Document:

EX-10.11

 

EXHIBIT 10.11

GUARANTY

     THIS GUARANTY (this “Guaranty”) is executed as of June 1, 2007, by ROBERT SILLERMAN, having an
address c/o Flag Luxury Properties, LLC, 650 Madison Avenue, 16th Floor, New York, NY
10022 (“Guarantor”), for the benefit of COLUMN FINANCIAL, INC., a Delaware corporation, having an
address at 11 Madison Avenue, New York, New York 10010 (“Lender”).

RECITALS:

     A. Concurrently with the execution and delivery of this Guaranty, Lender has extended certain
financial accommodations to FX LUXURY REALTY LLC, a Delaware limited liability company “Borrower”
as evidenced by that certain Promissory Note of even date (as now or hereafter amended, replaced or
supplemented the “Note”) in the original principal amount of $23,000,000.00 (the “Loan”).

     B. Lender is not willing to make the Loan, or otherwise extend credit, to Borrower unless
Guarantor unconditionally guarantees payment and performance to Lender of the Guaranteed
Obligations (as herein defined).

     C. Guarantor is the owner of direct or indirect interests in Borrower, and Guarantor will
directly benefit from Lender’s making the Loan to Borrower.

     D. All capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to such terms in the Note.

     NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower, and to extend such
additional credit as Lender may from time to time extend under the Loan Documents, and for other
good and valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:

ARTICLE 1

NATURE AND SCOPE OF GUARANTY

     1.1 Guaranty of Obligation. The Guarantor hereby irrevocably and unconditionally
guarantees to Lender and its successors and assigns the payment of the Guaranteed Obligations as
and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity
or otherwise. The Guarantor hereby irrevocably and unconditionally covenants and agrees that it is
liable for the Guaranteed Obligations as a primary obligor.

     1.2 Definition of Guaranteed Obligations. As used herein, the term “Guaranteed
Obligations” means any and all obligations arising pursuant to or relating to the Note and any
other Loan Document (including this Guaranty) including without limitation any and all obligations
for principal, interest, costs, fees and expenses and further including without limitation
reasonable attorney fees incurred with respect to the preparation, negotiation

 

 

execution, and enforcement of the Note, any Loan Document and each and any amendment or waiver
with respect thereto.

     1.3 Nature of Guaranty. This Guaranty is an irrevocable, absolute, continuing
guaranty of payment and performance and not a guaranty of collection. This Guaranty may not be
revoked by Guarantor and shall continue to be effective with respect to any Guaranteed Obligations
arising or created after any attempted revocation by Guarantor. The fact that at any time or from
time to time the Guaranteed Obligations may be increased or reduced shall not release or discharge
the obligation of Guarantor to Lender with respect to the Guaranteed Obligations. This Guaranty
may be enforced by Lender and any subsequent holder of the Note and shall not be discharged by the
assignment or negotiation of all or part of the Note.

     1.4 Guaranteed Obligations Not Reduced by Offset. The Guaranteed Obligations and the
liabilities and obligations of Guarantor to Lender hereunder shall not be reduced, discharged or
released because or by reason of any existing or future offset, claim or defense (except payment)
of Borrower or any other party against Lender or against payment of the Guaranteed Obligations,
whether such offset, claim or defense arises in connection with the Guaranteed Obligations (or the
transactions creating the Guaranteed Obligations) or otherwise.

     1.5 Payment By Guarantor. If all or any part of the Guaranteed Obligations shall not
be punctually paid when due, whether at demand, maturity, acceleration or otherwise, Guarantor
shall, immediately upon demand by Lender, and without presentment, protest, notice of protest,
notice of non-payment, notice of intention to accelerate the maturity, notice of acceleration of
the maturity, or any other notice whatsoever except as otherwise provided in the Loan Documents,
pay in lawful money of the United States of America, the amount due on the Guaranteed Obligations
to Lender at Lender’s address as set forth herein. Such demand(s) may be made at any time
coincident with or after the time for payment of all or part of the Guaranteed Obligations, and may
be made from time to time with respect to the same or different items of Guaranteed Obligations.
Such demand shall be deemed made, given and received in accordance with the notice provisions
hereof.

