Exhibit 10.5
REPAYMENT GUARANTY
THIS REPAYMENT GUARANTY (the "Guaranty") is made as of January 27,
2005, by National Lampoon Networks, Inc., a Delaware corporation, and National
Lampoon Tours, Inc., a California corporation (collectively, jointly, severally,
and jointly and severally, the "Guarantor"), whose address is set forth in
Paragraph 9 hereof, in favor of X. XXXXXXXX FAMILY INVESTMENTS, L.P., an Arizona
limited partnership ("Lender"), whose address is c/o Lake City Bank, X.X. Xxx
00000, Xxxx Xxxxx, Xxxxxxx 00000.
1. Except as otherwise provided in this Guaranty, all terms defined in
that certain Security Agreement of even date herewith by and between National
Lampoon, Inc., a Delaware corporation ("Borrower"), Guarantor, and Lender (as it
may be amended and modified from time to time) (the "Security Agreement") shall
have the same meaning when used in this Guaranty. Such defined terms are denoted
in the Security Agreement and in this Guaranty by initial capital letters.
2. In order to induce Lender to loan to Borrower the sum of Two Million
Seven Hundred Thousand and No/100 Dollars ($2,700,000.00) (the "Loan"), to be
evidenced by that certain Secured Promissory Note (the "Note") of even date
herewith, executed by Borrower and payable to the order of Lender, Guarantor
hereby unconditionally and irrevocably, jointly and severally, guarantees to
Lender and to its successors, endorsees and/or assigns, 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, the
full and prompt payment of all other sums, together with all interest accrued
thereon, when due under the terms of the Note, and in any deed of trust,
security agreement, and other assignment or agreement referred to in the
Security Agreement and/or now or hereafter securing the Note, or setting forth
obligations of Borrower in connection with the Loan (which documents, together
with the Note and the Security Agreement, are collectively referred to herein as
the "Loan Documents"). The obligations guaranteed pursuant to this Paragraph 2
are hereinafter referred to as the "Guaranteed Obligations". All payments under
this Guaranty shall be made to Lender in lawful money of the United States of
America at the address of Lender at the beginning of this Guaranty or such other
location as Lender may designate in writing. Any amount payable under this
Guaranty not paid when due and any judgment for such an amount and interest
thereon shall bear interest at the default rate set forth in the Note from the
due date or such judgment date, respectively, until such amount and interest
thereon are paid in full. Guarantor agrees to pay such interest on demand. All
Guaranteed Obligations will be paid and performed by Guarantor without
counterclaim, deduction, defense, deferment, reduction or set-off.
3. Each Guarantor agrees, represents and warrants to Lender as follows:
(a) Guarantor shall continue to be liable under this Guaranty
and the provisions hereof shall remain in full force and effect notwithstanding
(i) any modification, agreement or stipulation between Borrower and Lender, or
their respective successors and assigns, with respect to the Loan Documents or
the obligations encompassed thereby, including, without limitation, the
Guaranteed Obligations; (ii) Lender's waiver of or failure to enforce any of the
terms, covenants or conditions contained in the Loan Documents or in any
modification thereof; (iii) any release of Borrower or any other guarantor from
any liability with respect to the Guaranteed Obligations; or (iv) any release or
subordination of any real or personal property then held by Lender as security
for the performance of the Guaranteed Obligations.
(b) Guarantor's liability under this Guaranty shall continue
until all sums due under the Note have been paid in full and until all
Guaranteed Obligations of Borrower to Lender have been satisfied, and shall not
be reduced by virtue of any payment by Borrower of any amount due under the Note
or under any of the Loan Documents or by Lender's recourse to any collateral or
security, except to the extent that such payment or collateral has been
indefeasibly paid to or obtained by Lender, and applied against the Guaranteed
Obligations of Borrower. Each Guarantor acknowledges that Lender may apply any
payment made by Borrower to Lender to any obligation of Borrower to Lender under
the terms of any Loan Documents in such amounts and such manner as Lender may
elect, regardless of whether such application complies with any instruction or
designation given or made by Borrower with respect to such payment and agrees
that any such application shall not in any manner reduce, extinguish or
otherwise affect the liability of the Guarantor or any one of them hereunder.
