GUARANTY
EXHIBIT 10.6
GUARANTY, dated as of May 7, 2012, made by each of the undersigned (each a “Guarantor”, and collectively, the “Guarantors”), in favor of Xxxxxx Bay Master Fund Ltd., in its capacity as agent (in such capacity, the “Collateral Agent”) for the “Buyers” (as defined below) party to the Securities Purchase Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, Digital Domain Media Group, Inc., a Florida corporation (the “Company”) and each party listed as a “Buyer” on the Schedule of Buyers attached thereto (collectively, the “Buyers”) are parties to the Securities Purchase Agreement of even date herewith (as amended, restated, replaced or otherwise modified from time to time, the “Securities Purchase Agreement”), pursuant to which the Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the “Notes” (as defined therein) issued pursuant to the Securities Purchase Agreement (as defined therein);
WHEREAS, the Securities Purchase Agreement requires that the Guarantors execute and deliver to the Collateral Agent, (i) a guaranty guaranteeing all of the obligations of the Company under the Securities Purchase Agreement, the Notes and the “Transaction Documents” (as defined in the Securities Purchase Agreement); (ii) that certain Security and Pledge Agreement of even date herewith granting the Collateral Agent a lien on all of the personal property of the Company and the other grantors party thereto (collectively, the “Non-Canadian Grantors”) and pledging certain equity interests (the “Security Agreement”); and (iii) that certain Canadian Security and Pledge Agreement of even date herewith (the “Canadian Security Agreement”) granting Collateral Agent a lien on all of the personal property of Digital Domain Productions (Vancouver) Ltd. (the “Canadian Subsidiary” and, collectively with the Company and the Non-Canadian Grantors, the “Grantors”).
WHEREAS, each Guarantor has determined that the execution, delivery and performance of this Guaranty directly benefits, and is in the best interest of, such Guarantor;
NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Guarantor hereby agrees with each Buyer as follows:
SECTION 1. Definitions. Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms used in this Guaranty, which are defined in the Securities Purchase Agreement or the Notes and not otherwise defined herein, shall have the same meanings herein as set forth therein.
SECTION 2. Guaranty. The Guarantors, jointly and severally, unconditionally and irrevocably guarantee to Collateral Agent, for the benefit of the Buyers, the prompt payment (whether at stated maturity, by acceleration, or otherwise) and performance of all of Obligations, as that term is defined in the Security Agreement (or solely with respect to the guaranty of the Canadian Subsidiary, as that term is defined in the Canadian Security Agreement), including, without limitation (i) all principal of and interest on the Notes (including, without limitation, all
interest that accrues after the commencement of any insolvency proceeding of any Grantor, whether or not the payment of such interest is unenforceable or is not allowable due to the existence of such insolvency proceeding), and (ii) all fees, interest, premiums, penalties, contract causes of action, costs, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under any of the Transaction Documents (the “Guaranteed Obligations”), and agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Collateral Agent or any Buyer in enforcing any rights under this Guaranty. Without limiting the generality of the foregoing, each Guarantor’s liability hereunder shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed to the Collateral Agent or any Buyer by any party to the Securities Purchase Agreement, the Notes, or the other Transaction Documents (the “Transaction Parties”) but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving the Company or any Guarantors.
Each Guarantor, and by its acceptance of this Guaranty, the Collateral Agent and each Buyer, hereby confirms that it is the intention of all such Persons that this Guaranty and the Guaranteed Obligations of each Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of bankruptcy law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal, provincial or state law to the extent applicable to this Guaranty and the Guaranteed Obligations of each Guarantor hereunder. To effectuate the foregoing intention, the Collateral Agent, the Buyers and the Guarantors hereby irrevocably agree that the Guaranteed Obligations of each Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the Guaranteed Obligations of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance.
SECTION 3. Guaranty Absolute; Continuing Guaranty; Assignments.