     1.6 No Duty To Pursue Others. It shall not be necessary for Lender (and Guarantor
hereby waives any rights which Guarantor may have to require Lender), in order to enforce the
obligations of Guarantor hereunder, first to (a) institute suit or exhaust its remedies against
Borrower or others liable on the Loan or the Guaranteed Obligations or any other person, (b)
enforce Lender’s rights against any collateral which shall ever have been given to secure the Loan,
(c) enforce Lender’s rights against any other guarantor of the Guaranteed Obligations, (d) join
Borrower or any others liable on the Guaranteed Obligations in any action seeking to enforce this
Guaranty, (e) exhaust any remedies available to Lender against any collateral which shall ever have
been given to secure the Loan, or (f) resort to any other means of obtaining payment of the
Guaranteed Obligations. Lender shall not be required to mitigate damages or take any other action
to reduce, collect or enforce the Guaranteed Obligations.

     1.7 Waivers. Guarantor agrees to the provisions of the Loan Documents, and hereby
waives notice of (a) any loans or advances made by Lender to Borrower, (b) acceptance of this
Guaranty, (c) any amendment or extension of the Note or of any other Loan Documents, (d) the
execution and delivery by Borrower and Lender of any other loan or credit agreement or of

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Borrower’s execution and delivery of any promissory notes or other documents arising under the
Loan Documents or in connection with the Loan, (e) the occurrence of any breach by Borrower or an
Event of Default, (f) Lender’s transfer or disposition of the Guaranteed Obligations, or any part
thereof, (g) sale or foreclosure (or posting or advertising for sale or foreclosure) of any
collateral for the Guaranteed Obligations, (h) protest, proof of non-payment or default by
Borrower, and (i) any other action at any time taken or omitted by Lender, and, generally, all
demands and notices of every kind in connection with this Guaranty, the Loan Documents, any
documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations
and/or the obligations hereby guaranteed.

     1.8 Payment of Expenses. In the event that Guarantor should breach or fail to timely
perform any provisions of this Guaranty, Guarantor shall, promptly upon demand by Lender, pay
Lender all out-of-pocket costs and expenses (including court costs and reasonable attorney’s fees)
incurred by Lender in the enforcement hereof or the preservation of Lender’s rights hereunder. The
covenant contained in this Section 1.8 shall survive the payment and performance of the Guaranteed
Obligations.

     1.9 Effect of Bankruptcy. In the event that, pursuant to any insolvency, bankruptcy,
reorganization, receivership or other debtor relief law, or any judgment, order or decision
thereunder, Lender must rescind or restore any payment, or any part thereof, received by Lender in
satisfaction of the Guaranteed Obligations, as set forth herein, any prior release or discharge
from the terms of this Guaranty given to Guarantor by Lender shall be without effect, and this
Guaranty shall remain in full force and effect. It is the intention of Borrower and Guarantor that
Guarantor’s obligations hereunder shall not be discharged except by Guarantor’s performance of such
obligations and then only to the extent of such performance.

     1.10 Waiver of Subrogation, Reimbursement and Contribution. Notwithstanding anything
to the contrary contained in this Guaranty, Guarantor hereby unconditionally and irrevocably
waives, releases and abrogates any and all rights it may now or hereafter have under any agreement,
at law or in equity (including, without limitation, any law subrogating the Guarantor to the
rights of Lender), to assert any claim against or seek contribution, indemnification or any other
form of reimbursement from Borrower or any other party liable for payment of any or all of the
Guaranteed Obligations for any payment made by Guarantor under or in connection with this Guaranty
or otherwise until the Loan has been paid in full.

     1.11 Borrower. The term “Borrower” as used herein shall include any new or successor
corporation, association, partnership (general or limited), limited liability company, joint
venture, trust or other individual or organization formed as a result of any merger,
reorganization, sale, transfer, devise, gift or bequest of Borrower or any interest in Borrower.

