Exhibit 10.6
GUARANTY
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THIS GUARANTY is made as of November 1, 2002, by 1025 Investments, Inc., a
Nevada corporation ("Guarantor"), in favor Gemini Growth Fund, LP. or its
assigns ("Lender").
RECITALS:
1. Trimedia Entertainment Group, Inc. (hereinafter collectively referred
to as "Borrower") has executed in favor of Lender a certain convertible note of
even date herewith, payable to the order of Lender in the aggregate principal
amount of $250,000 (such convertible notes, as from time to time amended, and
all notes given in substitution, renewal or extension therefor or thereof, in
whole or in part, being herein collectively called the "Note").
2. The Note was executed pursuant to a Loan Agreement of approximate even
date herewith, (herein, as from time to time amended, supplemented or restated,
called the "Credit Agreement"), by and between Borrower and Lender, pursuant to
which Lender has agreed to advance funds to Borrower under the Note.
3. It is a condition precedent to Lender`s obligation to advance funds
pursuant to the Credit Agreement that Guarantor shall execute and deliver to
Lender a satisfactory guaranty of Borrower`s obligations under the Note and the
Credit Agreement.
4. Guarantor will benefit directly or indirectly from the advances under
the Note to Borrower.
NOW, THEREFORE, in consideration of the premises, of the benefits which
will inure to Guarantor from Lender`s advances of funds to Borrower under the
Credit Agreement, and of Ten Dollars and other good and valuable consideration,
the receipt and sufficiency of all of which are hereby acknowledged, and in
order to induce Lender to advance funds under the Credit Agreement, Guarantor
hereby agrees with Lender as follows:
AGREEMENTS:
Section 1. Definitions. Reference is hereby made to the Credit Agreement
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for all purposes. All terms used in this Guaranty which are defined in the
Credit Agreement and not otherwise defined herein shall have the same meanings
when used herein. All references herein to any Obligation Document, Loan
Document, or other document or instrument refer to the same as from time to time
amended, supplemented or restated. As used herein the following terms shall
have the following meanings:
"Lender" means all Persons who at any time are a "Lender" under the Credit
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Agreement.
"Obligations" means collectively all of the indebtedness, obligations, and
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undertakings, which are guaranteed by Guarantor and described in subsection (a)
and (b) of Section 2.
"Obligation Documents" means this Guaranty, the Note, the Credit Agreement,
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the Loan Documents, all other documents and instruments under, by reason of
which, or pursuant to which any or all of the Obligations are evidenced,
governed, secured, or otherwise dealt with, and all other documents,
instruments, agreements, certificates, legal opinions and other writings
heretofore or hereafter delivered in connection herewith or therewith.
"Obligors" means Borrower, Guarantor and any other endorsers, guarantors or
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obligors, primary or secondary, of any or all of the Obligations.
"Security" means any rights, properties, or interests of Lender, under the
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Obligation Documents or otherwise, which provide recourse or other benefits to
Lender in connection with the Obligations or the non-payment or non-performance
thereof, including collateral (whether real or personal, tangible or intangible)
in which Lender have rights under or pursuant to any Obligation Documents,
guaranties of the payment or performance of any Obligation, bonds, surety
agreements, keep-well agreements, letters of credit, rights of subrogation,
rights of offset, and rights pursuant to which other claims are subordinated to
the Obligations.
Section 2. Guaranty.
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(a) Guarantor hereby irrevocably, absolutely, and unconditionally
guarantees to Lender the prompt, complete, and full payment when due, and no
matter how the same shall become due, of:
(i) the Note, including all principal, all interest thereon and all
other sums payable thereunder; and
(ii) All other sums payable under the other Obligation Documents,
whether for principal, interest, fees or otherwise; and
(iii) Any and all other indebtedness or liabilities which Borrower may
at any time owe to Lender, whether incurred heretofore or hereafter or
concurrently herewith, voluntarily or involuntarily, whether owed alone or
with others, whether fixed, contingent, absolute, inchoate, liquidated or
unliquidated, whether such indebtedness or liability arises by notes,
discounts, overdrafts, open account indebtedness or in any other manner
whatsoever, and including interest, attorneys` fees and collection costs as
may be provided by law or in any instrument or agreement evidencing any
such indebtedness or liability.