(a) The Guarantors, jointly and severally, guaranty that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Transaction Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Collateral Agent or any Buyer with respect thereto. The obligations of each Guarantor under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against any Guarantor to enforce such obligations, irrespective of whether any action is brought against any Transaction Party or whether any Transaction Party is joined in any such action or actions. The liability of any Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives, to the extent permitted by law, any defenses it may now or hereafter have in any way relating to, any or all of the following:
(i) any lack of validity or enforceability of any Transaction Document or any agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any Transaction Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Transaction Party or otherwise;
(iii) any taking, exchange, release or non-perfection of any Collateral (as defined in the Security Agreement, or, solely with respect to the “Collateral” of the Canadian Subsidiary, as defined in the Canadian Security Agreement), or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations;
(iv) any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Transaction Party, including as a result of a merger or amalgamation;
(v) any manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations or any other Obligations of any Transaction Party under the Transaction Documents or any other assets of any Transaction Party or any of its Subsidiaries;
(vi) any failure of the Collateral Agent or any Buyer to disclose to any Transaction Party any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Transaction Party now or hereafter known to the Collateral Agent or any Buyer (each Guarantor waiving any duty on the part of the Collateral Agent or any Buyer to disclose such information); or
(vii) any other circumstance (including any statute of limitations) or any existence of or reliance on any representation by the Collateral Agent or any Buyer that might otherwise constitute a defense available to, or a discharge of, any Transaction Party or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the Collateral Agent, any Buyer or any other Person upon the insolvency, bankruptcy or reorganization of any Transaction Party or otherwise, all as though such payment had not been made.
(b) This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until the indefeasible cash payment in full of the Guaranteed Obligations (other than inchoate indemnity obligations) and/or complete conversion of all of the Company’s obligations under the Notes to equity securities of the Company and payment of all other amounts payable under this Guaranty (other than inchoate indemnity obligations) and shall not terminate for any reason prior to the respective Maturity Date of each Note (other than payment in full of the Notes and/or complete conversion of all of the Company’s obligations under the Notes to equity securities of the Company) and (ii) be binding upon each Guarantor and its respective successors and assigns. This Guaranty shall inure to the benefit of and be enforceable by the Collateral Agent, the Buyers and their respective successors, and permitted pledgees, transferees and assigns. Without limiting the generality of the foregoing sentence, the Collateral Agent or any Buyer may pledge, assign or otherwise transfer all or any portion of its rights and obligations under and subject to the terms of any Transaction Document to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to the
Collateral Agent or such Buyer herein or otherwise, in each case as provided in the Securities Purchase Agreement or such Transaction Document. Notwithstanding the foregoing and for the avoidance of doubt, this Guaranty will expire and each Guarantor will be released from its obligation hereunder upon (i) indefeasible and final payment in full in cash of the Guaranteed Obligations or (ii) complete conversion of all of the Guaranteed Obligations pursuant to the terms of the Notes to equity securities of the Company.
SECTION 4. Waivers. To the extent permitted by applicable law, each Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Collateral Agent exhaust any right or take any action against any Transaction Party or any other Person or any Collateral. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section 4 is knowingly made in contemplation of such benefits. The Guarantors hereby waive any right to revoke this Guaranty, and acknowledge that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future. To the extent permitted by applicable law, each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by the Collateral Agent or any Buyer that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against any of the other Transaction Parties, any other guarantor or any other Person or any Collateral and (ii) any defense based on any right of set-off or counterclaim against or in respect of the Guaranteed Obligations of such Guarantor hereunder. Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of the Collateral Agent or any Buyer to disclose to such Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Transaction Party or any of its Subsidiaries now or hereafter known by the Collateral Agent or a Buyer.
SECTION 5. Subrogation. No Guarantor may exercise any rights that it may now or hereafter acquire against any Transaction Party or any other guarantor that arise from the existence, payment, performance or enforcement of any Guarantor’s obligations under this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Collateral Agent or any Buyer against any Transaction Party or any other guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Transaction Party or any other guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations (other than inchoate indemnity obligations) and all other amounts payable under this Guaranty (other than inchoate indemnity obligations) shall have indefeasibly been paid in full in cash. If any amount shall be paid to a Guarantor in violation of the immediately preceding sentence at any time prior to the later of the indefeasible payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, such amount shall be held in trust for the benefit of the Collateral Agent and shall forthwith be paid to the Collateral Agent to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured,
in accordance with the terms of the Transaction Document, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (a) any Guarantor shall make payment to the Collateral Agent of all or any part of the Guaranteed Obligations, and (b) all of the Guaranteed Obligations (other than inchoate indemnity obligations) and all other amounts payable under this Guaranty (other than inchoate indemnity obligations) shall indefeasibly be paid in full in cash, the Collateral Agent will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.
SECTION 6. Representations, Warranties and Covenants.
