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Exhibit 10.17
GUARANTY
GUARANTY, dated June 27, 1997, of MEI HOLDINGS, L.P., a
Delaware Limited Partnership (the "Guarantor"), in favor of NOMURA ASSET
CAPITAL CORPORATION, a Delaware corporation (the "Lender").
W I T N E S S E T H:
WHEREAS, Malibu Centers, Inc., a Delaware corporation
("Borrower"), has entered into a Loan Agreement, dated as of the date hereof
(as at any time amended, modified or supplemented, the "Loan Agreement"), with
Lender, pursuant to which the Lender has agreed to make a Loan (as defined in
the Loan Agreement) to the Borrower; and
WHEREAS, the Guarantor owns approximately 81% of all the
outstanding common stock of Malibu Entertainment Worldwide, Inc., a Delaware
corporation, ("Malibu") the ultimate parent of the Borrower; and
WHEREAS, the Guarantor will derive economic benefits from the
making of the Loan to Borrower by the Lender; and
WHEREAS, in connection with the making of the Loan under the
Loan Agreement, and as a condition precedent thereto, the Lender is requiring
that the Guarantor shall have executed and delivered this Guaranty; and
WHEREAS, as partial security for a separate loan made from
Lender to Guarantor, Lender is the holder of that certain Pledge and Security
Agreement, dated as of June 5, 1997, between Lender and Guarantor (the
"Original Pledge"); and
WHEREAS, in connection with the making of the Loan under the
Loan Agreement, and as a condition precedent thereto, the Lender is requiring
that the Guarantor and the Lender amend and restate the Original Pledge
pursuant to the terms of that certain Amended and Restated Pledge and Security
Agreement, between the Lender and the Guarantor, dated as of the date hereof
(the "Security Agreement") such that the Original Pledge as amended and
restated by the Security Agreement will secure, amongst other things, this
Guaranty.
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NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, and to induce the Lender to provide the Loan
under the Loan Agreement, it is agreed as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein shall
have the meanings assigned to them in the Security Agreement and if not found
therein then in the Loan Agreement, unless the context otherwise requires or
unless otherwise defined herein.
References to this "Guaranty" shall mean this Guaranty,
including all amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to this Guaranty as the same
may be in effect at the time such reference becomes operative.
SECTION 2. GUARANTY.
2.1 Guaranty. The Guarantor hereby guarantees to the Lender,
and Lender's successors and assigns, the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the principal of
and interest on the Loan made by the Lender to, and under the Note held by the
Lender of, the Borrower and all other amounts from time to time owing to the
Lender by the Borrower under the Loan Agreement, the Note, and any of the other
Loan Documents (such obligations being herein collectively called the
"Guaranteed Obligations"). The Guarantor hereby further agrees that, if the
Borrower shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Guarantor
will promptly pay the same, without any demand or notice whatsoever, and that
in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance with
the terms of such extension or renewal.
2.2 Obligations Unconditional. The obligations of the
Guarantor under Section 2.1 hereof are absolute and unconditional, irrespective
of the value, genuineness, validity, regularity or enforceability of the Loan
Agreement, the Note or any other Loan Document, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 2.2
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that the obligations of the Guarantor hereunder shall be absolute and
unconditional, under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or
more of the following shall not affect the liability of the Guarantor under
this Guaranty:
(i) at any time or from time to time, without
notice to the Guarantor, the time for any performance of or compliance
with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the
provisions of the Loan Agreement or the Note or any other agreement or
instrument referred to herein or therein shall be done, other than
full performance or payment of the Guaranteed Obligations, or omitted;
(iii) the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the Guaranteed Obligations
shall be modified, supplemented or amended in any respect, or any
right under the Loan Agreement or the Note or any other agreement or
instrument referred to herein or therein shall be waived or any other
guarantee of any of the Guaranteed Obligations or any security
therefor shall be released or exchanged in whole or in part or
otherwise dealt with; or
(iv) any lien or security interest granted to, or
in favor of, the Lender as security for any of the Guaranteed
Obligations shall fail to be perfected.
