GUARANTY
Exhibit
10.3
GUARANTY
dated as of March 26, 2007 ("Guaranty") made jointly and severally by Xxxxx
Xxxxxx, Xxxxxx Xxxxxxxxxx, Jan Parent and Xxxx X. Xxxxxxx, each a resident
of
the State of California (each, a “Guarantor” and collectively, the
“Guarantors”), in favor of Xxxx Xxxx (the "Lender").
WITNESSETH
WHEREAS,
CenterStaging Corp., a Delaware corporation (the “Borrower”), and the Lender are
parties to a secured note, dated as of even date herewith (such note, as
amended, restated, supplemented or otherwise modified from time to time, being
hereinafter referred to as the “Note”);
WHEREAS,
pursuant to the Note, the Guarantors are required to execute and deliver to
the
Lender guaranties jointly and severally guaranteeing the Note and all other
obligations under the Note and the pledge agreement by and between the Pledgors
thereunder and the Lender of even date herewith (such pledge agreement, as
amended, restated, supplemented or otherwise modified from time to time, being
hereinafter referred to as the “Pledge Agreement”; the Note, the Guaranties and
the Pledge Agreement, together with all other documents required to be delivered
in connection herewith and therewith are collectively referred to as the “Loan
Documents”); and
WHEREAS,
each of the Guarantors has (a) received the sum of $1,000 for execution of
this
Guaranty, and (b) determined that (i) he will derive substantial benefit and
advantage from the Loan and other financial accommodations made available to
the
Borrower under the Note and the other Loan Documents and (ii) his execution,
delivery and performance of this Guaranty directly benefits, and is within
the
best interests of, such Guarantor;
NOW,
THEREFORE, in consideration of the premises and the agreements herein and in
order to induce the Lender to make and maintain the Loan pursuant to the Note,
each of the Guarantors hereby agrees with the Lender, jointly and severally,
as
follows:
Section
1. Definitions.
Reference is hereby made to the Note for a statement of the terms thereof.
All
terms used in this Guaranty which are defined in the Note and not otherwise
defined herein shall have the same meanings herein as set forth therein. As
used
in this Guaranty, the following terms have the following meanings (terms defined
in the singular to have the same meaning when used in the plural and vice
versa):
“Borrower”
has the meaning specified in the preamble above.
“Guaranty
Documents” means the Loan Documents and any document or agreement evidencing,
related to or delivered in connection with any or all of the Guaranteed
Obligations.
“Guaranteed
Obligations” means any and all present and future liabilities and obligations of
the Borrower and the Guarantors, or any thereof, to the Lender incurred by
the
Borrower or the Guarantors, or any thereof, respectively, under the Loan
Documents, and whether due or to become due, secured or unsecured, absolute
or
contingent, joint or several, direct or indirect, acquired outright,
conditionally or as collateral security by the Lender from another, liquidated
or unliquidated, arising by operation of law or otherwise, together with all
fees and expenses incurred in collecting any or all of the items specified
in
this definition or enforcing any rights under any of the Guaranty Documents,
including all fees and expenses of the Lender’s counsel and of any experts and
agents which may be paid or incurred by the Lender in collecting any such items
or enforcing any such rights.
Section
2. Rules
of Interpretation.
When
used in this Guaranty: (1) “or” is not exclusive, (2) a reference to a law or
document includes any amendment or modification to such law or document and
(3)
a reference to an agreement, instrument or document includes any amendment
or
modification of such agreement, instrument or document.
Section
3. Guaranty.
The
Guarantors hereby guarantee to the Lender and his successors, endorsees,
transferees and assigns the prompt and complete payment, as and when due and
payable (whether at stated maturity or by required prepayment, acceleration,
demand or otherwise), of all of the Guaranteed Obligations now existing or
hereafter incurred will be paid strictly in accordance with their
terms.
Section
4. Limitation
of Liability.
The
obligations of the Guarantors under this Guaranty shall be limited to an
aggregate amount equal to the largest amount that would not render the
obligations of the Guarantors under this Guaranty subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provision
of
any applicable state law.
Section
5. Type
of Guaranty.
