<PAGE>
 
                                PARENT GUARANTY


          THIS GUARANTY AGREEMENT (this "Guaranty"), dated as of the 31st day of
March, 1998 (this "Guaranty"), is made between THE PETERSEN COMPANIES, INC., a
Delaware corporation (the "Guarantor"), and FIRST UNION NATIONAL BANK, as
administrative agent for the banks and other financial institutions
(collectively, the "Lenders") party to the Credit Agreement referred to below
(in such capacity, the "Administrative Agent"), for the benefit of the
Guaranteed Parties (as hereinafter defined).  Capitalized terms used herein
without definition shall have the meanings given to them in the Credit Agreement
referred to below.


                                   RECITALS

          A.  The Guarantor, Petersen Publishing Company, L.L.C., a Delaware
limited liability company (the "Borrower"), the Lenders, First Union National
Bank, as Administrative Agent, Canadian Imperial Bank of Commerce, as
Syndication Agent, Morgan Stanley Senior Funding, Inc., as Documentation Agent,
and the Managing Agents named therein, are parties to a Credit Agreement, dated
as of March 30, 1998 (as amended, modified or supplemented from time to time,
the "Credit Agreement"), providing for the availability of certain credit
facilities to the Borrower upon the terms and subject to the conditions set
forth therein.  The Guarantor owns all of the membership interests in the
Borrower.

          B.  It is a condition to the extension of credit to the Borrower under
the Credit Agreement that the Guarantor shall have agreed, by executing and
delivering this Guaranty, to guarantee to the Guaranteed Parties the payment in
full of the Guaranteed Obligations (as hereinafter defined).  The Guaranteed
Parties are relying on this Guaranty in their decision to extend credit to the
Borrower under the Credit Agreement, and would not enter into the Credit
Agreement without this Guaranty.

          C.  The Guarantor will obtain benefits as a result of the extension of
credit to the Borrower under the Credit Agreement, which benefits are hereby
acknowledged, and, accordingly, desires to execute and deliver this Guaranty.


                             STATEMENT OF AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to induce the Guaranteed Parties to enter into the Credit
Agreement and to induce the Lenders to extend credit to the Borrower thereunder,
the Guarantor hereby agrees as follows:

          1.  Guaranty.  (a)  The Guarantor hereby irrevocably, absolutely and
              --------                                                        
unconditionally:

             (i) guarantees to the Lenders (including the Issuing Lender and the
     Swingline Lender in their capacities as such, and including any Lender in
     its capacity as a counterparty to any Interest Rate Protection Agreement
     with the Borrower), the Documentation Agent, the Syndication Agent and the
     Administrative Agent (collectively, the "Guaranteed Parties") the full and
     prompt payment, at any time and from time to time as and when due (whether
     at the
<PAGE>
 
     stated maturity, by acceleration or otherwise), of all Obligations of the
     Borrower under the Credit Agreement and the other Credit Documents,
     including, without limitation, all principal of and interest on the Loans,
     all Reimbursement Obligations in respect of Letters of Credit, all fees,
     expenses, indemnities and other amounts payable by the Borrower under the
     Credit Agreement or any other Credit Document (including interest accruing
     after the filing of a petition or commencement of a case by or with respect
     to the Borrower seeking relief under any applicable federal and state laws
     pertaining to bankruptcy, reorganization, arrangement, moratorium,
     readjustment of debts, dissolution, liquidation or other debtor relief,
     specifically including, without limitation, the Bankruptcy Code and any
     fraudulent transfer and fraudulent conveyance laws (collectively,
     "Insolvency Laws"), whether or not the claim for such interest is allowed
     in such proceeding), all obligations of the Borrower to any Lender under
     any Interest Rate Protection Agreement, and all Obligations that, but for
     the operation of the automatic stay under Section 362(a) of the Bankruptcy
     Code, would become due, in each case whether now existing or hereafter
     created or arising and whether direct or indirect, absolute or contingent,
     due or to become due (all liabilities and obligations described in this
     clause (i), collectively, the "Guaranteed Obligations"); and