The Guarantor hereby expressly waives, to the extent permitted by applicable
law, diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Lender exhaust any right, power or
remedy or proceed against the Borrower under the Loan Agreement or the Note or
any other agreement or instrument referred to herein or therein, or against any
other Person under this Guaranty or any other guarantee of, or security for,
any of the Guaranteed Obligations.
Guarantor represents, warrants and agrees that, as of the date of this
Guaranty, its obligations under this Guaranty are not subject to any offsets or
defenses, of any kind, against the Lender. Guarantor further agrees that its
obligations under this Guaranty shall not be subject to any counterclaims,
offsets or defenses.
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2.3 Reinstatement. The obligations of the Guarantor under
this Guaranty shall be automatically reinstated if and to the extent that, for
any reason, any payment by or on behalf of the Borrower in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Guarantor agrees that it
will indemnify the Lender on demand for all reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable fees of counsel) actually
incurred by the Lender in connection with such rescission or restoration.
2.4 Subrogation. The Guarantor hereby agrees that until the
payment and satisfaction in full of all Guaranteed Obligations, it shall not
exercise any right or remedy arising by reason of any performance by it of its
guarantee hereunder, whether by subrogation or otherwise, against the Borrower
or any other guarantor of any of the Guaranteed Obligations or any security for
any of the Guaranteed Obligations.
2.5 Remedies; Other. The Guarantor agrees that, as between
the Guarantor and the Lender, the obligations of the Borrower under the Loan
Agreement and the Note may be declared to be forthwith due and payable as
provided in the Loan Agreement (and shall be deemed to have become
automatically due and payable in the circumstances provided in the Loan
Agreement) for purposes of Section 2.1 hereof, notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against the
Borrower and that, in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such obligations (whether
or not due and payable by the Borrower) shall forthwith become due and payable
by the Guarantor for purposes of said Section 2.1. If the Lender shall bring
an action to enforce this Guaranty, it shall be entitled to recover reasonable
out-of-pocket costs and attorney fees incurred in such action, including but
not limited to reasonable costs and fees incurred in connection with any
provisional remedies, appeal, confirmation, petition for full faith and credit,
or execution after judgment.
2.6 Continuing Guarantee. The guarantee provided in this
Guaranty is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
2.7 Existence; Compliance with Law. Guarantor (i) is a
limited partnership duly organized, validly existing and in good standing under
the laws of the state of its organization; (ii) is duly qualified to do
business and is in good standing under the laws of
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each jurisdiction where its ownership or lease of property or the conduct of
its business requires such qualification (except for jurisdictions in which
such failure so to qualify or to be in good standing would not have a
materially adverse effect on (A) the business, operations, prospects or
financial condition of the Guarantor, (B) Guarantor's ability to pay the
Guaranteed Obligations in accordance with the terms hereof, or (C) the
Collateral, Lender's Liens on the Collateral pursuant to the Security Agreement
or the priority of any such Lien); (iii) has the requisite power and authority
and the legal right to own, pledge, mortgage and operate its properties, to
lease the property it operates under lease, and to conduct its business as now,
heretofore and proposed to be conducted; (iv) has all material licenses,
permits, consents or approvals from or by, and has made all material filings
with, and has given all material notices to, all governmental authorities
having jurisdiction, to the extent required for such ownership, operation and
conduct where failure to do so would have a materially adverse effect on (A)
the business, operations, prospects, assets or financial or other condition of
such Guarantor, (B) such Guarantor's ability to pay the Guaranteed Obligations
in accordance with the terms hereof, or (C) the Collateral, Lender's Liens on
the Collateral pursuant to the Security Agreement or the priority of any such
Liens; (v) is in compliance with its limited partnership agreement and
certificate of limited partnership; and (vi) is in compliance with all
applicable provisions of law where the failure to comply would have a
materially adverse effect on (A) the business, operations, prospects, assets or
financial or other condition of such Guarantor, (B) such Guarantor's ability to
pay the Guaranteed Obligations in accordance with the terms hereof, or (C) the
Collateral, Lender's Liens on the Collateral pursuant to the Security Agreement
or the priority of any such Liens.