This
Guaranty is absolute and unconditional and as such is not subject to any
conditions and each of the Guarantors is fully liable to perform all of his
duties and obligations under this Guaranty as of the date of execution of this
Guaranty. This Guaranty is a continuing guaranty and applies to all future
Guaranteed Obligations. In addition, this Guaranty shall remain in full force
and effect even if at any time there are no outstanding Guaranteed Obligations.
This Guaranty is a guaranty of payment and not of collection. The obligations
and liabilities of the Guarantors under this Guaranty shall not be conditioned
or contingent upon the pursuit by the Lender of any right or remedy against
the
Borrower, the Guarantors or any other person which may be or become liable
in
respect of all or any part of the Guaranteed Obligations, or against any assets
securing the payment of the Guaranteed Obligations or guarantee for such
Guaranteed Obligations or right of setoff with respect to such Guaranteed
Obligations. This Guaranty is irrevocable and as such cannot be cancelled,
terminated or revoked by the Guarantors or any thereof.
Section
6. Reinstatement
of Guaranty.
This
Guaranty shall continue to be effective or shall be reinstated, as the case
may
be, if at any time any payment, or any part thereof, of any of the Guaranteed
Obligations are rescinded or must otherwise be returned by the Lender upon
the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower, the Guarantors or otherwise, all as though such payment had not been
made.
The
Guarantors hereby consent that, without the necessity of any reservation of
rights against the Guarantors and without notice to or further assent by the
Guarantors, any demand for payment of any of the Guaranteed Obligations made
by
the Lender may be rescinded by the Lender and any of such Guaranteed Obligations
continued after such rescission.
Section
7. Security
Interest.
To
secure the payment of the obligations of the Guarantors under this Guaranty,
each of the Guarantors has executed (a) a Pledge Agreement in favor of the
Lender, and granted the Lender a pledge and security interest in the Pledged
Shares listed in Schedule
1
to the
Pledge Agreement, and (b) a Confession of Judgment in the form annexed hereto
as
Exhibit
1.
Section
8. Lender’s
Rights Upon Default.
In the
event of a default by Borrower pursuant to the Note, Lender shall sell all
of
the Collateral (as defined in the Pledge Agreement), prior to exercising his
rights and remedies against the Guarantors pursuant to this
Guaranty.
Section
9. Waiver
of Notices.
Each of
the Guarantors hereby waives any and all notices including (1) notice of or
proof of reliance by the Lender upon this Guaranty or acceptance of this
Guaranty, (2) notice of the incurrence of any Guaranteed Obligations or the
renewal, extension or accrual of any such Guaranteed Obligations, (3) notice
of
any actions taken by the Lender, the Borrower, any of the Guarantors or any
other person under any Guaranty Document, and (4) notices of nonpayment or
nonperformance, protest, notices of protest and notices of
dishonor.
Section
10. Waiver
of Defenses.
Each of
the Guarantors hereby waives any and all defenses to his performance of his
duties and obligations under this Guaranty, including any defense based on
any
of the following:
(1) any
failure of the Lender to disclose to the Guarantors any information relating
to
the business, condition (financial or otherwise), operations, performance,
properties or prospects of any party obligated to make payment on any and all
Guaranteed Obligations, whether as principal or guarantor, now or hereafter
known to the Lender,
(2) any
defense to the payment of any or all the Guaranteed Obligations, including
lack
of validity or enforceability of any of the Guaranteed Obligations or any
Guaranty Documents,
(3) any
change in the time, manner or place of payment of, or in any other term in
respect of, all or any of the Guaranteed Obligations, or any other amendment
or
waiver of or consent to any departure from any Guaranty Document,
(4) any
exchange or release of, or non-perfection of any security interest on or in
any
assets securing the payment of the Guaranteed Obligations,
(5) any
failure to execute any other guaranty for all or any part of the Guaranteed
Obligations, or any release or amendment or waiver of, or consent to any
departure from, any other guaranty for any or all of the Guaranteed Obligations,
(6)
any
subordination of any or all of the Guaranteed
Obligations,
(7)
any act
or omission of the Lender in connection with the enforcement of, or the exercise
of rights and remedies, including any election of, or the order of exercising
any, remedies, with respect to (a) the Guaranteed Obligations, (b) any other
guarantor of the Guaranteed Obligations, or (c) any assets securing the payment
of the Guaranteed Obligations,
(8) any
manner of application of any funds received by the Lender to Guaranteed
Obligations or any other obligations owed to the Lender, whether from the sale
or disposition of any assets securing the Guaranteed Obligations, from another
guarantor of the Guaranteed Obligations or otherwise, and
(9) any
failure to give or provide any notices, demands or protests, including those
specified under Section
9
herein,
entitled “Waiver of Notices”.
