Exhibit 10.6
GUARANTY
In order to induce X. Xxxxxxxx Family Investments, L.P., an Arizona
limited partnership (hereinafter the "Holder"), to extend credit to National
Lampoon, Inc., a Delaware corporation (hereinafter the "Borrower"), pursuant to
the terms of that certain Secured Promissory Note of even date herewith for the
principal amount of Two Million Seven Hundred Thousand Dollars ($2,700,000)
executed by the Borrower in favor of the Holder (the "Note"), Xxxxxx X. Xxxxxx
and Xxxxxxx Xxxxxx (hereinafter referred to collectively as the "Guarantor"),
hereby absolutely, irrevocably, jointly and severally and unconditionally
guarantees to the Holder, its successors, endorsees, or assigns (i) the full and
complete performance of all of the obligations of the Borrower under Section 5.5
of the Note (the "Section 5.5 Obligations"), and (ii) upon the occurrence of any
default in the complete performance of any Section 5.5 Obligations, the full and
prompt payment of the principal sum of the Note in accordance with its terms
when due, by acceleration or otherwise, together with all interest accrued
thereon, all other sums when due under the terms of the Note, and all costs of
enforcement and collection and preparation therefor whether or not any action or
proceeding is brought. The Guarantor also agrees as follows:
1. Default by Borrower. In the event of a default of Section 5.5 of the
Note by the Borrower, the Guarantor waives (a) any right to require the Holder
to bring any action against the Borrower or any other person, or (b) any
requirement that the Holder enforce, attempt to enforce or exhaust any of the
Holder's rights, benefits or privileges under the Note, by law or otherwise. The
Guarantor waives any requirement that a judgment first be sought or rendered
against the Borrower or that the Holder pursue any other remedy in the Holder's
power whatsoever.
2. Duration of Guaranty. This Guaranty will take effect when received
by the Holder and will continue in full force until such time as all obligations
of the Borrower to the Holder under the Note are fully satisfied. Guarantor
agrees that nothing contained herein shall prevent Holder from suing on the Note
or from exercising any rights available to it thereunder and that the exercise
of any of the aforesaid rights shall not constitute a legal or equitable
discharge of any Guarantor.
3. Guarantor's Liability Not Affected. The Guarantor's covenants,
agreements and obligations under this Guaranty shall in no way be released,
diminished, reduced, impaired or otherwise affected by reason of the happening
from time to time of any of the following things, for any reason, whether by
voluntary act, operation of law or order of any competent governmental authority
and whether or not the Guarantor is given any notice or is asked for or gives
any further consent: (a) the alteration, compromise, renewal, extension,
acceleration, or other change in the terms of the Note or any part thereof; (b)
the exchange, waiver, and/or release of any Collateral (as defined in the Note),
with or without the substitution of new collateral; (c) the release or waiver of
any obligation or duty to perform or observe any express or implied agreement,
covenant, term or condition imposed on the Borrower in the Note or by applicable
law; (d) the failure, omission, delay or refusal by the Holder to assert,
enforce, give notice of intent to exercise, or any other notice with respect to,
or exercise any right, privilege, power or remedy conferred on the Holder in the
Note or by law or action on the part of the Holder granting forbearance or
extension of any kind to the Borrower (this section does not waive the
requirement that the Holder give notice to the Borrower pursuant to the terms of
the Note); (e) failure by the Holder to notify, or timely notify, the Guarantor
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of any default or event of default (however denominated) under the Note; and (f)
release or substitution of any one or more of any other guarantors, including
any Guarantor named in this Guaranty.
4. Acceptance by Guarantor. The Guarantor warrants that this Guaranty
has been accepted by the Guarantor.
5. Guarantor's Waivers. The Guarantor waives any right to require the
Holder to: (a) give notice of acceptance of this Guaranty; (b) proceed directly
or at once against any person, including the Borrower, in the event of a breach
of Section 5.5 of the Note; (c) proceed directly against any other guarantor
(including any Guarantor named in this Guaranty) or any other person or (d)
pursue any other remedy in the Holder's power. In addition, the Guarantor
waives: (i) any statute of limitations affecting Guarantor's liability hereunder
or the enforcement hereof, (ii) all defenses and claims based upon the
principles of suretyship and/or guaranty, or (iii) any and all rights of
reimbursement, contribution, and subrogation, which Guarantor may now or
hereafter have against Borrower. Guarantor further agrees that, to the extent
the waiver of its rights of subrogation as set forth herein is found by a court
of competent jurisdiction to be void or voidable for any reason, any rights of
subrogation Guarantor may have against Borrower or against any Collateral shall
be junior and subordinate to any right Holder may have against Borrower and to
all right, title and interest Holder may have in any Collateral. Holder may use,
sell or dispose of any item of Collateral as it sees fit without regard to any
subrogation right Guarantor may have, and upon disposition or sale, any right of
subrogation Guarantor may have shall terminate.
