GUARANTY
This
Guaranty (the "Guaranty") is made on the 21st day of September, 2010, among the
persons whose names are set forth at the end of this Guaranty (collectively the
"Guarantors"), and XXXXX FARGO
BANK, NATIONAL ASSOCIATION, acting through its Xxxxx Fargo Business
Credit, operating division (the "Contractor"), as follows:
BACKGROUND OF
AGREEMENT:
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A.
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The
Contractor and SOUTHPEAK
INTERACTIVE, L.L.C., a Virginia limited liability company (the
"Distributor"), have on this day entered into a Master Purchase Order
Assignment Agreement (the "Assignment Agreement") under the terms of which
the Distributor will assign customer purchase orders to the Contractor and
request the Contractor to purchase the required materials to fulfill such
purchase orders; the Contractor will retain the Distributor to
manufacture, process and ship ordered goods; and fees will be paid to the
Contractor and the Distributor for their services
thereunder.
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B.
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Each
of the Guarantors has a substantial financial stake in the Distributor and
will substantially benefit from the performance by Contractor of its
obligations under the Assignment
Agreement.
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C.
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THEREFORE,
in consideration of the services to be performed, the payments to be made, and
the obligations to be assumed by the Contractor pursuant to the Assignment
Agreement, and further as an inducement to the Contractor to enter into and
perform in accordance with the Assignment Agreement, the Guarantors hereby agree
as follows:
1. DEFINITIONS. In
this Guaranty, the following frequently used terms are defined as set forth in
this ¶1:
(a) Any
terms used in this Guaranty which are defined in the Assignment Agreement will
have the same meaning herein as is ascribed to such term in the Assignment
Agreement.
(b) The
"Contract Documents" are, collectively, the Assignment Agreement, the Security
Agreement and Financing Statement between the Contractor and the Distributor
dated this day, the Subordination Agreement between the Contractor, the
Distributor, and the Senior Lender dated this day, and this
Guaranty.
(c) The
"Obligations" mean all of the obligations of the Distributor and each of the
Guarantors pursuant to the Contract Documents.
(d) The
term "Guarantors" means all of the undersigned, jointly and severally; and the
term "Guarantor" means each of the undersigned, individually and
collectively.
(e) A
"Default" means the occurrence of an event of default by the Distributor
pursuant to or in accordance with the provisions of any of the Contract
Documents or the failure of the Guarantors (or any of them) to perform any
covenant or agreement contained in this Guaranty or if any representation or
warranty contained in this Guaranty is found to have been untrue, incomplete or
misleading in any material respect when furnished.
2.
GUARANTY. The Guarantors,
jointly and severally, unconditionally and irrevocably, guaranty to Contractor
the full and prompt payment and performance when due, whether at maturity or
earlier (by reason of acceleration) and at all times thereafter, of all of the
Obligations, and the undersigned further agree to pay all costs and expenses
including, without limitation, all court costs and reasonable attorneys' fees
and expenses paid or incurred by the Contractor in endeavoring to collect all or
any part of the Obligations from, or in prosecuting any action against,
Distributor or any of the Guarantors. The obligations of the
Guarantors hereunder are secured by that certain Security Agreement and
Financing Statement of even date herewith among the Contractor, Southpeak
Interactive, L.L.C., and the Guarantors.
3.
TERMS AND
CONDITIONS. (a) Subject
to the provisions of the Contract Documents, Contractor shall have the exclusive
right to determine the application of payments and credits, if any, received by
Contractor from the undersigned, the Distributor, the Senior Lender, and any
Customer.
(b) Contractor
is authorized, without notice or demand, and without affecting the liability of
any of the Guarantors, from time to time to (i) renew, extend, accelerate or
otherwise change the time for payment or performance of, or other terms relating
to, the Obligations or any of them, or otherwise modify, amend or change the
terms of the Contract Documents or any of them, or any other agreement, document
or instrument now or hereafter executed by the Distributor and delivered to
Contractor; (ii) accept partial payments on or performance of the Obligations;
and (iii) settle, release, compromise, collect or otherwise liquidate the
Obligations in any manner, without affecting or impairing the Obligations of the
undersigned.
(c) At
any time after a Default, Contractor may, at its discretion, upon notice to the
Guarantors and regardless of the acceptance of any security or collateral for
the payment, appropriate and apply toward the payment and satisfaction of the
Obligations (i) any indebtedness due or to become due from Contractor to one or
more of the Guarantors; and (ii) any monies, credits or other property belonging
to one or more of the Guarantors, at any time held by Contractor on deposit or
otherwise.
(d) Contractor
shall not be required to take any steps to preserve any rights against prior
parties (if any) to or in any of the Obligations.
(e) The
Guarantors agree that to the extent that the Distributor makes a payment(s) to
Contractor, which payment(s) are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy act, state or federal law,
common law or equitable cause, then to the extent of such payment or repayment,
the obligation intended to be satisfied shall be renewed and continued in full
force and effect as if said payment had not been made, and the Guarantors shall,
upon demand by Contractor, immediately satisfy such obligation in full in
accordance with the terms of this Guaranty. The Guarantors further
agree that any and all claims of the Guarantors against the Distributor or
against its properties, arising by reason of any loan, advance, investment or
other payment by the undersigned to Contractor shall be subordinate and subject
in right of payment to the prior payment, in full, of all sums due pursuant to
the Obligations.
(f) Each
Guarantor assumes responsibility for keeping himself, herself or itself informed
of the financial condition of the Distributor and of all other circumstances
bearing upon the risk of Default. Contractor shall have no duty to
advise the Guarantors of information known to Contractor regarding such
condition or circumstances.
