GUARANTY
GUARANTY,
dated as of July 7, 2008 made by each of the undersigned (the
"
Guarantor "),
in favor of DRIFTWOOD VENTURES, INC., a Delaware corporation (the
"
Buyer ").
W I
T N
E S
S E
T H
:
WHEREAS,
Green Screen Interactive Software, Inc.
, a
Delaware corporation (the "
Company ")
and Buyer are parties to a Securities Purchase Agreement dated the
date hereof (as amended, restated or otherwise modified from time
to time, the "
Securities Purchase Agreement ");
WHEREAS,
it is a condition precedent to the Buyer that the Guarantor
executes and delivers to the Buyer a guaranty guaranteeing all
of the obligations of the Company under the Securities
Purchase Agreement and the Note (defined below);
and
WHEREAS,
the Guarantor has determined that its execution, delivery and
performance of this Guaranty directly benefit, and are within
the corporate purposes and in the best interests of, the
Guarantor;
NOW,
THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Buyer to perform under the
Securities Purchase Agreement, the Guarantor hereby agrees
with Buyer as follows:
SECTION
1.
Definitions .
Reference is hereby made to the Securities Purchase Agreement and
the "Notes" (as defined therein) issued pursuant thereto (as such
Notes may be amended, restated, replaced or otherwise modified from
time to time in accordance with the terms thereof, collectively,
the "
Notes ")
for a statement of the terms thereof. All terms used in this
Guaranty, which are defined in the Securities Purchase Agreement or
the Notes and not otherwise defined herein, shall have the same
meanings herein as set forth therein.
SECTION
2.
Guaranty .
The Guarantor hereby unconditionally and irrevocably, guaranties
the punctual payment, as and when due and payable, by stated
maturity or otherwise, of all obligations of the Company from time
to time owing by it in respect of the Securities Purchase
Agreement, the Notes and the other "Transaction Documents" (as
defined in the Securities Purchase Agreement), including, without
limitation, all interest that accrues after the commencement of any
Insolvency Proceeding of the Company or the Guarantor, whether or
not the payment of such interest is unenforceable or is not
allowable due to the existence of such Insolvency Proceeding), and
all fees, commissions, expense reimbursements, indemnifications and
all other amounts due or to become due under any of the Transaction
Documents (such obligations, to the extent not paid by the Company,
being the "
Guaranteed Obligations "),
and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) reasonably incurred by the Buyer in
enforcing any rights under this Guaranty. Without limiting the
generality of the foregoing, the Guarantor's liability hereunder
shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by the Company to the Buyer under the
Securities Purchase Agreement and the Notes but for the fact that
they are unenforceable or not allowable due to the existence of an
Insolvency Proceeding involving the Guarantor or the Company (each,
a "
Transaction Party ")
.
SECTION
3.
Guaranty Absolute; Continuing Guaranty; Assignments
.
(a)
The
Guarantor guaranties that the Guaranteed Obligations will be
paid strictly in accordance with the terms of the Transaction
Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Buyer with respect thereto. The
obligations of the Guarantor under this Guaranty are
independent of the Guaranteed Obligations, and a separate
action or actions may be brought and prosecuted against the
Guarantor to enforce such obligations, irrespective of whether
any action is brought against any Transaction Party or whether
any Transaction Party is joined in any such action or actions.
The liability of the Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and
the Guarantor hereby irrevocably waives, to the extent
permitted by law, any defenses it may now or hereafter have in
any way relating to, any or all of the following:
(i)
any
lack of validity or enforceability of any Transaction Document
or any agreement or instrument relating thereto;
(ii)
any
change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or
any other amendment or waiver of or any consent to departure
from any Transaction Document, including, without limitation,
any increase in the Guaranteed Obligations resulting from the
extension of additional credit to any Transaction
Party or
otherwise;
(iii)
any
taking, exchange, release or non-perfection of any Collateral,
or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the
Guaranteed Obligations;
(iv)
any
change, restructuring or termination of the corporate, limited
liability company or partnership structure or existence of
any Transaction
Party ;
or
(v)
any
other circumstance (including any statute of limitations) or
any existence of or reliance on any representation by the
Buyer that might otherwise constitute a defense available to,
or a discharge of, any Transaction Party or any other
guarantor or surety.
