COMMERCIAL GUARANTY
Principal Loan Date Maturity Loan No. Call Collateral
Account Officer Initials
anerican
References in the shaded area are for Lender's use only and do
not limit the applicability of this document to any particular
loan or item.
Borrower: American Passage Media, Inc. Lender: SIGNET BANK
149 Fifth Avenue Suite 500
New York, NY 10010 7799 Leesburg
Pike
Falls Church,
VA 22043
Guarantor: Network Event Theater, Inc.
149 Fifth Avenue
New York, NY 10010
IMPORTANT NOTICE
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH
CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR
AND ALLOWS THE CREDITOR TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT
ANY FURTHER NOTICE.
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTINUING UNLIMITED GUARANTY. For good and valuable
consideration, Network Event Theater, Inc. ("Guarantor")
absolutely and unconditionally guarantees and promises to pay to
SIGNET BANK ("Lender") or its order, in legal tender of the
United States of America, the Indebtedness (as that term is
defined below) of American Passage Media, Inc. ("Borrower") to
Lender on the terms and conditions set forth in this Guaranty.
Under this Guaranty, the liability of Guarantor is unlimited and
the obligations of Guarantor are continuing.
DEFINITIONS. The following words shall have the following
meanings which used in this Guaranty:
Borrower. The word "Borrower" means American Passage Media,
Inc.
Guarantor. The word "Guarantor" mens Network Event Theater,
Inc., and their respective personal representatives,
successors and assigns.
Guaranty. The word "Guaranty" means this Guaranty made by
Guarantor for the benefit of Lender dated September 11,
1996.
Indebtedness. The word "Indebtedness" means all of
Borrower's present and future liabilities and obligations to
Lender, in the most comprehensive sense, and includes
without limitation all such liabilities and obligations,
whether direct or indirect, matured or unmatured, and
whether absolute or contingent, joint, several or joint and
several, and no matter how owned, held or acquired,
including without limitation all such liabilities and
obligations arising from, or in connection with, or
evidenced by, the Note or the Related Documents.
Lender. The word "Lender" means SIGNET BANK, its successors
and assigns.
Note. The word "Note" means the promissory note or credit
agreement dated September 11, 1996, in the original
principal amount of $3,500,000.00 from Borrower to Lender
together with all modifications of and renewals,
replacements, and substitutions for the promissory note or
agreement. Notice to Guarantor: The Note evidences a
revolving line of credit from Lender to Borrower.
Related Documents. The words "Related Documents" mean and
include without limitation all promissory notes, credit
agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust,
and all other instruments, agreements and documents whether
now or hereafter existing, executed in connection with the
Indebtedness.
NATURE OF GUARANTY. Guarantor's liability under this Guaranty
shall be open and continuous for so long as this Guaranty remains
in force. Guarantor intends to guarantee at all times the
performance and prompt payment when due, whether at maturity or
earlier by reason of acceleration or otherwise, of all
Indebtedness. Accordingly, no payments made upon the
Indebtedness will discharge or diminish the continuing liability
of Guarantor in connection with any remaining portions of the
Indebtedness or any of the Indebtedness which subsequently arises
or is thereafter incurred or contracted.