(a) Each Guarantor hereby represents and warrants as of the date first written above as follows:
(i) The Guarantor (A) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization as set forth on the signature pages hereto, (B) has all requisite corporate, limited liability company or limited partnership power and authority to conduct its business as now conducted and as presently contemplated and to execute and deliver this Guaranty and each other Transaction Document to which the Guarantor is a party, and to consummate the transactions contemplated hereby and thereby and (C) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary except where the failure to be so qualified would not result in a Material Adverse Effect.
(ii) The execution, delivery and performance by the Guarantor of this Guaranty and each other Transaction Document to which the Guarantor is a party (A) have been duly authorized by all necessary corporate, limited liability company or limited partnership action, (B) do not and will not contravene its charter, articles or by-laws, its limited liability company or operating agreement or its certificate of partnership or partnership agreement, as applicable, or any applicable law or any contractual restriction binding on the Guarantor or its properties do not and will not result in or require the creation of any lien (other than pursuant to any Transaction Document) upon or with respect to any of its properties, and (C) to Guarantor’s knowledge, do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to it or its operations or any of its properties.
(iii) No authorization or approval or other action by, and no notice to or filing with, any governmental authority is required in connection with the due execution, delivery and performance by the Guarantor of this Guaranty or any of the other Transaction Documents to which the Guarantor is a party (other than expressly provided for in any of the Transaction Documents).
(iv) Each of this Guaranty and the other Transaction Documents to which the Guarantor is or will be a party, when delivered, will be, a legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law).
(v) There is no pending or, to the best knowledge of the Guarantor, threatened action, suit or proceeding against the Guarantor or to which any of the properties of the Guarantor is subject, before any court or other governmental authority or any arbitrator that (A) if adversely determined, could reasonably be expected to have a Material Adverse Effect or (B) relates to this Guaranty or any of the other Transaction Documents to which the Guarantor is a party or any transaction contemplated hereby or thereby.
(vi) The Guarantor (A) has read and understands the terms and conditions of the Securities Purchase Agreement and the other Transaction Documents, and (B) now has and will continue to have independent means of obtaining information concerning the affairs, financial condition and business of the Company and the other Transaction Parties, and has no need of, or right to obtain from any Buyer, any credit or other information concerning the affairs, financial condition or business of the Company or the other Transaction Parties that may come under the control of any Buyer.
(vii) There are no conditions precedent to the effectiveness of this Guaranty that have not been satisfied or waived.
(b) The Guarantor covenants and agrees that until indefeasible full and final payment in cash of the Guaranteed Obligations and/or complete conversion of all of the Company’s obligations under the Notes to equity securities of the Company in accordance with the terms of the Notes, it will comply with each of the covenants (except to the extent applicable only to a public company) which are set forth in Section 4 of the Securities Purchase Agreement as if the Guarantor were a party thereto.
SECTION 7. Right of Set-off. Upon the occurrence and during the continuance of any Event of Default, any Buyer may, and is hereby authorized to, at any time and from time to time, without notice to the Guarantors (any such notice being expressly waived by each Guarantor) and to the fullest extent permitted by law, set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by any Buyer to or for the credit or the account of any Guarantor against any and all obligations of the Guarantors now or hereafter existing under this Guaranty or any other Transaction Document, irrespective of whether or not any Buyer shall have made any demand under this Guaranty or any other Transaction Document and although such obligations may be contingent or unmatured. Each Buyer agrees to notify the relevant Guarantor promptly after any such set-off and application made by such Buyer, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of any Buyer under this Section 7 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Buyer may have under this Guaranty or any other Transaction Document in law or otherwise.
SECTION 8. Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed, telecopied or delivered, if to any Guarantor, to it at its address set forth on the signature page hereto, or if to the Collateral Agent or any Buyer, to it at its respective address set forth in the Securities Purchase Agreement; or as to any Person at such other address as shall be designated by such Person in a written notice to such other Person complying as to delivery with the terms of this Section 8. All such notices and other communications shall be effective (i) if mailed (by certified mail, postage prepaid and return receipt requested), when received or three Business Days after deposited in the mails, whichever occurs first; (ii) if telecopied, when transmitted and confirmation is received, provided same is on a Business Day and, if not, on the next Business Day; or (iii) if delivered by hand, upon delivery, provided same is on a Business Day and, if not, on the next Business Day.
SECTION 9. CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.
