UNCONDITIONAL GUARANTY AGREEMENT
Exhibit
A to Note
THIS
UNCONDITIONAL GUARANTY AGREEMENT (this
“Guaranty”),
dated
as of the __ day of September 2008, is made by LEGACY
MEDIA LLC,
a
California limited liability company (“Legacy”),
and
CONSUMER
LOYALTY GROUP LLC,
a
California limited liability company (“Consumer”),
each
having an address at c/o
COMMERCE
PLANET, INC.,
a Utah
corporation (the “Company”)
with
an address at 00 X. Xx Xxxxxx Xxxx, Xxxxxx, XX 00000, for
the
benefit of MORLEX,
INC.,
a
Colorado corporation
(hereinafter referred to as “Morlex”).
Legacy and Consumer are hereinafter referred to individually
as a “Guarantor”
and
collectively as the “Guarantors.”
W
I T N E
S S E T H :
WHEREAS,
the Guarantors are each wholly-owned subsidiaries of the Company;
WHEREAS,
the
parties hereto are parties to the Asset Purchase Agreement (the “Purchase
Agreement”)
dated
as of the 16th day of September 2008, by and among the Company, the Guarantors,
Morlex and Superfly Advertising, Inc., an Indiana corporation and wholly-owned
subsidiary of Morlex (the “Purchaser”).
Pursuant to the Purchase Agreement, the Guarantors have agreed to sell and
Purchaser has agreed to purchase certain of the assets used or held for use
by
the Guarantors in the conduct of the Business in consideration of the Purchase
Price and the Assumed Liabilities (the “Acquisition”).
WHEREAS,
in connection with the Purchase Agreement, Morlex has agreed to make
a
loan to
the Company in the original principal amount of $200,000 as evidenced by a
secured convertible promissory note dated of even date herewith (the
“Note”)
made
by the Company
(the “Maker”)
in
favor of Morlex or any subsequent holder of such Note (the “Payee”);
WHEREAS,
as
an
inducement and a condition to the willingness of Morlex and the Purchaser to
make the Loan and enter into the Purchase Agreement, as applicable, Morlex
desires the Guarantors to agree, and the Guarantors are willing to agree,
to
execute and deliver this Guaranty and jointly and severally guarantee payment
to
Morlex of the Guaranteed Amount (as herein defined) at the time and in the
manner hereinafter provided;
WHEREAS,
each Guarantor agrees that it is in its best interest to guaranty the Guaranteed
Amount, and is delivering this Guaranty with the intent that Morlex and the
Purchaser rely hereon, and acknowledging that Morlex and the Purchaser are
so
relying and that it is reasonable for them to do so.
NOW,
THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged
by
each Guarantor, and in order to induce Morlex to make the loan evidenced by
the
Note, each Guarantor intending to be legally bound hereby covenants and agrees
as follows:
1. (a) Unless
otherwise separately defined herein, all capitalized terms, when used in this
Guaranty shall have the same meaning as is defined in the Note.
(b) Each
Guarantor hereby absolutely and unconditionally jointly and severally guarantees
to Morlex the payment in full of the Note, of the sum of (i) the entire
(US) $200,000 principal amount of the Note, (ii) all accrued interest due
thereon, and (iii) any Penalty Interest that may be due and payable, in each
case in accordance with the terms of the Note (such
aggregate sum is referred to as the “Guaranteed
Amount”).
2. Each
Guarantor covenants to and shall, with or without notice or demand, (i)
reimburse Morlex for all costs and expenses (including, without limitation,
reasonable attorney’s fees) paid or incurred by Morlex in connection with
Morlex’s review and analysis of the Loan and viability thereof for Morlex’s
purposes, negotiation of the terms thereof and of this Guaranty, documentation
of this Guaranty and related matters, and the collection of the Guaranteed
Amount or any portion thereof (whether or not an action is brought for such
collection) or in any action or proceeding brought by Morlex to enforce any
of
the covenants, indemnities and obligations of each Guarantor under this
Guaranty.
3. All
moneys available to Morlex for application in payment of the Guaranteed Amount
may be applied by Morlex in such manner and in such amounts and at such time
or
times and in such order, priority and proportions as Morlex may to the payment
or reduction of such portion of the Guaranteed Amount Morlex may
elect.