6. Guarantor's Understanding With Respect to Waivers. The Guarantor
warrants and agrees that each of the waivers set forth herein is made with the
Guarantor's full knowledge of its significance and consequences, and that under
the circumstances, including, without limitation, the fact that the intent and
purpose of the Guarantor in entering into the Guaranty is to absolutely,
irrevocably, unconditionally and jointly and severally guaranty (i) the
performance of Section 5.5 of the Note, and (ii) upon the occurrence of any
default of the Section 5.5 Obligations, the payment of all sums due under the
Note, the waivers are reasonable and not contrary to public policy or law. If
any of such waivers is determined to be contrary to any applicable law or public
policy, such waiver shall be effective only to the extent permitted by law.
7. Joint and Several Liability if More than One Guarantor. If there is
more than one Guarantor under this Guaranty, all obligations herein contained
shall be deemed to be the joint and several obligations of each Guarantor.
8. Guaranty of Payment. The liability of the Guarantor under this
Guaranty is a guaranty of payment and not of collectability, and is not
conditioned or contingent upon the genuineness, validity, regularity or
enforceability of the Note or other instruments relating to the creation or
performance of the obligations guaranteed hereby or the pursuit by Holder of any
remedies which it now has or may hereafter have with respect thereto under the
Note, at law, in equity or otherwise.
9. Subordination. If from time to time Borrower shall have liabilities
or obligations to Guarantor, such liabilities and obligations and any and all
assignments as security, grants in trust, liens, mortgages, security interests,
other encumbrances, and other interests and rights securing such liabilities and
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obligations shall at all times be fully subordinate with respect to (i)
assignment as security, grant in trust, lien, mortgage, security interest, other
encumbrance, and other interest and right (if any), (ii) time and right of
payment and performance, and (iii) rights against any collateral therefor (if
any), to payment and performance in full of the obligations guaranteed hereby
and the right of Holder to realize upon any or all security for such
obligations.
10. Notices. All notices, requests, instructions, consents and other
communications to be given pursuant to this Guaranty shall be in writing and
shall be deemed received (i) on the same day if delivered in person, by same-day
courier or by facsimile transmission so long as confirmation of such
transmission is received; (ii) on the next day if delivered by over-night mail
or courier; or (iii) on the date indicated on the return receipt, or if there is
no such receipt, on the third calendar day (excluding Saturdays and Sundays), if
delivered by certified or registered mail, postage prepaid, to the party for
whom intended to the following address;
If to Holder: X. Xxxxxxxx Family Investments, L.P.
c/o Lake City Bank
P. O. Xxx 00000
Xxxx Xxxxx, Xxxxxxx
00000 Attn: Xxxxx Xxxxx, Trust
Officer
If to Guarantor: Xxxxxx X. Xxxxxx/Xxxxxxx Xxxxxx
c/o National Lampoon, Inc.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: President
Any party may, by written notice given to the other in accordance with
this Guaranty, change the address or facsimile number to which notices to such
party are to be sent.
11. California Law Applicable. This Guaranty is governed by and
construed in accordance with the laws of the state of California, and any legal
or equitable actions shall be heard and in the courts of law of the State of
California. Every provision of this Guaranty is intended to be severable. In the
event any term or provision hereof is declared to be illegal or invalid, for any
reason whatsoever, by a court of competent jurisdiction, such illegality or
invalidity shall not affect the balance of the terms and provisions hereof,
which terms and provisions shall remain binding and enforceable.
12. Successors and Assigns/Community Property. This Guaranty shall be
binding upon Guarantor, its successors and assigns and shall inure to the
benefit of and shall be enforceable by Holder, its successors, endorsees and
assigns. Any married person executing this Guaranty agrees that recourse may be
had against community assets and against his or her separate property for the
satisfaction of all obligations herein guaranteed.
13. Intended Benefit. This Guaranty is solely for the benefit of
Holder, its successors, endorsees and assigns, and is not intended to nor shall
it be deemed to be for the benefit of any third party, including Borrower.
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14. Time of Essence. Time is of the essence under this Guaranty and any
amendment, modification, or revision of this Guaranty.
15. Complete Agreement/No Waivers Except in Writing. This writing is
intended by the parties to be an integrated and final expression of this
Guaranty and also is intended to be a complete and exclusive statement of the
terms of their agreement. No course of prior dealing between the parties, no
usage of trade, and no parole or extrinsic evidence of any nature shall be used
to supplement, modify or vary any of the terms hereof. There are no conditions
to the full effectiveness of this Guaranty. No provisions of this Guaranty or
rights of the Holder under this Guaranty can be waived, nor can the Guarantor be
released from its obligations under this Guaranty, except by a writing duly
executed by Holder.
16. Counterparts. This Guaranty may be executed in counterparts, all of
which executed counterparts shall together constitute a single document.
The Guarantor has executed this Guaranty on the 28th day of January
2005.
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Xxxxxx X. Xxxxxx
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Xxxxxxx Xxxxxx
DO NOT DESTROY THIS GUARANTY; WHEN THE NOTE IS PAID, THIS GUARANTY MUST
BE IMMEDIATELY SURRENDERED TO THE GUARANTOR FOR CANCELLATION.
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