(a) ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY DOCUMENT RELATED HERETO SHALL BE BROUGHT EXCLUSIVELY IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX IN THE COUNTY OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, BY EXECUTION AND DELIVERY OF THIS GUARANTY, EACH GUARANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFOREMENTIONED COURTS. EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR BASED ON UPON 28 U.S.C. § 1404, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING AND ADJUDICATION OF ANY SUCH ACTION, SUIT OR PROCEEDING IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.
(b) EACH GUARANTOR IRREVOCABLY CONSENTS TO SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS FOR NOTICES AS SET FORTH ON THE SIGNATURE PAGE HERETO, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. TO THE EXTENT THAT ANY 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 OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER TRANSACTION DOCUMENTS.
SECTION 10. WAIVER OF JURY TRIAL, ETC. EACH GUARANTOR HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH GUARANTOR CERTIFIES THAT NO OFFICER, REPRESENTATIVE OR ATTORNEY OF THE COLLATERAL AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT COLLATERAL AGENT WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH GUARANTOR HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT ENTERING INTO THIS AGREEMENT.
SECTION 11. Taxes.
(a) All payments made by any Guarantor hereunder or under any other Transaction Document shall be made in accordance with the terms of the respective Transaction Document and shall be made without set-off, counterclaim, deduction or other defense. All such payments shall be made free and clear of and without deduction for any present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes imposed on the net income of any Buyer by the jurisdiction in which such Buyer is organized or where it has its principal lending office (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities, collectively or individually, “Taxes”). If any Guarantor shall be required to deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under any other Transaction Document:
(i) the amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings (including Taxes on amounts payable to any Buyer pursuant to this sentence) each Buyer receives an amount equal to the sum it would have received had no such deduction or withholding been made,
(ii) such Guarantor shall make such deduction or withholding,
(iii) such Guarantor shall pay the full amount deducted or withheld to the relevant taxation authority in accordance with applicable law, and
(iv) as promptly as possible thereafter, such Guarantor shall send the Buyers an official receipt (or, if an official receipt is not available, such other documentation as shall be reasonably satisfactory to the Collateral Agent, as the case may be) showing payment. In addition, each Guarantor agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made
hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document (collectively, “Other Taxes”).
(b) Each Guarantor hereby indemnifies and agrees to hold the Collateral Agent and each Buyer (each an “Indemnified Party”) harmless from and against Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 11) paid by any Indemnified Party as a result of any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document, and any liability (including penalties, interest and expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be paid within 30 days from the date on which the Collateral Agent or such Buyer makes written demand therefor, which demand shall identify the nature and amount of such Taxes or Other Taxes.
(c) If any Guarantor fails to perform any of its obligations under this Section 11, such Guarantor shall indemnify the Collateral Agent and each Buyer for any taxes, interest or penalties that may become payable as a result of any such failure. The obligations of the Guarantors under this Section 11 shall survive the termination of this Guaranty and the payment of the Obligations and all other amounts payable hereunder.
SECTION 12. Indemnification.
(a) Without limitation on any other Obligations of any Guarantor or remedies of the Collateral Agent and the Buyers under this Guaranty, except to the extent resulting from such Indemnified Party’s gross negligence or willful misconduct, as determined by a final judgment of a court of competent jurisdiction, each Guarantor shall, to the fullest extent permitted by law, indemnify, defend and save and hold harmless the Collateral Agent and each Buyer and each of their affiliates and their respective officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party in connection with or as a result of any failure of any Guaranteed Obligations to be the legal, valid and binding obligations of any Transaction Party enforceable against such Transaction Party in accordance with their terms.
(b) Each Guarantor hereby also agrees that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort or otherwise) to any of the Guarantors or any of their respective affiliates or any of their respective officers, directors, employees, agents and advisors, and each Guarantor hereby agrees not to assert any claim against any Indemnified Party on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the facilities, the actual or proposed use of the proceeds of the advances, the Transaction Documents or any of the transactions contemplated by the Transaction Documents.