4. Each
Guarantor hereby waives (a) notice of acceptance of this Guaranty; (b)
presentment and demand for payment of the Guaranteed Amount or any portion
thereof; (c) protest and notice of dishonor or default to him or to any other
person or party with respect to the Guaranteed Amount or any portion thereof;
(d) all other notices to which he undersigned might otherwise be entitled;
and
(e) any demand for payment under this Guaranty.
5. This
is a
Guaranty of payment and not of collection and each Guarantor further waives
any
right to require that any action be brought against the Maker or any other
person or party or to require that resort be had to any security or to any
balance of any deposit account or credit on the books of Morlex in favor of
or
any other person or party. The obligations hereunder are independent of the
obligations of the Partnership or any other person or entity to Morlex, and
a
separate action or actions may be brought and prosecuted against each Guarantor
whether action is brought against the Maker or any other person or entity or
whether any other person or entity be joined in any such action or actions;
and
each Guarantor waives the benefit of any statute of limitations affecting his
covenants, obligations and liabilities hereunder or the enforcement thereof.
6. Each
reference herein to Morlex shall be deemed to include his successors and assigns
or any other Payee of the Note, in whose favor the provisions of this Guaranty
shall also inure. Each reference herein to each Guarantor shall be deemed to
include the heirs, executors, administrators, legal representatives, successors
and assigns of each Guarantor, all of whom shall be bound by the provisions
of
this Guaranty, provided, however, that each Guarantor shall in no event or
under
any circumstance have the right without obtaining the prior written consent
of
Morlex to assign or transfer the obligations and liabilities of each Guarantor
under this Guaranty, in whole or in part, to any other person, party or
entity.
7. No
delay
on the part of Morlex in exercising any right or remedy under this Guaranty
or
failure to exercise the same shall operate as a waiver in whole or in part
of
any such right or remedy. No notice to or demand on each Guarantor shall be
deemed to be a waiver of the obligation of each Guarantor or of the right of
Morlex to take further action without notice or demand as provided in this
Guaranty.
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8. This
Guaranty may be modified, amended, changed or terminated only by an agreement
in
writing signed by Morlex and each Guarantor. No waiver of any term, covenant
or
provision of this Guaranty shall be effective unless given in writing by Morlex
and if so given by Morlex shall be effective only in the specific instance
in
which given.
9. Each
Guarantor acknowledges that this Guaranty and his and its obligations under
this
Guaranty are and shall at all times continue to be absolute and unconditional
in
all respects, and shall at all times be valid and enforceable irrespective
of
any other agreements or circumstances of any nature whatsoever which might
otherwise constitute a defense to this Guaranty and the obligations of each
Guarantor under this Guaranty or the obligations of any other person or party
(including, without limitation, the Partnership) relating to this Guaranty
or
otherwise with respect to the Guaranteed Amount.
10. This
Guaranty sets forth the entire agreement and understanding of Morlex and each
Guarantor, and each Guarantor absolutely, unconditionally and irrevocably waives
any and all right to assert any defense, setoff, counterclaim or crossclaim
of
any nature whatsoever with respect to this Guaranty or the obligations of each
Guarantor under this Guaranty or the obligations of any other person or party
relating to this Guaranty or otherwise with respect to the Guaranteed Amount,
or
in any action or proceeding brought by Morlex to collect the same, or any
portion thereof, or to enforce the obligations of each Guarantor under this
Guaranty. Each Guarantor acknowledges that no oral or other agreements,
understandings, representations or warranties exist with respect to this
Guaranty or with respect to the obligations of each Guarantor under this
Guaranty, except those specifically set forth in this Guaranty.
11. Each
Guarantor hereby irrevocably and unconditionally waives any and all right to
trial by jury in any action, suit or counterclaim arising in connection with,
out of or otherwise relating to this Guaranty.
12. Notwithstanding
anything to the contrary contained in this Guaranty, each Guarantor hereby
unconditionally and irrevocably waives, releases and abrogates any and all
rights it may now or hereafter have under any agreement, at law or in equity
(including, without limitation, any law subrogating each Guarantor to the rights
of Morlex), to assert any claim against or seek contribution, indemnification
or
any other form of reimbursement from the Maker or any other party liable for
payment of any or all of the Guaranteed Amount for any payment made by each
Guarantor under or in connection with this Guaranty or otherwise.
