EXHIBIT 99.12
PAYMENT GUARANTY
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(Principal Shareholder)
This Payment Guaranty (this "GUARANTY") is made as of February 11,
2003, by John W. Burcham II ("GUARANTOR"), in favor of MERCATOR ADVISORY GROUP,
LLC, acting as agent (in such capacity, "AGENT") for MERCATOR MOMENTUM FUND,
L.P., and MECATOR FOCUS FUND, L.P. (each, a "LENDER" and, together, "LENDERS").
Mercator is acting hereunder for the benefit of the Lenders on a proportional
basis in accordance with the amounts of their respective interests in the Loan,
as that term is defined below.
FACTUAL BACKGROUND
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A. Guarantor is executing this Guaranty to induce Lenders to make two
separate loans (defined, together, in SECTION 2 as the "LOAN") to MediaBus
Networks, Inc., a Florida corporation, and Presidion Solutions, Inc., a Florida
corporation (each, a "BORROWER" and, together, "BORROWERS"), in the aggregate
principal amount of Two Million Dollars ($2,000,000.00).
B. Concurrently herewith, Guarantor is executing a document entitled
Pledge Agreement in favor of Agent (the "PLEDGE AGREEMENT") to provide security
for the obligations of Guarantor under this Guaranty.
C. The Loan is evidenced by 6-1/2% Secured Convertible Debentures of
even date herewith (the "DEBENTURES"), each made payable to one of the Lenders,
which, together, are in the principal amount of the Loan.
D. This Guaranty, the Pledge Agreement, the Debentures and all other
documents executed by either Guarantor or Borrowers in connection with the Loan
are referred to herein as the "LOAN DOCUMENTS."
GUARANTY
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1. GUARANTY OF LOAN. Guarantor unconditionally guarantees to Agent,
for the benefit of Lenders, the full payment of the Loan, and unconditionally
agrees to pay Agent the full amount of the Loan. This is a guaranty of payment,
not of collection. If Borrowers default in the payment when due of all or any
part of the Loan, Guarantor shall in lawful money of the United States pay to
Agent or order, on demand, all sums due and owing on the Loan, including all
interest, charges, fees and other sums, costs and expenses.
2. LOAN. In this Guaranty, the term "LOAN" is broadly defined to
mean and include all primary, secondary, direct, indirect, fixed and contingent
obligations of Borrowers to pay principal, interest, prepayment fees, late
charges, loan fees and any other fees, charges, sums, costs and expenses which
may be owing at any time under either of the Debentures or the other Loan
Documents, as any or all of them may from time to time be modified, amended,
extended or renewed. If the amount outstanding under the Loan is determined by a
court of competent jurisdiction, that determination shall be conclusive and
binding on Guarantor, regardless of whether or not Guarantor was a party to the
proceeding in which the determination was made.
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3. RIGHTS OF AGENT. Guarantor authorizes Agent and each Lender,
acting separately or together, to perform any or all of the following acts at
any time in its sole discretion, all without notice to Guarantor and without
affecting Guarantor's obligations under this Guaranty:
(a) Lenders may alter any terms of the Loan or any part of it,
including renewing, compromising, extending or accelerating, or otherwise
changing the time for payment of, or increasing or decreasing the rate of
interest on, the Loan or any part of it.
(b) Lenders and Agent may take and hold security for the Loan or
this Guaranty, accept additional or substituted security for either, and
subordinate, exchange, enforce, waive, release, compromise, fail to perfect and
sell or otherwise dispose of any such security.
(c) Lenders and Agent may direct the order and manner of any
sale of all or any part of any security now or later to be held for the Loan or
this Guaranty, and Lender may also bid at any such sale.
(d) Lenders and Agent may apply any payments or recoveries from
Borrowers, Guarantor or any other source, and any proceeds of any security, to
Borrower's obligations under the Loan Documents in such manner, order and
priority as Lenders or Agent may elect, whether or not those obligations are
guaranteed by this Guaranty or secured at the time of the application.
(e) Lenders may release either or both Borrowers from their
liability for the Loan or any part of it.
(f) Lenders and Agent may substitute, add or release any one or
more guarantors or endorsers.
