GUARANTY AND PLEDGE AGREEMENT
Exhibit
10.4
THIS
GUARANTY AND PLEDGE AGREEMENT, dated this August 15, 2007, by and between
XXXXX XXXXX, an individual residing at 000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000 (“Guarantor”), and in favor of Third-Order Nanotechnologies,
Inc., (“Lender”).
W
I T N E S S E T H:
A. Theater
Xtreme Entertainment Group, Inc., a Florida corporation, at 000 Xxxxxxxxx Xxxx.,
Xxxxxx, XX 00000 (“Borrower”), has requested that Lender extend a loan (the
“Loan”) to Borrower in the principal amount of One Hundred Thousand Dollars and
Lender has agreed to make such Loan to Borrower.
B. Borrower
has executed and delivered to Lender a Promissory Note dated the date hereof
in
the principal amount of $100,000.00 (the “Note”).
C. Lender
is
willing to make the Loan to Borrower in consideration, among other things,
of
the covenants and obligations made and assumed by Guarantor as herein set
forth.
D. As security
for the obligations of Guarantor hereunder, Guarantor has agreed to pledge
to
Lender the Pledged Securities, as defined herein.
NOW
THEREFORE, for good and valuable consideration, intending to be legally bound
hereby, Guarantor agrees as follows:
1. Guarantor
hereby guarantees, as surety, the punctual performance of all of the Borrower’s
obligations, including without limitation thereto, payment of money, pursuant
to
the terms of the Note (the “Obligations”).
2. Guarantor
agrees to pay Lender all costs and expenses (including reasonable attorney’s
fees) at any time incurred by Lender in the enforcement of this Guaranty against
Guarantor.
3. This
shall be an agreement of suretyship as well as of guaranty and Lender, without
being required to proceed first against the Borrower or any other person or
entity, may proceed directly against Guarantor whenever the Borrower fails
to
make any payment when due or otherwise fails to perform any Obligation owed
or
hereafter owed to Lender. Guarantor hereby waives all notices of any
character whatsoever with respect to this Guaranty and the Borrower’s
obligations to Lender, including but not being limited to notice of the
acceptance hereof and reliance hereon and notice of any defaults of Borrower
pursuant to the Note. Guarantor hereby consents to the taking of, or
failure to take, from time to time, without notice to Guarantor, any action
of
any nature whatsoever with respect to the Borrower’s obligations to Lender and
with respect to any rights against any person or persons (including the Borrower
and Guarantor) or any property, including but not limited to, any renewals,
extensions, modifications, waivers, surrenders, exchanges and releases, and
Guarantor will remain fully
liable
hereunder. Guarantor hereby waives the benefit of all laws now or
hereafter in effect in any way limiting or restricting his, her or its liability
hereunder, including without limitation thereto (i) all defenses whatsoever
to
his her or its liability hereunder except the defense of payments made on
account of Borrower’s liabilities to Lender and the Guarantor’s liability
hereunder, and (ii) all right to stay of execution and exemption of property
in
any action to enforce the liability of Guarantor hereunder. Guarantor
hereby waives any benefit of and any right to participate in any other security
for the Note now or hereafter held by Lender.
4. This
Agreement shall be binding upon Guarantor and his or her heirs and personal
representatives and shall inure to the benefit of Lender and its successors
and
assigns.
5. Guarantor
will not exercise any rights with respect to Lender or Borrower related to
or
acquired in connection with or as a result of Guarantor’s making of this
Guaranty which Guarantor may acquire by way of subrogation, indemnification
or
contribution, by reason of payment made by Guarantor hereunder or otherwise,
until after the date on which all of the obligations of Borrower secured hereby
shall have been satisfied in full, and until such time any such rights of
Guarantor against the Borrower shall be fully subordinate in lien and payment
to
any claim in connection with such obligations which Lender now or hereafter
has
against the Borrower. If any amount shall be paid to Guarantor on
account of such subrogation, indemnification or contribution at any time when
all of such obligations and all other expenses guaranteed pursuant hereto shall
not have been paid in full, such amount shall be held in trust for the benefit
of Lender, shall be segregated from other funds of Guarantor and shall forthwith
be paid over to Lender to be applied in whole or in part by Lender against
the
obligations secured hereby, whether matured or unmatured, in such order as
Lender shall determine in its sole discretion. If Guarantor shall
make a payment to Lender of all or any portion of the obligations secured
hereby, and all of such obligations shall be paid in full, Guarantor’s right of
subrogation shall be without recourse to and without any implied warranties
by
Lender and shall remain fully subject and subordinate to Lender’s right to
collect any other amounts which may thereafter become due to Lender by the
Borrower in connection with such obligations.
6. Any
notice which may hereafter be given by or to Lender with respect to this
Guaranty must be in writing and shall be sufficiently given if hand delivered
with a signed receipt therefore or if deposited in the U.S. mail, by certified
mail, return receipt requested, postage prepaid, addressed to Guarantor as
set
forth below his, her or its signature hereto and addressed to Lender as set
forth above (or to such other place as the Guarantor or Lender, by written
notice as aforesaid, shall advise the other). Guarantor agrees to
give Lender prompt written notice of each change of such Guarantor’s
address.