13. Any
notice, request or demand given or made under this Guaranty shall be in writing
and shall be hand delivered or sent by Federal Express or other reputable
courier service or by postage prepaid registered or certified mail, return
receipt requested, and shall be deemed given when received (or when delivery
is
refused) at the addresses set forth in the “Purchase Agreement” (as that term is
defined in the Note) if hand delivered or if sent by Federal Express or other
reputable courier service, or if sent by registered or certified mail, return
receipt requested. Each party to this Guaranty may designate a change of address
by notice given to the other party fifteen (15) days prior to the date such
change of address is to become effective.
14. This
Guaranty is, and shall be deemed to be, a contract entered into under and
pursuant to the laws of the State of New York and shall in all respects be
governed, construed, applied and enforced in accordance with the laws of the
State of New York. No defense given or allowed by the laws of any other state
or
country shall be interposed in any action or proceeding hereon unless such
defense is also given or allowed by the laws of the State of New York. Each
Guarantor agrees to submit to personal jurisdiction in the State of New York
in
any action or proceeding arising out of this Guaranty and, in furtherance of
such agreement, each Guarantor hereby agrees and consents that without limiting
other methods of obtaining jurisdiction, personal jurisdiction over each
Guarantor in any such action or proceeding may be obtained within or without
the
jurisdiction of any court located in Orange County, New York and that any
process or notice of motion or other application to any such court in connection
with any such action or proceeding may be served upon each Guarantor by
registered or certified mail to or by personal service at the last known address
of each Guarantor, whether such address be within or without the jurisdiction
of
any such court.
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15. Miscellaneous.
(a) Rights
of Morlex.
Each
Guarantor authorizes Morlex, without notice or demand and without affecting
each
Guarantor’s liability hereunder, from time to time to:
(i)
renew, compromise, extend, accelerate, or otherwise change the time for payment,
or otherwise change the terms, of the Guaranteed Amount or any part thereof,
including increase or decrease of the Guaranteed Amount and/or the Penalty
Interest;
(ii)
receive and hold security for the payment of this Guaranty or repayment of
the
Guaranteed Amount and exchange, enforce, waive, release, fail to perfect, sell,
or otherwise dispose of any such security;
(iii)
apply such security and direct the order or manner of sale thereof as Morlex
in
its discretion may determine; and
(iv)
apply payments received from the Maker or each Guarantor, or any of them, to
the
Guaranteed Amount, or other amounts then due and payable to Morlex in such
order
as Morlex may determine in his sole and absolute discretion.
(b) Guaranty
to be Absolute.
Each
Guarantor agrees that until the Guaranteed Amount shall have been irrevocably
paid to Morlex in full and any commitments of Maker or commitments provided
by
Maker with respect to the Loan have been terminated, each Guarantor shall not
be
released by or because of:
(i)
any
act or event which might otherwise discharge, reduce, limit, or modify each
Guarantor’s obligations under this Guaranty;
(ii)
any
waiver, extension, modification, forbearance, delay, or other act or omission
of
Morlex, or its failure to proceed promptly or otherwise as against the Maker,
each Guarantor or any security;
(iii)
any
action, omission, or circumstance which might increase the likelihood that
each
Guarantor may be called upon to perform under this Guaranty or which might
affect the rights or remedies of each Guarantor as against the
Maker;
(iv)
any
dealings occurring at any time between the Maker and Morlex, whether relating
to
any of the Loan or otherwise; or
(v)
any
action of Morlex described in Section 15(a) above.
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Each
Guarantor acknowledges that absent the foregoing, each Guarantor might have
a
defense to the enforcement of this Guaranty as a result of one or more of the
foregoing acts, omissions, agreements, waivers, or matters. Each Guarantor
waives and surrenders any defense to any liability under this Guaranty based
upon any of such acts, omissions, agreements, waivers, or matters. It is the
express intent of each Guarantor that all of each Guarantor’s obligations under
this Guaranty are and shall be absolute and unconditional.
(c) Waivers
of Certain Rights and Certain Defenses.
Each
Guarantor waives:
(i)
any
right to require Morlex to proceed against the Maker or any other person or
entity, proceed against or exhaust any security or other support for the Loan
or
amounts due under this Guaranty, or pursue any other remedy in Morlex’s power
whatsoever.