(g) In addition to the Loan, Lenders may extend other credit to
Borrowers, and may take and hold security for the credit so extended, all
without affecting Guarantor's liability under this Guaranty, provided that this
Guaranty does not apply to such other credit.
4. GUARANTY TO BE ABSOLUTE. Guarantor expressly agrees that until
the Loan is paid and performed in full and each and every term, covenant and
condition of this Guaranty is fully performed, Guarantor shall not be released
by or because of:
(a) Any act or event which might otherwise discharge, reduce,
limit or modify Guarantor's obligations under this Guaranty;
(b) Any waiver, extension, modification, forbearance, delay or
other act or omission of Agent or any Lender, or their failure to proceed
promptly or otherwise as against Borrowers, Guarantor or any security;
(c) Any action, omission or circumstance which might increase
the likelihood that Guarantor may be called upon to perform under this Guaranty
or which might affect the rights or remedies of Guarantor as against Borrowers;
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(d) Any dealings occurring at any time between either or both
Borrowers and Agent or either or both Lenders, whether relating to the Loan or
otherwise; or
(e) Any action of Agent or any Lender described in SECTION 3
above.
Guarantor hereby acknowledges that absent this SECTION 4, 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. Guarantor
hereby expressly 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 Guarantor that Guarantor's obligations under this
Guaranty are and shall be absolute, unconditional and irrevocable.
5. GUARANTOR'S WAIVERS. Guarantor waives:
(a) Any right Guarantor may have to require Agent or Lenders to
proceed against any Borrower, proceed against or exhaust any security held from
any Borrower, or pursue any other remedy in Agent's or any Lender's power to
pursue;
(b) Any defense based on any claim that Guarantor's obligations
exceed or are more burdensome than those of any Borrower;
(c) Any defense based on: (i) any legal disability of any
Borrower, (ii) any release, discharge, modification, impairment or limitation of
the liability of any Borrower to any Lender from any cause, whether consented to
by any Lender or arising by operation of law or from any bankruptcy or other
voluntary or involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor relationships ("INSOLVENCY PROCEEDING") and (iii) any rejection
or disaffirmance of the Loan, or any part of it, or any security held for it, in
any such Insolvency Proceeding;
(d) Any defense based on any action taken or omitted by any
Lender in any Insolvency Proceeding involving either or both Borrowers,
including any election to have any Lender's claims allowed as being secured,
partially secured or unsecured, any extension of credit by any Lender to any
Borrower in any Insolvency Proceeding, and the taking and holding by Agent or
any Lender of any security for any such extension of credit;
(e) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty and of the existence, creation or incurring of new
or additional indebtedness, and demands and notices of every kind;
(f) Any defense based on or arising out of any defense that any
Borrower may have to the payment or performance of the Loan or any part of it,
other than the defense that the Loan has been paid in full; and
(g) Any defense based on or arising out of any action of Agent
or any Lender described in SECTIONS 3 OR 4 above.
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6. WAIVERS OF SUBROGATION AND OTHER RIGHTS AND DEFENSES.
(a) Upon a default by Borrowers, Agent, Lenders or an agent for
any such person, in its sole discretion, without prior notice to (except as
required by applicable law) or consent of Guarantor, may elect to: (i) foreclose
either judicially or nonjudicially against any real or personal property
security it may hold for the Loan, (ii) accept a transfer of any such security
in lieu of foreclosure, (iii) compromise or adjust the Loan or any part of it or
make any other accommodation with either or both Borrowers or Guarantor, or (iv)
exercise any other remedy against any Borrower or any security. No such action
by Agent or either Lender shall release or limit the liability of Guarantor
(except to the extent the Loan is satisfied or reduced as a result thereof), who
shall remain liable under this Guaranty after the action, even if the effect of
the action is to deprive Guarantor of any subrogation rights, rights of
indemnity, or other rights to collect reimbursement from any Borrower for any
sums paid to Agent or any Lender, whether contractual or arising by operation of
law or otherwise. Guarantor expressly agrees that under no circumstances shall
he be deemed to have any right, title, interest or claim in or to any real or
personal property to be held by Agent or either Lender or any third party after
any foreclosure or transfer in lieu of foreclosure of any security for the Loan.
