CONTINUING AND UNCONDITIONAL GUARANTY
1. The
Guaranty.
For
valuable consideration, the undersigned (“Guarantor”) hereby unconditionally
guarantees and promises to pay promptly to F&L LLP (collectively, “Lender”),
or order, in lawful money of the United States, any and all Indebtedness of
Oblio Telecom, Inc. (“Borrower”) to Lender when due, whether at stated maturity,
upon acceleration or otherwise, and at all times thereafter. The liability
of
Guarantor under this Guaranty is not limited as to the principal amount of
the
Indebtedness guaranteed and includes, without limitation, liability for all
interest, fees, indemnities (including, without limitation, hazardous waste
indemnities), and other costs and expenses relating to or arising out of the
Indebtedness and for all swap, option, or forward obligations now or hereafter
owing from Borrower to Lender. The liability of Guarantor is continuing and
relates to any Indebtedness, including that arising under successive
transactions which shall either continue the Indebtedness or from time to time
renew it after it has been satisfied. This Guaranty is cumulative and does
not
supersede any other outstanding guaranties, and the liability of Guarantor
under
this Guaranty is exclusive of Guarantor’s liability under any other guaranties
signed by Guarantor. If multiple individuals or entities sign this Guaranty,
their obligations under this Guaranty shall be joint and several.
2. Definitions.
(a) “Borrower”
shall
mean the individual or the entity named in Paragraph 1 of
this Guaranty and, if more than one, then any one or more of them.
(b) “Guarantor”
shall
mean the individual or the entity signing this Guaranty and,
if more than one, then any one or more of them.
(c) “Indebtedness”
shall
mean any and all debts, liabilities, and obligations of
Borrower to Lender, arising from or in connection with that certain Note and
Security Agreement dated August 11, 2005, made by Oblio Telecom, Inc., a
Delaware corporation (the "Borrower") in favor of Lender in the original
principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000)
(the
“Original Note”), and that certain Note dated December 14, 2005, made by
Xxxxxxxx in favor the Lender in the original principal amount of Two Million
Three Hundred Twenty Two Thousand Eight Hundred and Fifty Dollars ($2,322,850)
(the “Second Note”, and together with the Original Note, the “Notes”), or
pursuant to Amendment No. 1 to the Notes dated as of December 29, 2006 (the
“Amendment”).
(d) “Loan
Documents” shall mean the Notes and the Amendment, all as now in effect and as
hereafter amended, restated, renewed, or superseded.
3. Obligations
Independent.
The
obligations hereunder are independent of the obligations of Borrower or any
other guarantor, and a separate action or actions may be brought and prosecuted
against Guarantor whether action is brought against Borrower or any other
guarantor or whether Borrower or any other guarantor be joined in any such
action or actions. Anyone executing this Guaranty shall be bound by its terms
without regard to execution by anyone else.
4. Rights
of Lender.
Guarantor authorizes Xxxxxx, without notice or demand and without affecting
its
liability hereunder, from time to time to:
(a) renew,
compromise, extend, accelerate, or otherwise change the time for payment, or
otherwise change the terms, of the Indebtedness or any part thereof, including
increase or decrease of the rate of interest thereon, or otherwise change the
terms of any Loan Documents;
(b) receive
and hold security for the payment of this Guaranty or any Indebtedness and
exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose
of any such security;
(c) apply
such security and direct the order or manner of sale thereof as Lender in its
discretion may determine;
(d) release
or substitute any Guarantor or any one or more of any endorsers or other
guarantors of any of the Indebtedness; and
(e) permit
the Indebtedness to exceed Guarantor’s liability under this Guaranty, and
Guarantor agrees that any amounts received by Xxxxxx from any source other
than
Guarantor shall be deemed to be applied first to any portion of the Indebtedness
not guaranteed by Guarantor.
5. Guaranty
to be Absolute.