(g) No
delay on the part of Contractor in the exercise of any right or remedy shall
operate as a waiver or constitute a discharge of any of the Guarantors'
obligations under this Guaranty, and no single or partial exercise by Contractor
of any right or remedy shall preclude the further exercise to any extent; nor
shall any modification or waiver of any of the provisions of this Guaranty be
binding upon Contractor except as expressly set forth in a writing duly signed
and delivered by an authorized officer of Contractor. Contractor's
failure at any time to require strict performance by the Distributor or any
other party of any of the provisions, warranties, terms and conditions contained
in the Contract Documents shall not discharge any of the Guarantors' obligations
under this Guaranty, nor shall it waive, affect or diminish any right of the
Contractor at any time to demand strict performance and such right shall not be
deemed to have been waived by any act or knowledge of Contractor unless such
waiver is contained in an instrument in writing, signed by an officer of
Contractor specifying such waiver. No waiver by Contractor of any
default shall operate as a waiver of either any other default or the same
default on a future occasion, and no action or inaction by Contractor shall in
any way affect or impair Contractor's rights or the obligations of the
Guarantors under this Guaranty. The Guarantors agree that their
obligations under this Guaranty will not be discharged except by complete
performance of all of the Obligations. Any determination by a court
of competent jurisdiction of the sums owing by the Distributor to Contractor
shall be conclusive and binding on the Guarantors irrespective of whether any of
the Guarantors was a party to the suit or action in which such determination was
made.
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4.
WARRANTIES
AND REPRESENTATIONS. Each of the
Guarantors, jointly and severally, hereby represent and warrant to the
Contractor that:
(a) The
execution, delivery, and performance by each Guarantor of this Guaranty will not
violate any provision of law, any order of any court or other agency of
government, or any agreement or other instrument to which any of the Guarantors
is a party or by which any of the Guarantors is bound or be in conflict with,
result in a breach of or constitute (with due notice or lapse of time, or both)
a default under any such agreement or other instrument, or result in the
creation or imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of the property or assets of any Guarantor, except as
contemplated by the provisions of this Guaranty; and
(b)
This Guaranty constitutes the legal, valid and binding obligation of each of the
Guarantors and is enforceable against each of the Guarantors in accordance with
the terms hereof.
5.
DEFAULT. (a)
Upon and during the continuance of any Default, Contractor may, at its sole
election, proceed directly and at once, without notice, against one or more of
the Guarantors to collect and recover the full amount or any portion of the
Obligations, without first proceeding against the Distributor or any other
Guarantor, or any other party or any other person, firm or
corporation. All of the above rights and powers may be exercised by
Contractor without liability, except the obligation to account for property
actually received.
(b) Any
right to set-off exercised by Contractor shall be deemed to have been exercised
immediately on the occurrence of a Default, even though such set-off is made or
entered on the books of Contractor at any subsequent time.
6.
INDEMNIFICATION. The Guarantors
will at all times, now and hereafter, jointly and severally, indemnify and hold
Contractor harmless from and against all loss or damage arising in connection
with this Guaranty and against all claims, liability, demands, actions or suits,
and all liabilities, payments, costs, charges and expenses including, without
limitation, attorneys' fees and costs incurred by Contractor on account of or in
connection with this Guaranty or the transactions or assertions of rights
contemplated or permitted hereunder.
7.
MISCELLANEOUS. (a) This
Guaranty shall be binding upon the undersigned and upon the heirs, executors,
successors and assigns of the undersigned and shall inure to the benefit of
Contractor's successors and assigns; all references to the Distributor and to
the undersigned shall be deemed to include their respective successors, assigns,
participants, receivers or trustees (as the case may be).
(b) This
Guaranty embodies the entire understanding of the parties pertaining to the
subject matter hereof, and shall constitute a continuing agreement applicable to
future as well as existing transactions between the Contractor and the
Distributor.
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(c) THIS
GUARANTY HAS BEEN DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN
DEERFIELD, ILLINOIS, AND SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF
THE PARTIES DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS,
AND AS PART OF THE CONSIDERATION FOR CONTRACTOR'S PERFORMANCE PURSUANT TO THE
CONTRACT DOCUMENTS, THE UNDERSIGNED CONSENT TO THE JURISDICTION OF ANY LOCAL,
STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF ILLINOIS, AND FURTHER CONSENT
THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL
DIRECTED TO THE UNDERSIGNED AT THE ADDRESS STATED HEREIN AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED TWO (2) DAYS AFTER THE SAME SHALL HAVE BEEN
POSTED. THE UNDERSIGNED FURTHER CONSENT TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.
(d) The
headings used in this Guaranty are for the convenience of the reader only; such
headings constitute no part whatsoever of the agreement between the
parties.
(e)
No invalidity, irregularity or unenforceability of the Obligations (or any of
them) hereby secured shall affect, impair or be a defense to any provision
contained in this Guaranty. If any term, condition or provision of
this Guaranty is determined to be invalid or unenforceable, such determination
shall not affect the validity or enforceability of any other term, condition or
provision of this Guaranty.
(f)
If this Guaranty shall differ or conflict in terms with any of the Contract
Documents, the agreement which gives Contractor the greater right, as determined
by Contractor, shall prevail.
GUARANTORS:
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Xxxxx
Xxxxxxxx
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Address:
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Gone
Off Deep, LLC
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By:
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Name:
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Address:
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By:
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Name:
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Address:
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5
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Vid
Sub, LLC
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By:
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Name:
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Address:
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