(b) Regardless of whether Guarantor may have made any payments
to Agent or any Lender, Guarantor hereby waives: (i) all rights of subrogation,
indemnification, contribution and any other rights to collect reimbursement from
any Borrower or any other party for any sums paid to Agent or either Lender,
whether contractual or arising by operation of law (including the United States
Bankruptcy Code or any successor or similar statute) or otherwise, (ii) all
rights to enforce any remedy that Agent or any Lender may have against any
Borrower, and (iii) all rights to participate in any security now or later to be
held by Agent or any Lender for the Loan. The waivers given in this SUBSECTION
6(B) shall be effective until the Loan has been paid and performed in full.
(c) Guarantor further waives any defense to the recovery by
Agent or any Lender against Guarantor of any deficiency or otherwise to the
enforcement of this Guaranty or any security for this Guaranty based upon
Agent's or any Lender's election of any remedy against Guarantor or any
Borrower.
(d) Guarantor waives any rights, defenses and benefits that may
be derived from Sections 2787 to 2855, inclusive, of the California Civil Code
or comparable provisions of the laws of any other jurisdiction and further
waives all other suretyship defenses Guarantor would otherwise have under the
laws of California or any other jurisdiction.
(e) No provision or waiver in this Guaranty shall be construed
as limiting the generality of any other provision or waiver contained in this
Guaranty. All of the waivers contained herein are irrevocable and unconditional
and are intentionally and freely made by Guarantor.
7. REVIVAL AND REINSTATEMENT. If Agent or any Lender is required to
pay, return or restore to any Borrower or any other person any amounts
previously paid on the Loan because of any Insolvency Proceeding of any Borrower
or any other reason, the obligations of Guarantor shall be reinstated and
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revived and the rights of Agent and Lenders shall continue with regard to such
amounts, all as though they had never been paid.
8. INFORMATION REGARDING BORROWERS. Before signing this Guaranty,
Guarantor investigated the financial condition and business operations of
Borrowers and such other matters as Guarantor deemed appropriate to assure
himself of Borrowers' ability to discharge its obligations under the Loan
Documents. Guarantor assumes full responsibility for that due diligence, as well
as for keeping informed of all matters which may affect Borrowers' ability to
pay and perform their obligations to Lenders. Agent and Lenders have no duty to
disclose to Guarantor any information which any of them may have or receive
about Borrowers' financial condition or business operations, the condition or
uses of any properties of any Borrower, or any other circumstances bearing on
Borrowers' ability to perform.
9. SUBORDINATION. Any rights of Guarantor, whether now existing or
later arising, to receive payment on account of any indebtedness (including
interest) owed to Guarantor by either Borrower, or to withdraw capital invested
by Guarantor in either Borrower, or to receive distributions from either
Borrower, shall at all times be subordinate as to lien and time of payment and
in all other respects to the full and prior repayment to Lenders of the Loan.
Guarantor shall not be entitled to enforce or receive payment of any sums hereby
subordinated until the Loan has been paid and performed in full and any such
sums received in violation of this Guaranty shall be received by Guarantor in
trust for Agent. The foregoing notwithstanding, if Guarantor provides services
to either Borrower, Guarantor is not prohibited from receiving reasonable
compensation from Borrowers.
10. EVENTS OF DEFAULT. Agent may declare Guarantor to be in default
under this Guaranty upon the occurrence of any of the following events ("EVENTS
OF DEFAULT"):
(a) Guarantor fails to perform Guarantor's obligations under
SECTION 1 of this Guaranty; or
(b) Guarantor fails to perform or comply with any covenant or
agreement contained in this Guaranty (other than those referred to in SECTION
10(A)), provided, that if such failure is by its nature capable of being cured,
then such failure shall not become an Event of Default unless such failure
remains uncured for a period ending on the first to occur of thirty (30) days
after Guarantor shall receive written notice of any such failure from Lender or
thirty (30) days after Guarantor became aware or should have become aware
thereof; or
(c) Guarantor revokes this Guaranty or this Guaranty becomes
ineffective for any reason; or
(d) Any representation or warranty made or given by Guarantor to
Agent or either Lender proves to be false or misleading in any material respect;
or
(e) Guarantor (i) shall become insolvent or shall generally not,
or shall be unable to, or shall admit in writing Guarantor's inability to, pay
Guarantor's debts as they come due; or (ii) shall make an assignment for the
benefit of creditors; or (iii) shall apply for, consent to, or acquiesce in the
appointment of a trustee, receiver, or custodian for Guarantor or any of
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Guarantor's property; or (iv) shall commence or have commenced against Guarantor
any proceeding under any bankruptcy, reorganization, arrangement, readjustment
of debt, dissolution or liquidation law or statute of any jurisdiction.