(ii)
any
defense arising by reason of any disability or other defense of the Maker
(including without limitation that the execution and delivery of the Note
evidencing the Loan was not properly authorized, or that the signatory thereof
lacked proper power and authority, or that it was not duly or properly executed
or delivered, or that it is not enforceable against the Maker for some other
reason), or the cessation from any cause whatsoever of the liability of the
Maker;
(iii)
any
defense based on any claim that each Guarantor’s obligations exceed or are more
burdensome than those of the Maker;
(iv)
the
benefit of any statute of limitations affecting each Guarantor’s liability
hereunder;
(v)
any
defense arising out of any action of Morlex described in Sections 15(a) and
(b)
above; and
(vi)
any
statute or decision, that otherwise may require Morlex to proceed against or
exhaust any security held by Morlex at any time or to pursue any other remedy
in
Morlex’s power before proceeding against any each Guarantor.
(d) Waiver
of Subrogation.
Each
Guarantor shall have no right of, and hereby waives any right of, subrogation,
reimbursement, indemnification, and contribution (contractual, statutory, or
otherwise) including, without limitation, any claim or right of subrogation
under the Bankruptcy Code (Title 11, United States Code) or any successor
statute, arising from the existence or performance of this Guaranty, and each
Guarantor waives any right to enforce any remedy which Morlex now has or may
hereafter have against the Maker and waives any benefit of, and any right to
participate in, any security now or hereafter held by Morlex.
(e) Waiver
of Notices.
Each
Guarantor waives all presentments, demands for performance, notices of
nonperformance or other defaults, protests, notices of protest, notices of
dishonor, notices of intent to accelerate, notices of acceleration, notices
of
any suit or any other action against the Maker or any other person, any other
notices to Maker or otherwise (including each Guarantor and his or its
affiliates), notices of acceptance of this Guaranty, and notices of the
existence, creation, or incurring of any new or additional
Loan.
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(f) Reinstatement
of Guaranty.
If this
Guaranty is revoked, returned, or canceled, and subsequently any payment or
transfer of any interest in property by the Maker or each Guarantor to Morlex
is
rescinded or must be returned by Morlex to the Maker or each Guarantor, as
applicable, this Guaranty shall be reinstated with respect to any such payment
or transfer, regardless of any such prior revocation, return, or cancellation.
Without limiting the generality of the foregoing, this Guaranty shall continue
to be effective or be reinstated, as the case may be, if at any time any
distribution by the Maker to Morlex or other amount received by Morlex is
avoided as a preference, or on any other grounds provided by law, or must
otherwise be returned by Morlex as a result of an order for relief being entered
with respect to the Maker or any other person or entity under the United
States Bankruptcy Code,
or as a
result of the Maker’s or any other person’s or entity’s assignment for the
benefit of creditors.
(g) Successors
and Assigns.
This
Guaranty (i) binds each Guarantor and each Guarantor’s executors,
administrators, successors, and assigns, and (ii) inures to the benefit of
Morlex and Morlex’s endorsees, successors, and assigns. This Agreement may not
be assigned by either Guarantor.
(h)
Costs
and Expenses.
Each
Guarantor agrees to pay, and shall pay promptly upon demand, all reasonable
attorneys' fees and all other costs and expenses which may be incurred by Morlex
(i) in the negotiation, preparation and review of the Loan and related
documents, this Guarantee and other investigations related to Morlex’s making of
the Loan, (ii) in the enforcement of this Guaranty and (iii) in the
preservation, protection, or enforcement of any rights of Morlex in any case
commenced by or against each Guarantor under the Bankruptcy Code (Title 11,
United States Code) or any similar or successor statute.
(i)
Severability
of Provisions; Amendment of this Guaranty.
If any
term, provision, covenant or condition of this Guaranty is held by a court
or
other tribunal of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the provisions shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. This Guaranty is intended by
each Guarantor and Morlex as the final expression of each Guarantor’s
obligations and liabilities to Morlex described herein and is intended as a
complete statement of their agreement concerning the subject matter hereof.
This
Guaranty may be amended only by a writing signed by each Guarantor and agreed
to
by Morlex in writing.
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balance of this page intentionally left blank - signature page
follows]
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IN
WITNESS WHEREOF,
each
Guarantor has duly executed and delivered this Guaranty to Morlex as of the
day
and year first above set forth.
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LEGACY
MEDIA LLC
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By:
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Xxxxxxx
Xxxx, Manager
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CONSUMER
LOYALTY GROUP LLC
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By:
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Xxxxxxx
Xxxx, Manager
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