(c) Guarantor warrants and represents to Lender that it now
has and will continue to have full and complete access to any and all
information concerning the transactions contemplated by the Loan Documents or
referred to therein, the value of the assets owned or to be acquired by
Borrower, Borrower's financial status and its ability to pay and perform the
Guaranteed Obligations owed to Lender. Guarantor further warrants and represents
that it has approved copies of the Loan Documents and is fully informed of the
remedies Lender may pursue, with or without notice to Borrower, in the event of
default under the Note or other Loan Documents. So long as any of the Guaranteed
Obligations remains unsatisfied or owing to Lender, Guarantor shall keep itself
fully informed as to all aspects of Borrower's financial condition and the
performance of the Guaranteed Obligations.
(d) Guarantor has filed or caused to be filed all tax returns
(federal, state, or local) required to be filed by Guarantor and has paid all
taxes and other amounts shown thereon to be due (including, without limitation,
any interest or penalties).
(e) Guarantor understands the Obligations of Borrower pursuant
to the Loan Documents and the Guaranteed Obligations and has had access to
information about the financial condition of Borrower and the ability of
Borrower to perform the Obligations of Borrower pursuant to the Loan Documents.
(f) Guarantor is providing this Guaranty at the request of
Borrower in order to induce Lender to extend or continue financial
accommodations to Borrower.
4. The liability of 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 Loan Documents or
other instruments relating to the creation or performance of the Guaranteed
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Obligations or the pursuit by Lender of any remedies which it now has or may
hereafter have with respect thereto under the Loan Documents, at law, in equity
or otherwise.
5. Guarantor hereby waives to the extent permitted by law: (i) all
notices to Guarantor, to Borrower, or to any other person, including, but not
limited to, notices of the acceptance of this Guaranty, or the creation,
renewal, extension, modification or accrual of any of the Guaranteed Obligations
owed to Lender and, except to the extent set forth in Paragraph 7 hereof,
enforcement of any right or remedy with respect thereto, and notice of any other
matters relating thereto; (ii) diligence and demand of payment, presentment,
protest, dishonor and notice of dishonor; (iii) any statute of limitations
affecting Guarantor's liability hereunder or the enforcement thereof; and (iv)
all principles or provisions of law which conflict with the terms of this
Guaranty. Guarantor further agrees that Lender may enforce this Guaranty upon
the occurrence and during the continuation of an Event of Default under the Note
or the Loan Documents (as Event of Default is defined therein), notwithstanding
the existence of any dispute between Borrower and Lender with respect to the
existence of the default or performance of the Guaranteed Obligations or any
counterclaim, set-off or other claim which Borrower may allege against Lender
with respect thereto. Moreover, Guarantor agrees that its obligations shall not
be affected by any circumstances which constitute a legal or equitable discharge
of a guarantor or surety.
6. Guarantor agrees that Lender may enforce this Guaranty without the
necessity of resorting to or exhausting any security or collateral and without
the necessity of enforcing any other guaranty or proceeding against Borrower or
any other guarantor, including without limitation, any other Guarantor named
herein. Guarantor hereby waives the right to require Lender to proceed against
Borrower, to proceed against any other guarantor, including without limitation
any other Guarantor named herein, to foreclose any lien on any real or personal
property, to exercise any right or remedy under the Loan Documents, to pursue
any other remedy or to enforce any other right.
7. (a) Guarantor further agrees that nothing contained herein shall
prevent Lender from suing on the Note or from exercising any rights available to
it thereunder or under any of the Loan Documents and that the exercise of any of
the aforesaid rights shall not constitute a legal or equitable discharge of any
Guarantor. Guarantor hereby fully and completely waives and relinquishes any
right of subrogation against Borrower and that Guarantor understands and
acknowledges that Guarantor may therefore incur a partially or totally
non-reimbursable liability hereunder; nevertheless, Guarantor hereby authorizes
and empowers Lender to exercise, in its sole discretion, any rights and
remedies, or any combination thereof, which may then be available to Lender,
since it is the intent and purpose of Guarantor that the obligations hereunder
shall be absolute, independent and unconditional under any and all
circumstances. For example, but without limiting the generality of the
foregoing, under current California law (Section 580d of the California Code of
Civil Procedure ("CCP") as interpreted in Union Bank x. Xxxxxxx, 265 ---
Cal.App.2d 40 (1968)), Guarantor may be entitled to assert a defense to
liability under this Guaranty if Lender forecloses nonjudicially against real
property security for the Loan. By executing this Guaranty, Guarantor: (1)
waives and relinquishes that defense; (2) agrees that it will not assert that
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defense in any action or proceeding which Lender may commence to enforce this
Guaranty; and (3) acknowledges and agrees that Lender is relying on this waiver
in making the Loan, and that this waiver is a material part of the consideration
which Lender is receiving for making the Loan.
