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NON-RECOURSE GUARANTY
THIS CONTINUING NON-RECOURSE GUARANTY ,
dated as of August 31, 2007 (this
"Guaranty" ),
is made by GAH-CDC Holdings, LLC, a Delaware limited liability
company having an office address at c/o Golden Autumn Holdings
Inc., 15455 Dallas Pkwy, 6
th Floor,
Dallas, Texas 75001 (the
"Guarantor" ),
in favor of each of the persons defined as Buyers in that certain
Securities Purchase Agreement dated of even date herewith (the
“SPA”) among GOLDEN AUTUMN HOLDINGS, INC., a Nevada
corporation (the “
Company ”),
and the Buyers. Terms that are capitalized in this Guaranty and not
otherwise defined herein shall have the respective meanings given
to such terms in the SPA.
WHEREAS,
the Buyers and the Company have entered into SPA (together
with all other documents, instruments and agreements executed
or delivered by the Company in connection therewith
(collectively, the “Documents”), pursuant to which
the Buyers have purchased, among other securities, senior
secured convertible promissory notes of the Buyer in the
aggregate principal amount of $1,000,000 (the “
Notes ”);
and
WHEREAS,
the Guarantor is a substantial stockholder of the Company;
and
WHEREAS,
Guarantor will benefit from the execution and delivery of the
SPA and the purchase by the Buyers of the Notes thereunder;
and
WHEREAS,
as a condition to the closing of the SPA the Guarantor is
required to enter into this Guaranty of the obligations of the
Company under the Notes (the “Obligations”);
and
WHEREAS,
Guarantor desires to satisfy the condition described in the
preceding paragraph and therefore is willing to enter into
this Guaranty of payment of all Obligations.
NOW,
THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Guarantor hereby agrees
as follows:
SECTION 1 .
Guaranty . The
Guarantor hereby unconditionally guarantees the punctual payment
and performance when due, whether at stated maturity, by
acceleration or otherwise, of all Obligations and agrees to pay in,
in addition, all reasonable out-of-pocket costs and expenses
(including reasonable attorneys' fees and related expenses)
incurred by the Buyers in enforcing their rights under this
Guaranty.
SECTION 2.
Guaranty Absolute .
The Guarantor guarantees that the Obligations will be paid and
performed strictly in accordance with the terms of the SPA and the
Notes or any other agreement evidencing or governing such
Obligations 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 Buyers with respect thereto. The Guarantor
agrees that this Guaranty constitutes a guarantee of payment when
due and not of collection. Subject to the terms of this Guaranty,
the liability of the Guarantor under this Guaranty shall be
absolute and unconditional irrespective of:
(a)
any
lack of validity or enforceability of the the SPA or Notes, or
any other document, agreement or instrument relating to the
Obligations;
(b)
any
change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any amendment
or waiver of any term of or any consent to departure from the
SPA or Notes, or any other document, agreement or instrument
related to the Obligations;
(c)
any
exchange, release, non-perfection or impairment of any
collateral, or any release, amendment or waiver of any term
of, or consent to departure from, any other guaranty for all
or any of the Obligations;
(d)
any
failure on the part of the Buyers or any other person, firm or
entity (“Person”) to exercise, or any delay in
exercising, any right under the SPA, Notes or any other
agreement or instrument relating to the Obligations;
or
(e)
any
other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Company or a guarantor
with respect to the Obligations (including, without
limitation, all defenses based on suretyship or impairment of
collateral, and all defenses which the Company may assert on
the underlying debt, including failure of consideration,
breach of warranty, fraud, payment, statute of frauds,
bankruptcy, lack of legal capacity, statute of limitations,
lender liability, accord and satisfaction, and usury) or that
might otherwise constitute a defense to this Guaranty and the
obligations of the Guarantor under this Guaranty.
The
Guarantor hereby agrees that if the Company is the subject of
any insolvency, reorganization, assignment for the benefit of
creditors, moratorium, bankruptcy or similar proceeding under
the laws of any applicable jurisdiction, the Guarantor will
not assert the pendency of such proceeding or any order
entered therein as a defense to (i) the timely payment of the
Obligations or the Guarantor's obligations hereunder, or (ii)
the Guarantor's guaranty of any interest on any portion of the
Obligations that accrues after the commencement of any such
proceeding (or, if interest on any portion of the Obligations
ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have
accrued on such portion of such Obligations if said
proceedings had not been commenced). This Guaranty shall
continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of such Obligations is
rescinded or must otherwise be returned by the Buyers upon the
insolvency, bankruptcy or reorganization of the Company or
otherwise, all as though such payment had not been
made.
SECTION 3.
Waiver .
The Guarantor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the
Obligations and this Guaranty and any requirement that the Buyer
protect, secure, perfect or insure any security interest or lien or
any property subject thereto or exhaust any right to take any
action against the Companyor any other Person or any Collateral.
The Guarantor further waives any and all right to assert any
set-off, counterclaim or cross-claim against the Buyers of any
nature whatsoever with respect to this Guaranty or the obligations
of the Guarantor under this Guaranty, in any action or proceeding
brought by the Buyers to enforce the obligations of the Guarantor
under this Guaranty. The Guarantor acknowledges that no oral or
other agreements, understandings, representations or warranties
exist with respect to this Guaranty or with respect to the
obligations of the Guarantor under this Guaranty, except as
specifically set forth in this Guaranty.
SECTION 4.
Subrogation .
So long as any Obligations remain outstanding and unpaid, the
Guarantor hereby irrevocably waives, to the fullest extent
permitted by law, any and all claims, rights or remedies that the
Guarantor may now have or hereafter acquire against the Company
that arise hereunder or from the performance by the Guarantor
hereunder, including, without limitation, any claims, rights or
remedies of subrogation, reim
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