SECTION 13. Subordination. Each Guarantor hereby subordinates any and all debts, liabilities and other Obligations owed to such Guarantor by each other Transaction Party
(the “Subordinated Obligations”) to the Guaranteed Obligations to the extent and in the manner hereinafter set forth in this Section 13:
(a) Prohibited Payments, Etc. Except during the occurrence and continuance of a Default, each Guarantor may receive regularly scheduled payments from any other Transaction Party on account of the Subordinated Obligations. After the occurrence and during the continuance of any Default, however, no Guarantor shall demand, accept or take any action to collect any payment on account of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any proceeding under any bankruptcy law relating to any other Loan Party, each Guarantor agrees that the Collateral Agent and the Buyers shall be entitled to receive payment in full in cash of all Guaranteed Obligations (including all interest and expenses accruing after the commencement of a proceeding under any bankruptcy law, whether or not constituting an allowed claim in such proceeding (“Post Petition Interest”)) before such Guarantor receives payment of any Subordinated Obligations.
(c) Turn-Over. After the occurrence and during the continuance of any Default, each Guarantor shall, if the Collateral Agent so requests, collect, enforce and receive payments on account of the Subordinated Obligations as trustee for the Collateral Agent and the Buyers and deliver such payments to the Collateral Agent on account of the Guaranteed Obligations (including all Post Petition Interest), together with any necessary endorsements or other instruments of transfer, but without reducing or affecting in any manner the liability of such Guarantor under the other provisions of this Guaranty.
(d) Collateral Agent Authorization. After the occurrence and during the continuance of any Default, the Collateral Agent is authorized and empowered (but without any obligation to so do), in its discretion, (i) in the name of each Guarantor, to collect and enforce, and to submit claims in respect of, Subordinated Obligations and to apply any amounts received thereon to the Guaranteed Obligations (including any and all Post Petition Interest), and (ii) to require each Guarantor (A) to collect and enforce, and to submit claims in respect of, Subordinated Obligations and (B) to pay any amounts received on such obligations to the Collateral Agent for application to the Guaranteed Obligations (including any and all Post Petition Interest).
SECTION 14. Miscellaneous.
(a) Each Guarantor will make each payment hereunder in lawful money of the United States of America and in immediately available funds to each Buyer, at such address specified by such Buyer from time to time by notice to the Guarantors.
(b) No amendment or waiver of any provision of this Guaranty and no consent to any departure by any Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by each Guarantor and each Buyer, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
(c) No failure on the part of any Buyer to exercise, and no delay in exercising, any right hereunder or under any other Transaction Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder or under any Transaction
Document preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Collateral Agent and the Buyers provided herein and in the other Transaction Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Collateral Agent and the Buyers under any Transaction Document against any party thereto are not conditional or contingent on any attempt by the Collateral Agent or any Buyer to exercise any of their respective rights under any other Transaction Document against such party or against any other Person.
(d) Any provision of this Guaranty that 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 affecting the validity or enforceability of such provision in any other jurisdiction.
(e) This Guaranty shall (i) be binding on each Guarantor and its respective successors and assigns, and (ii) inure, together with all rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the Buyers and their respective successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence, the Collateral Agent and any Buyer may assign or otherwise transfer its rights and obligations under the Securities Purchase Agreement or any other Transaction Document to any other Person in accordance with the terms thereof, and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to the Collateral Agent or such Buyer, as the case may be, herein or otherwise. None of the rights or obligations of any Guarantor hereunder may be assigned or otherwise transferred without the prior written consent of each Buyer.
(f) This Guaranty reflects the entire understanding of the transaction contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, entered into before the date hereof.
(g) Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
(h) THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES (EXCEPT 5-1401 OF THE NEW YORK GENERAL OBLIGATION LAW). FURTHER, THE LAW OF THE STATE OF NEW YORK SHALL APPLY TO ALL DISPUTES OR CONTROVERSIES ARISING OUT OF OR CONNECTED TO OR WITH THIS GUARANTY WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES (EXCEPT 5-1401 OF THE NEW YORK GENERAL OBLIGATION LAW).
SECTION 15. Currency Indemnity.
If, for the purpose of obtaining or enforcing judgment against Guarantor in any court in any jurisdiction, it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 15 referred to as the “Judgment Currency”) an amount due under this Guaranty in any currency (the “Obligation Currency”) other than the
Judgment Currency, the conversion shall be made at the rate of exchange prevailing on the business day immediately preceding (a) the date of actual payment of the amount due, in the case of any proceeding in the courts of courts of the jurisdiction that will give effect to such conversion being made on such date, or (b) the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the applicable date as of which such conversion is made pursuant to this Section 13 being hereinafter in this Section 13 referred to as the “Judgment Conversion Date”).
