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EXHIBIT 10.38B
GUARANTY
(JAKKS ACQUISITION CORP.)
Minneapolis, Minnesota
October 21, 1997
This Guaranty, dated as of October 21, 1997, is made by JAKKS
ACQUISITION CORP., a Delaware corporation (the "Guarantor"), for the benefit of
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association
(with its participants, successors and assigns, the "Lender").
Road Champs Limited, a Hong Kong limited company ("Road Champs
Limited"), JP (HK) Limited, a Hong Kong limited company ("JP (HK) Limited") and
JAKKS Pacific (HK) Limited, a Hong Kong limited company ("JAKKS Pacific (HK)
Limited"; and together with Road Champs Limited and JP (HK) Limited,
collectively, the "Borrowers") have requested that the Lender make loans and
extend other credit and financial accommodations to the Borrowers.
As a condition to making loans and extending other credit and
financial accommodations to the Borrowers, the Lender has required the execution
and delivery of this Guaranty.
ACCORDINGLY, the Guarantor, in consideration of the premises
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, hereby agrees as follows:
1. Indebtedness Guaranteed. The Guarantor hereby absolutely
and unconditionally guarantees to the Lender the full and prompt payment when
due, whether at maturity or earlier by reason of acceleration or otherwise, of
each and every other sum now or hereafter owing to the Lender by the Borrowers,
including but not limited to, debts, liabilities and obligations arising out of
loans, letter of credit transactions, financial accommodations, discounts,
purchases of property or other transactions with the Borrowers or for the
Borrowers' accounts or out of any other transaction or event, owed to the Lender
or owed to others by reason of participations granted to or interests acquired
or created for or sold to them by the Lender, in each case whether now existing
or hereafter arising, whether arising directly in a transaction or event
involving the Lender or acquired by the Lender from another by purchase or
assignment or as collateral security, whether owed by the Borrowers as drawer,
maker, endorser, accommodation party, guarantor, principal, surety or as a
member of any partnership, syndicate, association or group or in any other
capacity, whether absolute or contingent, direct or indirect, primary or
secondary, sole, joint, several or joint and several, secured or unsecured, due
or not due, contractual, tortious or statutory, liquidated or unliquidated,
arising by agreement or imposed by law or otherwise (all of said sums being
hereinafter called the "Indebtedness").
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2. Guarantor's Representations and Warranties. The Guarantor
represents and warrants to the Lender that (i) the Guarantor is a corporation,
duly organized and existing in good standing and has full power and authority to
make and deliver this Guaranty; (ii) the execution, delivery and performance of
this Guaranty by the Guarantor have been duly authorized by all necessary action
of its directors and stockholders and do not and will not violate the provisions
of, or constitute a default under, any presently applicable law or its articles
of incorporation or bylaws or any agreement presently binding on it; (iii) this
Guaranty has been duly executed and delivered by the authorized officers of the
Guarantor and constitutes its lawful, binding and legally enforceable
obligation; and (iv) the authorization, execution, delivery and performance of
this Guaranty do not require notification to, registration with, or consent or
approval by, any federal, state or local regulatory body or administrative
agency. The Guarantor represents and warrants to the Lender that the Guarantor
has a direct and substantial economic interest in the Borrowers and expects to
derive substantial benefits therefrom and from any loans, letter of credit
transactions, financial accommodations, discounts, purchases of property and
other transactions and events resulting in the creation of the Indebtedness
guarantied hereby, and that this Guaranty is given for a corporate purpose. The
Guarantor agrees to rely exclusively on the right to revoke this Guaranty
prospectively as to future transactions, in accordance with paragraph 3, if at
any time, in the opinion of the directors or officers, the benefits then being
received by the Guarantor in connection with this Guaranty are not sufficient to
warrant the continuance of this Guaranty as to the future Indebtedness of the
Borrowers. Accordingly, so long as this Guaranty is not revoked prospectively in
accordance with paragraph 3, the Lender may rely conclusively on a continuing
warranty, hereby made, that the Guarantor continues to be benefitted by this
Guaranty and the Lender shall have no duty to inquire into or confirm the
receipt of any such benefits, and this Guaranty shall be effective and
enforceable by the Lender without regard to the receipt, nature or value of any
such benefits.
3. Unconditional Nature. No act or thing need occur to
establish the Guarantor's liability hereunder, and no act or thing, except full
payment and discharge of all of the Indebtedness, shall in any way exonerate the
Guarantor hereunder or modify, reduce, limit or release the Guarantor's
liability hereunder. This is an absolute, unconditional and continuing guaranty
of payment of the Indebtedness and shall continue to be in force and be binding
upon the Guarantor, whether or not all of the Indebtedness is paid in full,
until this Guaranty is revoked prospectively as to future transactions, by
written notice actually received by the Lender, and such revocation shall not be
effective as to the amount of Indebtedness existing or committed for at the time
of actual receipt of such notice by the Lender, or as to any renewals,
extensions, refinancings or refundings thereof.