Without limiting the generality of the foregoing, Guarantor`s liability
hereunder shall extend to and include all post-petition interest, expenses, and
other duties and liabilities of Borrower described above in this subsection (a),
or below in the following subsection (b), which would be owed by Borrower but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization, or similar proceeding involving Borrower.
(b) Guarantor hereby irrevocably, absolutely, and unconditionally
guarantees to Lender the prompt, complete and full performance, when due, and no
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matter how the same shall become due, of all obligations and undertakings of
Borrower to Lender under, by reason of, or pursuant to any of the Obligation
Documents.
(c) If Borrower shall for any reason fail to pay any Obligation, as and
when such Obligation shall become due and payable, whether at its stated
maturity, as a result of the exercise of any power to accelerate, or otherwise,
Guarantor will, upon demand by Lender, pay such Obligation in full to Lender.
If Borrower shall for any reason fail to perform promptly any Obligation,
Guarantor will, upon demand by Lender, cause such Obligation to be performed or,
if specified by Lender, provide sufficient funds, in such amount and manner as
Lender shall in good faith determine, for the prompt, full and faithful
performance of such Obligation by Lender or such other Person as Lender shall
designate.
(d) If either Borrower or Guarantor fails to pay or perform any Obligation
as described in the immediately preceding subsections (a), (b), or (c) Guarantor
will incur the additional obligation to pay to Lender, and Guarantor will
forthwith upon demand by Lender pay to Lender, the amount of any and all
expenses, including fees and disbursements of Lender`s counsel and of any
experts or agents retained by Lender, which Lender may incur as a result of such
failure.
(e) As between Guarantor and Lender, this Guaranty shall be considered a
primary and liquidated liability of Guarantor.
Section 3. Unconditional Guaranty.
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(a) No action that Lender may take or omit to take in connection with any
of the Obligation Documents, any of the Obligations (or any other indebtedness
owing by Borrower to Lender), or any Security, and no course of dealing of
Lender with any Obligor or any other Person, shall release or diminish
Guarantor`s obligations, liabilities, agreements or duties hereunder, affect
this Guaranty in any way, or afford Guarantor any recourse against Lender,
regardless of whether any such action or inaction may increase any risks to or
liabilities of Lender or any Obligor or increase any risk to or diminish any
safeguard of any Security. Without limiting the foregoing, Guarantor hereby
expressly agrees that Lender may, from time to time, without notice to or the
consent of Guarantor, do any or all of the following:
(i) Amend, change or modify, in whole or in part, any one or more of
the Obligation Documents and give or refuse to give any waivers or other
indulgences with respect thereto.
(ii) Neglect, delay, fail, or refuse to take or prosecute any action
for the collection or enforcement of any of the Obligations, to foreclose
or take or prosecute any action in connection with any Security or
Obligation Document, to bring suit against any Obligor or any other Person,
or to take any other action concerning the Obligations or the Obligation
Documents.
(iii) Accelerate, change, rearrange, extend, or renew the time, rate,
terms, or manner for payment or performance of any one or more of the
Obligations (whether for principal, interest, fees, expenses,
indemnifications, affirmative or negative covenants, or otherwise).
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(iv) Compromise or settle any unpaid or unperformed Obligation or any
other obligation or amount due or owing, or claimed to be due or owing,
under any one or more of the Obligation Documents.
(v) Take, exchange, amend, eliminate, surrender, release, or
subordinate any or all Security for any or all of the Obligations, accept
additional or substituted Security therefor, and perfect or fail to perfect
Lender`s rights in any or all Security.
(vi) Discharge, release, substitute, or add Obligors.
(vii) Apply all monies received from Obligors or others, or from any
Security for any of the Obligations, as Lender may determine to be in their
best interest, without in any way being required to marshal Security or
assets or to apply all or any part of such monies upon any particular
Obligations.
