UNCONDITIONAL GUARANTEE OF PAYMENT
(Brown)
TO: IMPERIAL BANK, a California banking corporation
1. FOR VALUABLE CONSIDERATION, the undersigned (hereinafter called
"Guarantor"), whose address is set forth after Guarantor's signature below,
jointly and severally, and unconditionally, guarantees and promises to pay to
IMPERIAL BANK, a California banking corporation (hereinafter called "Lender"),
or order, upon demand, in lawful money of the United States, (i) that Promissory
Note dated July 13, 2000, made by MAIN STREET AND MAIN INCORPORATED, a Delaware
corporation (hereinafter called "Borrower"), in favor of Lender in the face
amount of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) (the "Note"),
principal and interest and all other sums payable thereunder, or at the election
of Lender any one or more installments thereof, in the event that Borrower fails
to punctually pay any one or more installments of the Note (principal and/or
interest), or any other sum payable thereunder at the time and in the manner
provided therein; and (ii) all other indebtedness of Borrower to Lender arising
under or in connection with the Note, any loan agreement between Borrower and
Lender executed and delivered in connection with the Note and any deed of trust
or other security document or instrument given in connection therewith (the
indebtedness evidenced by the Note together with all other indebtedness
specified above is hereinafter collectively called the "Indebtedness"). This is
an absolute, continuing and unconditional guarantee of payment and not merely of
collection.
2. The obligations of Guarantor hereunder are joint and several if
Guarantor is more than one person or entity, are separate and independent of the
obligations of Borrower and of any other guarantor, and a separate action or
actions may be brought and prosecuted against Guarantor whether action is
brought against Borrower or any other guarantor or whether Borrower or any other
guarantor is joined in any action or actions. The obligations of Guarantor
hereunder shall survive and continue in full force and effect until payment in
full of the Indebtedness is actually received by Lender and the period of time
has expired during which any payment made by Borrower or Guarantor to Lender may
be determined to be a Preferential Payment (defined below), notwithstanding any
release or termination of Borrower's or any other guarantor's liability by
express or implied agreement with Lender or by operation of law and
notwithstanding that the Indebtedness or any part thereof is deemed to have been
paid or discharged by operation of law or by some act or agreement of Lender.
For purposes of this Guarantee, the Indebtedness shall be deemed to be paid only
to the extent that Lender actually receives immediately available funds and to
the extent of any credit bid by Lender at any foreclosure or trustee's sale of
any security for the Indebtedness.
3. Guarantor agrees that to the extent Borrower or Guarantor makes any
payment to Lender in connection with the Indebtedness, and all or any part of
such payment is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid by Lender or paid over to a
trustee, receiver or any other entity, whether under any bankruptcy act or
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otherwise (any such payment is hereinafter referred to as a "Preferential
Payment"), then this Guarantee shall continue to be effective or shall be
reinstated, as the case may be, and, to the extent of such payment or repayment
by Lender, the Indebtedness or part thereof intended to be satisfied by such
Preferential Payment shall be revived and continued in full force and effect as
if said Preferential Payment had not been made.
4. Guarantor is providing this Guarantee at the instance and request of
Borrower to induce Lender to extend or continue financial accommodations to
Borrower. Guarantor hereby represents and warrants that Guarantor is and will
continue to be fully informed about all aspects of the financial condition and
business affairs of Borrower that Guarantor deems relevant to the obligations of
Guarantor hereunder and hereby waives and fully discharges Lender from any and
all obligations to communicate to Guarantor any information whatsoever regarding
Borrower or Borrower's financial condition or business affairs.
5. Guarantor authorizes Lender, without notice or demand and without
affecting Guarantor's liability hereunder, from time to time, to: (a) renew,
modify, compromise, extend, accelerate or otherwise change the time for payment
of, or otherwise change the terms of the Indebtedness or any part thereof,
including increasing or decreasing the rate of interest thereon; (b) release,
substitute or add any one or more endorsers, Guarantor or other guarantors; (c)
take and hold security for the payment of this Guarantee or the Indebtedness,
and enforce, exchange, substitute, subordinate, waive or release any such
security; (d) proceed against such security and direct the order or manner of
sale of such security as Lender in its discretion may determine; and (e) apply
any and all payments from Borrower, Guarantor or any other guarantor, or
recoveries from such security, in such order or manner as Lender in its
discretion may determine.
