GUARANTYGuarantee Agreement |
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ZEALOUS TRADING GROUP, INC. | Zealous Holdings, Inc | Zealous Trading Group, Inc. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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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.
| (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.
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(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
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Purchasers against the Guarantor. For the purposes hereof,
“demand” shall include the commencement and continuance of any legal
proceedings.
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(f) Reinstatement.
The guarantee contained in this Section 2 shall continue to be effective, or
be
reinstated, as the case may be, if at any time payment, or any part thereof,
of
any of the Obligations is rescinded or must otherwise be restored or returned
by
the Purchasers upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company or the Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Company or Guarantor or any substantial part of its property,
or otherwise, all as though such payments had not been made.
(g) Payments.
The Guarantor hereby guarantees that payments hereunder will be paid to the
Purchasers without set-off or counterclaim in U.S. dollars at the address set
forth or referred to in the Purchase Agreement.
3. Representations
and Warranties. The Guarantor hereby makes the following representations and
warranties to Purchasers as of the date hereof:
(a) Organization
and Qualification. The Guarantor is a corporation, duly incorporated,
validly existing and in good standing under the laws of the applicable
jurisdiction set forth on Schedule 1, with the requisite corporate power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. The Guarantor has no subsidiaries other than those
identified as such on the Disclosure Schedules to the Purchase Agreement. The
Guarantor is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not,
individually or in the aggregate, (x) adversely affect the legality, validity
or
enforceability of any of this Guaranty in any material respect, (y) have a
material adverse effect on the results of operations, assets, prospects, or
financial condition of the Guarantor or (z) adversely impair in any material
respect the Guarantor's ability to perform fully on a timely basis its
obligations under this Guaranty (a “Material Adverse
Effect”).
(b) Authorization;
Enforcement. The Guarantor has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by
this
Guaranty, and otherwise to carry out its obligations hereunder. The execution
and delivery of this Guaranty by the Guarantor and the consummation by it of
the
transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of the Guarantor. This Guaranty has been duly
executed and delivered by the Guarantor and constitutes the valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance
with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws
relating