ARTICLE 2

EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING

GUARANTOR’S OBLIGATIONS

     Guarantor hereby consents and agrees to each of the following, and agrees that Guarantor’s
obligations under this Guaranty shall be released, diminished, impaired, reduced or

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adversely affected by any of the following, and waives any common law, equitable, statutory or
other rights (including, without limitation, rights to notice) which Guarantor might otherwise have
as a result of or in connection with any of the following:

     2.1 Modifications. Any renewal, extension, increase, modification, alteration or
rearrangement of all or any part of the Guaranteed Obligations, the Note, the other Loan Documents,
or any other document, instrument, contract or understanding between Borrower and Lender, or any
other parties, pertaining to the Guaranteed Obligations or any failure of Lender to notify
Guarantor of any such action.

     2.2 Adjustment. Any adjustment, indulgence, forbearance or compromise that might be
granted or given by Lender to Borrower or Guarantor.

     2.3 Condition of Borrower or Guarantor. The insolvency, bankruptcy, arrangement,
adjustment, composition, liquidation, disability, dissolution or lack of power of Borrower,
Guarantor or any other party at any time liable for the payment of all or part of the Guaranteed
Obligations; or any dissolution of Borrower or Guarantor, or any sale, lease or transfer of any or
all of the assets of Borrower or Guarantor, or any changes in the shareholders, partners or members
of Borrower or Guarantor other than as a result of exercise of remedies by any Mezzanine Lender; or
any reorganization of Borrower or Guarantor.

     2.4 Invalidity of Guaranteed Obligations. The invalidity, illegality or
unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement
executed in connection with the Guaranteed Obligations, for any reason whatsoever, including,
without limitation, the fact that (a) the Guaranteed Obligations, or any part thereof, exceed the
amount permitted by law, (b) the act of creating the Guaranteed Obligations or any part thereof is
ultra vires, (c) the officers or representatives executing the Note or the other Loan Documents or
otherwise creating the Guaranteed Obligations acted in excess of their authority, (d) the
Guaranteed Obligations violate applicable usury laws, (e) the Borrower has valid defenses (other
than payment), claims or offsets (whether at law, in equity or by agreement) which render the
Guaranteed Obligations wholly or partially uncollectible from Borrower, (f) the creation,
performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance
of any document or instrument representing part of the Guaranteed Obligations or executed in
connection with the Guaranteed Obligations, or given to secure the repayment of the Guaranteed
Obligations) is illegal, uncollectible or unenforceable, or (g) the Note or any of the other Loan
Documents have been forged or otherwise are irregular or not genuine or authentic, it being agreed
that Guarantor shall remain liable hereon regardless of whether Borrower or any other Person be
found not liable on the Guaranteed Obligations or any part thereof for any reason.

     2.5 Release of Obligors. Any full or partial release of the liability of Borrower on
the Guaranteed Obligations, or any part thereof, or of any co-guarantors, or any other Person now
or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally,
to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part
thereof, it being recognized, acknowledged and agreed by Guarantor that Guarantor may be required
to pay the Guaranteed Obligations in full without assistance or support of any other party, and
Guarantor has not been induced to enter into this Guaranty on the basis of a

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contemplation, belief, understanding or agreement that other Persons will be liable to pay or
perform the Guaranteed Obligations, or that Lender will look to other Persons to pay or perform the
Guaranteed Obligations.

     2.6 Other Collateral. The taking or accepting of any other security, collateral or
guaranty, or other assurance of payment, for all or any part of the Guaranteed Obligations.

     2.7 Release of Collateral. Any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including, without limitation, negligent, willful,
unreasonable or unjustifiable impairment) of any collateral, property or security at any time
existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed
Obligations.

     2.8 Care and Diligence. The failure of Lender or any other party to exercise
diligence or reasonable care (but not for the gross negligence, willful misconduct, or unlawful act
of Lender or any of its officers, agents or employees) in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such collateral, property or
security, including but not limited to any neglect, delay, omission, failure or refusal of Lender
(a) to take or prosecute any action for the collection of any of the Guaranteed Obligations or (b)
to foreclose, or initiate any action to foreclose, or, once commenced, prosecute to completion any
action to foreclose upon any security therefor, or (c) to take or prosecute any action in
connection with any instrument or agreement evidencing or securing all or any part of the
Guaranteed Obligations.