             (ii) agrees to pay or reimburse upon demand all reasonable costs
     and expenses (including, without limitation, reasonable attorneys' fees and
     expenses) incurred or paid by (y) any Guaranteed Party in connection with
     any suit, action or proceeding to enforce or protect any rights of the
     Guaranteed Parties hereunder and (z) the Administrative Agent in connection
     with any amendment, modification or waiver hereof or consent pursuant
     hereto (all liabilities and obligations described in this clause (ii),
     collectively, the "Other Obligations"; and the Other Obligations, together
     with the Guaranteed Obligations, the "Total Obligations").

     (b) The guaranty of the Guarantor set forth in this SECTION 1 is a guaranty
of payment as a primary obligor, and not a guaranty of collection.

     2.   Guaranty Absolute.  The Guarantor agrees that its obligations
          -----------------                                            
hereunder are irrevocable, absolute and unconditional, are independent of the
Guaranteed Obligations and any Collateral or other security therefor or other
guaranty or liability in respect thereof, whether given by the Guarantor or any
other Person, and (to the full extent permitted by applicable law) shall not be
discharged, limited or otherwise affected by reason of any of the following,
whether or not the Guarantor has notice or knowledge thereof:

             (i)     any change in the time, manner or place of payment of, or
     in any other term of, any Guaranteed Obligations or any guaranty or other
     liability in respect thereof, or any amendment, modification or supplement
     to, restatement of, or consent to any rescission or waiver of or departure
     from, any provisions of the Credit Agreement, any other Credit Document or
     any agreement or instrument delivered pursuant to any of the foregoing;

             (ii)    the invalidity or unenforceability of any Guaranteed
     Obligations, any guaranty or other liability in respect thereof or any
     provisions of the Credit Agreement, any other Credit Document or any
     agreement or instrument delivered pursuant to any of the foregoing;

             (iii)   the release of the Guarantor hereunder or the taking,
     acceptance or release of other guarantees of any Guaranteed Obligations or
     additional Collateral or other security for any Guaranteed Obligations or
     for any guaranty or other liability in respect thereof;


                                      -2-
<PAGE>
 
             (iv)    any renewal, extension, increase, decrease, release,
     discharge, modification, settlement, compromise or other action or inaction
     in respect of any Guaranteed Obligations or any guaranty or other liability
     in respect thereof (other than satisfaction of the Termination Requirements
     (as hereinafter defined)), including any acceptance or refusal of any offer
     or performance with respect to the same or the subordination of the same to
     the payment of any other obligations;

             (v)     any agreement not to pursue or enforce or any failure to
     pursue or enforce (whether voluntarily or involuntarily as a result of
     operation of law, court order or otherwise) any right or remedy in respect
     of any Guaranteed Obligations, any guaranty or other liability in respect
     thereof or any Collateral or other security for any of the foregoing; any
     sale, exchange, release, substitution, compromise or other action in
     respect of any such Collateral or other security; or any failure to create,
     protect, perfect, secure, insure, continue or maintain any Liens in any
     such Collateral or other security;

             (vi)    the exercise of any right or remedy available under the
     Credit Documents, at law, in equity or otherwise in respect of any
     Collateral or other security for any Guaranteed Obligations or for any
     guaranty or other liability in respect thereof, in any order and by any
     manner thereby permitted, including, without limitation, foreclosure on any
     such Collateral or other security by any manner of sale thereby permitted,
     whether or not every aspect of such sale is commercially reasonable;