4. Dissolution or Insolvency of Guarantor. The dissolution or
adjudication of bankruptcy of the Guarantor shall not revoke this Guaranty,
except upon actual receipt of written notice thereof by the Lender and only
prospectively, as to future transactions, as herein set forth. If the Guarantor
shall be dissolved or shall be or become insolvent (however
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defined), then the Lender shall have the right to declare immediately due and
payable, and the Guarantor will forthwith pay to the Lender, the full amount of
all of the Indebtedness whether due and payable or unmatured. If the Guarantor
voluntarily commences or there is commenced involuntarily against the Guarantor
a case under the United States Bankruptcy Code, the full amount of all
Indebtedness, whether due and payable or unmatured, shall be immediately due and
payable without demand or notice thereof.
5. Subrogation, etc. The Guarantor hereby waives all rights
that the Guarantor may now have or hereafter acquire, whether by subrogation,
contribution, reimbursement, recourse, exoneration, contract or otherwise, to
recover from the Borrowers or from any property of the Borrowers any sums paid
under this Guaranty. The Guarantor will not exercise or enforce any right of
contribution to recover any such sums from any person who is a co-obligor with
the Borrowers or a guarantor or surety of the Indebtedness or from any property
of any such person until all of the Indebtedness shall have been fully paid and
discharged.
6. Enforcement Expenses. The Guarantor will pay or reimburse
the Lender for all costs, expenses and attorneys' fees paid or incurred by the
Lender in endeavoring to collect and enforce the Indebtedness and in enforcing
this Guaranty.
7. Lender's Rights. The Lender shall not be obligated by
reason of its acceptance of this Guaranty to engage in any transactions with or
for the Borrowers. Whether or not any existing relationship between the
Guarantor and the Borrowers has been changed or ended and whether or not this
Guaranty has been revoked, the Lender may enter into transactions resulting in
the creation or continuance of the Indebtedness and may otherwise agree, consent
to or suffer the creation or continuance of any of the Indebtedness, without any
consent or approval by the Guarantor and without any prior or subsequent notice
to the Guarantor. The Guarantor's liability shall not be affected or impaired by
any of the following acts or things (which the Lender is expressly authorized to
do, omit or suffer from time to time, both before and after revocation of this
Guaranty, without consent or approval by or notice to the Guarantor): (i) any
acceptance of collateral security, guarantors, accommodation parties or sureties
for any or all of the Indebtedness; (ii) one or more extensions or renewals of
the Indebtedness (whether or not for longer than the original period) or any
modification of the interest rates, maturities, if any, or other contractual
terms applicable to any of the Indebtedness or any amendment or modification of
any of the terms or provisions of any loan agreement or other agreement under
which the Indebtedness or any part thereof arose; (iii) any waiver or indulgence
granted to the Borrowers, any delay or lack of diligence in the enforcement of
the Indebtedness or any failure to institute proceedings, file a claim, give any
required notices or otherwise protect any of the Indebtedness; (iv) any full or
partial release of, compromise or settlement with, or agreement not to ▇▇▇, the
Borrowers or any guarantor or other person liable in respect of any of the
Indebtedness; (v) any release, surrender, cancellation or other discharge of any
evidence of the Indebtedness or the acceptance of any instrument in renewal or
substitution therefor; (vi) any failure to obtain collateral security
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(including rights of setoff) for the Indebtedness, or to see to the proper or
sufficient creation and perfection thereof, or to establish the priority
thereof, or to preserve, protect, insure, care for, exercise or enforce any
collateral security; or any modification, alteration, substitution, exchange,
surrender, cancellation, termination, release or other change, impairment,
limitation, loss or discharge of any collateral security; (vii) any collection,
sale, lease or disposition of, or any other foreclosure or enforcement of or
realization on, any collateral security; (viii) any assignment, pledge or other
transfer of any of the Indebtedness or any evidence thereof; (ix) any manner,
order or method of application of any payments or credits upon the Indebtedness;
and (x) any election by the Lender under Section 1111(b) of the United States
Bankruptcy Code. The Guarantor waives any and all defenses and discharges
available to a surety, guarantor or accommodation co-obligor.