     2.9 Unenforceability. The fact that any collateral, security, security interest or
lien contemplated or intended to be given, created or granted as security for the repayment of the
Guaranteed Obligations, or any part thereof, shall not be properly perfected or created, or shall
prove to be unenforceable or subordinate to any other security interest or lien, it being
recognized and agreed by Guarantor that Guarantor is not entering into this Guaranty in reliance
on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value
of any of the collateral for the Guaranteed Obligations.

     2.10 Offset. The Note, the Guaranteed Obligations and the liabilities and obligations
of Guarantor to Lender hereunder shall not be reduced, discharged or released by reason of any
existing or future right of offset, claim or defense (other than payment) of Borrower against
Lender, or any other Person, or against payment of the Guaranteed Obligations, whether such right
of offset, claim or defense arises in connection with the Guaranteed Obligations (or the
transactions creating the Guaranteed Obligations) or otherwise.

     2.11 Merger. The reorganization, merger or consolidation of Borrower into or with any
Person.

     2.12 Preference. Any payment by Borrower to Lender is held to constitute a preference
under bankruptcy laws, or for any reason Lender is required to refund such payment or pay such
amount to Borrower or someone else.

     2.13 Other Actions Taken or Omitted. Any other action taken or omitted to be taken
with respect to the Loan Documents, the Guaranteed Obligations, or the security and collateral

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therefor, whether or not such action or omission prejudices Guarantor or increases the
likelihood that Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms
hereof, it is the unambiguous and unequivocal intention of Guarantor that Guarantor shall be
obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance,
event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not
otherwise or particularly described herein, which obligation shall be deemed satisfied only upon
the full and final payment and satisfaction of the Guaranteed Obligations.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

     To induce Lender to enter into the Loan Documents and extend credit to Borrower, Guarantor
represents and warrants to Lender as follows:

     3.1 Benefit. Guarantor is an Affiliate of Borrower, is the owner of a direct or
indirect interest in Borrower, and has received, or will receive, direct or indirect benefit from
the making of this Guaranty with respect to the Guaranteed Obligations.

     3.2 Familiarity and Reliance. Guarantor is familiar with, and has independently
reviewed books and records regarding, the financial condition of the Borrower and is familiar with
the value of any and all collateral intended to be created as security for the payment of the Note
or Guaranteed Obligations; however, Guarantor is not relying on such financial condition or the
collateral as an inducement to enter into this Guaranty.

     3.3 No Representation By Lender. Neither Lender nor any other party has made any
representation, warranty or statement to Guarantor in order to induce Guarantor to execute this
Guaranty.

     3.4 Guarantor’s Financial Condition. As of the date hereof, and after giving effect
to this Guaranty and the contingent obligation evidenced hereby, Guarantor is, and will be,
solvent, and has and will have assets which, fairly valued, exceed its obligations, liabilities
(including contingent liabilities) and debts, and has and will have property and assets sufficient
to satisfy and repay its obligations and liabilities.

     3.5 Legality. The execution, delivery and performance by Guarantor of this Guaranty
and the consummation of the transactions contemplated hereunder do not, and will not, contravene or
conflict with any law, statute or regulation whatsoever to which Guarantor is subject or constitute
a default (or an event which with notice or lapse of time or both would constitute a default)
under, or result in the breach of, any indenture, mortgage, deed of trust, charge, lien, or any
contract, agreement or other instrument to which Guarantor is a party or which may be applicable to
Guarantor. This Guaranty is a legal and binding obligation of Guarantor and is enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to the enforcement of creditors’ rights.