11. AUTHORIZATION; NO VIOLATION. Guarantor is authorized to execute,
deliver and perform under this Guaranty, which is a valid and binding obligation
of Guarantor. No provision or obligation of Guarantor contained in this Guaranty
violates any applicable law, regulation or ordinance, or any order or ruling of
any court or governmental agency. No such provision or obligation conflicts
with, or constitutes a breach or default under, any agreement to which Guarantor
is a party. No consent, approval or authorization of or notice to any person or
entity is required in connection with Guarantor's execution of and obligations
under this Guaranty.
12. ADDITIONAL AND INDEPENDENT OBLIGATIONS. Guarantor's obligations
under this Guaranty are in addition to Guarantor's obligations under any other
existing or future guaranties, each of which shall remain in full force and
effect until it is expressly modified or released in a writing signed by Agent.
Guarantor's obligations under this Guaranty are independent of those of
Borrowers on the Loan. Agent may bring a separate action, or commence a separate
reference or arbitration proceeding against Guarantor without first proceeding
against either Borrower, any other person or any security that Agent or either
Lender may hold, and without pursuing any other remedy. Agent's rights under
this Guaranty shall not be exhausted by any action by Agent or either Lender
until the Loan has been paid and performed in full.
13. NO WAIVER; CONSENTS; CUMULATIVE REMEDIES. Each waiver by Agent
must be in writing, and no waiver shall be construed as a continuing waiver. No
waiver shall be implied from Agent's or either Lender's delay in exercising or
failure to exercise any right or remedy against Borrowers, Guarantor or any
security. Consent by Agent or either Lender to any act or omission by Borrowers
or Guarantor shall not be construed as a consent to any other or subsequent act
or omission, or as a waiver of the requirement for Agent's or any Lender's
consent to be obtained in any future or other instance. All remedies of Agent
and Lenders against Borrowers and Guarantor are cumulative.
14. NO RELEASE. Guarantor shall not be released from his obligations
under this Guaranty except by a writing signed by Agent.
15. HEIRS, SUCCESSORS AND ASSIGNS; DISCLOSURE OF INFORMATION. The
terms of this Guaranty shall bind and benefit the heirs, legal representatives,
successors and assigns of Lender and Guarantor; provided, however, that
Guarantor may not assign this Guaranty, or assign or delegate any of his rights
or obligations under this Guaranty, without the prior written consent of Agent
in each instance. Agent and any Lender may, at any time, sell, transfer or
assign all or any portion of the Loan and the Loan Documents. In the event of
any such sale, transfer or assignment of the Loan or any part thereof, the
rights and benefits under this Guaranty, to the extent applicable to the Loan
obligations so sold, transferred or assigned, may be transferred with such
obligations. Guarantor waives notice of any sale, transfer or assignment of the
Loan and/or this Guaranty or any part thereof, and agrees that failure to give
notice of any such sale, transfer or assignment will not affect the liability of
Guarantor hereunder. Agent and each Lender is hereby authorized to disseminate
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any information it now has or hereafter obtains pertaining to the Loan or this
Guaranty, including credit or other information on Borrowers, Guarantor and/or
any party liable, directly or indirectly, for any part of the Loan, to any
actual or prospective assignee with respect to the Loan, to any affiliates or
Agent or Lenders, to any regulatory body having jurisdiction over Agent or
either Lender, and to any other parties as necessary or appropriate in Agent's
or either Lender's reasonable judgment. The Lenders are third party
beneficiaries of this Payment Guaranty.