If, in the case of any proceeding in the court of any jurisdiction referred to in the preceding paragraph, there is a change in the rate of exchange prevailing between the Judgment Conversion Date and the date of actual receipt of the amount due in immediately available funds, the Guarantor shall pay such additional amount (if any, but in any event not a lesser amount) as may be necessary to ensure that the amount actually received in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of’ the Judgment Currency stipulated in the judgment or judicial order at the rate of exchange prevailing on the Judgment Conversion Date. Any amount due from the Guarantor under this Section 13 shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this Guaranty.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed by its respective duly authorized officer, as of the date first above written.
|
|
GUARANTORS: | |||
|
|
| |||
|
|
||||
|
|
| |||
|
|
| |||
|
|
By: |
/s/ Xxxx X. Xxxxxx | ||
|
|
|
Name: |
Xxxx X. Xxxxxx | |
|
|
|
Title: |
Chief Executive Officer | |
|
|
|
|
| |
|
|
|
Address: |
||
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | |
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | |
|
|
|
|
| |
|
|
Facsimile: |
(000) 000-0000 | ||
Guaranty
|
|
D2 SOFTWARE, INC. | |||
|
|
| |||
|
|
| |||
|
|
By: |
/s/ Xxxx X. Xxxxxx | ||
|
|
|
Name: |
Xxxx X. Xxxxxx | |
|
|
|
Title: |
Chief Executive Officer | |
|
|
|
|
| |
|
|
|
Address: |
||
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | |
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | |
|
|
|
|
| |
|
|
|
Facsimile: |
(000) 000-0000 | |
Guaranty
|
|
DDH LAND HOLDINGS, LLC | ||||
|
|
| ||||
|
|
By: |
||||
|
|
|
its Managing Member | |||
|
|
| ||||
|
|
| ||||
|
|
By: |
/s/ Xxxx X. Xxxxxx | |||
|
|
|
Name: |
Xxxx X. Xxxxxx | ||
|
|
|
Title: |
Chief Executive Officer | ||
|
|
|
|
| ||
|
|
|
Address: |
|||
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | ||
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | ||
|
|
|
|
| ||
|
|
Facsimile: |
(000) 000-0000 | |||
Guaranty
|
|
DDH LAND HOLDINGS II, LLC | ||||
|
|
| ||||
|
|
By: |
||||
|
|
|
its Managing Member | |||
|
|
| ||||
|
|
| ||||
|
|
By: |
/s/ Xxxx X. Xxxxxx | |||
|
|
|
Name: |
Xxxx X. Xxxxxx | ||
|
|
|
Title: |
Chief Executive Officer | ||
|
|
|
|
| ||
|
|
|
Address: |
|||
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | ||
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | ||
|
|
|
|
| ||
|
|
Facsimile: |
(000) 000-0000 | |||
Guaranty
|
|
DIGITAL DOMAIN | |||
|
|
| |||
|
|
| |||
|
|
By: |
/s/ Xxxx X. Xxxxxx | ||
|
|
|
Name: |
Xxxx X. Xxxxxx | |
|
|
|
Title: |
Chief Executive Officer | |
|
|
|
|
| |
|
|
|
Address: |
||
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | |
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | |
|
|
|
|
| |
|
|
|
Facsimile: |
(000) 000-0000 | |
Guaranty
|
|
DIGITAL DOMAIN INSTITUTE, INC. | |||
|
|
| |||
|
|
| |||
|
|
By: |
/s/ Xxxxxxxx X. Xxxxxxx | ||
|
|
|
Name: |
Xxxxxxxx X. Xxxxxxx | |
|
|
|
Title: |
Chief Executive Officer & President | |
|
|
|
|
| |
|
|
|
Address: |
||
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | |
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | |
|
|
|
|
| |
|
|
Facsimile: |
(000) 000-0000 | ||
Guaranty
|
|