(b) No action or inaction of any Obligor or any other Person, and no
change of law or circumstances, shall release or diminish Guarantor`s
obligations, liabilities, agreements, or duties hereunder, affect this Guaranty
in any way, or afford Guarantor any recourse against Lender. Without limiting
the foregoing, the obligations, liabilities, agreements, and duties of Guarantor
under this Guaranty shall not be released, diminished, impaired, reduced, or
affected by the occurrence of any or all of the following from time to time,
even if occurring without notice to or without the consent of Guarantor:
(i) Any voluntary or involuntary liquidation, dissolution, sale of all
or substantially all assets, marshaling of assets or liabilities,
receivership, conservatorship, assignment for the benefit of creditors,
insolvency, bankruptcy, reorganization, arrangement, or composition of any
Obligor or any other proceedings involving any Obligor or any of the assets
of any Obligor under laws for the protection of debtors, or any discharge,
impairment, modification, release, or limitation of the liability of, or
stay of actions or lien enforcement proceedings against, any Obligor, any
properties of any Obligor, or the estate in bankruptcy of any Obligor in
the course of or resulting from any such proceedings.
(ii) The failure by Lender to file or enforce a claim in any
proceeding described in the immediately preceding subsection (i) or to take
any other action in any proceeding to which any Obligor is a party.
(iii) The release by operation of law of any Obligor from any of the
Obligations or any other obligations to Lender.
(iv) The invalidity, deficiency, illegality, or unenforceability of
any of the Obligations or the Obligation Documents, in whole or in part,
any bar by any statute of limitations or other law of recovery on any of
the Obligations, or any defense or excuse for failure to perform on account
of force majeure, act of God, casualty, impossibility, impracticability, or
other defense or excuse whatsoever.
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(v) The failure of any Obligor or any other Person to sign any
guaranty or other instrument or agreement within the contemplation of any
Obligor, Lender.
(vi) The fact that Guarantor may have incurred directly part of the
Obligations or is otherwise primarily liable therefor.
(vii) Without limiting any of the foregoing, any fact or event
(whether or not similar to any of the foregoing) which in the absence of
this provision would or might constitute or afford a legal or equitable
discharge or release of or defense to a guarantor or surety other than the
actual payment and performance by Guarantor under this Guaranty.
(c) Lender may invoke the benefits of this Guaranty before pursuing any
remedies against any Obligor or any other Person and before proceeding against
any Security now or hereafter existing for the payment or performance of any of
the Obligations. Lender may maintain an action against Guarantor on this
Guaranty without joining any other Obligor therein and without bringing a
separate action against any other Obligor.
(d) If any payment to Lender by any Obligor is held to constitute a
preference or a voidable transfer under applicable state or federal laws, or if
for any other reason Lender is required to refund such payment to the payor
thereof or to pay the amount thereof to any other Person, such payment to Lender
shall not constitute a release of Guarantor from any liability hereunder, and
Guarantor agrees to pay such amount to Lender on demand and agrees and
acknowledges that this Guaranty shall continue to be effective or shall be
reinstated, as the case may be, to the extent of any such payment or payments.
Any transfer by subrogation which is made as contemplated in Section 6 prior to
any such payment or payments shall (regardless of the terms of such transfer) be
automatically voided upon the making of any such payment or payments, and all
rights so transferred shall thereupon revert to and be vested in Lender.
(e) This is a continuing guaranty and shall apply to and cover all
Obligations and renewals and extensions thereof and substitutions therefor from
time to time.
Section 4. Waiver. Guarantor hereby waives, with respect to the
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Obligations, this Guaranty, and the other Obligation Documents:
(a) notice of the incurrence of any Obligation by Borrower, and notice of
any kind concerning the assets, liabilities, financial condition,
creditworthiness, businesses, prospects, or other affairs of Borrower (it being
understood and agreed that: (i) Guarantor shall take full responsibility for
informing itself of such matters, (ii) Lender shall not have any responsibility
of any kind to inform Guarantor of such matters, and (iii) Lender is hereby
authorized to assume that Guarantor, by virtue of its relationships with
Borrower which are independent of this Guaranty, has full and complete knowledge
of such matters whenever Lender extends credit to Borrower or takes any other
action which may change or increase Guarantor`s liabilities or losses
hereunder).