             (vii)   any bankruptcy, reorganization, arrangement, liquidation,
     insolvency, dissolution, termination, reorganization or like change in the
     corporate structure or existence of the Borrower or any other Person
     directly or indirectly liable for any Guaranteed Obligations (it being
     understood and agreed that, as between the Guarantor, on the one hand, and
     the Guaranteed Parties, on the other hand, (a) the maturity of the
     Guaranteed Obligations may be accelerated as provided in the Credit
     Agreement for the purposes of the Guarantor's guaranty herein,
     notwithstanding any stay, injunction or other prohibition preventing such
     acceleration in respect of the Obligations guaranteed hereby, and (b) in
     the event of any declaration of acceleration of such Obligations as
     provided in the Credit Agreement, such Obligations (whether or not due and
     payable) shall forthwith become due and payable in full by the Guarantor
     for purposes of this Guaranty);

             (viii)  any manner of application of any payments by or amounts
     received or collected from any Person, by whomsoever paid and howsoever
     realized, whether in reduction of any Guaranteed Obligations or any other
     obligations of the Borrower or any other Person directly or indirectly
     liable for any Guaranteed Obligations, regardless of what Guaranteed
     Obligations may remain unpaid after any such application; or

             (ix)    any other circumstance that might otherwise constitute a
     legal or equitable discharge of, or a defense, set-off or counterclaim
     available to, the Borrower, the Guarantor or a surety or guarantor
     generally, other than the occurrence of all of the following: (x) the
     payment in full of the Total Obligations (other than indemnity obligations
     not then due and payable and that survive termination of the Credit
     Documents), (y) the termination or expiration of all Letters of Credit
     under the Credit Agreement and (z) the termination of the Commitments under
     the Credit Agreement (the events in clauses (x), (y) and (z) above,
     collectively, the "Termination Requirements").


                                      -3-
<PAGE>
 
     3.   Waivers.  The Guarantor hereby knowingly, voluntarily and expressly
          -------                                                            
waives to the full extent permitted by applicable law:

             (i)    presentment, demand for payment, demand for performance,
     protest and notice of any other kind, including, without limitation, notice
     of nonpayment or other nonperformance (including notice of default under
     any Credit Document with respect to any Guaranteed Obligations), protest,
     dishonor, acceptance hereof, extension of additional credit to the Borrower
     and of any of the matters referred to in SECTION 2 and of any rights to
     consent thereto;

             (ii)   any right to require the Guaranteed Parties or any of them,
     as a condition of payment or performance by the Guarantor hereunder, to
     proceed against, or to exhaust or have resort to any Collateral or other
     security from or any deposit balance or other credit in favor of, the
     Borrower or any other Person directly or indirectly liable for any
     Guaranteed Obligations, or to pursue any other remedy or enforce any other
     right; and any other defense based on an election of remedies with respect
     to any Collateral or other security for any Guaranteed Obligations or for
     any guaranty or other liability in respect thereof, notwithstanding that
     any such election (including any failure to pursue or enforce any rights or
     remedies) may impair or extinguish any right of indemnification,
     contribution, reimbursement or subrogation or other right or remedy of the
     Guarantor against the Borrower or any other Person directly or indirectly
     liable for any Guaranteed Obligations or any such Collateral or other
     security; and, without limiting the generality of the foregoing, the
     Guarantor hereby specifically waives the benefits of Sections 26-7 through
     26-9, inclusive, of the General Statutes of North Carolina, as amended from
     time to time, and any similar statute or law of any other jurisdiction, as
     the same may be amended from time to time;

             (iii)   any right or defense based on or arising by reason of any
     right or defense of the Borrower or any other Person, including, without
     limitation, any defense based on or arising from a lack of authority or
     other disability of the Borrower or any other Person, the invalidity or
     unenforceability of any Guaranteed Obligations, any Collateral or other
     security therefor or any Credit Document or other agreement or instrument
     delivered pursuant thereto, or the cessation of the liability of the
     Borrower for any reason other than the satisfaction of the Termination
     Requirements;

             (iv)    any defense based on the acts or omissions of any
     Guaranteed Party in the administration of the Guaranteed Obligations, any
     guaranty or other liability in respect thereof or any Collateral or other
     security for any of the foregoing, and promptness, diligence or any
     requirement that any Guaranteed Party create, protect, perfect, secure,
     insure, continue or maintain any Liens in any such Collateral or other
     security;