Section
11. Subrogation.
None of
the Guarantors may exercise any rights which the Guarantors may acquire by
way
of subrogation or contribution, whether acquired by any payment made under
this
Guaranty, by any setoff or application of funds of the Borrower, by the Lender
or otherwise, until (1) the payment in full of the Guaranteed Obligations (after
the Lender no longer has any obligation or arrangement to provide credit to
the
Borrower, including under or pursuant to a line of credit), and (2) the payment
of all fees and expenses to be paid by the Guarantors pursuant to this Guaranty.
If any amount shall be paid to the Guarantors on account of such subrogation
or
contribution rights at any time when all of the Guaranteed Obligations and
all
such other expenses shall not have been paid in full (after the Lender no longer
has any obligation or arrangement to provide credit to the Borrower, including
under or pursuant to a line of credit), such amount shall be held in trust
for
the benefit of the Lender, shall be segregated from the other funds of the
Guarantors and shall forthwith be paid over to the Lender to be credited and
applied in whole or in part by the Lender against the Guaranteed Obligations,
whether matured or unmatured, and all such other fees and expenses in accordance
with the terms of the Guaranty Documents.
Section
12. Representations.
At the
time of execution of this Guaranty and each time the Lender provides credit
as
noted above, the Guarantors, jointly and severally, represent and warrant to
the
Lender as follows:
(1) Name.
The
exact legal names of the Guarantors are the names specified in the preamble
to
this Guaranty. The Guarantors have not been known by any other names during
the
two (2) years prior to the date of the Guaranty.
(2) Location.
The
principal addresses of the Guarantors are as set forth in the preamble to this
Guaranty.
(3) No
Contravention.
The
execution, delivery and performance by the Guarantors of this Guaranty do not
and will not (a) violate any provision of any law, order, writ, judgment,
injunction, decree, determination, or award presently in effect applicable
to
the Guarantors, (b) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease, or
instrument to which the Guarantors, or any thereof, is a party or by which
the
Guarantors, or any thereof, or their respective properties may be bound or
affected, or (c) result in, or require, the creation or imposition of any lien
upon or with respect to any of the properties now owned or hereafter acquired
by
the Guarantors.
(4) Governmental
Authority.
No
authorization, approval or other action by, and no notice to or filing with,
any
governmental authority is required for the due execution, delivery and
performance by the Guarantors of this Guaranty.
(5) Legally
Enforceable Guaranty.
This
Guaranty is the legal, valid and binding obligation of the Guarantors,
enforceable against each of them in accordance with its terms, except to the
extent that such enforcement may be limited by (a) applicable bankruptcy,
insolvency, and other similar laws affecting creditors' rights generally, or
(b)
general equitable principles, regardless of whether the issue of enforceability
is considered in a proceeding in equity or at law.
Section
13. Remedies.
The
Lender shall not, by any act, delay, omission or otherwise, be deemed to have
waived any of his rights or remedies under this Guaranty or otherwise. A waiver
by the Lender of any right or remedy hereunder on any one occasion, shall not
be
construed as a ban or waiver of any such right or remedy which the Lender would
have had on any future occasion, nor shall the Lender be liable for exercising
or failing to exercise any such right or remedy. The rights and remedies of
the
Lender under this Guaranty are cumulative and, as such, are in addition to
any
other rights and remedies available to the Lender under law or any other
agreements.
Section
14. Appointment
as Attorney-in-Fact.
The
Guarantors hereby appoint the Lender as the attorney-in-fact for the Guarantors,
with full authority in the place and stead of, and in the name of, the
Guarantors, or otherwise, to exercise all rights and remedies granted to the
Lender under this Guaranty and to take any action and to execute any instrument
which the Lender may deem necessary or advisable to accomplish the purposes
of
this Guaranty.
