Exhibit 10.6
GUARANTY
GUARANTY dated September 8, 1998, made by Gargoyles, Inc., a Washington
corporation (the "Guarantor") in favor of Xxxxx Xxxxx, Inc., a New Jersey
corporation ("Xxxxx Xxxxx").
W I T N E S S E T H :
WHEREAS, Gargoyles Acquisition Corporation II, now known as Private
Sunglasses Corporation ("Obligor"), a wholly-owned subsidiary of Guarantor, has
entered into a Termination Agreement, dated the date hereof, with Xxxxx Xxxxx
("the Termination Agreement") pursuant to which Obligor and Xxxxx Xxxxx have
agreed to terminate a certain license agreement (the "License Agreement") to
which Xxxxx Xxxxx and Obligor are parties; and
WHEREAS, pursuant to the Termination Agreement, Obligor has agreed to pay
Xxxxx Xxxxx certain royalties due and owing to Xxxxx Xxxxx under the License
Agreement by delivery of a promissory note (the "Note") of even date herewith in
the amount of $214,375.00; and
WHEREAS, as a further inducement to Xxxxx Xxxxx to enter into the
Termination Agreement, Guarantor has agreed to deliver this Guaranty,
guaranteeing the obligations of Obligor under the Note; and
WHEREAS, Guarantor has determined that its execution, delivery and
performance of this Guaranty directly benefit, and are within the purposes and
in the best interests of, Guarantor.
NOW, THEREFORE, in consideration of the premises and the agreements herein
and in order to induce Xxxxx Xxxxx to execute the Termination Agreement,
Guarantor hereby agrees with Xxxxx Xxxxx as follows:
1. Guaranty. Guarantor hereby (i) irrevocably, absolutely and
unconditionally guarantees the prompt payment by Obligor as and when due and
payable (whether by scheduled maturity, demand or otherwise), of all amounts now
or hereafter owing in respect of the Note, for principal or otherwise (the
"Obligations"), and whether accruing before or subsequent to the filing of a
petition initiating a bankruptcy, reorganization, liquidation or similar
proceeding affecting Obligor, notwithstanding the operation of the automatic
stay under Section 362(a) of the U.S. Bankruptcy Code, and (ii) agrees to pay
any and all expenses (including counsel fees and expenses) incurred by Xxxxx
Xxxxx in enforcing its rights under this Guaranty.
2. Guarantor's Obligations Unconditional.
(a) Guarantor hereby guarantees that the Obligations will be paid
strictly in accordance with the terms of the Note, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of Xxxxx Xxxxx with respect thereto. The liability
of Guarantor hereunder shall be absolute and unconditional irrespective of: (i)
any lack of validity or enforceability of the Termination Agreement and/or the
Note or any agreement or instrument relating thereto; (ii) any change in the
time, manner or place of payment of, or in any other term in respect of the
Obligations, or any other amendment or waiver of or consent to any departure
from the Termination Agreement and/or the Note or (iii) any other circumstance
which might otherwise constitute a defense available to, or a discharge of,
Obligor or any other guarantor in respect of the Obligations or Guarantor in
respect hereof.
(b) This Guaranty (i) is a continuing guaranty and shall remain in
full force and effect until the satisfaction in full of the Obligations and the
payment of the other expenses to be paid by Guarantor pursuant hereto and (ii)
shall continue to be effective or shall be reinstated, as the case may be, if at
any time any payment of any of the Obligations is rescinded or must otherwise be
returned by Xxxxx Xxxxx upon the insolvency, bankruptcy or reorganization of
Obligor or otherwise, all as though such payment had not been made.
3. Waivers. Guarantor hereby waives (i) promptness and diligence, (ii)
notice of acceptance and notice of the incurrence of the Obligations by Obligor,
(iii) notice of any actions taken by Xxxxx Xxxxx or Obligor under the
Termination Agreement and/or the Note or any other agreement or instrument
relating thereto, (iv) notice of change, modification or amendment to the Note,
(v) all other notices, demands and protests, and all other formalities of every
kind in connection with the enforcement of the Obligations or of the obligations
of Guarantor hereunder, the omission of or delay in which, but for the
provisions of this Section 3, might constitute grounds for relieving Guarantor
of its obligations hereunder, and (vi) any requirement that Xxxxx Xxxxx protect,
secure, perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against Obligor or any other
entity or any collateral. Guarantor hereby consents to any and all forebearances
and extensions of time of payment or performance of the Note and to any and all
changes in the terms, covenants and conditions thereof now or at any other time
hereafter made or granted with or without notice to Guarantor or prior consent
by Guarantor. Guarantor agrees that this Guaranty shall constitute a guaranty of
payment and not of collection.