             (v)     any right to assert against any Guaranteed Party, as a
     defense, counterclaim, crossclaim or set-off, any defense, counterclaim,
     claim, right of recoupment or set-off that it may at any time have against
     any Guaranteed Party (including, without limitation, failure of
     consideration, statute of limitations, payment, accord and satisfaction and
     usury), other than compulsory counterclaims; and


                                      -4-
<PAGE>
 
             (vi)    any defense based on or afforded by any applicable law that
     limits the liability of or exonerates guarantors or sureties or that may in
     any other way conflict with the terms of this Guaranty.

     4.   Waiver of Subrogation; Subordination.  The Guarantor hereby knowingly,
          ------------------------------------                                  
voluntarily and expressly waives, until satisfaction of the Termination
Requirements, all claims and rights that it may have against the Borrower at any
time as a result of any payment made under or in connection with this Guaranty
or the performance or enforcement hereof, including all rights of subrogation to
the rights of any Guaranteed Party against the Borrower, all rights of
indemnity, contribution or reimbursement against the Borrower, all rights to
enforce any remedies of any Guaranteed Party against the Borrower, and any
benefit of, and any right to participate in, any Collateral or other security
held by any Guaranteed Party to secure payment of the Guaranteed Obligations, in
each case whether such claims or rights arise by contract, statute (including,
without limitation, the Bankruptcy Code), common law or otherwise.  The
Guarantor agrees that all indebtedness and other obligations, whether now or
hereafter existing, of the Borrower to the Guarantor, including, without
limitation, any such indebtedness in any proceeding under the Bankruptcy Code
and any intercompany receivables, together with any interest thereon, shall be,
and hereby are, subordinated and made junior in right of payment to the Total
Obligations.  The Guarantor agrees further that if any amount shall be paid to
or any distribution received by the Guarantor (i) on account of any such
indebtedness at any time after the occurrence and during the continuance of an
Event of Default, or (ii) on account of any such rights of subrogation,
indemnity, contribution or reimbursement at any time prior to the satisfaction
of the Termination Requirements, such amount or distribution shall be deemed to
have been received and to be held in trust for the benefit of the Guaranteed
Parties, and shall forthwith be delivered to the Administrative Agent in the
form received (with any necessary endorsements in the case of written
instruments), to be applied against the Guaranteed Obligations, whether or not
matured, in accordance with the terms of the applicable Credit Documents and
without in any way discharging, limiting or otherwise affecting the liability of
the Guarantor under any other provision of this Guaranty.

     5.   Representations and Warranties.  The Guarantor represents and warrants
          ------------------------------                                        
to the Guaranteed Parties as follows:

     (a) The Guarantor (i) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, (ii) has the full
corporate power and authority to execute, deliver and perform this Guaranty and
the other Credit Documents to which it is or will be a party, to own and hold
its property and to engage in its business as presently conducted, and (iii) is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the nature of its business or the ownership of its
properties requires it to be so qualified, except where the failure to be so
qualified could not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect.

     (b) The Guarantor has taken, or on the Closing Date will have taken, all
necessary corporate action to execute, deliver and perform this Guaranty and
each of the other Credit Documents to which it is or will be a party, and has,
or on the Closing Date (or any later date of execution and delivery) will have,
validly executed and delivered this Guaranty and each of the other Credit
Documents to which it is or will be a party.  This Guaranty constitutes, and
upon execution and delivery thereof each of such other Credit Documents will
constitute, the legal, valid and binding obligation of the Guarantor,
enforceable against it in accordance with its terms, except as 


                                      -5-
<PAGE>
 
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally or by
general equitable principles or principles of good faith and fair dealing.