8. Waivers by Guarantor. The Guarantor waives any and all
defenses, claims, setoffs and discharges of the Borrowers, or any other obligor,
pertaining to the Indebtedness, except the defense of discharge by payment in
full. Without limiting the generality of the foregoing, the Guarantor will not
assert, plead or enforce against the Lender any defense of waiver, release,
discharge or disallowance in bankruptcy, statute of limitations, res judicata,
statute of frauds, anti-deficiency statute, fraud, incapacity, minority, usury,
illegality or unenforceability which may be available to the Borrowers or any
other person liable in respect of any of the Indebtedness, or any setoff
available against the Lender to the Borrowers or any other such person, whether
or not on account of a related transaction. The Guarantor expressly agrees that
the Guarantor shall be and remain liable for any deficiency remaining after
foreclosure of any mortgage or security interest securing the Indebtedness,
whether or not the liability of the Borrowers or any other obligor for such
deficiency is discharged pursuant to statute or judicial decision. The liability
of the Guarantor shall not be affected or impaired by any voluntary or
involuntary liquidation, dissolution, sale or other disposition of all or
substantially all of the assets, marshalling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other similar
event or proceeding affecting, the Borrowers or any of their assets. The
Guarantor will not assert, plead or enforce against the Lender any claim,
defense or setoff available to the Guarantor against the Borrowers. The
Guarantor waives presentment, demand for payment, notice of dishonor or
nonpayment and protest of any instrument evidencing the Indebtedness. The Lender
shall not be required first to resort for payment of the Indebtedness to the
Borrowers or other persons, or their properties, or first to enforce, realize
upon or exhaust any collateral security for the Indebtedness, before enforcing
this Guaranty.
9. If Payments Set Aside, etc. If any payment applied by the
Lender to the Indebtedness is thereafter set aside, recovered, rescinded or
required to be returned for any reason (including, without limitation, the
bankruptcy, insolvency or reorganization of the Borrowers or any other obligor),
the Indebtedness to which such payment was applied shall for the purpose of this
Guaranty be deemed to have continued in existence, notwithstanding
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such application, and this Guaranty shall be enforceable as to such Indebtedness
as fully as if such application had never been made.
10. Additional Obligation of Guarantor. The Guarantor's
liability under this Guaranty is in addition to and shall be cumulative with all
other liabilities of the Guarantor to the Lender as guarantor, surety, endorser,
accommodation co-obligor or otherwise of any of the Indebtedness or obligation
of the Borrowers, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.
11. No Duties Owed by Lender. The Guarantor acknowledges and
agrees that the Lender (i) has not made any representations or warranties with
respect to, (ii) does not assume any responsibility to the Guarantor for, and
(iii) has no duty to provide information to the Guarantor regarding, the
enforceability of any of the Indebtedness or the financial condition of the
Borrowers or any guarantor. The Guarantor has independently determined the
creditworthiness of the Borrowers and the enforceability of the Indebtedness and
until the Indebtedness is paid in full will independently and without reliance
on the Lender continue to make such determinations.
12. Miscellaneous. This Guaranty shall be effective upon
delivery to the Lender, without further act, condition or acceptance by the
Lender, shall be binding upon the Guarantor and the successors and assigns of
the Guarantor and shall inure to the benefit of the Lender and its participants,
successors and assigns. Any invalidity or unenforceability of any provision or
application of this Guaranty shall not affect other lawful provisions and
application thereof, and to this end the provisions of this Guaranty are
declared to be severable. This Guaranty may not be waived, modified, amended,
terminated, released or otherwise changed except by a writing signed by the
Guarantor and the Lender. This Guaranty shall be governed by and construed in
accordance with the substantive laws (other than conflict laws) of the State of
Minnesota. The Guarantor hereby (i) consents to the personal jurisdiction of the
state and federal courts located in the State of Minnesota in connection with
any controversy related to this Guaranty; (ii) waives any argument that venue in
any such forum is not convenient, (iii) agrees that any litigation initiated by
the Guarantor in connection with this Guaranty shall be venued in either the
District Court of Hennepin County, Minnesota, or the United States District
Court, District of Minnesota, Fourth Division; and (iv) agrees that a final
judgment in any such suit, action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
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13. Waiver of Jury Trial. THE GUARANTOR HEREBY IRREVOCABLY
WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF, BASED ON OR PERTAINING TO THIS GUARANTY.
IN WITNESS WHEREOF, this Guaranty has been duly executed by
the Guarantor the date first written above.
JAKKS ACQUISITION CORP.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its PRESIDENT
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Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 21st
day of October, 1997 by ▇▇▇▇ ▇▇▇▇▇▇▇▇, the President of JAKKS Acquisition Corp.,
a Delaware corporation, on behalf of the corporation.
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Notary Public
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