DURATION OF GUARANTY. This Guaranty will take effect when
received by Lender without the necessity of any acceptance by
Lender, or any notice to Guarantor or to Borrower, and will
continue in full force until all Indebtedness incurred or
contracted before receipt by Lender of any notice of revocation
shall have been fully and finally paid and satisfied and all
other obligations of Guarantor under this Guaranty shall have
been performed in full. If Guarantor elects to revoke this
Guaranty, Guarantor may only do so in writing. Guarantor's
written notice of revocation must be mailed to Lender, by
certerfied mail, at the address of Lender listed above or such
other place as Lender may designate in writing. Written
revocation of this Guaranty will apply only to advances or new
Indebtedness created after actual receipt by Lender of
Guarantor's written revocation. For this purpose and without
limitation, the term "new Indebtedness" does not include
Indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later
becomes absolute, liquidated, determined or due. This Guaranty
will continue to bind Guarantor for all Indebtedness incurred by
Borrower or committee by Lender prior to receipt of Guarantor's
written notice of revocation, including any extensions, renewals,
substitutions or modifications of the Indebtedness. Release of
any other guarantor or termination of any other guaranty of the
Indebtedness shall not affect the liability of Guarantor under
this Guaranty. A revocation received by Lender from any one or
more Guarantors shall not affect the liability of any remaining
Guarantors under this Guaranty. It is anticipated that
fluctuations may occur in the aggregate amount of Indebtedness
covered by this Guaranty, and it is specifically acknowledged and
agreed by Guarantor that reductions in the amount of
Indebtedness, even to zero dollars ($0.00), prior to written
revocation of this Guaranty by Guarantor shall not constitute a
termination of this Guaranty. This Guaranty is binding upon
Guarantor and Guarantor's heirs, successors and assigns so long
as any of the guaranteed Indebtedness remains unpaid and even
though the Indebtedness guaranteed may from time to time be zero
dollars ($0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes
Lender, either before or after any revocation hereof, without
notice or demand and without lessening Guarantor's liability
under this Guaranty, from time to time: (a) prior to revocation
as set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to
Borrower, or otherwise to extend additional credit to Borrower;
(b) to alter, compromise, renew, extend, accelerate, or otherwise
change one or more times the time for payment or other terms of
the Indebtedness or any part of the Indebtedness, including
increases and decreases of the rate of interest on the
Indebtedness; (c) to take and hold security for the payment of
this Guaranty or the Indebtedness, and exchange, enforce, waive,
subordinate, fail or decide not to perfect, and release any such
security, with or without the substitution of new collateral; (d)
to release, substitute, agree not to sue, or deal with any one or
more of Borrower's sureties, endorsers, or other guarantors on
any terms or in any manner Lender may choose; (e) to determine
how, when and what application of payments and credits shall be
made on the Indebtedness; (f) to apply such security and direct
the order or manner of sale thereof, including without
limitation, any nonjudicial sale permitted by the terms of the
controlling security agreement or deed of trust, as Lender in its
discretion may determine; (g) to sell, transfer assign, or grant
participations in all or any part of the Indebtedness; and (h) to
assign or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents
and warrants to Lender that (a) no representations of agreements
of any kind have been made to Guarantor which would limit or
qualify in any way the terms of this Guaranty; (b) this Guaranty
is executed at Borrower's request and not at the request of
Lender; (c) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber,
hypothecate, transfer, or otherwise dispose of all or
substantially all of Guarantor's assets, or any interest therein;
(d) Lender has made no representation to Guarantor as to the
creditworthiness of Borrower; (e) upon Lender's request,
Guarantor's assets, or any interest therein; (d) Lender has made
no representation to Guarantor as to the creditworthiness of
Borrower; (e) upon Lender's request, Guarantor will provide to
Lender financial and credit information in form acceptable to
Lender, and all such financial information provided to Lender is
true and correct in all material respects and fairly presents the
financial condition of Guarantor as of the dates thereof, and no
material adverse change has occurred in the financial condition
of Guarantor since the date of the financial statements; and (f)
Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's
financial condition. Guarantor agrees to keep adequately
informed from such means of any facts, events, or circumstances
which might in any way affect Guarantor's risks under this
Guaranty, and Guarantor further agrees that Lender shall have no
obligation to disclose to Guarantor any information or documents
acquired by Lender in the course of its relationship with
Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law,
Guarantor waives any right to require Lender (a) to continue
lending money or to extend other credit to Borrower; (b) to make
any presentment, protest, demand, or notice of any kind,
including notice of any nonpayment of the Indebtedness or of any
nonpayment related to any collateral, or notice of any action or
nonaction on the part of Borrower, Lender, any surety, endorser,
or other guarantor in connection with the Indebtedness or in
connection with the creation of new or additional loans or
obligations; (c) to resort for payment or to proceed directly or
at once against any person, including Borrower or any other
guarantor; (d) to proceed directly against or exhaust any
collateral held by Lender from Borrower, any other guarantor, or
any other person; (e) to give notice of the terms, time, and
place of any public or private sale of personal property security
held by Lender from Borrower or to comply with any other
applicable provisions of the Uniform Commercial Code; (f) to
pursue any other remedy within Lender's power; or (g) to commit
any act or omission of any kind, or at any time, with respect to
any matter whatsoever.