     3.6 Survival. All representations and warranties made by Guarantor herein shall
survive the execution hereof.

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ARTICLE 4

Intentionally Omitted

ARTICLE 5

SUBORDINATION OF CERTAIN INDEBTEDNESS

     5.1 Subordination of All Guarantor Claims. As used herein, the term “Guarantor
Claims” shall mean all debts and liabilities of Borrower to Guarantor, whether such debts and
liabilities now exist or are hereafter incurred or arise, or whether the obligations of Borrower
thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or
otherwise, and irrespective of the Person or Persons in whose favor such debts or liabilities may,
at their inception, have been, or may hereafter be created, or the manner in which they have been
or may hereafter be acquired by Guarantor. The Guarantor Claims shall include, without limitation,
all rights and claims of Guarantor against Borrower (arising as a result of subrogation or
otherwise) as a result of Guarantor’s payment of all or a portion of the Guaranteed Obligations.
Upon the occurrence of and during the continuance of an Event of Default, Guarantor shall not
receive or collect, directly or indirectly, from Borrower or any other party any amount upon the
Guarantor Claims.

     5.2 Claims in Bankruptcy. In the event of receivership, bankruptcy, reorganization,
arrangement, debtor’s relief, or other insolvency proceedings involving Guarantor as debtor, Lender
shall have the right to prove its claim in any such proceeding so as to establish its rights
hereunder and receive directly from the receiver, trustee or other court custodian dividends and
payments which would otherwise be payable upon the Guarantor Claims. Guarantor hereby assigns such
dividends and payments to Lender. Should Lender receive, for application against the Guaranteed
Obligations, any such dividend or payment which is otherwise payable to Guarantor on account of a
Guarantor Claim, and which, as between Borrower and Guarantor, shall constitute a credit against
Guarantor Claims, then upon payment to Lender in full of the Loan, Guarantor shall become
subrogated to the rights of Lender to the extent that such payments to Lender on the Guarantor
Claims have contributed toward the liquidation of the Guaranteed Obligations, and such subrogation
shall be with respect to that proportion of the Guaranteed Obligations which would have been unpaid
if Lender had not received dividends or payments upon the Guarantor Claims.

     5.3 Payments Held in Trust. Notwithstanding anything to the contrary in this
Guaranty, in the event that Guarantor shall receive any funds, payments, claims or distributions
upon such Guarantor Claims prior to payment in full of the Guaranteed Obligations, which are
prohibited by this Guaranty, Guarantor agrees to hold in trust for Lender an amount equal to the
amount of all funds, payments, claims or distributions so received, and agrees that it shall have
absolutely no dominion over the amount of such funds, payments, claims or distributions so received
except to pay such funds, payments, claims and/or distributions promptly to Lender, and Guarantor
covenants promptly to pay the same to Lender.

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     5.4 Liens Subordinate. Guarantor agrees that any liens, security interests, judgment
liens, charges or other encumbrances upon Borrower’s assets securing payment of the Guarantor
Claims shall be and remain inferior and subordinate to any liens, security interests, judgment
liens, charges or other encumbrances upon Borrower’s assets securing payment of the Guaranteed
Obligations, regardless of whether such encumbrances in favor of Guarantor or Lender presently
exist or are hereafter created or attach. Without the prior written consent of Lender, Guarantor
shall not (a) exercise or enforce any creditor’s right it may have against Borrower, or (b)
foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings
(judicial or otherwise, including, without limitation, the commencement of, or joinder in, any
liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any
liens, mortgages, deeds of trust, security interests, collateral rights, judgments or other
encumbrances on assets of Borrower held by Guarantor.

ARTICLE 6

MISCELLANEOUS

     6.1 Waiver. No failure to exercise, and no delay in exercising, on the part of
Lender, any right hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise of any other right.
The rights of Lender hereunder shall be in addition to all other rights provided by law. No
modification or waiver of any provision of this Guaranty, nor consent to departure therefrom, shall
be effective unless in writing and no such consent or waiver shall extend beyond the particular
case and purpose involved. No notice or demand given in any case shall constitute a waiver of the
right to take other action in the same, similar or other instances without such notice or demand.

