EXHIBIT 10.4
CITADEL HOLDING CORPORATION GUARANTY
GUARANTY AGREEMENT (this "Guaranty"), dated as of July 28, 2000, between
CITADEL HOLDING CORPORATION, a Nevada corporation (together with its successors,
the "Guarantor"), and XXXXX X. XXXXXX (a "Beneficiary").
RECITALS
A. The Guarantor is the indirect owner of all of the outstanding common
stock of Citadel Cinemas, Inc. (the "Company").
B. Pursuant to an Agreement of Purchase and Sale of Membership Interest,
dated as of July 28, 2000 ("Purchase Agreement"), the Company is on the date
hereof purchasing from the Beneficiary the Membership Interest (as defined in
the Purchase Agreement) held by the Beneficiary in exchange for a note (the
"Note") in the principal amount equal to the Purchase Price (as defined in the
Purchase Agreement) payable to the Beneficiary and is assuming pursuant thereto
certain obligations and indemnities for the benefit of the Beneficiary.
C. It is a condition to the Beneficiary's obligations under the Purchase
Agreement that this Guaranty shall have been executed and delivered by the
Guarantor and shall be in full force and effect.
NOW THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby agrees as follows:
1. Guaranty of Obligations. The Guarantor hereby
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unconditionally guarantees to the Beneficiary the due and
punctual payment when due of all amounts now due or hereafter
becoming due in respect of the Company's obligations arising
under the Note and under the Purchase Agreement (including,
without limitation, Section 7.2 thereof) (such obligations being
herein called the "Obligations"), and agrees to pay any and all
reasonable expenses incurred by the Beneficiary in enforcing any
rights under this Guaranty. This Guaranty is a primary and
original obligation of the Guarantor and is an absolute,
unconditional, continuing and irrevocable guaranty of payment and
not of collectibility or performance and is in no way conditioned
or contingent upon any attempt to collect from the Company or to
realize upon any property constituting security for the
Obligations; provided, however, that, in respect of the Company's
obligations arising under the Purchase Agreement and the
Guarantor's obligations hereunder in respect of such obligations
of the Company, the Guarantor shall be obligated hereunder to the
same extent, except as otherwise specifically provided herein, as
if the Guarantor were the Company under the Purchase Agreement;
provided, further, however, that the immediately foregoing
limitation on the Guarantor's Obligations
Agreement (except as set forth herein) shall not limit
obligations of the Guarantor hereunder to the extent the
limitations (including termination, disavowal, rejection or
reduction) of any such obligation of the Company results from (a)
any insolvency or bankruptcy case or proceeding (including any
case under the U.S. Bankruptcy Code of 1978, as amended), or any
receivership, liquidation, reorganization or other similar case
or proceeding relative to the Company or all or substantially all
of its assets, or (b) any liquidation, dissolution,
reorganization or winding up of the Company, whether voluntary or
involuntary and whether or not involving insolvency or
bankruptcy, or (c) any assignment of all or substantially all of
the assets of the Company for the benefit of creditors or any
other marshalling of assets and liabilities of the Company (the
events in clauses (a), (b) and (c) collectively referred to as an
"Insolvency or Liquidation Proceeding"), and in such event the
Guarantor shall be liable in respect of obligations of the
Company pursuant to the Purchase Agreement as if no such
Insolvency or Liquidation Proceeding had been initiated. If the
Company shall fail to pay any of the Obligations when and as the
same shall become due and payable, the Guarantor shall forthwith
pay such Obligations, in immediately available funds, directly to
the Beneficiary at his address specified herein or at such other
place as the Beneficiary shall direct. If the Beneficiary shall
be entitled to acceleration of payment of the Obligations and
such acceleration is stayed, enjoined or otherwise prevented, the
Guarantor, upon demand therefor, will pay to the Beneficiary the
sums which would otherwise have been due to the Beneficiary in
respect of the Obligations had such acceleration occurred. The
Guarantor hereby waives diligence, presentment or protest. Each
default in payment of any of the Obligations shall give rise to a
separate cause of action hereunder and separate suits may be
brought hereunder as each cause of action arises.
2. Character of Obligations Hereunder: Subrogation. (a) The
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right of the Beneficiary to enforce the obligations of the
Guarantor hereunder by any proceedings, whether by action at law,
suit in equity or otherwise, shall not be impaired by any right,
claim or defense (against the Company or any other person,
including the other Seller, as defined in the Purchase Agreement)
of any character whatsoever, including without limitation any
right, claim or defense of rescission, recoupment, reduction,
limitation, termination, setoff, counterclaim, waiver,
frustration, surrender, alteration or compromise. Without
limiting the generality of the foregoing, such obligations of the
Guarantor shall not be discharged, released or impaired or
otherwise affected by: (i) any renewal, extension, amendment or
modification of or addition or supplement to or deletion from
this Guaranty or the Note; (ii) any inability or failure on the
part of the Company to perform or comply with the Purchase
Agreement; (iii) any
waiver, consent, extension, indulgence or other action or
inaction (including, without limitation, any lack of diligence)
under or in respect of this Guaranty, the Note, or any obligation
or liability of the Company, or any other person, or any exercise
or nonexercise of any right, power or remedy under or in respect
of any such agreement or any such obligation or liability; (iv)
any bankruptcy, insolvency, moratorium, reorganization,
arrangement, or the like, relating to the Company; and (v) any
limitation or any party's obligation or liability under any such
agreement or any such obligation or liability or any termination,
cancellation, frustration, invalidity or enforceability, in whole
or in part, of any such agreement or any such obligation or
liability or any term of any thereof. Notwithstanding any
provision hereof to the contrary, the Guarantor shall be entitled
to exercise against its liability in respect of the Obligations
hereunder any rights of offset or recoupment which the Company
may be entitled to exercise in accordance with the Note
(including under the New York State Debtor and Creditor Law) as
if the Guarantor were the Company.
(b) This Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Obligations is rescinded
or must otherwise be returned by the Beneficiary upon the insolvency, bankruptcy
or reorganization of the Company or otherwise, all as though such payment had
not been made.
(c) The Guarantor will not exercise any rights which it may acquire by way
of subrogation under this Guaranty, by any payment made hereunder or otherwise,
until all of the Obligations shall have been paid in full. If any amount shall
be paid to the Guarantor on account of such subrogation rights at any time when
all the Obligations shall not have been indefeasibly paid in full, such amount
shall be held in trust for the benefit of the Beneficiary and shall forthwith be
paid to the Beneficiary and applied upon the Obligations, whether matured or
unmatured. If (i) the Guarantor shall make payment to the Beneficiary of all or
any part of the Obligations and (ii) all the Obligations shall be paid in full
and the Note shall no longer be in effect, the Beneficiary will, at the
Guarantor's request, execute and deliver to the Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to the Guarantor of an interest in the Obligations
resulting from such payment by the Guarantor.
3. Representations and Warranties of the Guarantor. The
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Guarantor represents and warrants to the Beneficiary that:
(a) The Guarantor is a corporation duly organized and validly existing
under the laws of Nevada and has full power, authority and legal right to carry
on its business as currently conducted, to own its properties and to enter into
and perform its obligations under this Guaranty;
(b) The execution, delivery and performance by the Guarantor of this
Guaranty have been duly authorized by all necessary corporate action and do not
and will not contravene any presently existing law or any governmental rule,
regulation or order applicable to the Guarantor or its properties;
(c) The execution, delivery and performance by the Guarantor of this
Guaranty do not require the consent or approval or authorization or order of,
the giving of notice to, or the registration with, or the taking of any other
action in respect of, any governmental authority or agency, foreign or domestic,
other than such as have been duly obtained, given or taken; and
(d) This Guaranty has been duly executed and delivered by the Guarantor
and constitutes the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its terms.
4. Miscellaneous.
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(a) No failure on the part of a Beneficiary to exercise, no delay in
exercising, and no course of dealing with respect to, any right or remedy
hereunder will operate as a waiver thereof; nor will any single or partial
exercise of any right or remedy hereunder preclude any exercise of any other
right or remedy. This Guaranty may not be amended or modified except by written
agreement of the Guarantor and the Beneficiary.
(b) All notices in connection with this Guaranty shall be in writing,
shall be deemed given and shall become effective when delivered by hand or
courier service or received by telex, telecopier, telegram, cable or registered
or certified first-class mail, postage prepaid, addressed as follows: if to the
Guarantor, at 000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000
if to the Beneficiary, addressed to: 000 Xxxxx Xxxxxxxxx Xxxx., Xxx Xxxxxxx,
Xxxxxxxxxx 00000 or at such other addresses which either of the foregoing shall
from time to time designate in writing.
(c) If the Guarantor fails to pay any amount hereunder in respect of any
of the guaranteed Obligations, a Beneficiary may (but shall not be obligated to)
pay such amount. In such case, the amount paid, and the reasonable expenses of
the Beneficiary incurred in connection therewith, shall be payable by the
Guarantor to the Beneficiary upon demand.
(d) The terms of this Guaranty shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of, and be enforceable by,
the Beneficiary and his respective successors and assigns.
(e) This Guaranty shall be construed in accordance with and governed by
the internal laws of the State of New York.
(f) If any term of this Guaranty and any other application thereof shall
be invalid or unenforceable, the remainder of this Guaranty and any other
application of such terms shall not be affected thereby.
(g) Each of the parties hereto (i) hereby irrevocably submits to the
nonexclusive jurisdiction of the Supreme Court of the State of New York, New
York County (without prejudice to the right of any party to remove to the United
States District Court for the Southern District of New York) and to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York, for the purposes of any suit, action or other proceeding
arising out of this Guaranty or the subject matter hereof or any of the
transactions contemplated hereby or thereby brought by either of the parties
hereto or their successors or assigns, (ii) hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such New York State court or, to the fullest extent permitted by applicable law,
in such Federal court, (iii) hereby waives any right it may have to trial by
jury in respect of any litigation based on, arising out of, under or in
connection with this Guaranty, and (iv) to the extent permitted by applicable
law, hereby irrevocably waives, and agrees not to assert, by way of motion, as a
defense or otherwise, in any such suit, action or proceeding any claim that it
is not subject to the jurisdiction of the above-named courts, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Guaranty or the subject
matter hereof may not be enforced in or by such court. A final judgment
obtained in respect of any action, suit or proceeding referred to in this
Section 4 shall be conclusive and may be enforced in other jurisdictions by suit
or judgment or in any manner as provided by applicable law. Each of the parties
hereto hereby consents to service of process by registered mail, Federal
Express, DHL or similar courier at the address to which notices to it are to be
given, it being agreed that service in such manner shall constitute valid
service upon such party or its respective successors or assigns in connection
with any such action or proceeding only; provided, however, that nothing in this
Section 4 shall affect the right of any of such parties or their respective
successors or assigns to serve legal process in any other manner permitted by
applicable law or affect the right of any of such parties or its respective
successors or assigns to bring any action or proceeding against any other one of
such parties or its respective property in the courts of other jurisdictions.
IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be duly
executed as of the date first set forth herein.
GUARANTOR:
CITADEL HOLDING CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxxx
Title: Chief Financial Officer
BENEFICIARY:
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