If now or hereafter (a) Borrower shall be or become insolvent,
and (b) the Indebtedness shall not at all times until paid be
fully secured by collateral pledge by Borrower, Guarantor hereby
forever waives and relinquishes in favor of Lender and Borrower,
and their respective successors, any claim or right to payment
Guarantor may now have or hereafter have or acquire against
Borrower, by subrogation or otherwise, so that at no time shall
Guarantor be or become a "creditor" of Borrower within the
meaning of 11 U.S.C. section 547(b), or any successor provision
of the Federal bankruptcy laws.
Guarantor also waives any and all rights or defenses arising by
reason of (a) any election of remedies by Lender which destroys
or otherwise adversely affects Guarantor's subrogation rights or
Guarantor's rights to proceed against Borrower for reimbursement,
including without limitation, any loss of rights Guarantor may
suffer by reason of any law limiting, qualifying, or discharging
the Indebtedness; (b) any disability or other defense of
Borrower, of any other guarantor, or of any other person, or by
reason of the cessation of Borrower's liability from any cause
whatsoever, other than payment in full in legal tender, of the
Indebtedness; (c) any right to claim discharge of the
Indebtedness on the basis of unjustified impairment of any
Collateral for the Indebtedness; or (d) any statute of
limitations, if at any time any action or suit brought by Lender
against Guarantor is commenced there is outstanding Indebtedness
of Borrower to Lender which is not barred by any applicable
statute of limitations. Guarantor acknowledges and agrees that
Guarantor's obligations under this Guaranty shall apply to and
continue with respect to any amount paid to Lender which is
subsequently recovered from Lender for any reason whatsoever
(including without limitation as a result of bankruptcy,
insolvency or fraudulent conveyance proceeding), notwithstanding
the fact that all or a part of the Indebtedness may have been
previously paid, or this Guaranty may have been terminated, or
both.
Guarantor further waives and agrees not to assert or claim at any
time any deductions to the amount guaranteed under this Guaranty
for any claim of setoff, counterclaim, counter demand, recoupment
or similar right, whether such claim, demand or right may be
asserted by the Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor
warrants and agrees that each of the waivers set forth above is
made with Guarantor's full knowledge of its significance and
consequences and that, under the circumstances, the waivers are
reasonable and not contrary to public policy or law. If any such
waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent
permitted by law or public policy.
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and
rights of setoff against the moneys, securities or other property
of Guarantor given to Lender by law, Lender shall have, with
respect to Guarantor's obligations to Lender under this Guaranty
and to the extent permitted by law, a contractual possessory
security interest in and a right of setoff against, and Guarantor
hereby assigns, conveys, delivers, pledges, and transfers to
Lender all of Guarantor's right, title and interest in and to,
all deposits, moneys, securities and other property of Guarantor
now or hereafter in the possession of or on deposit with Lender,
whether held in a general or special account or deposit, whether
held jointly with someone else, or whether held for safekeeping
or otherwise, excluding however all IRA, Keogh, and trust
accounts. Every such security interest and right of setoff may
be exercised without demand upon or notice to Guarantor. No
security interest or right of setoff shall be deemed to have been
waived by any act or conduct on the part of Lender or by any
neglect to exercise such right of setoff or to enforce such
security interest or by any delay in so doing. Every right of
setoff and security interest shall continue in full force and
effect until such right of setoff or security interest is
specifically waived or released by an instrument in writing
executed by Lender.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees
that the Indebtedness of Borrower to Lender, whether now existing
or hereafter created, shall be prior to any claim that Guarantor
may how have or hereafter acquire against Borrower, whether or
not Borrower becomes insolvent. Guarantor hereby expressly
subordinates any claim Guarantor may have against Borrower, upon
any account whatsoever, to any claim that Lender may now or
hereafter have against Borrower. In the event of insolvency and
consequent liquidation of the assets of Borrower, through
bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower
applicable to the payment of the claims of both lender and
Guarantor shall be paid to Lender and shall be first applied by
Lender to the Indebtedness of Borrower to Lender. Guarantor does
hereby assign to lender all claims which it may have or acquire
against Borrower or against any assignee or trust in bankruptcy
of Borrower; provided however, that such assignment shall be
effective only for the purpose of assuring the Lender full
payment in legal tender of the Indebtedness. If Lender so
requests, any notes or credit agreements now or hereafter
evidencing any debts or obligations of Borrower so to Guarantor
shall be marked with a legend that the same are subject to this
Guaranty and shall be delivered to Lender. Guarantor agrees, and
Lender hereby is authorized, in the name of Guarantor, from time
to time to execute and file financing statements and continuing
statements and to execute such other documents and to take such
other actions as Lender deems necessary or appropriate to
perfect, preserve and enforce its rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions
are a part of this Guaranty:
Amendments. This Guaranty, together with any Related
Documents, constitutes the entire understanding and
agreement of the parties as to the matters set forth in the
Guaranty. No alternation of or amendment to this Guaranty
shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the
alteration or amendment.