6. Guarantor waives and agrees not to assert: (a) any right to require
Lender to proceed against Borrower or any other guarantor, to proceed against or
exhaust any security for the Indebtedness, to pursue any other remedy available
to Lender, or to pursue any remedy in any particular order or manner; (b) the
benefit of any statute of limitations affecting Guarantor's liability hereunder
or the enforcement hereof; (c) demand, diligence, presentment for payment,
protest and demand, and notice of extension, dishonor, protest, demand,
nonpayment and acceptance of this Guarantee; (d) notice of the existence,
creation or incurring of new or additional indebtedness of Borrower to Lender;
(e) the benefits of any statutory provision limiting the liability of a surety;
(f) any defense arising by reason of any disability or other defense of Borrower
or by reason of the cessation from any cause whatsoever (other than payment in
full) of the liability of Borrower for the Indebtedness; and (g) the benefits of
any statutory provision limiting the right of Lender to recover a deficiency
judgment, or to otherwise proceed against any person or entity obligated for
payment of the Indebtedness, after any foreclosure or trustee's sale of any
security for the Indebtedness. Guarantor hereby expressly consents to any
impairment of collateral, including, but not limited to, failure to perfect a
security interest and release collateral and any such impairment or release
shall not affect Guarantor's obligations hereunder. Until payment in full of the
Indebtedness, Guarantor shall have no right of subrogation and hereby waives any
right to enforce any remedy which Lender now has, or may hereafter have, against
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Borrower, and waives any benefit of, and any right to participate in, any
security now or hereafter held by Lender.
7. All existing and future indebtedness of Borrower to Guarantor is hereby
subordinated to the Indebtedness and such indebtedness of Borrower to Guarantor,
if Lender so requests, shall be collected, enforced and received by Guarantor as
trustee for Lender and shall be paid over to Lender on account of the
Indebtedness, but without reducing or affecting in any manner the liability of
Guarantor under the other provisions of this Guarantee.
8. In addition to all liens upon, and rights of setoff against, the monies,
securities or other property of Guarantor given to Lender by law, Lender shall
have a lien and a right of setoff against, and Guarantor hereby grants to Lender
a security interest in, all monies, securities and other property of Guarantor
now and hereafter in the possession of or on deposit with Lender, whether held
in a general or special account or deposit, or for safekeeping or otherwise;
every such lien and right of setoff may be exercised upon Borrower's default in
the payment of the Indebtedness or upon the occurrence of any event of default
under this Guarantee or any other document or instrument executed and delivered
in connection with the Indebtedness. No lien or right of setoff shall be deemed
to have been waived by any act or conduct on the part of Lender, by any neglect
to exercise such right of setoff or to enforce such lien, or by any delay in so
doing.
9. If Borrower is a corporation, limited liability company, partnership or
trust, it is not necessary for Lender to inquire into the powers of Borrower or
the officers, directors, members, managers, partners, trustees or agents acting
or purporting to act on its behalf, and any of the Indebtedness made or created
in reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
10. Guarantor agrees to deliver to Lender financial statements, income tax
returns and other financial information in form and level of detail, and
containing certifications, as and to the extent required pursuant to the Credit
Agreement between Borrower and Lender dated April 2, 1999 (as amended, the
"Credit Agreement").
11. All financial statements, income tax returns and other financial
information previously or hereafter given to Lender by or on behalf of Guarantor
are and shall be true, complete and correct as of the date thereof.
12. Guarantor agrees to pay all attorneys' fees and all other costs and
expenses which may be incurred by Lender in enforcing this Guarantee or in
collecting all or any part of the Indebtedness.
