UNCONDITIONAL GUARANTY
December 30, 1997
American Passage Media, Inc.,
Beyond The Wall, Inc. and
Campus Voice, Inc.
c/o Network Event Theater, Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000-0000
(Individually and collectively "Borrower")
Network Event Theater, Inc. and
National Campus Media, Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000-0000
(Individually and collectively "Guarantor")
First Union National Bank
00 Xxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
(Hereinafter referred to as "Bank")
To induce Bank to make, extend or renew loans, advances, credit, or other
financial accommodations to or for the benefit of Borrower, and in consideration
of loans, advances, credit, or other financial accommodations made, extended or
renewed to or for the benefit of Borrower, Guarantor hereby absolutely,
irrevocably and unconditionally guarantees to Bank and its successors, assigns
and affiliates the timely payment and performance of all liabilities and
obligations of Borrower to Bank and all renewals thereof, including without
limitation all principal, interest, charges, and costs and expenses incurred
thereunder (including reasonable attorneys' fees and other costs of collection
incurred, regardless of whether suit is commenced) (collectively, the
"Guaranteed Obligations").
Guarantor further covenants and agrees:
GUARANTOR'S LIABILITY. This Guaranty is a continuing and unconditional guaranty
of payment and performance and not of collection. The parties to this Guaranty
are jointly and severally obligated hereunder. This Guaranty does not impose any
obligation on Bank to extend or continue to extend credit or otherwise deal with
Borrower at any subsequent time. This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of the Guaranteed
Obligations is rescinded, avoided or for any other reason must be returned by
Bank, and the returned payment shall remain payable as part of the Guaranteed
Obligations; all as though such payment had not been made. Except to the extent
the provisions of this Guaranty give the Bank additional rights, this Guaranty
shall not be deemed to supersede or replace any other guaranties given to Bank
by Guarantor; and the obligations guaranteed hereby shall be in addition to any
other obligations guaranteed by Guarantor pursuant to any other agreement of
guaranty given to Bank and other guaranties of the Guaranteed Obligations.
SECURITY. To secure this Guaranty the Guarantor has granted Bank a security
interest in certain collateral described in the Loan Documents, including, but
not limited to, personal property collateral described in that certain Security
Agreement and Pledge and Assignment Agreement, both of even date herewith.
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TERMINATION OF GUARANTY. Guarantor may terminate this Guaranty by written
notice, delivered personally to or received by certified or registered United
States Mail by an authorized officer of the Bank at the address for notices
provided herein. Such termination shall be effective with respect to Guaranteed
Obligations arising more than 15 days after the date such written notice is
received by said Bank officer. Guarantor may not terminate this Guaranty as to
Guaranteed Obligations (including any subsequent extensions, modifications or
compromises of the Guaranteed Obligations) then existing, or to Guaranteed
Obligations arising subsequent to receipt by Bank of said notice if such
Guaranteed Obligations are a result of Bank's obligation to make advances
pursuant to a commitment entered into prior to expiration of the 15 day notice
period, or are a result of advances which are necessary for Bank to protect its
collateral or otherwise preserve its interests. Termination of this Guaranty by
any single Guarantor will not affect the existing and continuing obligations of
any other guarantor hereunder.
APPLICATION OF PAYMENTS, BANK LIEN AND SET-OFF. Monies received from any source
by Bank for application toward payment of the Guaranteed Obligations may be
applied to such Guaranteed Obligations in any manner or order deemed appropriate
by Bank. Except as prohibited by law, Guarantor grants Bank a security interest
in all of Guarantor's accounts maintained with Bank and any of its affiliates
(collectively, the "Accounts"). If a Default occurs, Bank is authorized to
exercise its right of set-off or to foreclose its lien against any obligation of
Bank to Guarantor including, without limitation, all Accounts or any other debt
of any maturity, without notice.