     (c) The execution, delivery and performance by the Guarantor of this
Guaranty and each of the other Credit Documents to which it is or will be a
party, compliance by it with the terms hereof and thereof, and the consummation
of the Transactions, do not and will not (i) violate any provision of its
certificate of incorporation or bylaws, or contravene any other Requirement of
Law applicable to it, (ii) conflict with, result in a breach of or constitute
(with notice, lapse of time or both) a default under any indenture, agreement or
other instrument to which it is a party, by which it or any of its properties is
bound or to which it is subject, (iii) require any approval of its stockholders
or any approval or consent of any Person under any agreement to which it is a
party, except for such approvals or consents which will be obtained on or before
the Closing Date and disclosed in writing to the Lenders or such approvals or
consents the failure of which to obtain could not reasonably be expected, singly
or in the aggregate, to have a Material Adverse Effect, or (iv) except for the
Liens granted pursuant to the Security Documents, result in or require the
creation or imposition of any Lien upon any of its properties or assets.

     (d) No consent, approval, authorization or other action by, notice to, or
registration or filing with, any Governmental Authority or other Person is or
will be required as a condition to or otherwise in connection with the due
execution, delivery and performance by the Guarantor of this Guaranty or any of
the other Credit Documents to which it is or will be a party or the legality,
validity or enforceability hereof or thereof, other than filings of Uniform
Commercial Code financing statements and other instruments and actions necessary
to perfect the Liens created by the Security Documents.

     (e) There are no actions, investigations, suits or proceedings pending or,
to the knowledge of the Guarantor (after due investigation) threatened, at law,
in equity or in arbitration, before any court, other Governmental Authority or
other Person, (i) against or affecting the Guarantor or any of its properties
that could, if adversely determined, be reasonably expected to have a Material
Adverse Effect, or (ii) with respect to this Guaranty, any of the other Credit
Documents or any of the Transactions.

     (f) All representations and warranties contained in the Credit Agreement or
any of the other Credit Documents that relate to the Guarantor are true and
correct in all material respects.

     (g) The Guarantor has been provided with a true and complete copy of the
executed Credit Agreement, as in effect as of the date hereof, and its principal
officers are familiar with the contents thereof, particularly insofar as the
contents thereof relate or apply to the Guarantor.

     6.   Financial Condition of the Borrower.  The Guarantor represents that it
          -----------------------------------                                   
has knowledge of the Borrower's financial condition and affairs and that it has
adequate means to obtain from the Borrower on an ongoing basis information
relating thereto and to the Borrower's ability to pay and perform the Guaranteed
Obligations, and agrees to assume the responsibility for keeping, and to keep,
so informed for so long as this Guaranty is in effect.  The Guarantor agrees
that the Guaranteed Parties shall have no obligation to investigate the
financial condition or affairs of the Borrower for the benefit of the Guarantor
nor to advise the Guarantor of any fact respecting, or any change in, the
financial condition or affairs of the Borrower that might become known to any
Guaranteed Party at 



                                      -6-
<PAGE>
 
any time, whether or not such Guaranteed Party knows or believes or has reason
to know or believe that any such fact or change is unknown to the Guarantor, or
might (or does) materially increase the risk of the Guarantor as guarantor, or
might (or would) affect the willingness of the Guarantor to continue as a
guarantor of the Guaranteed Obligations.

     7.   Payments; Application; Set-Off.  (a)  The Guarantor agrees that, upon
          ------------------------------                                       
the failure of the Borrower to pay any Guaranteed Obligations when and as the
same shall become due (whether at the stated maturity, by acceleration or
otherwise), and without limitation of any other right or remedy that any
Guaranteed Party may have at law, in equity or otherwise against the Guarantor,
the Guarantor will forthwith pay or cause to be paid to the Administrative
Agent, for the benefit of the Guaranteed Parties, an amount equal to the amount
of the Guaranteed Obligations then due and owing as aforesaid.