     6.2 Notices. Any notice, demand, statement, request or consent made hereunder shall
be in writing and shall be deemed to be received by the addressee (a) in the case of hand delivery,
at the time of delivery, (b) if deposited with a nationally recognized overnight delivery service,
the next Business Day after such deposit, or (c) on the third day following the day such notice is
deposited with the United States Postal Service, by first class certified mail, return receipt
requested, in each case addressed to the address, as set forth below, of the party to whom such
notice is to be given, or to such other address as either party shall in like manner designate in
writing. The addresses of the parties hereto are as follows:

	 	 	 
	Guarantor:

	 	Robert Sillerman
	 

	 	c/o Flag Luxury Properties, LLC
	 

	 	650 Madison Avenue, 15th Floor
	 

	 	New York, New York 10022
	 

	 	Facsimile No. 212-750-3034
	 
	 	 
	with a copy to:

	 	Flag Luxury Properties, LLC
	 

	 	650 Madison Avenue, 15th Floor
	 

	 	New York, New York 10022
	 

	 	Attention: Mitchell Nelson
	 

	 	Facsimile No. 212-750-3034

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	Lender:

	 	Column Financial, Inc.
	 

	 	11 Madison Avenue
	 

	 	New York, New York 10010
	 

	 	Attention: Ian Davis
	 

	 	Facsimile No.: (212) 325-4958
	 
	 	 
	with a copy to:

	 	Column Financial, Inc.
	 

	 	1 Madison Avenue, 9th Floor
	 

	 	New York, New York 10010
	 

	 	Legal and Compliance Department
	 

	 	Attention: Casey McCutcheon
	 

	 	Facsimile No. (917) 326-8433
	 
	 	 
	with a copy to:

	 	Thelen Reid Brown Raysman & Steiner LLP
	 

	 	875 Third Avenue
	 

	 	New York, New York 10022
	 

	 	Attention: Jeffrey B. Steiner, Esq.
	 

	 	Telephone No. (212) 603-2260

     6.3 Governing Law; Jurisdiction; Service of Process.

          (a) THIS GUARANTY WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY GUARANTOR AND ACCEPTED
BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE WERE DISBURSED FROM THE STATE OF
NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION RELATED HERETO, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS GUARANTY AND
THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE
FULLEST EXTENT PERMITTED BY LAW, GUARANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM
TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS GUARANTY AND/OR THE OTHER LOAN
DOCUMENTS, AND THIS GUARANTY AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.

          (b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR GUARANTOR ARISING OUT OF OR
RELATING TO THIS GUARANTY MAY, AT LENDER’S OPTION, BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN
THE CITY OF NEW YORK, COUNTY OF NEW YORK,

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PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND GUARANTOR WAIVES ANY
OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY
SUCH SUIT, ACTION OR PROCEEDING, AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. GUARANTOR DOES HEREBY DESIGNATE AND APPOINT

Mitchell J. Nelson Esq

c/o Flag Luxury Properties LLC

650 Madison Avenue
15th Floor

New York, New York 10022

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS
WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW
YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN
NOTICE OF SAID SERVICE MAILED OR DELIVERED TO IT IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE
STATE OF NEW YORK. GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS
AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE
SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS
DISSOLVED WITHOUT LEAVING A SUCCESSOR. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST GUARANTOR IN ANY OTHER JURISDICTION.

     6.4 Invalid Provisions. If any provision of this Guaranty is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term of this Guaranty,
such provision shall be fully severable and this Guaranty shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part of this Guaranty, and
the remaining provisions of this Guaranty shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance from this Guaranty,
unless such continued effectiveness of this Guaranty, as modified, would be contrary to the basic
understandings and intentions of the parties as expressed herein.

     6.5 Amendments. This Guaranty may be amended only by an instrument in writing
executed by the party or an authorized representative of the party against whom such amendment is
sought to be enforced.

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     6.6 Parties Bound; Assignment. This Guaranty shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and legal representatives;
provided, however, that Guarantor may not, without the prior written consent of
Lender, assign any of its rights, powers, duties or obligations hereunder.

     6.7 Headings. Section headings are for convenience of reference only and shall in no
way affect the interpretation of this Guaranty.

     6.8 Recitals. The recital and introductory paragraphs hereof are a part hereof, form
a basis for this Guaranty and shall be considered prima facie evidence of the facts and documents
referred to therein.