CONSENT TO MODIFICATIONS. Guarantor consents and agrees that Bank may from time
to time, in its sole discretion, without affecting, impairing, lessening or
releasing the obligations of the Guarantor hereunder: (a) extend or modify the
time, manner, place or terms of payment or performance and/or otherwise change
or modify the credit terms of the Guaranteed Obligations; (b) increase, renew,
or enter into a novation of the Guaranteed Obligations; (c) waive or consent to
the departure from terms of the Guaranteed Obligations; (d) permit any change in
the business or other dealings and relations of Borrower or any other guarantor
with Bank; (e) proceed against, exchange, release, realize upon, or otherwise
deal with in any manner any collateral that is or may be held by Bank in
connection with the Guaranteed Obligations or any liabilities or obligations of
Guarantor; and (f) proceed against, settle, release, or compromise with
Borrower, any insurance carrier, or any other person or entity liable as to any
part of the Guaranteed Obligations, and/or subordinate the payment of any part
of the Guaranteed Obligations to the payment of any other obligations, which may
at any time be due or owing to Bank; all in such manner and upon such terms as
Bank may deem appropriate, and without notice to or further consent from
Guarantor. No invalidity, irregularity, discharge or unenforceability of, or
action or omission by Bank relating to any part of, the Guaranteed Obligations
or any security therefor shall affect or impair this Guaranty.
WAIVERS AND ACKNOWLEDGMENTS. Guarantor waives and releases the following rights,
demands, and defenses Guarantor may have with respect to Bank and collection of
the Guaranteed Obligations: (a) promptness and diligence in collection of any of
the Guaranteed Obligations from Borrower or any other person liable thereon, and
in foreclosure of any security interest and sale of any property serving as
collateral for the Guaranteed Obligations; (b) any law or statute that requires
that Bank make demand upon, assert claims against, or Collect from Borrower or
other persons or entities, foreclose any security interest, sell collateral,
exhaust any remedies, or take any other action against Borrower or other persons
or entities prior to making demand upon, collecting from or taking action
against Guarantor with respect to the Guaranteed Obligations, including any such
rights Guarantor might otherwise have had under Va. Code ss. 49-25 and 49-26, et
seq. N.C.G.S. ss. 26-7, et seq. Tenn. Code Xxx. ss. 00-00-000, O.C.G.A. ss.
10-7-24 (and any successor statute) and any other applicable law; (c) any law or
statute that requires that Borrower or any other person be joined in, notified
of or made part of any action against Guarantor; (d) that Bank preserve, insure
or perfect any security interest in collateral or sell or dispose of collateral
in a particular manner or at a particular time; (e) notice of extensions,
modifications, renewals, or novations of the Guaranteed Obligations, of any new
transactions or other relationships between Bank, Borrower and/or any guarantor,
and of changes in the
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financial condition of, ownership of, or business structure of Borrower or any
other guarantor; (f) presentment, protest, notice of dishonor, notice of
default, demand for payment, notice of intention to accelerate maturity, notice
of acceleration of maturity, notice of sale, and all other notices of any kind
whatsoever; (g) the right to assert against Bank any defense (legal or
equitable), set-off, counterclaim, or claim that Guarantor may have at any time
against Borrower or any other party liable to Bank; (h) all defenses relating to
invalidity, insufficiency, unenforceability, enforcement, release or impairment
of Bank's lien on any collateral, of the Loan Documents, or of any other
guaranties held by Bank; (i) any claim or defense that acceleration of maturity
of the Guaranteed Obligations is stayed against Guarantor because of the stay of
assertion or of acceleration of claims against any other person or entity for
any reason including the bankruptcy or insolvency of that person or entity; and
(j) the benefit of any exemption claimed by Guarantor. Guarantor acknowledges
and represents that it has relied upon its own due diligence in making its own
independent appraisal of Borrower, Borrower's business affairs and financial
condition, and any collateral; Guarantor will continue to be responsible for
making its own independent appraisal of such matters; and Guarantor has not
relied upon and will not hereafter rely upon Bank for information regarding
Borrower or any collateral.