13. This Guarantee sets forth the entire agreement of Guarantor and Lender
with respect to the subject matter hereof and supersedes all prior oral and
written agreements and representations by Lender to Guarantor. No modification
or waiver of any provision of this Guarantee or any right of Lender hereunder
and no release of Guarantor from any obligation
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hereunder shall be effective unless in a writing executed by an authorized
officer of Lender. There are no conditions, oral or otherwise, on the
effectiveness of this Guarantee.
14. This Guarantee shall inure to the benefit of Lender and its successors
and assigns and shall be binding upon Guarantor and its heirs, personal
representatives, successors and assigns. Lender may assign this Guarantee in
whole or in part without notice.
15. Guarantor shall not, without Lender's prior written consent, enter into
any merger or consolidation (if Guarantor is other than a natural person) or,
except in the ordinary course of business, sell, lease or otherwise transfer or
dispose of a material portion of Guarantor's assets.
16. Guarantor represents and warrants to Lender that: (a) (if Guarantor is
not a natural person) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization; (b) Guarantor
has full capacity and authority to execute, deliver and perform this Guarantee,
and the execution, delivery and performance of this Guarantee will not (i)
violate any law or regulation, (ii) (if Guarantor is not a natural person)
violate any provision of Guarantor's organizational documents, (iii) violate or
constitute (with due notice or lapse of time or both) a default under any
indenture, agreement, license or other instrument to which Guarantor is a party
or by which Guarantor or any of Guarantor's properties may be bound, (iv)
violate any order of any court, tribunal or governmental agency binding on
Guarantor or any of Guarantor's properties, (v) result in the creation or
imposition of any lien of any nature whatsoever on any of Guarantor's properties
or assets, (vi) render Guarantor insolvent under generally accepted accounting
principles, (vii) leave Guarantor with remaining assets which constitute
unreasonably small capital given the nature of its business, or (viii) result in
the incurrence of debts (whether matured or unmatured, liquidated or
unliquidated, absolute, fixed or contingent) beyond Guarantor's ability to pay
them when and as they become due; (c) no approval or consent of, or filing or
registration with, any federal, state or local regulatory authority is required
in connection with the execution, delivery and performance of this Guarantee;
(d) the value to Guarantor of the advances of the Indebtedness being made to
Borrower is worth at least as much as the liability and obligations of Guarantor
hereunder and may reasonably be expected to benefit Guarantor directly or
indirectly; and (e) this Guarantee constitutes the legal, valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with its
terms. These representations and warranties shall survive the execution of this
Guarantee. As used in this paragraph, "insolvent" means the present fair
saleable value of assets is less than the probable amount required to be paid on
existing debts when and as they mature.
17. This Guarantee shall be governed by and construed according to the laws
of the State of Kentucky. Guarantor represents and warrants that the domicile of
Guarantor and Guarantor's spouse is the State of Kentucky.
18. All claims or controversies of any type regarding matters occurring at
any time arising under or relating to this Guarantee (including, but not limited
to, claims under contract, law or statute), except the parties rights to seek
injunctive relief between Guarantor and the Lender (including claims against any
shareholders or affiliated entities of the Lender in claims against any
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directors, officers, employees or agents of the Lender or their affiliated
entities), shall be settled and finally determined by one arbitrator in Campbell
County, Kentucky, in accordance with the arbitration rules of JAMS/Endispute and
judgment by the arbitrator may be entered into any court having jurisdiction
thereof. This agreement to arbitrate includes all claims of breach of contract
and all other claims of any type to the maximum extent permissible. The
prevailing party in any such arbitration shall be awarded its reasonable costs
and attorneys' fees as determined by the arbitrator.
IN WITNESS WHEREOF these presents are executed as of the 18th day of July,
2000.
GUARANTOR:
/s/ Bart A. Brown, Jr.
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BART A. BROWN, JR.
Address: 140 Highland Avenue
Ft. Thomas, Kentucky 41075