Applicable Law. This Guaranty shall be governed by,
construed and enforced in accordance with the laws of the
Commonwealth of Virginia. Lender and Guarantor hereby waive
the right to any jury trial in any action, proceeding, or
counterclaim brought by either party against the other.
Attorneys' Fees; Expenses. Guarantor agrees that if Lender
hires an attorney to help enforce this Guaranty or to
collect any sums owing under this Guaranty, Guarantor will
pay, subject to any limits under applicable law, Lender's
attorney fees equal to 25.000% of the amount due under this
Guaranty, and all of Lender's other collection expenses,
whether or not here is a lawsuit and including without
limitation additional legal expenses for bankruptcy
proceedings.
Notices. All notices required to be given by either party
to the other under this Guaranty shall be in writing, may be
sent by telefacsimilie, and, except for revocation notices
by Guarantor, shall be effective if hand delivered when
actually delivered, or when deposited with a nationally
recognized overnight courier, or when deposited in the
United States mail, first class postage prepaid, addressed
to the party to whom the notice is to be given at the
address shown above or to such other addresses as either
party may designate to the other in writing. All revocation
notices by Guarantor shall be in writing and shall be
effective only upon delivery to Lender as provided above in
the section titled "DURATION OF GUARANTY." If there is more
than one Guarantor notice to any Guarantor will constitute
notice to all Guarantors. For notice purposes. Guarantor
agrees to keep Lender informed at all times of Guarantor's
current address.
Interpretation. In all cases where there is more than one
Borrower or Guarantor, then all words used in this Guaranty
in the singular shall be deemed to have been used in the
plural where the context and construction so require; and
where there is more than one Borrower named in this Guaranty
or when this Guaranty is executed by more than one
Guarantor, the words "Borrower" and "Guarantor" respectively
shall mean all and any one or more of them. Caption
headings in this Guaranty are for convenience purposes only
and are not to be used to interpret or define the provisions
of this Guaranty. If a court of competent jurisdiction
finds any provision of this Guaranty to be invalid or
unenforceable as to any person or circumstances, such
finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances, and
all provisions of this Guaranty in all other respects shall
remain valid and enforceable. If any one or more of
Borrower or Guarantor are corporations or partnerships, it
is not necessary for Lender to inquire into the powers of
Borrowers or Guarantor or of the officers, directors,
partners, or agents acting or purporting to act on their
behalf, and any Indebtedness made or created in reliance
upon the professed exercise of such powers shall be
guaranteed under this Guaranty.
Waiver. Lender shall not be deemed to have waived any
rights under this Guaranty unless such waiver is given in
writing and signed by Lender. No delay or omission on the
part of Lender in exercising any right shall operate as a
waiver of such right or any other right. A waiver by Lender
of a provision of this Guaranty shall not prejudice or
constitute a waiver of Lender's right otherwise to demand
strict compliance with that provision or any other provision
of this Guaranty. No prior waiver by Lender, nor any course
of dealing between Lender and Guarantor, shall constitute a
wavier of any of Lender's rights or of any of Guarantor's
obligations as to any future transactions. Whenever the
consent of Lender is required under this Guaranty, the
granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where
such consent is required and in all cases such consent may
be granted or withheld in the sole discretion of Lender.
WORKING CAPITAL. Guarantor will infuse cash into accounts
payable sufficient to cover the working capital shortfall
associated with the payover of accounts receivables to the seller
and the obligation for all accounts payable liabilities.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE
PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN
ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS
EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL
TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED
"DURATION OF GUARANTY." NO FORMAL ACCEPTANCE BY LENDER IS
NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS
DATED SEPTEMBER 11,1996.
GUARANTOR:
Network Event Theater, Inc.
By: /s/Don Leeds (SEAL)
Don Leeds, E.V.P.
By: /s/Harlan Peltz (SEAL)
Harlan Peltz, Chairman/CEO
Signed, acknowledged and delivered in
the presence of:
/s/ Jon A Siabaugh
Jon A Siabaugh
Witness