     (b) All payments made by the Guarantor hereunder will be made in Dollars to
the Administrative Agent, without set-off, counterclaim or other defense and, in
accordance with SECTION 2.17 of the Credit Agreement, free and clear of and
without deduction for any Taxes, the Guarantor hereby agreeing to comply with
and be bound by the provisions of SECTION 2.17 of the Credit Agreement in
respect of all payments made by it hereunder and the provisions of which Section
are hereby incorporated into and made a part of this Guaranty by this reference
as if set forth herein at length.

     (c) All payments made hereunder shall be applied upon receipt as follows:

             (i)    first, to the payment of all Other Obligations owing to the
     Administrative Agent;

             (ii)   second, after payment in full of the amounts specified in
     clause (i) above, to the ratable payment of all other Total Obligations
     owing to the Guaranteed Parties; and

             (iii)  third, after payment in full of the amounts specified in
     clauses (i) and (ii) above, and following the termination of this Guaranty,
     to the Guarantor or any other Person lawfully entitled to receive such
     surplus.

     (d) For purposes of applying amounts in accordance with this Section, the
Administrative Agent shall be entitled to rely upon any Guaranteed Party that
has entered into an Interest Rate Protection Agreement with the Borrower for a
determination (which such Guaranteed Party agrees to provide or cause to be
provided upon request of the Administrative Agent) of the outstanding Guaranteed
Obligations owed to such Guaranteed Party under any such Interest Rate
Protection Agreement.  Unless it has actual knowledge (including by way of
written notice from any such Guaranteed Party) to the contrary, the
Administrative Agent, in acting hereunder, shall be entitled to assume that no
Interest Rate Protection Agreements or Obligations in respect thereof are in
existence between any Guaranteed Party and the Borrower.

     (e) The Guarantor shall remain liable to the extent of any deficiency
between the amount of all payments made hereunder and the aggregate amount of
the sums referred to in clauses (i) and (ii) of subsection (c) above.


                                      -7-
<PAGE>
 
     (f) In addition to all other rights and remedies available under the Credit
Documents or applicable law or otherwise, upon and at any time after the
occurrence and during the continuance of any Event of Default, each Guaranteed
Party may, and is hereby authorized by the Guarantor, at any such time and from
time to time, to the fullest extent permitted by applicable law, without
presentment, demand, protest or other notice of any kind, all of which are
hereby knowingly and expressly waived by the Guarantor, to set off and to apply
any and all deposits (general or special, time or demand, provisional or final)
and any other property at any time held (including at any branches or agencies,
wherever located), and any other indebtedness at any time owing, by such
Guaranteed Party to or for the credit or the account of the Guarantor against
any or all of the obligations of the Guarantor to such Guaranteed Party
hereunder now or hereafter existing, whether or not such obligations may be
contingent or unmatured, the Guarantor hereby granting to each Guaranteed Party
a continuing security interest in and Lien upon all such deposits and other
property as security for such obligations.  Each Guaranteed Party agrees to
notify the Guarantor promptly after any such set-off and application; provided,
                                                                      -------- 
however, that the failure to give such notice shall not affect the validity of
-------                                                                       
such set-off and application.

     8.   Enforcement.  The Guaranteed Parties agree that, except as provided in
          -----------                                                           
SECTION 7(f), this Guaranty may be enforced only by the Administrative Agent,
acting upon the instructions or with the consent of the Required Lenders as
provided for in the Credit Agreement, and that no Guaranteed Party shall have
any right individually to enforce or seek to enforce this Guaranty or to realize
upon any Collateral or other security given to secure the payment and
performance of the Guarantor's obligations hereunder.  The obligations of the
Guarantor hereunder are independent of the Guaranteed Obligations, and a
separate action or actions may be brought against the Guarantor whether or not
action is brought against the Borrower and whether or not the Borrower is joined
in any such action.  The Guarantor agrees that to the extent all or part of any
payment of the Guaranteed Obligations made by any Person is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid by or on behalf of any Guaranteed Party to a trustee, receiver or any
other party under any Insolvency Laws (the amount of any such payment, a
"Reclaimed Amount"), then, to the extent of such Reclaimed Amount, this Guaranty
shall continue in full force and effect or be revived and reinstated, as the
case may be, as to the Guaranteed Obligations intended to be satisfied as if
such payment had not been received; and the Guarantor acknowledges that the term
"Guaranteed Obligations" includes all Reclaimed Amounts that may arise from time
to time.  Notwithstanding any other provisions contained herein or in any other
Credit Document, no provision of this Guaranty shall require or permit the
collection from the Guarantor of interest in excess of the maximum rate or
amount that the Guarantor may be required or permitted to pay pursuant to
applicable law.