(b) Without limiting the generality of the foregoing,
Guarantor waives all rights and defenses arising out of an election of remedies
by Lender, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a Guaranteed Obligation, has destroyed
the Guarantor's rights of subrogation and reimbursement against the Borrower by
the operation of Section 580d of the Code of Civil Procedure or otherwise.
(c) Without limiting the generality of the foregoing,
Guarantor hereby expressly waives any and all benefits and defenses under
California Civil Code ("CC") Sections 2809, 2810, 2819, 2845, 2847, 2848, 2849
and 2850 including, without limitation, the right to require Lender to (i)
proceed against Borrower or any other guarantor or pledgor, (ii) proceed against
or exhaust any security or collateral Lender may hold, or (iii) pursue any other
right or remedy for the benefit of Guarantor. Guarantor also hereby expressly
waives any and all benefits and defenses under (x) CCP Section 580a which would
otherwise limit Guarantor's liability after a nonjudicial foreclosure sale to
the difference between the obligations guaranteed herein and the fair market
value of the property or interests sold at such nonjudicial foreclosure sale,
(y) CCP Sections 580b and 580d, which would otherwise limit Lender's right to
recover a deficiency judgment with respect to purchase money obligations and
after a nonjudicial foreclosure sale, respectively, and (z) CCP Section 726
which, among other things, would otherwise require Lender to exhaust all of its
security before a personal judgment may be obtained for a deficiency and would
limit Guarantor's liability after a judicial foreclosure sale to the difference
between the obligations guaranteed herein and the fair market value of the
property or interests sold at such judicial foreclosure sale. Notwithstanding
any foreclosure of the lien of any deed of trust or security agreement with
respect to any or all of any real or personal property secured thereby, whether
by the exercise of the power of sale contained therein, by an action for
judicial foreclosure or by an acceptance of a deed in lieu of foreclosure, and
notwithstanding any enforcement of any other guaranty executed in accordance
with the Loan, Guarantor shall remain bound under this Guaranty.
(d) Guarantor agrees that it shall have no right of
subrogation, reimbursement or contribution against Borrower or against any
collateral or security provided for in the Loan Documents for payment or
performance of any right of subrogation, reimbursement or contribution against
Borrower now or in the future in connection with the Guaranteed Obligations.
Guarantor hereby forever waives and relinquishes any and all such subrogation,
reimbursement, and contribution rights, whether or not the Guaranteed
Obligations have been fully satisfied, all obligations owed to Lender under the
Loan Documents have been fully performed and Lender has released, transferred or
disposed of all of its right, title and interest in such collateral or security.
Guarantor further agrees that to the extent the waiver of its rights of
subrogation, reimbursement and/or contribution as set forth herein is found by a
court of competent jurisdiction to be void or voidable for any reason, any
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rights of subrogation, reimbursement and/or contribution Guarantor may have
against Borrower or against any collateral or security shall be junior and
subordinate to any rights Lender may have against Borrower and to all right,
title and interest Lender may have in such collateral or security. Lender may
use, sell or dispose of any item of collateral or security as it sees fit
without regard to any subrogation, reimbursement and/or contribution rights that
Guarantor may have pursuant to the immediately preceding sentence, and upon any
disposition or sale, any such rights of subrogation, reimbursement and/or
contribution that Guarantor may have shall terminate. Guarantor understands that
it may record a Request for Notice of Default pursuant to California Civil Code
ss. 2924b and thereby receive notice of any proposed foreclosure of any real
property collateral then securing the Borrower's obligations under the Loan
Documents. With respect to the foreclosure of any security interest in any
personal property collateral then securing the Guaranteed Obligations, Lender
agrees to give Guarantor ten (10) days' prior written notice, in the manner set
forth in Paragraph 9 hereof, of any sale or disposition of any such personal
property collateral, other than collateral which is perishable, threatens to
decline speedily in value, is of a type customarily sold on a recognized market,
or is cash, cash equivalents, certificates of deposit or the like.
(e) Guarantor's sole right with respect to any such
foreclosure of real or personal property collateral shall be to bid at such sale
in accordance with applicable law. Guarantor acknowledges and agrees that Lender
may also bid at any such sale and in the event such collateral is sold to Lender
in whole or partial satisfaction of the obligations owed to Lender, Guarantor
shall not have any further right or interest with respect thereto.
