee a new
Guaranty shall contain the same conditions, agreements, terms, provisions and
limitations as such original Guaranty (except for any requirements which have
been fulfilled by the Borrower and the Guarantor prior to such rejection or
termination). References in this Guaranty to such "LEASE DOCUMENT" shall be
deemed also to refer to such new Lease Document.
(b) Upon written request by the Agent to the Lessee given on or after
any foreclosure, trustee sale or conveyance in lieu thereof, the owner of the
Mortgaged Premises, as landlord, and the Lessee, as tenant, shall execute a
lease of the Mortgaged Premises containing all of the same terms, provisions,
options and conditions as are contained in the Agreement, which lease shall
be for the unexpired portion of the term of the Agreement, as to the
Mortgaged Premises. Upon written request by Agent to Guarantor relating to
the execution by Lessee of a new lease of the Ground or Facility, the
Guarantor hereby agrees to execute a new guaranty agreement in form and
substance substantially equivalent to this Guaranty which shall relate to
each new lease.
Sincerely yours,
GUARANTY - Page 5
Brazos Beltline Development, Inc.
As of December 21, 1995
Page 6
VARI-LITE HOLDINGS, INC., a Texas corporation
By: /s/ X.X. Xxxxxxxx III
------------------------------------------
X.X. Xxxxxxxx, III, President and
Chief Executive Officer
ACCEPTED AND AGREED as of the date first above written:
BRAZOS BELTLINE DEVELOPMENT, INC.,
a Texas corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx, President
GUARANTY - Page 6