7. If
any
claim is made upon Lender for repayment or recovery of any amount or amounts
received by Lender in payment or on account of any obligations of Borrower
to
Lender and Lender repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over Lender or any of its property, or (ii) any settlement or
compromise in good faith with any such claimant (including Borrower), then
and
in such event Guarantor agrees that any such judgment, decree, order, settlement
or compromise shall be binding upon Guarantor, notwithstanding any termination
hereof or the cancellation of any note or other instrument evidencing any
obligation, and Guarantor shall
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remain
liable to Lender hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by
Lender.
8. As
security for the due and punctual payment of all indebtedness and obligations
of
Guarantor under the Guaranty, Guarantor hereby pledges to
Lender and grants to Lender a security interest in all of Guarantor's right,
title and interest in and to the securities (collectively, the “Pledged
Securities”) set forth on Exhibit A attached hereto and incorporated herein by
reference. The Pledged Securities shall also include any interests
hereafter issued by the issuers of the Pledged Securities by way of a stock
dividend, split or other distribution or reclassification. The
liability of Guarantor to Lender hereunder shall be limited to all of the
Guarantor’s right, title and interest in and to the Pledged
Securities.
9. Guarantor
hereby represents, warrants and covenants as follows:
(a) Guarantor
is the legal and beneficial owner of the Pledged Securities and has the right
to
pledge the Pledged Securities to Lender; neither said pledge nor the performance
of this Pledge Agreement (including the exercise of the Lender's remedies upon
default) will violate any agreement or other instrument to which Guarantor
is a
party or by which it is bound.
(b) The
Pledged Securities shall at all times be free and clear of any security
interests, mortgages, pledges, liens, encumbrances and restrictions on the
transfer thereof other than those created by this Guaranty, and Guarantor will
not suffer or permit any security interests, mortgages, pledges, liens,
encumbrances or restrictions to attach to the Pledged Securities or transfer
or
attempt to transfer any interest in the Pledged Securities without the written
consent of Lender.
(c) Without
affecting the rights of Lender hereunder, any collateral security for the
Obligations, and any guarantee or surety therefor, may be exchanged, sold,
surrendered, released, modified or otherwise dealt with in accordance with
the
terms of any present or future agreement between Lender and any Guarantor or
any
guarantor or surety, including any agreement permitting Lender to take
unilateral action with respect thereto.
10. Unless
a
default shall have occurred under the Guaranty and be continuing, Guarantor
shall be entitled to vote or consent with respect to the Pledged Securities,
to
receive distributions thereon, and to have and exercise all other rights as
a
holder of the Pledged Securities in any manner not inconsistent with or in
violation of the terms of this Guaranty.
11. Upon
the
occurrence and continuance of any default under the Guaranty, except to the
extent prohibited by applicable law which cannot be waived, the following
provisions shall govern the right of Lender to realize upon the Pledged
Securities, in addition to any rights and remedies available in law or equity,
and in addition to the rights and remedies provided in the
Guaranty:
(a) Unless
Lender agrees otherwise in writing, only Lender shall be entitled to vote or
consent or take any other action with respect to the Pledged Securities, and
Guarantor hereby irrevocably constitutes and appoints Lender its proxy and
attorney in fact, with
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full
power of substitution to do so, and agrees, if so requested, to execute or
cause
to be executed appropriate irrevocable proxies therefor in addition to and
separate from this Agreement.
(b) Lender
shall not be required to make any demand upon or pursue or exhaust any of its
rights or remedies against Guarantor or any other person with respect to the
payment of the Obligations, or to pursue or exhaust any of its rights or
remedies with respect to the Pledged Securities or any other collateral held
in
respect of the Obligations, or any direct or indirect guaranty
thereof. Lender shall not be required to xxxxxxxx the Pledged
Securities or any other collateral for or guaranty of the Obligations or to
resort to the Pledged Securities or any such other collateral or guaranty in
any
particular order and all of the rights granted to Lender hereunder and under
all
other agreements relating to the Obligations shall be cumulative. To
the extent not prohibited by applicable law, Guarantor hereby agrees to waive,
and does hereby absolutely and irrevocably waive and relinquish the benefit
and
advantage of, and does hereby covenant not to assert against Lender, any
valuation, stay, appraisement, extension, or redemption laws now existing or
which may hereafter exist and which, but for this provision, might be applicable
to any sale made under the judgment, order or decree of any court, or privately
under the power of sale conferred by this Guaranty or in respect of any Pledged
Securities. Without limiting the generality of the foregoing,
Guarantor hereby agrees that it will not invoke or utilize any law which might
cause delay in, or impede, the enforcement of the rights of Lender under this
Guaranty, and hereby waives the same. IN ADDITION, TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW, GUARANTOR HEREBY WAIVES ANY RIGHT TO PRIOR NOTICE
(EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN THIS GUARANTY) OR JUDICIAL HEARING
IN CONNECTION WITH THE TAKING POSSESSION OR THE DISPOSITION OF ANY OF THE
PLEDGED SECURITIES, INCLUDING, WITHOUT LIMITATION, ANY SUCH RIGHT WHICH
GUARANTOR WOULD OTHERWISE HAVE.