     9.   Amendments, Waivers, etc.  No amendment, modification, waiver,
          ------------------------                                      
discharge or termination of, or consent to any departure by the Guarantor from,
any provision of this Guaranty, shall be effective unless in a writing executed
and delivered in accordance with SECTION 11.6 of the Credit Agreement, and then
the same shall be effective only in the specific instance and for the specific
purpose for which given.

     10.  Continuing Guaranty; Term; Successors and Assigns; Assignment;
          --------------------------------------------------------------
Survival.  This Guaranty is a continuing guaranty and covers all of the
--------                                                               
Guaranteed Obligations as the same may arise and be outstanding at any time and
from time to time from and after the date hereof, and shall (i) remain in full
force and effect until satisfaction of all of the Termination Requirements, (ii)
be binding upon and enforceable against the Guarantor and its successors and
assigns (provided, however, that the Guarantor may not sell, assign or transfer
         --------  -------                                                     
any of its rights, interests, duties or 


                                      -8-
<PAGE>
 
obligations hereunder without the prior written consent of all of the Lenders)
and (iii) inure to the benefit of and be enforceable by each Guaranteed Party
and its successors and assigns. All representations, warranties, covenants and
agreements herein shall survive the execution and delivery of this Guaranty.

     11.  Governing Law; Consent to Jurisdiction.  THIS GUARANTY SHALL BE
          --------------------------------------                         
INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE GUARANTEED PARTIES AND THE
GUARANTOR DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NORTH CAROLINA.  AS PART OF THE
CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, THE GUARANTOR HEREBY CONSENTS TO
THE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG COUNTY, NORTH CAROLINA OR
ANY FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT OF THE STATE OF NORTH
CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER
CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY
OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH ANY GUARANTEED PARTY
OR THE GUARANTOR IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF,
OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY GUARANTEED PARTY OR THE GUARANTOR.
THE GUARANTOR IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF
APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING.  THE GUARANTOR
   --------------------                                                      
CONSENTS THAT ALL SERVICE OF PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
DIRECTED TO IT AT ITS ADDRESS SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE
(3) BUSINESS DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE
PREPAID AND PROPERLY ADDRESSED.  NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT
OF ANY GUARANTEED PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST THE GUARANTOR
IN THE COURTS OF ANY OTHER JURISDICTION.

     12.  Arbitration; Preservation and Limitation of Remedies.  (a)  Upon
          ----------------------------------------------------            
demand of any party hereto, whether made before or after institution of any
judicial proceeding, any dispute, claim or controversy arising out of, connected
with or relating to this Guaranty or any other Credit Document ("Disputes")
between or among the Guarantor and the Guaranteed Parties, or any of them, shall
be resolved by binding arbitration as provided herein.  Institution of a
judicial proceeding by a party does not waive the right of that party to demand
arbitration hereunder.  Disputes may include, without limitation, tort claims,
counterclaims, claims brought as class actions, claims arising from documents
executed in the future, or claims arising out of or connected with the
transactions contemplated by this Guaranty, the Credit Agreement and the other
Credit Documents.  Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association (the "AAA"), as in effect from time to time,
and Title 9 of the U.S. Code, as amended.  All arbitration hearings shall be
conducted in the 

                                      -9-
<PAGE>
 
city in which the principal office of the Administrative Agent is located. The
expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules shall
                                          -- ---
be applicable to claims of less than $1,000,000. All applicable statutes of
limitation shall apply to any Dispute. A judgment upon the award may be entered
in any court having jurisdiction. The panel from which all arbitrators are
selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest court
of general jurisdiction, state or federal, of the state where the hearing will
be conducted or, if such person is not available to serve, the single arbitrator
may be a licensed attorney. Notwithstanding the foregoing, this arbitration
provision does not apply to Disputes under or related to Interest Rate
Protection Agreements.