     6.9 Counterparts. To facilitate execution, this Guaranty may be executed in as many
counterparts as may be convenient or required. It shall not be necessary that the signature of, or
on behalf of, each party, or that the signature of all Persons required to bind any party, appear
on each counterpart. All counterparts shall collectively constitute a single instrument. It shall
not be necessary in making proof of this Guaranty to produce or account for more than a single
counterpart containing the respective signatures of, or on behalf of, each of the parties hereto.
Any signature page to any counterpart may be detached from such counterpart without impairing the
legal effect of the signatures thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature pages.

     6.10 Rights and Remedies. If Guarantor becomes liable for any indebtedness owing by
Borrower to Lender, by endorsement or otherwise, other than under this Guaranty, such liability
shall not be in any manner impaired or affected hereby and the rights of Lender hereunder shall be
cumulative of any and all other rights that Lender may ever have against such Guarantor. The
exercise by Lender of any right or remedy hereunder or under any other instrument, or at law or in
equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy.

     6.11 Entirety. THIS GUARANTY EMBODIES THE FINAL AND ENTIRE AGREEMENT OF GUARANTOR AND
LENDER WITH RESPECT TO GUARANTOR’S GUARANTY OF THE GUARANTEED OBLIGATIONS AND SUPERSEDES ANY AND
ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTOR AND LENDER AS A
FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THIS GUARANTY, AND NO COURSE OF DEALING BETWEEN
GUARANTOR AND LENDER, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY
NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY AGREEMENT.
THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR AND LENDER.

     6.12 Waiver of Right To Trial By Jury. GUARANTOR AND LENDER HEREBY AGREE NOT TO ELECT
A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY
TO THE EXTENT THAT

11

 

ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE NOTE, OR THE
OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH GUARANTOR AND
LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER AND/OR GUARANTOR IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR
AND LENDER.

     6.13 Reinstatement in Certain Circumstances. If at any time any payment of the
principal of or interest under the Note or any other amount payable by the Borrower under the Loan
Documents is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, the Guarantor’s obligations hereunder with respect to
such payment shall be reinstated as though such payment has been due but not made at such time.

     6.14 Receipt of Loan Documents. Guarantor acknowledges that it has received and
reviewed with counsel a full set of the Loan Documents.

     IN WITNESS WHEREOF, this Guaranty has been executed by Guarantor and is effective as of the
day and year first above written.

	 	 	 	 	 
	 

	 	GUARANTOR:	 	 
	 
	 	 	 	 
	 

	 	/s/ Robert F.X. Sillerman	 	 
	 

	 	 	 	 
	 

	 	ROBERT SILLERMAN	 	 

12EX-10.16

 

EXHIBIT 10.16

WAIVER OF RIGHTS

     THIS WAIVER OF RIGHTS (this “Waiver”), dated June  , 2007, to participate in the
Rights Offering (as defined hereinafter) is made pursuant to the Membership Interest Purchase
Agreement (the “Purchase Agreement”), dated as of June  , 2007, by and among CKX, Inc.
(“CKX”), FX Luxury Realty, LLC (the “Company”) and Flag Luxury Properties, LLC
(“Flag”). Certain capitalized terms used herein have the meaning ascribed to them in the
Purchase Agreement.

     WHEREAS, pursuant to the Purchase Agreement, CKX shall invest $100 million in the Company in
return for ownership of 50% of the Company’s aggregate outstanding membership interests.

     WHEREAS, as an inducement for Flag to enter into the Purchase Agreement and as a condition
thereof, CKX (but not its stockholders following the Stockholder Distribution) and Flag and all
members of Flag have agreed to waive (or shall otherwise become subject to a waiver of) their
rights to participate in any such Rights Offering, in each case, as provided in the Purchase
Agreement.

     NOW, THEREFORE, in consideration of these premises, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned hereby
waives and forfeits any and all rights to participate in the Rights Offering and any and all other
rights or interests that a stockholder of NEWCO Inc. may have, or hereafter obtain with respect to
the Rights Offering. This Waiver shall not apply to any other rights that the undersigned may have
under the Purchase Agreement or the Operating Agreement.

	 	 	 	 	 	 	 
	 	 	CKX, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	Title:	 	 	 	 

 

 

Acknowledged:

FX LUXURY REALTY, LLC

          By: Flag Luxury Property, LLC, its managing member

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:

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