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(b) notice that Lender, any Obligor, or any other Person has taken or
omitted to take any action under any Obligation Document or any other agreement
or instrument relating thereto or relating to any Obligation.
(c) notice of acceptance of this Guaranty and all rights of Guarantor
under `34.02 of the Texas Business and Commerce Code, as amended.
(d) default, demand, presentment for payment, and notice of default,
demand, dishonor, nonpayment, or nonperformance.
(e) notice of intention to accelerate, notice of acceleration, protest,
notice of protest, notice of any exercise of remedies (as described in the
following Section 5 or otherwise), and all other notices of any kind whatsoever.
Section 5. Exercise of Remedies. Lender shall have the right to enforce,
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from time to time, in any order and at Lender`s sole discretion, any rights,
powers and remedies that Lender may have under the Obligation Documents or
otherwise, including judicial foreclosure, the exercise of rights of power of
sale, the taking of a deed or assignment in lieu of foreclosure, the appointment
of a receiver to collect rents, issues and profits, the exercise of remedies
against personal property, or the enforcement of any assignment of leases,
rentals, oil or gas production, or other properties or rights, whether real or
personal, tangible or intangible; and Guarantor shall be liable to Lender
hereunder for any deficiency resulting from the exercise by Lender of any such
right or remedy even though any rights which Guarantor may have against Borrower
or others may be destroyed or diminished by exercise of any such right or
remedy. No failure on the part of Lender to exercise, and no delay in
exercising, any right hereunder or under any other Obligation Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right preclude any other or further exercise thereof or the exercise of any
other right. The rights, powers and remedies of Lender provided herein and in
the other Obligation Documents are cumulative and are in addition to, and not
exclusive of, any other rights, powers or remedies provided by law or in equity.
The rights of Lender hereunder are not conditional or contingent on any attempt
by Lender to exercise any of its rights under any other Obligation Document
against any Obligor or any other Person.
Section 6. Limited Subrogation.
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(a) Until all of the Obligations have been paid and performed in full
Guarantor shall have no right to exercise any right of subrogation,
reimbursement, indemnity, exoneration, contribution or any other claim which it
may now or hereafter have against or to any Obligor or any Security in
connection with this Guaranty (including any right of subrogation under `34.04
of the Texas Business and Commerce Code, as amended), and Guarantor hereby
waives any rights to enforce any remedy which Guarantor may have against
Borrower and any right to participate in any Security until such time. If any
amount shall be paid to Guarantor on account of any such subrogation or other
rights, any such other remedy, or any Security at any time when all of the
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 the other funds of Guarantor and shall forthwith be
paid over to Lender to be held by Lender as collateral for, or then or at any
time thereafter applied in whole or in part by Lender against, all or any
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portion of the Obligations, whether matured or unmatured, in such order as
Lender shall elect.
(b) If Guarantor shall make payment to Lender of all or any portion of
the Obligations and if all of the Obligations shall be finally paid in full,
Lender will, at Guarantor`s request and expense, execute and deliver to
Guarantor (without recourse, representation or warranty) appropriate documents
necessary to evidence the transfer by subrogation to Guarantor of an interest in
the Obligations resulting from such payment by Guarantor; provided that such
transfer shall be subject to Section 3(d) above and that without the consent of
Lender (which Lender may withhold in its discretion) Guarantor shall not have
the right to be subrogated to any claim or right against any Obligor which has
become owned by Lender, whose ownership has otherwise changed in the course of
enforcement of the Obligation Documents, or which Lender otherwise has released
or wishes to release from its Obligations.
Section 7. Successors and Assigns. Guarantor`s rights or obligations
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hereunder may not be assigned or delegated, but this Guaranty and such
obligations shall pass to and be fully binding upon the successors of Guarantor,
as well as Guarantor. This Guaranty shall apply to and inure to the benefit of
Lender and their successors or assigns.