DIGITAL DOMAIN INTERNATIONAL, INC. | |||
|
|
| |||
|
|
| |||
|
|
By: |
/s/ Xxxx X. Xxxxxx | ||
|
|
|
Name: |
Xxxx X. Xxxxxx | |
|
|
|
Title: |
Chief Executive Officer | |
|
|
|
|
| |
|
|
|
Address: |
c/o Digital Domain Media Group, Inc. | |
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | |
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | |
|
|
|
|
| |
|
|
Facsimile: |
(000) 000-0000 | ||
Guaranty
|
|
DIGITAL DOMAIN PRODUCTIONS, INC. | |||
|
|
| |||
|
|
| |||
|
|
By: |
/s/ Xxxx X. Xxxxxx | ||
|
|
|
Name: |
Xxxx X. Xxxxxx | |
|
|
|
Title: |
Chief Executive Officer | |
|
|
|
|
| |
|
|
|
Address: |
c/o Digital Domain Media Group, Inc. | |
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | |
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | |
|
|
|
|
| |
|
|
Facsimile: |
(000) 000-0000 | ||
Guaranty
|
|
DIGITAL DOMAIN STEREO GROUP, INC. | |||||
|
|
|
|
| |||
|
|
|
|
| |||
|
|
By: |
/s/ Xxxx X. Xxxxxx | ||||
|
|
|
Name: |
Xxxx X. Xxxxxx | |||
|
|
|
Title: |
Chief Executive Officer | |||
|
|
|
|
| |||
|
|
|
Address: |
c/o Digital Domain Media Group, Inc. | |||
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | |||
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | |||
|
|
|
| ||||
|
|
Facsimile: |
(000) 000-0000 | ||||
Guaranty
|
|
DIGITAL DOMAIN TACTICAL, INC. | ||||
|
|
|
| |||
|
|
|
| |||
|
|
By: |
/s/ Xxxx Xxxxx | |||
|
|
|
Name: |
Xxxx Xxxxx | ||
|
|
|
Title: |
President | ||
|
|
|
|
| ||
|
|
|
Address: |
c/o Digital Domain Media Group, Inc. | ||
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | ||
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | ||
|
|
|
| |||
|
|
Facsimile: |
(000) 000-0000 | |||
Guaranty
|
|
MOTHERSHIP MEDIA, INC. | ||||
|
|
|
| |||
|
|
|
| |||
|
|
By: |
/s/ Xxxx X. Xxxxxx | |||
|
|
|
Name: Xxxx X. Xxxxxx | |||
|
|
|
Title: Chief Executive Officer | |||
|
|
|
| |||
|
|
|
Address: |
c/o Digital Domain Media Group, Inc. | ||
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | ||
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | ||
|
|
| ||||
|
|
Facsimile: |
(000) 000-0000 | |||
Guaranty
|
|
TRADITION STUDIOS, INC. | ||||
|
|
|
| |||
|
|
|
| |||
|
|
By: |
/s/ Xxxx X. Xxxxxx | |||
|
|
|
Name: Xxxx X. Xxxxxx | |||
|
|
|
Title: Chief Executive Officer | |||
|
|
|
| |||
|
|
|
Address: |
c/o Digital Domain Media Group, Inc. | ||
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | ||
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | ||
|
|
|
| |||
|
|
Facsimile: |
(000) 000-0000 | |||
Guaranty
|
|
DIGITAL DOMAIN PRODUCTIONS (VANCOUVER) LTD. | |||
|
|
|
| ||
|
|
|
| ||
|
|
By: |
/s/ Xxxx X. Xxxxxx | ||
|
|
|
Name: Xxxx X. Xxxxxx | ||
|
|
|
Title: Chief Executive Officer | ||
|
|
|
|
| |
|
|
|
Address: |
c/o Digital Domain Media Group, Inc. | |
|
|
|
|
00000 XX Xxxxxxx Xxxxxxx | |
|
|
|
|
Xxxx Xx. Xxxxx, XX 00000 | |
|
|
|
| ||
|
|
Facsimile: |
(000) 000-0000 | ||
Guaranty
|
ACCEPTED BY: |
| |||
|
|
| |||
|
XXXXXX BAY MASTER FUND LTD., as Collateral Agent |
| |||
|
|
| |||
|
|
|
| ||
|
By: |
/s/ Xxxxxxx Xxxxxxx |
| ||
|
|
Name: |
Xxxxxxx Xxxxxxx |
| |
|
|
Title: |
Authorized Signatory |
| |
|
|
|
| ||
|
Address: |
000 Xxxxx Xxxxxx, 00xx Xxxxx |
| ||
|
|
Xxx Xxxx, XX 00000 |
| ||
|
|
Attention: Xxxx Xxxx |
| ||
|
|
|
| ||
|
Facsimile: (000) 000-0000 |
| |||
Guaranty