Guarantor agrees that until the Indebtedness has been paid in full and any
commitments of Lender or facilities provided by Lender with respect to the
Indebtedness have been terminated, Guarantor shall not be released by or because
of the taking, or failure to take, any action that might in any manner or to
any
extent vary the risks of Guarantor under this Guaranty or that, but for this
paragraph, might discharge or otherwise reduce, limit, or modify Guarantor’s
obligations under this Guaranty. Guarantor waives and surrenders any defense
to
any liability under this Guaranty based upon any such action, including but
not
limited to any action of Xxxxxx described in the immediately preceding paragraph
of this Guaranty. It is the express intent of Guarantor that Guarantor’s
obligations under this Guaranty are and shall be absolute and
unconditional.
6. Guarantor’s
Waivers of Certain Rights and Certain Defenses.
Guarantor waives:
(a) any
right
to require Lender to proceed against Borrower, proceed against or exhaust any
security for the Indebtedness, or pursue any other remedy in Xxxxxx’s power
whatsoever including but not limited to the benefits of Chapter 34 of the Texas
Business and Commerce Code, §17.001 of the Texas Civil Practice and Remedies
Code, and Rule 31 of the Texas Rules of Civil Procedure, or any similar
statute.
(b) any
defense arising by reason of any disability or other defense of Borrower, or
the
cessation from any cause whatsoever of the liability of Borrower;
(c) any
defense based on any claim that Guarantor’s obligations exceed or are more
burdensome than those of Borrower; and
(d) the
benefit of any statute of limitations affecting Guarantor’s liability
hereunder.
No
provision or waiver in this Guaranty shall be construed as limiting the
generality of any other waiver contained in this Guaranty.
7. Waiver
of Subrogation.
Until
the Indebtedness has been paid in full and any commitments of Lender or
facilities provided by Lender with respect to the Indebtedness have been
terminated, even though the Indebtedness may be in excess of Guarantor’s
liability hereunder, Guarantor waives to the extent permitted by applicable
law
any right of subrogation, reimbursement, indemnification, and contribution
(contractual, statutory, or otherwise) including, without limitation, any claim
or right of subrogation under the Bankruptcy Code (Title 11, United States
Code)
or any successor statute, arising from the existence or performance of this
Guaranty, and Guarantor waives to the extent permitted by applicable law any
right to enforce any remedy that Lender now has or may hereafter have against
Borrower, and waives any benefit of, and any right to participate in, any
security now or hereafter held by Lender.
8. Waiver
of Notices.
Guarantor waives all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices
of
intent to accelerate, notices of acceleration, notices of any suit or any other
action against Borrower or any other person, any other notices to any party
liable on any Loan Document (including Guarantor), notices of acceptance of
this
Guaranty, notices of the existence, creation, or incurring of new or additional
Indebtedness to which this Guaranty applies or any other Indebtedness of
Borrower to Lender, and notices of any fact that might increase Guarantor’s
risk.
9. Subordination.
Any
obligations of Borrower to Guarantor, now or hereafter existing, including
but
not limited to any obligations to Guarantor as subrogee of Lender or resulting
from Guarantor’s performance under this Guaranty, are hereby subordinated to the
Indebtedness. In addition to Guarantor’s waiver of any right of subrogation as
set forth in this Guaranty with respect to any obligations of Borrower to
Guarantor as subrogee of Lender, Guarantor agrees that, if Lender so requests,
Guarantor shall not demand, take, or receive from Borrower, by setoff or in
any
other manner, payment of any other obligations of Borrower to Guarantor until
the Indebtedness has been paid in full and any commitments of Lender or
facilities provided by Lender with respect to the Indebtedness have been
terminated. If any payments are received by Guarantor in violation of such
waiver or agreement, such payments shall be received by Guarantor as trustee
for
Lender and shall be paid over to Lender on account of the Indebtedness, but
without reducing or affecting in any manner the liability of Guarantor under
the
other provisions of this Guaranty. Any security interest, lien, or other
encumbrance that Guarantor may now or hereafter have on any property of Borrower
is hereby subordinated to any security interest, lien, or other encumbrance
that
Lender may have on any such property.