FINANCIAL CONDITION. Guarantor warrants, represents and covenants to Bank that
on and after the date hereof: (a) the fair saleable value of Guarantor's assets
exceeds its liabilities, Guarantor is meeting its current liabilities as they
mature, and Guarantor is and shall remain solvent; (b) all financial statements
of Guarantor furnished to Bank are correct in all material respects and fairly
present the financial condition of Guarantor as of the respective dates thereof;
(c) since the date of such financial statements, there has not occurred a
material adverse change in the financial condition of Guarantor; (d) there are
not now pending any court or administrative proceedings or undischarged
judgments against Guarantor, no federal or state tax liens have been filed or
threatened against Guarantor, and Guarantor is not in default or claimed default
in any material respect under any agreement; and (e) at such reasonable times as
Bank requests, Guarantor will furnish Bank with such other financial information
as Bank may reasonably request.
INTEREST. Regardless of any other provision of this Guaranty or other Loan
Documents, if for any reason the effective interest on any of the Guaranteed
Obligations should exceed the maximum lawful interest, the effective interest
shall be deemed reduced to and shall be such maximum lawful interest, and any
sums of interest which have been collected in excess of such maximum lawful
interest shall be applied as a credit against the unpaid principal balance of
the Guaranteed Obligations.
DEFAULT. If any of the following events occur, a default ("Default") under this
Guaranty shall exist: (a) Failure of timely payment or performance of the
Guaranteed Obligations or a Default under any Loan Document; (b) A breach of any
agreement or representation contained or referred to in the Guaranty, or any of
the Loan Documents, or contained in any other contract or agreement of Guarantor
with Bank or its affiliates, whether now existing or hereafter arising; (c) The
dissolution of, termination of existence of, loss of good standing status by,
appointment of a receiver for, assignment for the benefit of creditors of, or
the commencement of any insolvency or bankruptcy proceeding by or against,
Guarantor or any general partner of or the holder(s) of the majority ownership
interests of Guarantor; and/or (d) The entry of any monetary judgment or the
assessment against, the filing of any tax lien against, or the issuance of any
writ of garnishment or attachment against any property of or debts due Guarantor
in an amount which may have a materially adverse impact on the financial
condition of Guarantor and that is not discharged or execution is not stayed
within 30 days of entry.
If a Default occurs, not cured within 15 days of the Bank mailing written notice
to Guarantor or Borrower of such default, the Guaranteed Obligations shall be
due immediately and payable without notice. Guarantor shall pay interest on the
Guaranteed Obligations from such Default at the highest rate of interest charged
on any of the Guaranteed Obligations.
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ATTORNEY'S FEES AND OTHER COSTS OF COLLECTION. Guarantor shall pay all of Bank's
reasonable expenses incurred to enforce or collect any of the Guaranteed
Obligations, including, without limitation, reasonable arbitration, paralegals',
attorneys' and experts' fees and expenses, whether incurred without the
commencement of a suit, in any suit, arbitration, or administrative proceeding,
or in any appellate or bankruptcy proceeding.
SUBORDINATION OF OTHER DEBTS. Guarantor agrees: (a) to subordinate the
obligations now or hereafter owed by Borrower to Guarantor ("Subordinated Debt")
to any and all obligations of Borrower to Bank now or hereafter existing while
this Guaranty is in effect, provided however that Guarantor may receive
regularly scheduled principal and interest payments on the Subordinated Debt so
long as (i) all sums due and payable by Borrower to Bank have been paid in full
on or prior to such date, and (ii) no event or condition which constitutes or
which with notice or the lapse or time would constitute an event of default with
respect to the Guaranteed Obligations, shall be continuing on or as of the
payment date; (b) Guarantor will place a legend indicating such subordination on
every note, ledger page or other document evidencing any part of the
Subordinated Debt; and (c) except as permitted by this paragraph, Guarantor will
not request or accept payment of or any security for any part of the
Subordinated Debt, and any proceeds of the Subordinated Debt paid to Guarantor,
through error or otherwise, shall immediately be forwarded to Bank by Guarantor,
properly endorsed to the order of Bank, to apply to the Guaranteed Obligations.