2.8 Executive Offices. Guarantor's executive office and
principal place of business are the same as set forth in Section 3.4 hereof
(with respect to notices).
2.9 Power; Authorization; Enforceable Obligations. The
execution, delivery and performance of this Guaranty by the Guarantor are
within Guarantor's powers, have been duly authorized by all necessary or proper
action, including the consent of partners where required, are not in
contravention of any provision of Guarantor's certificate of limited
partnership or limited partnership agreement, will not violate any law or
regulation, or any order or decree of any court or governmental instrumentality
to which the Guarantor is subject or by which the Guarantor is bound, will not
conflict with or result in the breach of, or constitute a default under, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which the Guarantor is a party or by which the Guarantor or any of its property
is bound, will not result in the creation or imposition of any Lien upon any of
the
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property of the Guarantor, and the same do not require the consent or approval
of any governmental body, agency, authority or any other Person except those
already obtained. At or prior to the Closing Date, this Guaranty shall have
been duly executed and delivered for the benefit of or on behalf of Guarantor,
and shall then constitute a legal, valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting the rights of creditors generally or by the application
of general equity principles.
2.10 Benefit of Guaranty. The provisions of this Guaranty
are for the benefit of the Lender and Lender's successors and transferees,
endorsees and assigns, and nothing herein contained shall impair, as between
the Borrower and the Lender, the obligations of Borrower under the Loan
Documents. In the event all or any part of the Guaranteed Obligations are
transferred, endorsed or assigned by the Lender to any Person or Persons any
reference to "Lender" herein shall be deemed to refer equally to such Person or
Persons.
2.11 Further Assurances. The Guarantor agrees, upon the
written request of the Lender, to execute and deliver to the Lender, from time
to time, any additional instruments or documents reasonably considered
necessary by the Lender to cause this Guaranty to remain valid and effective in
accordance with its terms.
2.12 Payments Free And Clear Of Taxes. All payments required
to be made by the Guarantor hereunder shall be made to the Lender, free and
clear of, and without deduction for, any and all present and future taxes,
withholdings, levies, duties, and other governmental charges ("Taxes"),
excluding such income and franchise taxes of the United States and any
political subdivision thereof which would otherwise have been payable by Lender
if Borrower had paid the Guaranteed Obligations to Lender in accordance with
the terms of the Loan Documents. Upon request by Lender, the Guarantor shall
furnish to Lender a receipt for any Taxes paid by such Guarantor pursuant to
this Section 2.12 or, if no Taxes are payable with respect to any payments
required to be made by the Guarantor hereunder, either a certificate from each
appropriate taxing authority or an opinion of counsel acceptable to the Lender,
in either case stating that such payment is exempt from or not subject to
Taxes. If Taxes are paid by the Lender, such Guarantor will, upon demand of
the Lender, and whether or not such Taxes shall be correctly or legally
asserted, indemnify the Lender for such payments, together with any interest,
penalties and expenses in connection therewith plus interest thereon at the
rate specified in the Loan Agreement.
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2.13 Limitation of Guaranty. Any term or provision of this
Guaranty or any other Loan Document to the contrary notwithstanding, the
maximum aggregate amount of the Guarantied Obligations for which the Guarantor
shall be liable shall not exceed the maximum amount for which such Guarantor
can be liable without rendering this Guaranty or any other Loan Document, as it
relates to such Guarantor, voidable under Section 548 of the United States
Bankruptcy Code or any comparable provision of any state law or any applicable
law relating to fraudulent conveyance or fraudulent transfer.
SECTION 3. MISCELLANEOUS.
3.1 Entire Agreement; Amendments. This Guaranty, together
with the other Loan Documents, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements relating to a guaranty of the loans and advances under the Loan
Documents and/or the Guaranteed Obligations and may not be amended or
supplemented except by a writing signed by the Guarantor and the Lender.
3.2 Headings. The headings in this Guaranty are for
convenience of reference only and are not part of the substance of this
Guaranty.