10. Reinstatement
of Guaranty.
If this
Guaranty is returned or canceled, and subsequently any payment or transfer
of
any interest in property by Borrower to Lender is rescinded or must be returned
by Lender to Borrower, this Guaranty shall be reinstated with respect to any
such payment or transfer, regardless of any such prior return, or
cancellation.
11. Stay
of Acceleration.
In the
event that acceleration of the time for payment of any of the Indebtedness
is
stayed upon the insolvency, bankruptcy, or reorganization of Borrower or
otherwise, all such Indebtedness guaranteed by Guarantor shall nonetheless
be
payable by Guarantor immediately if requested by Xxxxxx.
12. Information
Relating to Borrower.
Guarantor acknowledges and agrees that it shall have the sole responsibility
for, and has adequate means of, obtaining from Borrower such information
concerning Borrower’s financial condition or business operations as Guarantor
may require, and that Lender has no duty, and Guarantor is not relying on
Lender, at any time to disclose to Guarantor any information relating to the
business operations or financial condition of Borrower.
13. Borrower’s
Authorization.
Where
Borrower is a corporation, partnership, or limited liability company, it is
not
necessary for Lender to inquire into the powers of Borrower or of the officers,
directors, partners, members, managers, or agents acting or purporting to act
on
its behalf, and any Indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder, subject to any
limitations on Guarantor’s liability set forth herein.
14. Information
Relating to Guarantor.
Guarantor authorizes Lender to verify or check any information given by
Guarantor to Lender, check Guarantor’s credit references, verify employment, and
obtain credit reports. Guarantor acknowledges and agrees that the authorizations
provided in this paragraph apply to any individual general partner of
Guarantor.
15. Change
of Status.
Any
Guarantor that is a business entity shall not enter into any consolidation,
merger, or other combination unless Guarantor is the surviving business entity.
Further, Guarantor shall not change its legal structure unless (a) Guarantor
obtains the prior written consent of Lender and (b) all Guarantor’s obligations
under this Guaranty are assumed by the new business entity.
16. Remedies.
If
Guarantor fails to fulfill its duty to pay all Indebtedness guaranteed
hereunder, Xxxxxx shall have all of the remedies of a creditor and, to the
extent applicable, of a secured party, under all applicable law. Without
limiting the foregoing, Lender may, at its option and without notice or
demand:
(a) declare
any Indebtedness due and payable at once;
(b) take
possession of any collateral pledged by Borrower or Guarantor, wherever located,
and sell, resell, assign, transfer, and deliver all or any part of the
collateral at any public or private sale or otherwise dispose of any or all
of
the collateral in its then condition, for cash or on credit or for future
delivery, and in connection therewith Lender may impose reasonable conditions
upon any such sale. Further, Lender, unless prohibited by law the provisions
of
which cannot be waived, may purchase all or any part of the collateral to be
sold, free from and discharged of all trusts, claims, rights of redemption
and
equities of Borrower or Guarantor whatsoever. Guarantor acknowledges and agrees
that the sale of any collateral through any nationally recognized broker-dealer,
investment banker, or any other method common in the securities industry shall
be deemed a commercially reasonable sale under the Uniform Commercial Code
or
any other equivalent statute or federal law, and expressly waives notice thereof
except as provided herein; and
(c) set
off
against any or all liabilities of Guarantor all money owed by Lender or any
of
its agents or affiliates in any capacity to Guarantor, whether or not due,
and
also set off against all other liabilities of Guarantor to Lender all money
owed
by Lender in any capacity to Guarantor. If exercised by Xxxxxx, Lender shall
be
deemed to have exercised such right of setoff and to have made a charge against
any such money immediately upon the occurrence of such default although made
or
entered on the books subsequent thereto.
