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EXHIBIT 10.6
GUARANTEE
GUARANTEE,
dated as of October 17, 2007 (this “ Guarantee
”), made by Zealous Holdings, Inc., a Delaware
corporation (the “ Guarantor ”), in favor
of the purchasers signatory (the “ Purchasers
”) to that certain Securities Purchase Agreement, dated
as of the date hereof, between Zealous Trading Group, Inc., a
Nevada corporation (the “ Company ”) and
the Purchasers.
W I T N E S S E T H:
WHEREAS,
pursuant to that certain Securities Purchase Agreement, dated
as of the date hereof, by and between the Company and the
Purchasers (the “ Purchase Agreement ”),
the Company has agreed to sell and issue to the Purchasers,
and the Purchasers have agreed to purchase from the Company
the Company’s 5% Senior Secured Convertible Debentures,
due October 17, 2008 (the “ Debentures ”),
subject to the terms and conditions set forth therein;
and
WHEREAS, the Guarantor
will directly benefit from the extension of credit to the
Company represented by the issuance of the Debentures;
and
NOW,
THEREFORE, in consideration of the premises and to induce the
Purchasers to enter into the Purchase Agreement and to carry
out the transactions contemplated thereby, the Guarantor
hereby agrees with the Purchasers as follows:
1.
Definitions . Unless otherwise defined herein, terms defined in
the Purchase Agreement and used herein shall have the meanings
given to them in the Purchase Agreement. The words
“hereof,” “herein,” “hereto”
and “hereunder” and words of similar import when used
in this Guarantee shall refer to this Guarantee as a whole and not
to any particular provision of this Guarantee, and Section and
Schedule references are to this Guarantee unless otherwise
specified. The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms. The following terms shall have the following
meanings:
“
Guarantee ” means this Guarantee, as the same may
be amended, supplemented or otherwise modified from time to
time.
“
Obligations ” means, in addition to all other
costs and expenses of collection incurred by Purchasers in
enforcing any of such Obligations and/or this Guarantee, all
of the liabilities and payment obligations (primary,
secondary, direct, contingent, sole, joint or several) due or
to become due, or that are now or may be hereafter contracted
or acquired, or owing to, of any Debtor to the Secured
Parties, under this Agreement, the Debentures and the Security
Agreement, in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly
owed with others, and whether or not from time to time
decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly
from any of the Secured Parties as a preference, fraudulent
transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to
time. Without limiting the generality of the
foregoing, the term “Obligations” shall include,
without limitation: (i) principal of, and interest on the
Debentures and the loans extended pursuant thereto; (ii) any
and all other fees, indemnities, costs, obligations and
liabilities of the Debtors from time to time under or in
connection with this Agreement, the Debentures and the
Security Agreement; and (iii) all amounts (including but not
limited to post-petition interest) in respect of the foregoing
that would be payable but for the fact that the obligations to
pay such amounts are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar
proceeding involving any Debtor.
2.
Guarantee .
(a)
Guarantee .
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(i) |
The
Guarantor hereby, guarantees to the Purchasers and their
respective successors, indorsees, transferees and assigns, the
prompt and complete payment and performance by the Company when due
(whether at the stated maturity, by acceleration or otherwise) of
the Obligations.
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(ii) |
Anything
herein or in any other Transaction Document to the contrary
notwithstanding, the maximum liability of the Guarantor hereunder
and under the other Transaction Documents shall in no event exceed
the amount which can be guaranteed by the Guarantor under
applicable federal and state laws, including laws relating to the
insolvency of debtors, fraudulent conveyance or transfer or laws
affecting the rights of creditors generally (after giving effect to
the right of contribution established in Section
2(b)).
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(iii) |
The
Guarantor agrees that the Obligations may at any time and from time
to time exceed the amount of the liability of the Guarantor
hereunder without impairing the guarantee contained in this Section
2 or affecting the rights and remedies of the Purchasers
hereunder.
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(iv) |
The
guarantee contained in this Section 2 shall remain in full force
and effect until all the Obligations and the obligations of the
Guarantor under the guarantee contained in this Section 2 shall
have been satisfied by payment in full.