3.3 Severability. In the event that any one or more of the
provisions contained in this Guaranty shall be determined to be invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision or provisions in every other respect
and the remaining provisions of this Guaranty shall not be in any way impaired.
3.4 Notices. All notices and other communications provided
for herein (including, without limitation, any modifications of, or waivers or
consents under, this Guaranty) shall be given or made by telecopy, or in
writing and telecopied (with confirmation), mailed or delivered to the intended
recipient at the address specified below; or, as to any party, at such other
address as shall be designated by such party in a notice to each other party.
Except as otherwise provided in this Guaranty, all such communications shall be
deemed to have been duly given when transmitted by telecopier (with
confirmation of receipt), or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid. The giving
of any notice required hereunder may be waived in writing by the party entitled
to receive such notice.
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If to Guarantor, at:
MEI Holdings, L.P.
c/o Hempstead Group
Texas Commerce Tower
0000 Xxxx Xxx., Xxxxx 0000-X
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Fax #: 000-000-0000
With a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Fax #: 000-000-0000
If to the Lender to:
Nomura Asset Capital Corporation
Two World Xxxxxxxxx Xxxxxx
Xxxxxxxx X
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx
Fax #: 000-000-0000
with a copy to:
Xxxx Xxxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: J. Xxxxxx Xxxxx, Esq.
Fax #: 000-000-0000
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3.5 Binding Effect. This Guaranty shall bind Guarantor and
shall inure to the benefit of Lender and Lender's respective successors and
permitted assigns. Guarantor may not assign this Guaranty.
3.6 Non-Waiver. The failure of the Lender to enforce any
right or remedy hereunder, or promptly to enforce any such right or remedy,
shall not constitute a waiver thereof, nor give rise to any estoppel against
the Lender, nor excuse Guarantor from its Obligations hereunder. Any waiver of
any such right or remedy by the Lender must be in writing and signed by the
Lender.
3.7 Termination. This Guaranty shall terminate and be of no
further force or effect at such time as the Guaranteed Obligations shall be
paid and performed in full. Upon payment and performance in full of the
Guaranteed Obligations, the Lender shall deliver to Guarantor such documents as
Guarantor may reasonably request to evidence such termination.
3.8 Governing Law. The terms of this Guaranty shall be
governed by, and shall be construed and enforced in accordance with, the laws
of the State of New York (exclusive of any rules as to conflict of laws) and
the laws of the United States applicable therein. Guarantor hereby submits to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State Court sitting in the
Borough of Manhattan in New York City for the purposes of all legal proceedings
arising out of or relating to this Guaranty or the transactions contemplated
hereby. The Guarantor irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum.
3.9 Counterparts. This Guaranty may be executed in any
number of counterparts which shall individually and collectively constitute one
agreement.
3.10 Non-Recourse. The Guarantied Obligations are full
recourse obligations of Guarantor. Anything contained herein, in the Note or
in any other Loan Document to the contrary notwithstanding, no recourse shall
be had for the Guarantied Obligations against any partner, agent, director,
officer, or employee of the Guarantor. It is understood that the preceding
sentence shall not (A) in the event of any malfeasance, such as fraud,
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misappropriation of funds or intentional misrepresentation, estop any Lender
from instituting or prosecuting a legal action or proceeding or otherwise
making a claim against the Person or Persons committing such malfeasance, and
(B) constitute a waiver, release or discharge of any Guaranteed Obligation, and
the same shall continue until paid or discharged in full.
3.11 Secured Obligations. The obligations of Guarantor
hereunder are secured by the Security Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the Guarantor has executed and delivered
this Guaranty as of the date first above written.
MEI HOLDINGS, L.P., a Delaware limited partnership
By: MEI GENPAR, L.P.
its general partner
By: HH GenPar Partners, its general partner
By: Hampstead Associates, Inc.,
a managing general partner
By:
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Name:
Title:
Accepted and acknowledged by:
NOMURA ASSET CAPITAL CORPORATION, as Lender
By:
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Name:
Title:
