GUARANTY
Borrowers: Northwest Teleproductions, Inc., a
Minnesota corporation
and
Northwest Teleproductions/Chicago, Inc., a
Minnesota corporation
Guarantor(s) Southwest Teleproductions, Inc., a
Texas corporation
Borrowers have requested that NationsCredit Commercial Corporation, through
its NationsCredit Commercial Funding Division ("Lender") provide certain
financial accommodations to Borrowers pursuant to the terms of certain Loan and
Security Agreements between each Borrower and Lender, respectively, dated of
even date herewith (as amended from time to time, the "Loan Agreements"). As one
of the conditions to providing financing, Lender has required that Southwest
Teleproductions, Inc. ("Guarantor") guaranty all obligations of Borrowers to
Lender.
For value received and in consideration of any loan, advance or financial
accommodation of any kind whatsoever heretofore, now or hereafter made, given or
granted to each Borrower by Lender pursuant to the Loan Agreements, Guarantor
unconditionally guaranties the full and prompt payment when due, whether at
maturity or earlier, by reason of acceleration or otherwise, and at all times
thereafter, of the indebtedness, liabilities and obligations of every kind and
nature of each Borrower to Lender (including all interest accruing after the
filing of a proceeding under the Bankruptcy Code (as defined in the Loan
Agreements) whether or not allowed by the court in such proceeding, and all
indebtedness, liabilities and obligations arising after the filing of any
proceeding under the Bankruptcy Code), howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, joint or several, now or
hereafter existing, or due or to become due, in each case arising under the Loan
Agreements and the other Loan Documents, plus all costs and expenses (including,
without limitation, all court costs and reasonable attorneys' and paralegals'
fees and expenses) paid or incurred by Lender in endeavoring to collect all or
any part of such indebtedness, liabilities and obligations from, or in
prosecuting any action against, Guarantor or any other guarantor of all or any
part of such indebtedness, liabilities and obligations (all such indebtedness,
liabilities, obligations, costs and expenses being hereinafter referred to as
"Borrowers' Obligations"). All sums becoming due under this Guaranty shall bear
interest from the due date thereof until paid at the highest rate charged with
respect to any of Borrowers' Obligations under the Loan Agreements.
Guarantor agrees that its obligations under this Guaranty are
unconditional, irrespective of (i) the validity or enforceability of Borrowers'
Obligations or any notes or other instruments evidencing Borrowers' Obligations,
(ii) the absence of any attempt by Lender to collect Borrowers' Obligations from
either Borrower or any other guarantor, (iii) Lender's waiver or consent with
respect to any provision of the Loan Documents, (iv) Lender's failure to perfect
or maintain its security interests in, or to preserve its rights with respect
to, any of the Collateral, (v) Lender's election, in any proceeding under
Chapter 11 of the Bankruptcy Code, of the application of Section 1111(b)(2) of
the Bankruptcy Code, (vi) any borrowing or grant of a security interest by
Borrower as debtor-in-possession under Section 364 of the Bankruptcy Code, (vii)
the disallowance, under Section 502 of the Bankruptcy Code, of all or any of
Lender's claims for repayment of Borrowers' Obligations or (viii) any other
circumstance which might constitute a legal or equitable discharge or defense of
either Borrower or a guarantor.
No payment made by or for the account or benefit of Guarantor (including
(i) a payment made by either Borrower in respect of Borrowers' Obligations, (ii)
a payment made by any person under any other guaranty of Borrowers' Obligations
or (iii) a payment made by means of set off or other application of funds by
Lender) pursuant to this Guaranty shall entitle Guarantor, by subrogation or
otherwise, to any payment by either Borrower or from or out of any property of
either Borrower, and Guarantor shall not exercise any rights or remedies against
either Borrower or any property of either Borrower including any right of
contribution, indemnity or reimbursement by reason of any performance by
Guarantor under this Guaranty, all of such rights of subrogation, contribution,
indemnity and reimbursement being hereby waived by Guarantor. The provisions of
this paragraph shall survive the termination of this Guaranty or the release or
discharge of Guarantor from liability hereunder. Guarantor and Lender hereby
agree that each Borrower is a third party beneficiary of the provisions of this
paragraph.
Guarantor hereby waives diligence, presentment, demand for payment, filing
of claims with a court in the event of receivership or bankruptcy of a Borrower,
protest or notice with respect to Borrowers' Obligations and all demands
whatsoever, and covenants that this Guaranty will not be discharged, except by
complete and irrevocable payment and performance of the obligations and
liabilities contained herein. No notice to any party, including Guarantor, shall
be required for Lender to make demand hereunder. Such demand shall constitute a
mature and liquidated claim against Guarantor. At any time after maturity of
Borrowers' Obligations, whether by acceleration or otherwise, Lender may, at its
sole election, proceed directly and at once, without notice, against Guarantor
to collect and recover the full amount or any portion of Borrowers' Obligations,
without first proceeding against either Borrower or any other person or against
any of the Collateral. Lender shall have the exclusive right to determine the
application of payments and credits, if any, from Guarantor, either Borrower or
any other person, on account of Borrowers' Obligations.
Lender is hereby authorized, without notice or demand to Guarantor and
without affecting or impairing the liability of Guarantor hereunder, to from
time to time (i) renew, extend, accelerate or otherwise change the time for
payment of, or other terms relating to, Borrowers' Obligations or otherwise
modify, amend or change the terms of any promissory note or other agreement,
document or instrument now or hereafter executed by a Borrower and delivered to
Lender; (ii) accept partial payments on Borrowers' Obligations; (iii) take and
hold collateral for the payment of Borrowers' Obligations, or for the payment of
this Guaranty, or for the payment of any other guaranties or Borrowers'
Obligations or other liabilities of a Borrower, and exchange, enforce, waive and
release any such security or collateral; (iv) apply such security or collateral
and direct the order or manner of sale thereof as in its sole discretion it may
determine; and (v) settle, release, compromise, collect or otherwise liquidate
Borrowers' Obligations and any security or collateral therefor in any manner.
At any time after maturity of Borrowers' Obligations, Lender may, in its
sole discretion, without notice to Guarantor and regardless of the acceptance of
any security or collateral for the payment hereof, appropriate and apply toward
payments of Borrowers' Obligations that remain unpaid, (i) any indebtedness due
or to become due from Lender to Guarantor and (ii) any moneys, credits or other
property belonging to Guarantor at any time held by or coming into the
possession of Lender or any affiliates of Lender, whether for deposit or
otherwise.
Guarantor assumes responsibility for keeping itself informed of the
financial condition of each Borrower and all other guarantors of all or any of
Borrowers' Obligations, and of all other circumstances bearing upon the risk of
nonpayment of Borrowers' Obligations or any part thereof that diligent inquiry
might reveal, and Guarantor agrees that Lender shall have no duty to advise
Guarantor of information known to Lender regarding any of the foregoing.
Guarantor acknowledges familiarity with each Borrower's financial condition and
represents that it has not relied on any statements made, or information
furnished, by Lender or its agents in obtaining such familiarity. If Lender
provides any such information to Guarantor, Lender shall be under no obligation
to (i) undertake any investigation not a part of its regular business routine,
(ii) disclose any information which, pursuant to accepted or reasonable
commercial finance practices, Lender wishes to maintain confidential or (iii)
make any other or future disclosures of any information to Guarantor.
Notwithstanding any contrary provision of this Guaranty, it is intended
that neither this Guaranty nor any liens or security interests securing this
Guaranty constitute a "Fraudulent Conveyance" (as defined below). Consequently,
Guarantor agrees that if this Guaranty or any liens or security interests
securing this Guaranty, would, but for the application of this sentence,
constitute a Fraudulent Conveyance, this Guaranty and each such lien and
security interest shall be valid and enforceable only to the maximum extent that
would not cause this Guaranty or such lien or security interest to constitute a
Fraudulent Conveyance, and this Guaranty shall automatically be deemed to have
been amended accordingly at all relevant times. For purposes hereof, a
"Fraudulent Conveyance" means a fraudulent conveyance under Section 548 of the
Bankruptcy Code or a fraudulent conveyance or fraudulent transfer under any
applicable fraudulent conveyance or fraudulent transfer law or similar law of
any state or other governmental unit as in effect from time to time.
Guarantor waives the right to assert the doctrine of marshaling with
respect to any collateral held by Lender to secure any of the Borrowers'
Obligations. Guarantor further agrees that, to the extent a Borrower makes one
or more payments to Lender, or Lender receives any proceeds of collateral which
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to such Borrower, its estate, trustee, receiver
or any other party under the Bankruptcy Code or other law, that portion of
Borrowers' Obligations which has been paid, reduced or satisfied by such payment
shall be reinstated and continued in full force and effect as of the date such
initial payment, reduction or satisfaction occurred and this Guaranty shall
continue to be in existence and in full force and effect, irrespective of
whether any evidence of indebtedness or this Guaranty has been surrendered or
canceled.
Guarantor agrees that all payments hereunder shall be made without setoff
or counterclaims and Guarantor waives all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor and
notices of acceptance of this Guaranty. Guarantor further waives all notices of
the existence, creation or incurring of new or additional indebtedness, arising
either from additional loans extended to a Borrower or otherwise, and also
waives all notices that the principal amount, or any portion thereof, or any
interest on any instrument or document evidencing all or any part of Borrowers'
Obligations is due, notices of any and all proceedings to collect from the
maker, any endorser or any other guarantor of all or any part of Borrowers'
Obligations, or from anyone else, and, to the extent permitted by law, notices
of exchange, sale, foreclosure, surrender or other handling of any security or
collateral securing payment of Borrowers' Obligations.
No delay on the part of Lender in the exercise of any right or remedy shall
operate as a waiver thereof, and no single or partial exercise by Lender of any
right or remedy shall preclude any further exercise thereof except as expressly
set forth in a writing duly signed and delivered on Lender's behalf by an
authorized officer or agent of Lender; nor shall any modification or waiver of
any of the provisions of this Guaranty be binding upon Lender, except as
expressly set forth in a writing duly signed and delivered on Lender's behalf by
an authorized officer or agent of Lender. Lender's failure at any time or times
hereafter to require strict performance by either Borrower or Guarantor of any
of the provisions, warranties, terms and conditions contained in any promissory
note, security agreement, agreement, guaranty, instrument or document now or at
any time or times hereafter executed by either Borrower or Guarantor and
delivered to Lender, shall not waive, affect or diminish any right of Lender at
any time or times hereafter to demand strict performance thereof and such right
shall not be deemed to have been waived by any act or knowledge of Lender, or
its respective agents, officers or employees, unless such waiver is contained in
an instrument in writing signed by an officer or agent of Lender, and directed
to such Borrower or Guarantor, as applicable, specifying such waiver. No waiver
by Lender of any default shall operate as a waiver of any other default or the
same default on a future occasion, and no action by Lender permitted hereunder
shall in any way affect or impair Lender's rights or the obligations of
Guarantor under this Guaranty. Any determination by a court of competent
jurisdiction of the amount of any principal or interest owing by a Borrower to
Lender shall be conclusive and binding on Guarantor irrespective of whether
Guarantor was a party to the suit or action in which such determination was
made.
Guarantor hereby represents and warrants that (i) it is in Guarantor's
direct interest to assist each Borrower in procuring credit, because each
Borrower is an affiliate of Guarantor, furnishes goods or services to Guarantor,
purchases or acquires goods or services from Guarantor, and/or otherwise has a
direct or indirect corporate or business relationship with Guarantor, (ii) this
Guaranty has been duly and validly authorized, executed and delivered and
constitutes the valid and binding obligation of Guarantor, enforceable in
accordance with its terms, and (iii) the execution and delivery of this Guaranty
does not violate or constitute a default under (with or without the giving of
notice, the passage of time, or both) any order, judgment, decree, instrument or
agreement to which Guarantor is a party or by which it or its assets are
affected or bound.
This Guaranty shall be binding upon Guarantor and upon the successors and
permitted assigns of Guarantor and shall inure to the benefit of Lender and its
successors and assigns. All references herein to each Borrower shall be deemed
to include its successors and permitted assigns and all references herein to
Lender shall be deemed to include its successors and assigns. Each Borrower's
and Guarantor's successors and permitted assigns shall include a receiver,
trustee, custodian of or for each Borrower or Guarantor or any of their
respective assets and such Borrower and Guarantor as debtor in possession. All
references to the singular shall be deemed to include the plural where the
context so requires.
GUARANTOR HEREBY CONSENTS AND AGREES THAT THE STATE AND FEDERAL COURTS IN
NEW YORK SHALL HAVE NONEXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
OR DISPUTES WITH RESPECT TO THIS GUARANTY AND WAIVES ANY OBJECTION WHICH IT MAY
HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY
PROCEEDING IN ANY SUCH COURT AND EACH OF GUARANTOR AND LENDER CONSENTS THAT ALL
SERVICE OF PROCESS UPON GUARANTOR OR LENDER BE MADE BY REGISTERED MAIL OR
MESSENGER DIRECTED TO GUARANTOR OR LENDER AT THE ADDRESS SET FORTH BELOW
GUARANTOR'S SIGNATURE AND LENDER'S ADDRESS SET FORTH IN THE LOAN AGREEMENTS AND
THAT SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT
THEREOF. GUARANTOR HEREBY AGREES THAT ANY CLAIM OR DISPUTE BROUGHT BY GUARANTOR
AGAINST LENDER OR ANY MATTER ARISING OUT OF THIS GUARANTY SHALL BE BROUGHT
EXCLUSIVELY IN THE STATE AND FEDERAL COURTS IN NEW YORK. GUARANTOR AND LENDER
EACH HEREBY WAIVE, TO THE EXTENT PERMITTED BY LAW, TRIAL BY JURY. NOTHING
CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF LENDER TO BRING ANY ACTION
OR PROCEEDING AGAINST GUARANTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
THIS GUARANTY SHALL BE GOVERNED IN ALL RESPECTS BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.
Wherever possible each provision of this Guaranty shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Guaranty shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Guaranty.
IN WITNESS WHEREOF, this Guaranty has been duly executed by Guarantor this
24th day of April, 1997.
SOUTHWEST TELEPRODUCTIONS, INC.
By /s/ Xxxxxxx X. Xxxxxx
Its Chief Financial Officer
0000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
With a copy to:
Northwest Teleproductions, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