     (b) Notwithstanding the preceding binding arbitration provisions, the
parties hereto agree to preserve, without diminution, certain remedies that any
party hereto may employ or exercise freely, independently or in connection with
an arbitration proceeding or after an arbitration action is brought.  Any party
hereto shall have the right to proceed in any court of proper jurisdiction or by
self-help to exercise or prosecute the following remedies, as applicable: (i)
all rights to foreclose against any Collateral by exercising a power of sale
granted pursuant to any of the Credit Documents or under applicable law or by
judicial foreclosure and sale, including a proceeding to confirm the sale; (ii)
all rights of self-help, including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property;
(iii) obtaining provisional or ancillary remedies, including injunctive relief,
sequestration, garnishment, attachment, appointment of a receiver and filing an
involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment.  Preservation of these remedies does not limit the power
of an arbitrator to grant similar remedies that may be requested by a party in a
Dispute.  The parties hereto agree that no party shall have a remedy of punitive
or exemplary damages against any other party in any Dispute, and each party
hereby waives any right or claim to punitive or exemplary damages that it has
now or that may arise in the future in connection with any Dispute, whether such
Dispute is resolved by arbitration or judicially.

     13.  Notices.  All notices and other communications provided for hereunder
          -------                                                              
shall be given in the manner set forth in and subject to the provisions of
SECTION 11.5 of the Credit Agreement and shall be addressed (a) if to the
Guarantor, in care of the Borrower and at the Borrower's address for notices set
forth in SECTION 11.5 of the Credit Agreement, and (b) if to any Guaranteed
Party, at its address for notices set forth in SECTION 11.5 of the Credit
Agreement; or to such other address as any of the Persons listed above may
designate for itself by like notice to the other Persons listed above; and in
each case, with copies to such other Persons as may be specified under the
provisions of the Credit Agreement.

     14.  No Waiver.  The rights and remedies of the Guaranteed Parties
          ---------                                                    
expressly set forth in this Guaranty and the other Credit Documents are
cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise.  No failure or delay on the
part of any Guaranteed Party in exercising any right, power or privilege shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege or be construed to be a
waiver of any Default or Event of Default.  No course of dealing between the
Guarantor and any Guaranteed Party or their agents or employees shall be
effective to amend, modify or discharge any provision of this Guaranty or any
other Credit Document or to constitute a waiver of any Default or Event of
Default.  No notice to or demand upon the Guarantor in any case shall entitle
the Guarantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of 



                                     -10-
<PAGE>
 
the right of any Guaranteed Party to exercise any right or remedy or take any
other or further action in any circumstances without notice or demand.

     15.  Severability.  To the extent any provision of this Guaranty is
          ------------                                                  
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Guaranty in any jurisdiction.

     16.  Construction.  The headings of the various sections and subsections of
          ------------                                                          
this Guaranty have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof.  Unless the
context otherwise requires, words in the singular include the plural and words
in the plural include the singular.

     17.  Counterparts.  This Guaranty may be executed in any number of
          ------------                                                 
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.


                                     -11-
<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be
executed by their duly authorized officers as of the date first above written.



                         THE PETERSEN COMPANIES, INC.


                         By: /s/ ILLEGIBLE 
                            -----------------------------------
                         Title: Executive Vice President, CFO
                               --------------------------------



Accepted and agreed to:

FIRST UNION NATIONAL BANK, as
 Administrative Agent


By: /s/ ILLEGIBLE
   ----------------------------------

Title: Senior Vice President
      -------------------------------  



                                     -12-