4. Representations and Warranties. Guarantor hereby represents and warrants
that (i) it has all requisite power and authority to execute, deliver and
perform this Guaranty, (ii) no authorization or approval or other action by, and
no notice to or filing with, any governmental authority or other regulatory body
is required for the due execution, delivery and performance by Guarantor of this
Guaranty, (iii) this Guaranty is a legal, valid and binding obligation of
Guarantor, enforceable against Guarantor in accordance with its terms, and (iv)
there is no action, suit or proceeding pending or threatened against or
otherwise affecting Guarantor before any court or other governmental authority
or any arbitrator which may materially adversely affect Guarantor's ability to
perform its obligations hereunder.
5. Consent to Jurisdiction; Waiver of Immunities. Guarantor hereby
irrevocably submits to the jurisdiction of any state or Federal court sitting in
New York in any action or proceeding arising out of or relating to this
Guaranty, and Guarantor hereby irrevocably agrees that all claims in respect of
such action or proceeding may be heard and determined in such state or Federal
court. Guarantor irrevocably consents to the service of any and all process in
any such action or proceeding by the mailing of copies of such process to
Guarantor at its address specified in Section 6 hereof. Guarantor agrees 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 other manner
provided by law. Nothing in this Section 5 shall affect the right of Xxxxx Xxxxx
to serve legal process in any other manner permitted by law or affect the right
of Xxxxx Xxxxx to bring any action or proceeding against Guarantor or its
property in the courts of any other jurisdictions. To the extent that Guarantor
has or hereafter may acquire any immunity from jurisdiction of any court or from
any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with respect
to itself or its property, Guarantor hereby irrevocably waives such immunity in
respect of its obligations under this Guaranty.
6. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing and shall be mailed, telegraphed or delivered, if
to Guarantor, to its address at 0000 Xxxxx 000xx Xxxxxx, Xxxx, Xxxxxxxxxx 00000;
and if to Xxxxx Xxxxx, to its address at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000;
or, as to either such entity, at such other address as shall be designated by
such entity in a written notice to such other entity complying as to delivery
with the terms of this Section 6. All such notices and other communications
shall be effective (i) if mailed, when deposited in the mails, (ii) if
telegraphed, when delivered to the telegraph company, or (iii) if delivered,
upon delivery.
7. Miscellaneous.
(a) Guarantor will make each payment hereunder in lawful money of
United States of America and in same day funds to Xxxxx Xxxxx at its address
specified in Section 6 hereof.
(b) No amendment of any provision of this Guaranty shall be effective
unless it is in writing and signed by Guarantor and Xxxxx Xxxxx, 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 Xxxxx Xxxxx,
and then such waiver of consent shall be effective only in the specific instance
and for the specific purpose for which given.
(c) No failure on the part of Xxxxx Xxxxx to exercise, and no delay in
exercising, any right hereunder or under the Termination Agreement and/or Note
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 and remedies of Xxxxx Xxxxx provided herein and in the
Termination Agreement and/or Note are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law. The rights of Xxxxx Xxxxx
under the Termination Agreement and/or Note against any party thereto are not
conditional or contingent on any attempt by Xxxxx Xxxxx to exercise any of its
rights under the Termination Agreement and/or Note against such party or against
any other entity.
(d) Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(e) This Guaranty shall (i) be binding on Guarantor and its successors
and assigns, and (ii) inure, together with all rights and remedies of Xxxxx
Xxxxx hereunder, to the benefit of Xxxxx Xxxxx and its successors, transferees
and assigns. Without limiting the generality of clause (ii) of the immediately
preceding sentence, Xxxxx Xxxxx xxx assign or otherwise transfer the Note, and
its rights under the Agreement, to any other entity, and such other entity shall
thereupon become vested with all of the benefits in respect thereof granted to
Xxxxx Xxxxx herein or otherwise. None of the rights or obligations of Guarantor
hereunder may be assigned or otherwise transferred without the prior written
consent of Xxxxx Xxxxx.
(f) This Guaranty shall be governed by and construed in accordance
with the law of the State of New York.
(g) Guarantor acknowledges that Xxxxx Xxxxx is agreeing to accept the
Note in reliance upon this Guaranty. This Guaranty may not be revoked by the
undersigned except with the express written consent of Xxxxx Xxxxx.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed under
seal as of the date first above written.
GARGOYLES, INC.
By: /s/ Xxx Xxxxxxxxxxx
---------------------------------
Xxx Xxxxxxxxxxx, CEO & CFO
(SEAL)