Section 8. Subordination. Guarantor hereby subordinates and makes
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inferior to the Obligations any and all indebtedness now or at any time
hereafter owed by Borrower to Guarantor. Guarantor agrees that after the
occurrence of any Default or Event of Default it will neither permit Borrower to
repay such indebtedness or any part thereof nor accept payment from Borrower of
such indebtedness or any part thereof without the prior written consent of
Lender. If Guarantor receives any such payment without the prior written
consent of Lender, the amount so paid shall be held in trust for the benefit of
Lender, shall be segregated from the other funds of Guarantor, and shall
forthwith be paid over to Lender to be held by Lender as collateral for, or then
or at any time thereafter applied in whole or in part by Lender against, all or
any portions of the Obligations, whether matured or unmatured, in such order as
Lender shall elect.
Section 9. No Oral Change. No amendment of any provision of this Guaranty
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shall be effective unless it is in writing and signed by Guarantor and Lender,
and no waiver of any provision of this Guaranty, and no consent to any departure
by Guarantor therefrom, shall be effective unless it is in writing and signed by
Lender, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Section 9. Invalidity of Particular Provisions. If any term or provision
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of this Guaranty shall be determined to be illegal or unenforceable all other
terms and provisions hereof shall nevertheless remain effective and shall be
enforced to the fullest extent permitted by applicable law.
Section 10. Term. This Guaranty shall be irrevocable until all of the
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Obligations have been completely and finally paid and performed, no Lender has
any obligation to make any loans or other advances to Borrower, and all
obligations and undertakings of Borrower under, by reason of, or pursuant to the
Obligation Documents have been completely performed, and this Guaranty is
thereafter subject to reinstatement as provided in Section 3(d). All extensions
of credit and financial accommodations heretofore or hereafter made by Lender to
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Borrower shall be conclusively presumed to have been made in acceptance hereof
and in reliance hereon.
In the event of the death of Guarantor, the obligation of the deceased
shall continue in full force and effect against his estate as to all Obligations
that shall have been created or incurred by Borrower prior to the time when
Lender shall have received notice, in writing, of such death.
Section 11. Notices. Any notice or communication required or permitted
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hereunder shall be given in writing, sent by personal delivery, by telecopy, by
delivery service with proof of delivery, or by registered or certified United
States mail, postage prepaid, addressed to the appropriate party as follows:
To Guarantor: 000 Xxxxxxx Xxxxx
Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Phone: (000) 000-0000
Fax (000) 000-0000
To Lender: Gemini Growth Fund LP
000 Xxxxxx
Xxxxxxx, XX 00000
Attn. Xxxxx St. Xxxxxx
or to such other address or to the attention of such other individual as
hereafter shall be designated in writing by the applicable party sent in
accordance herewith. Any such notice or communication shall be deemed to have
been given (a) in the case of personal delivery or delivery service, as of the
date of first attempted delivery at the address or in the manner provided
herein, (b) in the case of telecopy, upon receipt, or (b) in the case of
registered or certified United States mail, three days after deposit in the
mail.
Section 12. Limitation on Interest. Lender and Guarantor intend to
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contract in strict compliance with applicable usury law from time to time in
effect, and the provisions of the Credit Agreement and the Note limiting the
interest for which Guarantor is obligated are expressly incorporated herein by
reference.
Section 13. Loan Document. This Guaranty is a Loan Document, as defined
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in the Credit Agreement, and is subject to the provisions of the Credit
Agreement governing Loan Documents.
Section 14. Accuracy of Financial Statement. The financial statement
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of Guarantor dated December 31, 2001 attached hereto as Exhibit A delivered in
conjunction with this extension of credit is accurate and complete and does not
omit any liabilities, guaranties or similar contingent liabilities.
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Section 15. INTENTIONALLY LEFT BLANK
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Section 16. INTENTIONALLY LEFT BLANK
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Section 17. Governing Law. This Guaranty is to be performed in the State
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of Texas and shall be governed by and construed and enforced in accordance with
the laws of such state without regard to principles of conflicts of law.
Guarantor hereby irrevocably submits itself to the non-exclusive jurisdiction of
the state and federal courts of such state of Texas.
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as
of the date first written above.
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1025 Investments, Inc.
By:
Its:
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