This
Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be
returned by the Buyer
or
any other Person upon the insolvency, bankruptcy or
reorganization of any Transaction Party or otherwise, all as
though such payment had not been made.
(b)
This
Guaranty is a continuing guaranty and shall (i) remain in full
force and effect until the indefeasible cash payment in full
of the Guaranteed Obligations (other than inchoate indemnity
obligations) and payment of all other amounts payable under
this Guaranty and shall not terminate for any reason prior to
the respective date of Maturity of each Note (other than
payment in full of the Notes) and (ii) be binding upon the
Guarantor and its successors and assigns. This Guaranty shall
inure to the benefit of and be enforceable by the
Buyer
and
its successors, and permitted pledgees, transferees and
assigns. Without limiting the generality of the foregoing
sentence, the Buyer may pledge, assign or otherwise transfer
all or any portion of its rights and obligations under and
subject to the terms of any Transaction Document to any other
Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to Buyer
herein or otherwise, in each case as provided in the
Securities Purchase Agreement or such Transaction
Document.
SECTION
4.
Waivers .
To the extent permitted by applicable law, the Guarantor
hereby
waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Guaranteed Obligations and this
Guaranty and any requirement that the Buyer exhaust any right or
take any action against any Transaction Party or any other Person
or any Collateral. The Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements
contemplated herein and that the waiver set forth in this
Section 4 is knowingly made in contemplation of such benefits.
The Guarantor hereby waives any right to revoke this Guaranty, and
acknowledges that this Guaranty is continuing in nature and applies
to all Guaranteed Obligations, whether existing now or in the
future.
SECTION
5.
Subrogation .
The
Guarantor may not exercise any rights that it may now or hereafter
acquire against any Transaction Party or any other guarantor that
arise from the existence, payment, performance or enforcement of
the Guarantor's obligations under this Guaranty, including, without
limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any
claim or remedy of the Buyer against any Transaction Party or any
other guarantor or any Collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or
receive from any Transaction Party or any other guarantor, directly
or indirectly, in cash or other property or by set-off or in any
other manner, payment or security solely on account of such claim,
remedy or right, unless and until all of the Guaranteed Obligations
(other than inchoate indemnity obligations) and all other amounts
payable under this Guaranty shall have indefeasibly
been
paid in full in cash. If any amount shall be paid to the Guarantor
in violation of the immediately preceding sentence at any time
prior to the later of the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, such
amount shall be held in trust for the benefit of the Buyer and
shall forthwith be paid to the Buyer to be credited and applied to
the Guaranteed Obligations and all other amounts payable under this
Guaranty, whether matured or unmatured, in accordance with the
terms of the Transaction Document, or to be held as Collateral for
any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising. If (a) the Guarantor shall make
payment to the Buyer of all or any part of the Guaranteed
Obligations, and (b) all of the Guaranteed Obligations (other
than inchoate indemnity obligations) and all other amounts payable
under this Guaranty shall indefeasibly
be
paid in full in cash, the Buyer will, at the Guarantor's request
and expense, execute and deliver to the Guarantor appropriate
documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Guarantor
of an interest in the Guaranteed Obligations resulting from such
payment by the Guarantor.
SECTION
6.
Representations, Warranties and Covenants .
The Guarantor hereby represents and warrants as
follows:
(a)
The
Guarantor (i) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
organization as set forth on the first page hereof, (ii) has
all requisite power and authority to conduct its business as
now conducted and as presently contemplated and to execute and
deliver this Guaranty and each other Transaction Document to
which the
Guarantor is
a party, and to consummate the transactions contemplated
hereby and thereby and (iii) is duly qualified to do
business and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it or in
which the transaction of its business makes such qualification
nec
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