Section
15. Indemnity
and Expenses.
The
Guarantors hereby indemnify the Lender from and against any and all claims,
losses, damages and liabilities growing out of or resulting from this Guaranty
(including, without limitation, enforcement of this Guaranty), except claims,
losses, damages or liabilities resulting from the Lender's gross negligence
and
willful misconduct.
The
Guarantors will upon demand pay to the Lender the amount of any and all
expenses, including the fees and expenses of his counsel and of any experts
and
agents, which the Lender may incur in connection with (1) any amendment to
this
Guaranty, (2) the administration of this Guaranty, (3) the exercise or
enforcement of any of the rights of the Lender under this Guaranty, or (4)
the
failure by the Guarantors to perform or observe any of the provisions of this
Guaranty.
Section
16. Amendments.
No
amendment or waiver of any provision of this Guaranty, nor consent to any
departure by the Guarantors from this Guaranty, shall in any event be effective
unless the same shall be in writing and signed by the Guarantors and the Lender,
and then such amendment or waiver shall be effective only in the specific
instance and for the specific purpose for which given.
Section
17. Addresses
for Notices.
All
notices and other communications provided for under this Guaranty shall be
in
writing and, mailed or delivered by messenger or overnight delivery service,
addressed, in the case of each Guarantor at the address specified below his
signature, and in the case of the Lender at the address specified below, or
as
to any such party at such other address as shall be designated by such party
in
a written notice to the other parties complying as to delivery with the terms
of
this Section.
If
to the
Lender:
Xxxx
Xxxx
000
Xxxx
Xxxxxx Xxxxx
Xxxxx
000
Xxxxxxx,
XX 00000
With
copies to:
Xxxxxxx
X. Xxxxx, Esq.
000
Xxxx
Xxxxxx Xxxxx
Xxxxx
000
Xxxxxxx,
XX 00000
If
to the
Guarantors, or any thereof:
0000
Xxxxxx Xxx.
Xxxxxxx,
XX 00000
With
copies to:
Xxxxxx
X.
Xxxxxx, Esq.
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
All
such
notices and other communications shall, when mailed, be effective three (3)
days
after being placed in the mails, or when delivered to a messenger or overnight
delivery service, be effective one (1) day after being delivered to the
messenger or overnight delivery service, in each case, addressed as specified
above.
Section
18. Assignment
and Transfer of Obligations.
This
Guaranty will bind the estate of each of the Guarantors as to Guaranteed
Obligations created or incurred both before and after the bankruptcy or
liquidation of the Guarantors, whether or not the Lender receives notice of
such
bankruptcy or liquidation. This Guaranty shall inure to the benefit of the
Lender and his successors, transferees and assigns. The Guarantors may not
transfer or assign their respective obligations under this Guaranty. The Lender
may assign or otherwise transfer all or a portion of his rights or obligations
with respect to the Guaranteed Obligations to any other party, and such other
party shall then become vested with all the benefits in respect of such
transferred Guaranteed Obligations granted to the Lender in this Guaranty or
otherwise. The Guarantors agree that the Lender can provide information
regarding the Guarantors to any prospective or actual successor, transferee
or
assign.
Section
19. Setoff.
The
Guarantors agree that, in addition to, and without limiting, any right of
setoff, the Lender’s lien or counterclaim the Lender may otherwise have, the
Lender shall be entitled, at his option, to offset balances (general or special,
time or demand, provisional or final) held by him for the account of the
Guarantors, or any thereof, at any of the offices of the Lender, in Dollars
or
any other currency, against any amount payable by the Guarantors to the Lender
under this Guaranty which is not paid when demanded (regardless of whether
such
balances are then due to the Guarantors), in which case the Lender shall
promptly notify the Guarantors, provided that the Lender’s failure to give such
notice shall not affect the validity of such offset.
Section
20. Submission
to Jurisdiction.