12. Guarantor
recognizes that Lender may be unable to effect a public sale of all or a part
of
the Pledged Securities by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the "1933 Act"), as now or hereafter in
effect, or in applicable Blue Sky or other state securities laws, as now or
hereafter in effect, but may be compelled to resort to one or more private
sales
to a restricted group of purchasers who will be obliged to agree, among other
things, to acquire the Pledged Securities, or portions thereof, for their own
account, for investment and not with a view to the distribution or resale
thereof. If, at the time of any sale of the Pledged Securities, the
same or any part thereof to be sold shall not, for any reason whatsoever be
effectively registered under the 1933 Act, Lender, in its sole and absolute
discretion, is hereby authorized to sell the Pledged Securities or any such
part
thereof by private sale in such manner and under such circumstances as Lender
may reasonably deem necessary or advisable in order that such sale may legally
be effected without registration. Guarantor acknowledges that private
sales so made may be at prices and on other terms less favorable to the seller
than if the Pledged Securities were sold at public sales, and agrees that Lender
has no obligation to delay the sale of the Pledged Securities or any part
thereof for the period of time necessary to register the Pledged Securities
or
public sale under such applicable securities laws. Guarantor agrees
that private sales made under the foregoing circumstances shall not, because
so
made, be deemed to have been made in a commercially unreasonable
manner.
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13. The
proceeds of all sales and any other monies received by Lender with respect
to
the disposition of Pledged Securities shall be applied as follows:
(a) First,
to the payment of the costs and expenses of such sale or sales, and the
reasonable attorneys' fees incurred by Lender;
(b) Second,
any surplus then remaining, to the payment of the Obligations; and
(c) Third,
any surplus then remaining shall be paid to Guarantor.
14. Upon
the
occurrence and continuance of any default under the Guaranty, Lender shall
be
entitled to receive all distributions on the Pledged Securities, and Lender
at
its option shall have the right to transfer into its name or that of its nominee
any and all of the Pledged Securities.
15. Guarantor
shall at any time and from time to time, execute and deliver upon the written
request of Lender further documents and do further acts and things as Lender
may
reasonably request to effect the purposes of this Pledge Agreement, including,
without limitation, delivering to Lender upon the occurrence and continuance
of
a default under the Guaranty irrevocable proxies with respect to the Pledged
Securities in a form satisfactory to Lender. Until receipt thereof, this Pledge
Agreement shall constitute Guarantor's proxy to Lender or its nominee to
exercise all of the voting and other consensual rights pertaining to the Pledged
Securities at any and all such times as Lender has the right to exercise such
rights pursuant to the terms of this Pledge Agreement. The power of
attorney granted hereby is coupled with an interest and is
irrevocable.
16. Concurrent
with the execution of this Pledge Agreement, Guarantor shall deliver to Lender
certificates evidencing the Pledged Securities together with
appropriate assignments separate from certificate duly executed by
Guarantor
17. No
delay
or omission on the part of Lender in exercising any right under this Guaranty
shall operate as a waiver or relinquishment of such right and no such waiver
or
relinquishment shall be effective.
18. This
Guaranty shall be binding upon and inure to the benefit of the parties hereto,
their respective successors and assigns, and shall inure to the benefit of
the
holders from time to time of any evidence of indebtedness created pursuant
to
the Agreement.
19. This
Guaranty shall be construed in accordance with the laws of the State of
Delaware. If any provision of this Guaranty shall for any reason be
held to be invalid or unenforceable, or if this Guaranty shall for any reason
be
unenforceable against Guarantor, such invalidity or unenforceability shall
not
affect any other provision hereof, but this Guaranty shall be construed as
if
such invalid or unenforceable provision had never been contained herein or
as if
the person or persons against whom this Guaranty is for any reason unenforceable
had not be signatories hereto.
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IN
WITNESS WHEREOF, Guarantor has executed this Guaranty and Pledge Agreement
the
date first above written.
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GUARANTOR:
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Witness
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XXXXX
XXXXX
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By: /s/
Xxxxx X. Xxxxxxxx
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/s/
Xxxxx Xxxxx
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Name:
Xxxxx X. Xxxxxxxx
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Name:
Xxxxx Xxxxx
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LENDER:
|
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Witness
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THIRD-ORDER
NANOTECHNOLOGIES, INC.
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By:____________________________
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/s/
Xxxxxxxxx Xxxxx
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Name:
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Name:
Xxxxxxxxx Xxxxx
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EXHIBIT
A
PLEDGED
SECURITIES
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1.
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That
certain number of shares of Xxxxx Xxxxx’x stock of Theater Xtreme
Entertainment Group, Inc., a Florida corporation rounded down to
the
nearest whole share, rounded down, that reflects the product of the
(a)
the ratio whose numerator is the principal amount of the Promissory
Note
payable to Borrower and whose denominator is $400,000 multiplied
by (b)
three million six hundred eighteen thousand two hundred and seventy
five
(3,618,275).
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