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(v) |
No
payment made by the Company, the Guarantor, any other guarantor or
any other Person or received or collected by the Purchasers from
the Company, the Guarantor, any other guarantor or any other Person
by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of the
Guarantor hereunder which shall, notwithstanding any such payment
(other than any payment made by the Guarantor in respect of the
Obligations or any payment received or collected from the Guarantor
in respect of the Obligations), remain liable for the Obligations
up to the maximum liability of the Guarantor hereunder until the
Obligations are paid in full.
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(vi) |
Notwithstanding
anything to the contrary in this Agreement, with respect to any
defaulted non-monetary Obligations the specific performance of
which by the Guarantor is not reasonably possible (e.g. the
issuance of the Company's Common Stock), the Guarantor shall only
be liable for making the Purchasers whole on a monetary basis for
the Company's failure to perform such Obligations.
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(b)
RESERVED .
(c)
No Subrogation . Notwithstanding any payment made by
the Guarantor hereunder or any set-off or application of funds of
the Guarantor by the Purchasers, the Guarantor shall not be
entitled to be subrogated to any of the rights of the Purchasers
against the Company or any collateral security or guarantee or
right of offset held by the Purchasers for the payment of the
Obligations, nor shall the Guarantor seek or be entitled to seek
any contribution or reimbursement from the Company in respect of
payments made by the Guarantor hereunder, until all amounts owing
to the Purchasers by the Company on account of the Obligations are
paid in full. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be
held by the Guarantor in trust for the Purchasers, segregated from
other funds of the Guarantor, and shall, forthwith upon receipt by
the Guarantor, be turned over to the Purchasers in the exact form
received by the Guarantor (duly indorsed by the Guarantor to the
Purchasers, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Purchasers may
determine.
(d)
Amendments, Etc. With Respect to the Obligations . The
Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Guarantor and without
notice to or further assent by the Guarantor, any demand for
payment of any of the Obligations made by the Purchasers may be
rescinded by the Purchasers and any of the Obligations continued,
and the Obligations, or the liability of any other Person upon or
for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the
Purchasers, and the Purchase Agreement and the other Transaction
Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Purchasers may deem
advisable from time to time, and any collateral security, guarantee
or right of offset at any time held by the Purchasers for the
payment of the Obligations may be sold, exchanged, waived,
surrendered or released. The Purchasers shall have no obligation to
protect, secure, perfect or insure any Lien at any time held by
them as security for the Obligations or for the guarantee contained
in this Section 2 or any property subject thereto.
(e)
Guarantee Absolute and Unconditional . The Guarantor waives any
and all notice of the creation, renewal, extension or accrual of
any of the Obligations and notice of or proof of reliance by the
Purchasers upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the
Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended
or waived, in reliance upon the guarantee contained in this Section
2; and all dealings between the Company and the Guarantor, on the
one hand, and the Purchasers, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance
upon the guarantee contained in this Section 2. The Guarantor
waives to the extent permitted by law diligence,
presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Company or the Guarantor with respect to
the Obligations. The Guarantor understands and agrees that the
guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without
regard to (a) the validity or enforceability of the Purchase
Agreement or any other Transaction Document, any of the Obligations
or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held
by the Purchasers, (b) any defense, set-off or counterclaim (other
than a defense of payment or performance or fraud or misconduct by
Purchasers) which may at any time be available to or be asserted by
the Company or any other Person against the Purchasers, or (c) any
other circumstance whatsoever (with or without notice to or
knowledge of the Company or the Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge
of the Company for the Obligations, or of the Guarantor under the
guarantee contained in this Section 2, in bankruptcy or in any
other instance. When making any demand hereunder or otherwise
pursuing its rights and remedies hereunder against the Guarantor,
the Purchasers may, but shall be under no obligation to, make a
similar demand on or otherwise pursue such rights and remedies as
they may have against the Company, or any other Person or against
any collateral security or guarantee for the Obligations or any
right of offset with respect thereto, and any failure by the
Purchasers to make any such demand, to pursue such other rights or
remedies or to collect any payments from the Company, or any other
Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of the
Company, or any other Person or any such collateral security,
guarantee or right of offset, shall not relieve the
Guarant
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