The
Guarantors hereby irrevocably submit to the jurisdiction of any federal or
state
court sitting in Xxxx County in the State of Illinois over any action or
proceeding arising out of or related to this Guaranty and agrees with the Lender
that personal jurisdiction over the Guarantors and the venue of any such actions
or proceedings rests with such courts for purposes of any action on or related
to this Guaranty. The Guarantors hereby waive personal service by manual
delivery and agree that service of process may be made by prepaid certified
mail
directed to the Guarantors at the address of the Guarantors for notices under
this Guaranty or at such other addresses as may be designated in writing by
the
Guarantors to the Lender, and that upon mailing of such process such service
will be effective as if the Guarantors were personally served. The Guarantors
agree that a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
manner provided by law. The Guarantors further waive any objection to venue
in
any such action or proceeding on the basis of inconvenient forum.
Notwithstanding the above, the Guarantors agree that any action on or proceeding
brought against the Lender may be brought in any state or Federal court in
which
jurisdiction may be had.
Section
21. Governing
Law.
This
Guaranty shall be governed by and construed in accordance with the laws of
the
State of Illinois without regard to its principles of conflicts of
law.
Section
22. Subordination.
Once a
demand for payment is made on the Guarantors under this Guaranty, the Guarantors
will not, individually or collectively, (1) make any demand for payment of,
or
take any action to accelerate, any obligation owed to the Guarantors, or any
thereof, by the Borrower, (2) seek to collect payment of, or enforce any right
or remedies against the Borrower, any of the obligations owed to the Guarantors,
or any thereof, by the Borrower or any guarantees, credit supports, collateral
or other security related to or supporting any of such obligations, or (3)
commence, or join with any other creditor in commencing, any bankruptcy or
similar proceeding against the Borrower. The Guarantors also agree, individually
and collectively, that the payment of all obligations of the Borrower to the
Guarantors shall be subordinate and junior in time and right of payment in
accordance with the terms of this Section
21
to the
prior payment in full (in cash) of the Guaranteed Obligations. In furtherance
of
such subordination, (1) to the extent possible, none of the Guarantors will
take
or receive from the Borrower any payments, in cash or any other property, by
setoff or any other means, of any or all of the obligations owed to the
Guarantors, or any thereof, by the Borrower, or purchase, redeem, or otherwise
acquire any of such obligations, or change the terms or provisions of any such
obligations and (2) if for any reason and under any circumstance the Guarantors,
or any thereof, shall receive a payment on such obligation, whether in a
bankruptcy or similar proceeding or otherwise, all such payments or
distributions upon or with respect to such obligations shall be received in
trust for the benefit of the Lender, shall be segregated from other funds and
property held by the Guarantors and shall be forthwith paid over to the Lender
in the same form as so received (with any necessary endorsement) to be applied
(in the case of cash) to, or held as collateral (in the case of securities
or
other non-cash property) for, the payment or prepayment of the Guaranteed
Obligations.
Section
23. Miscellaneous.
This
Guaranty is in addition to and not in limitation of any other rights and
remedies the Lender may have by virtue of any other instrument or agreement
previously, contemporaneously or hereafter executed by the Guarantors or any
thereof or any other party or by law or otherwise. If any provision of this
Guaranty is contrary to applicable law, such provision shall be deemed
ineffective without invalidating the remaining provisions of this Guaranty.
Titles in this Guaranty are for convenience of reference only and shall not
affect the interpretation or construction of this Guaranty. This Guaranty
constitutes the entire agreement between the Guarantors and the Lender with
respect to the matters covered by this Guaranty and supercedes all written
or
oral agreements with respect to such matters.
Section
24. WAIVER
OF JURY TRIAL.
THE
GUARANTOR EXPRESSLY WAIVES ANY AND EVERY RIGHT TO A TRIAL BY JURY IN ANY ACTION
ON OR RELATED TO THIS GUARANTY.
[THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the Guarantors have duly executed and delivered this Guaranty
as of the date first written above.
| By: | /s/ Xxxxx Xxxxxx | |
|
Name:
|
Xxxxx Xxxxxx |
|
| By: | /s/ Xxxxxx Xxxxxxxxxx | |
|
Name:
|
Xxxxxx Xxxxxxxxxx |
|
| By: | /s/ Jan Parent | |
|
Name:
|
Jan Parent |
|
| By: | /s/ Xxxx X. Xxxxxxx | |
|
Name:
|
Xxxx X. Xxxxxxx |
|