16. NOTICES. All notices given under this Guaranty must be in
writing and shall be effectively served upon delivery, or if mailed, upon the
first to occur of receipt or the expiration of forty-eight hours after deposit
in certified United States mail, postage prepaid, sent to the party at such
party's address given at the end of this Guaranty. Those addresses may be
changed by Agent or Guarantor by written notice to the other party.
17. RULES OF CONSTRUCTION. In this Guaranty, the word "BORROWERS"
includes both the named Borrowers and any other person who at any time assumes
or otherwise becomes primarily liable for all or any part of the obligations of
the named Borrowers on the Loan. The word "PERSON" includes any individual,
company, trust or other legal entity of any kind. The word "INCLUDE(S)" means
"include(s), without limitation," and the word "INCLUDING" means "including, but
not limited to." When the context and construction so require, all words used in
the singular shall be deemed to have been used in the plural and vice versa. No
listing of specific instances, items or matters in any way limits the scope or
generality of any language of this Guaranty. All headings appearing in this
Guaranty are for convenience only and shall be disregarded in construing this
Guaranty.
18. GOVERNING LAW. This Guaranty shall be governed by, and construed
in accordance with, the laws of the State of California.
19. COSTS AND EXPENSES. If any lawsuit, reference or arbitration is
commenced which arises out of, or which relates to this Guaranty, the Loan
Documents or the Loan, the prevailing party shall be entitled to recover from
each other party such sums as the court, referee or arbitrator may adjudge to be
reasonable attorneys' fees in the action or proceeding, in addition to costs and
expenses otherwise allowed by law. In all other situations, including any
Insolvency Proceeding, Guarantor agrees to pay all of the costs and expenses of
Agent and Lenders, including attorneys' fees which may be incurred in any effort
to collect or enforce the Loan or any part of it or any term of this Guaranty.
From the time(s) incurred until paid in full to Agent and Lender, all sums shall
bear interest at the rate of interest for the Loan specified in the Debentures.
20. CONSIDERATION. Guarantor acknowledges that Guarantor expects to
benefit from Lenders extension of the Loan to Borrowers because of Guarantor's
relationship to Borrowers, and that Guarantor is executing this Guaranty in
consideration of that anticipated benefit.
21. INTEGRATION; MODIFICATIONS. This Guaranty and the Pledge
Agreement (a) integrate all the terms and conditions mentioned in or incidental
to this Guaranty and the Pledge Agreement, (b) supersede all oral negotiations
and prior writings with respect to their subject matter, and (c) are intended by
Guarantor and Agent as the final expression of the agreement with respect to the
terms and conditions set forth in this Guaranty and the Pledge Agreement and as
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the complete and exclusive statement of the terms agreed to by Guarantor and
Agent. No representation, understanding, promise or condition shall be
enforceable against any party hereto unless it is contained in this Guaranty or
the Pledge Agreement. This Guaranty may not be modified except in a writing
signed by both Agent and Guarantor. No course of prior dealing, usage of trade,
parol or extrinsic evidence of any nature shall be used to supplement, modify or
vary any of the terms hereof.
22. MISCELLANEOUS. The illegality or unenforceability of one or more
provisions of this Guaranty shall not affect any other provision. This Guaranty
and any attached consents or exhibits requiring signatures may be executed in
counterparts, and all counterparts shall constitute but one and the same
document. Time is of the essence in the performance of this Guaranty by
Guarantor.
23. COUNSEL. Guarantor acknowledges that Guarantor has had adequate
opportunity to carefully read this Guaranty and to consult with an attorney of
Guarantor's choice prior to signing it.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the
date first above written.
Guarantor: John W. Burcham II Address Where Notices to
Guarantor are to be Sent:
/s/ John W. Burcham II
- ----------------------------- 775 W. Big Beaver, Ste. 1700,
Signature of Guarantor Troy, MI 48084
John W. Burcham II
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Printed Name of Guarantor
Address Where Notices to
Agent to be Sent:
Mercator Advisory Group, LLC
555 South Flower Street, Suite 4500
Los Angeles, California 90071
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