Notwithstanding anything to the contrary contained herein, no provision of this
Guaranty shall be deemed to limit, decrease, or in any way to diminish any
rights of set-off Lender may have with respect to any cash, cash equivalents,
certificates of deposit, notes or the like which may now or hereafter be put on
deposit with Lender by Borrower or by Guarantor.
(f) To the extent any dispute exists at any time between or
among any guarantors as to Guarantor's right to contribution or otherwise,
Guarantor agrees to indemnify, defend and hold Lender harmless for, from and
against any loss, damage, claim, demand, cost or any other liability (including
reasonable attorneys' fees and costs) Lender may suffer as a result of such
dispute.
(g) 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
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 Guaranteed Obligations and the
right of Lender to realize upon any or all security for such obligations.
Guarantor agrees that such liabilities and obligations of Borrower to Guarantor
shall not be secured by any assignment as security, grant in trust, lien,
mortgage, security interest, other encumbrance or other interest or right in any
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property, interests in property, or rights to property of Borrower and that
Borrower shall not pay, and Guarantor shall not receive, payments of any or all
liabilities or obligations of Borrower to Guarantor until after payment and
performance of the Guaranteed Obligations in full. If, notwithstanding the
foregoing, Guarantor receives any payment from Borrower, such payment shall be
held in trust by Guarantor for the benefit of Lender, shall be segregated from
the other funds of Guarantor, and shall forthwith be paid by Guarantor to Lender
and applied to payment of the Guaranteed Obligations, whether or not then due.
To secure the Guaranteed Obligations, Guarantor grants to Lender a lien and
security interest in all liabilities and obligations of Borrower to Guarantor,
in any assignments as security, grants in trust, liens, mortgages, security
interests, other encumbrances, other interests or rights securing such
liabilities and obligations, and in all of Guarantor's right, title, and
interest in and to any payments, property, interests in property, or rights to
property acquired or received by Guarantor from Borrower in respect of any
liabilities or obligations of Borrower to Guarantor.
8. (a) Guarantor warrants and represents that any financial statements
of Guarantor heretofore delivered to Lender are true and correct in all material
respects.
(b) Guarantor covenants and agrees to immediately notify
Lender of any material adverse change in Guarantor's financial status.
9. All notices, requests and demands to be made hereunder to the
parties hereto shall be in writing and shall be delivered by hand, or sent by
registered or certified mail, postage prepaid, through the United States Postal
Service to the addresses shown below or such other addresses which the parties
may provide to one another in accordance herewith. Such notices, requests and
demands, if sent by mail, shall be deemed given two (2) days after deposit in
the United States mail, and if delivered by hand shall be deemed given when
delivered.
To Guarantor: National Lampoon Networks, Inc.,
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: President
National Lampoon Tours, Inc.,
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: President
To Lender: X. Xxxxxxxx Family Investments, L.P.
c/o Lake City Bank
X.X. Xxx 00000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx, Trust Officer
10. This Guaranty shall be binding upon Guarantor, its respective
successors and assigns and shall inure to the benefit of and shall be
enforceable by Lender, its successors, endorsees and assigns. As used herein,
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the singular shall include the plural, and the masculine shall include the
feminine and neuter and vice versa, if the context so requires.
11. If any or all of the Guaranteed Obligations are not paid when due,
Guarantor agrees to pay all costs of enforcement and collection and preparation
therefore (including, without limitation, reasonable attorneys' fees) whether or
not any action or proceeding is brought (including, without limitation, all such
costs incurred in connection with any bankruptcy, receivership, or other court
proceedings (whether at the trial or appellate level)).
12. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS
PRINCIPLES.
13. This Guaranty is solely for the benefit of Lender, 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.
14. If any provision of this Guaranty is unenforceable, the
enforceability of the other provisions shall not be affected and they shall
remain in full force and effect.
15. This Guaranty may be executed in counterparts, all of which
executed counterparts shall together constitute a single document.
16. GUARANTOR, AND, BY ACCEPTING THIS GUARANTY, LENDER HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT
OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER ARISING OUT OF OR IN
ANY WAY RELATED TO THIS GUARANTY OR ANY OTHER RELATED DOCUMENT. THIS PROVISION
IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING DESCRIBED HEREIN OR
IN THE OTHER LOAN DOCUMENTS.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the day
and year first above written.
NATIONAL LAMPOON NETWORKS, INC., A
Delaware corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
NATIONAL LAMPOON TOURS, INC., A
California corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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