MISCELLANEOUS. (a) Assignment. This Guaranty and other Loan Documents shall
inure to the benefit of and be binding upon the parties and their respective
heirs, legal representatives, successors and assigns. Bank's interests in and
rights under this Guaranty and other Loan Documents are freely assignable, in
whole or in part, by Bank to an Affiliate of the Bank or any Federal Reserve
Bank or during the continuance of Default to any other person not a competitor
of Guarantor with the consent of Guarantor, not to be unreasonably withheld or
delayed. Any assignment shall not release Guarantor from the Guaranteed
Obligations. (b) Applicable Law; Conflict Between Documents. This Guaranty and
other Loan Documents shall be governed by and construed under the laws of the
state of New York without regard to that state's conflict of laws principles. If
the terms of this Guaranty should conflict with the terms of any commitment
letter that survives closing, the terms of this Guaranty shall control. (c)
Jurisdiction. Guarantor irrevocably agrees to non-exclusive personal
jurisdiction in the state named in Bank's address shown above. (d) Severability.
If any provision of this Guaranty or of the other Loan Documents shall be
prohibited or invalid under applicable law, such provision shall be ineffective
but only to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Guaranty or
other document. (e) Notices. Any notices to Guarantor shall be sufficiently
given, if in writing and mailed or delivered to the Guarantor's address shown
above or such other address as provided hereunder, and to Bank, if in writing
and mailed or delivered to Bank's office address shown above or such other
address as Bank may specify in writing from time to time. In the event that
Guarantor changes Guarantor's address at any time prior to the date the
Guaranteed Obligations are paid in full, Guarantor agrees to promptly give
written notice of said change of address by registered or certified mail, return
receipt requested, all charges prepaid. (f) Plural; Captions. All references in
the Loan Documents to borrower, guarantor, person, document or other nouns of
reference mean both the singular and plural form, as the case may be, and the
term "person" shall mean any individual, person or entity. The captions
contained in the Loan Documents are inserted for convenience only and shall not
affect the meaning or interpretation of the Loan Documents. (g) Binding
Contract. Guarantor by execution of and Bank by acceptance of this Guaranty
agree that each Party is bound to all terms and provisions of this Guaranty. (h)
Amendments, Waivers and Remedies. No Waivers, amendments or modifications of
this Guaranty and other Loan Documents shall be valid unless in writing and
signed by an officer of Bank. No waiver by Bank of any Default shall operate as
a waiver of any other Default or the same Default on a future occasion. Neither
the failure nor any delay on the part of Bank in exercising any right, power, or
privilege granted pursuant to this Guaranty and other Loan Documents shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise or the exercise of any other right, power
or privilege. All
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remedies available to Bank with respect to this Guaranty and other Loan
Documents and remedies available at law or in equity shall be cumulative and may
be pursued concurrently or successively. (i) partnerships. If Guarantor is a
partnership, the obligations, liabilities and agreements on the part of
Guarantor shall remain in full force and effect and fully applicable
notwithstanding any changes in the individuals comprising the partnership. The
term "Guarantor" includes any altered or successive partnerships, and
predecessor partnership(s) and the partners shall not be released from any
obligations or liabilities hereunder. (j) Loan Documents. The term "Loan
Documents" refers to all documents executed in connection with the Guaranteed
Obligations and may include, without limitation, commitment letters that survive
closing, loan agreements, other guaranty agreements, security agreements,
instruments, financing statements, mortgages, deeds of trust, deeds to secure
debt, letters of credit and any amendments or supplements (excluding swap
agreements as defined in 11 U.S. Code ss. 101).
FINANCIAL AND OTHER INFORMATION. Guarantor shall deliver to Bank such
information as Bank may reasonably request from time to time, including without
limitation, financial statements and information pertaining to Guarantor's
financial condition. Such information shall be true, complete, and accurate in
all material respects.
IN WITNESS WHEREOF, Guarantor, on the day and year first written above, has
caused this Unconditional Guaranty to be executed under seal.
NETWORK EVENT THEATER, INC., a
Delaware corporation
By Xxxxx X. Xxxxxx
---------------------------------------
XXXXX X. XXXXXX, Executive Vice President
& Chief Financial Officer
NATIONAL CAMPUS MEDIA, INC., a
Delaware corporation
By Xxxxx X. Xxxxxx
---------------------------------------
XXXXX X. XXXXXX, Executive Vice President
& Chief Financial Officer
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