GUARANTY
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IOM HOLDINGS, INC., a Nevada corporation ("GUARANTOR"), executes this
Guaranty ("GUARANTY") in favor of GMAC COMMERCIAL FINANCE LLC ("LENDER"), on
March 9, 2005.
BACKGROUND
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A. Simultaneous with the execution of this Guaranty, Lender is entering
into a Loan and Security Agreement (the "LOAN AGREEMENT") with I/OMagic
Corporation, a Nevada corporation ("Borrower").
B. The Guarantor is a subsidiary of Borrower and will benefit in a direct
and substantial way from the loans being made to Borrower.
C. The Guarantor is executing this Guaranty as an inducement to Lender to
enter into the Loan Agreement and in consideration of loans, advances
and financial accommodations to be made by Lender to or for the benefit
of Borrower.
BASED ON THE FOREGOING and other good and valuable consideration, the
receipt and adequacy of which is acknowledged, Guarantor agrees as follows:
TERMS AND CONDITIONS
1. GUARANTY. Guarantor absolutely, unconditionally and irrevocably
guaranties the full, complete and prompt payment and performance of all
of the Obligations (defined below) as primary obligor and not merely as
surety, whether by acceleration or otherwise. Guarantor also agrees to
pay Lender all accrued and unpaid interest, and any reasonable
expenses, including reasonable attorneys' fees, that Lender may incur
in collecting from Borrower or Guarantor, enforcing this Guaranty and
in liquidating or enforcing its rights in any collateral. For purposes
of this Guaranty, the term "OBLIGATIONS" means all existing and future
loans, advances, debts, obligations and liabilities of Borrower to
Lender (including interest which, but for the application of any
insolvency, bankruptcy or other laws is payable by Borrower), direct
and indirect, contingent and absolute, however arising or created,
whether joint, several or joint and several, acquired by assignment,
purchase or otherwise and whether as principal or surety and whether or
not matured. This Guaranty is a guaranty of payment and not of
collection. Therefore, Lender can insist that Guarantor pay
immediately, and Lender is not required to attempt to collect first
from Borrower, any collateral, or any OTHER person liable for the
Obligations. The obligation of Guarantor shall be unconditional and
absolute, regardless of the unenforceability of any provision of any
agreement between Borrower and Lender, or the existence of any defense,
setoff or counterclaim which Borrower may assert.
2. ACTION REGARDING BORROWER. Lender can take any action against Borrower,
any collateral, or any other person liable for any of the Obligations
it deems appropriate without the consent or approval of Guarantor.
Lender can release Borrower or anyone else from the Obligations, either
in whole or in part, or release any collateral, and need not perfect a
security interest in any collateral. Lender does not have to exercise
any rights that it has against Borrower or anyone else, or make any
effort to realize on any collateral or right of set-off. If Borrower
requests additional loans or any other benefit, Lender may grant it and
Lender may grant renewals, extensions, modifications and amendments of
the Obligations and otherwise deal with Borrower or any other person as
Lender sees fit and as if this Guaranty were not in effect. Guarantor's
obligations under this Guaranty shall not be released or affected by
(a) any act or omission of Lender, (b) the voluntary or involuntary
liquidation, sale or other disposition of all or substantially all of
the assets of Borrower, or any receivership, insolvency, bankruptcy,
reorganization, or other similar proceedings affecting Borrower or any
of its assets, or (c) any change in the composition or structure of
Borrower or Guarantor, including a merger or consolidation with any
other person or entity. Further, if any monies become available that
Lender can apply to the Obligations, Lender may apply them in any
manner it chooses, including but not limited to applying them against
Obligations which are not covered by this Guaranty.
3. RIGHTS OF SUBROGATION, ETC. Guarantor agrees not to enforce any rights
of subrogation, contribution, set-off, counterclaim or indemnification
that it has or may acquire in the future against Borrower, any entity
liable for the Obligations, or any collateral, until the Obligations
are fully paid and the Loan Agreement is no longer in effect. Guarantor
further agrees that if any payments to Lender on the Obligations are in
whole or in part invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver
or any other party under any bankruptcy act or code, state or federal
law, common law or equitable doctrine, this Guaranty and Lender's
interest in any collateral of Guarantor will remain in full force and
effect (or be reinstated as the case may be) until payment in full of
those amounts.
4. WAIVERS, ETC. Guarantor waives any right it may have to receive notice
of the following matters before Lender enforces any of its rights: (a)
Lender's acceptance of this Guaranty, (b) any loans or advances that
Lender extends to Borrower, (c) Borrower's default, (d) any demand, (e)
any action that Lender takes regarding Borrower, anyone else, any
collateral, or any liability, which it might be entitled to by law or
under any other agreement. Any waiver shall affect only the specific
terms and time period stated in the waiver. Lender may waive or delay
enforcing any of its rights without losing them. No modification or
waiver of this Guaranty shall be effective unless it is in writing and
signed by the party against whom it is being enforced.