17. Notices.
All
notices required under this Guaranty shall be personally delivered or sent
by
first class mail, postage prepaid, or by overnight courier, to the addresses
on
the signature page of this Guaranty, or sent by facsimile to the fax numbers
listed on the signature page, or to such other addresses as Lender and Guarantor
may specify from time to time in writing. Notices sent by (a) first class mail
shall be deemed delivered on the earlier of actual receipt or on the fourth
business day after deposit in the U.S. mail, postage prepaid, (b) overnight
courier shall be deemed delivered on the next business day, and (c) telecopy
shall be deemed delivered when transmitted.
18. Successors
and Assigns.
This
Guaranty (a) binds Guarantor and Guarantor’s executors, administrators,
successors, and assigns, provided that Guarantor may not assign its rights
or
obligations under this Guaranty without the prior written consent of Lender,
and
(b) inures to the benefit of Xxxxxx and Xxxxxx’s indorsees, successors, and
assigns. Lender may, without notice to Guarantor and without affecting
Guarantor’s obligations hereunder, sell, assign, grant participations in, or
otherwise transfer to any other person, firm, or corporation the Indebtedness
and this Guaranty, in whole or in part. Guarantor agrees that Xxxxxx may
disclose to any assignee or purchaser, or any prospective assignee or purchaser,
of all or part of the Indebtedness any and all information in Xxxxxx’s
possession concerning Guarantor, this Guaranty, and any security for this
Guaranty.
19. Amendments,
Waivers, and Severability.
No
provision of this Guaranty may be amended or waived except in writing. No
failure by Lender to exercise, and no delay in exercising, any of its rights,
remedies, or powers shall operate as a waiver thereof, and no single or partial
exercise of any such right, remedy, or power shall preclude any other or further
exercise thereof or the exercise of any other right, remedy, or power. The
unenforceability or invalidity of any provision of this Guaranty shall not
affect the enforceability or validity of any other provision of this
Guaranty.
20. Costs
and Expenses.
Guarantor agrees to pay all reasonable attorneys’ fees, including allocated
costs of Xxxxxx’s in-house counsel to the extent permitted by applicable law,
and all other costs and expenses that may be incurred by Xxxxxx (a) in the
enforcement of this Guaranty or (b) in the preservation, protection, or
enforcement of any rights of Lender in any case commenced by or against
Guarantor or Borrower under the Bankruptcy Code (Title 11, United States Code)
or any similar or successor statute.
21. Governing
Law and Jurisdiction.
This
Guaranty shall be governed by and construed and enforced in accordance with
federal law and the law of the State of Texas. Jurisdiction and venue for any
action or proceeding to enforce this Guaranty shall be the forum appropriate
for
such action or proceeding against Borrower, to which jurisdiction Guarantor
irrevocably submits and to which venue Guarantor waives to the fullest extent
permitted by law any defense asserting an inconvenient forum in connection
therewith. It is provided, however, that if Guarantor owns property in another
state, notwithstanding that the forum for enforcement action is elsewhere,
Lender may commence a collection proceeding in any state in which Guarantor
owns
property for the purpose of enforcing provisional remedies against such
property. Service of process by Lender in connection with such action or
proceeding shall be binding on Guarantor if sent to Guarantor by registered
or
certified mail at its address specified below.
22. Waiver
of Jury Trial.
GUARANTOR AND XXXXXX EACH WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (a) UNDER THIS GUARANTY OR ANY
RELATED AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THIS
GUARANTY OR (B) ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
GUARANTY, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE
A
COURT AND NOT BEFORE A JURY. XXXXXXXXX AGREES THAT IT WILL NOT ASSERT ANY CLAIM
AGAINST XXXXXX OR ANY OTHER PERSON INDEMNIFIED UNDER THIS GUARANTY ON ANY THEORY
OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE
DAMAGES.
23. Notice
of Final Agreement.
THIS WRITTEN GUARANTY AND THE LOAN DOCUMENTS EXECUTED IN CONNECTION XXXXXXXX
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN
WITNESS WHEREOF, this Continuing and Unconditional Guaranty is executed
as of
the 29th
day of
December 2006.
By:
/s/
XXXXX XXXXXX
Xxxxx
Xxxxxx, President