5. REPRESENTATIONS BY GUARANTOR. Guarantor represents: (a) that the
execution and delivery of this Guaranty and the performance of the
obligations it imposes do not violate any law, conflict with any
agreement by which it is bound, or require the consent or approval of
any governmental authority or any third party; (b) that this Guaranty
is a valid and binding agreement, enforceable according to its terms;
and (c) that all balance sheets, profit and loss statements, and other
financial statements furnished to Lender are accurate in all material
respects and fairly reflect the financial condition of the
organizations and persons to which they apply on their effective dates,
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including contingent Obligations of every type, which financial
condition has not changed materially and adversely since those dates.
Guarantor further represents: (a) that it is duly organized, existing
and in good standing pursuant to the laws under which it is organized;
and (b) that the execution and delivery of this Guaranty and the
performance of the obligations it imposes (i) are within its powers and
have been duly authorized by all necessary action of its governing
body; and (ii) do not contravene the terms of its articles or
certificate of incorporation or organization, its by-laws, or any
partnership, operating or other agreement governing its affairs.
6. BORROWER'S FINANCIAL CONDITION. Guarantor is fully aware of the
financial condition of Borrower. Guarantor is delivering this Guaranty
based solely upon its own independent investigation and in no part upon
any representation or statement of Lender with respect to the
Obligations as they may now or in the future exist. Guarantor is in a
position to obtain, and assumes full responsibility for obtaining, from
time to time any additional information concerning Borrower's financial
condition as Guarantor deems material to its obligations under this
Guaranty. Guarantor is not relying upon or expecting Lender to furnish
Guarantor any information in Lender's possession, from time to time,
concerning Borrower's financial condition or the Obligations.
7. NOTICES. Notice from one party to another relating to this Guaranty
shall be deemed effective if made in writing (including
telecommunications) and delivered to the recipient's address, telex
number or facsimile number set forth under its name by any of the
following means: (a) hand delivery, (b) registered or certified mail,
postage prepaid, with return receipt requested, (c) first class or
express mail, postage prepaid, (d) Federal Express, or like overnight
courier service or (e) facsimile, telex or other wire transmission with
request for assurance of receipt in a manner typical with respect to
communications of that type. Notice made in accordance with this
section shall be deemed delivered on receipt if delivered by hand or
wire transmission, on the third business day after mailing if mailed by
first class, registered or certified mail, or on the next business day
after mailing or deposit with an overnight courier service if delivered
by express mail or overnight courier.
8. LAW AND JUDICIAL FORUM THAT APPLY. This agreement is governed by
Michigan law. The Guarantor agrees that any legal action or proceeding
against it with respect to any of its obligations under this Guaranty
may be brought in any court in Oakland County, Michigan or of the
United States of America for the Eastern District of Michigan, as the
Lender in its sole discretion may elect. By the execution and delivery
of this Guaranty, the Guarantor submits to and accepts, with regard to
any such action or proceeding, for itself and in respect of its
property, generally and unconditionally, the jurisdiction and venue of
those courts; Guarantor also agrees that if Guarantor institutes
litigation against Lender, the only proper jurisdiction and venue will
be in courts of the United States of America in the Eastern District of
Michigan or in State courts in Oakland County, Michigan. Guarantor
waives any claim that the referenced courts are not convenient forum or
the proper venue for any suit, action or proceeding.
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9. GENERAL PROVISIONS. Guarantor's liability under this Guaranty is
independent of its liability under any other guaranty previously or
subsequently executed by Guarantor, singularly or together with others,
as to all or any part of the Obligations, and may be enforced for the
full amount of this Guaranty regardless of Guarantor's liability under
any other guaranty. This Guaranty is binding on Guarantor's successors
and assigns, and will operate to the benefit of Lender and its
successors and assigns. The use of headings shall not limit the
provisions of this Guaranty. A certificate of Lender or Agent as to the
amount of any Obligations due at any time will, in the absence of
manifest error, be prima facie evidence for purposes of this Guaranty.
10. WAIVER OF JURY TRIAL. LENDER AND GUARANTOR, AFTER CONSULTING OR HAVING
HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION OR OTHER PROCEEDINGS BASED UPON OR ARISING OUT
OF THIS GUARANTY OR ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS GUARANTY, OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF EITHER OF
THEM. NEITHER LENDER NOR GUARANTOR SHALL SEEK TO CONSOLIDATE, BY
COUNTERCLAIM OR OTHERWISE, ANY ACTION IN WHICH A JURY TRIAL HAS BEEN
WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED
IN ANY RESPECT OR RELINQUISHED BY EITHER LENDER OR GUARANTOR EXCEPT BY
A WRITTEN INSTRUMENT EXECUTED BY BOTH OF THEM.
"GUARANTOR"
IOM HOLDINGS, INC.
By: /S/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: President/CEO
ADDRESS FOR NOTICE:
0 Xxxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PRIOR PAGE]
ACCEPTED BY LENDER:
GMAC COMMERCIAL FINANCE LLC
By: /S/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: Sr. Vice President
ADDRESS FOR NOTICE:
GMAC Commercial Finance LLC
0000 Xxxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
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