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Exhibit 10.5
SUBSIDIARY GUARANTY
Philadelphia, Pennsylvania
May 5, 2005
FOR VALUE RECEIVED, and in consideration of note purchases from,
loans
made or to be made or credit otherwise
extended or to be extended by IL
Resources, LLC ("Lender") to or for the
account of TriMedia Entertainment Group,
Inc., a Delaware corporation ("Debtor"),
from time to time and at any time and
for other good and valuable consideration
and to induce Lender, in its
discretion, to purchase such notes, make
such loans or extensions of credit and
to make or grant such renewals, extensions,
releases of collateral or
relinquishments of legal rights as Lender
may deem advisable, each of the
undersigned (and each of them if more than
one, the liability under this
Guaranty being joint and several) (jointly
and severally referred to as
"Guarantors " or "the undersigned")
unconditionally guaranties to Lender, its
successors, endorsees and assigns the
prompt payment when due (whether by
acceleration or otherwise) of all present
and future obligations and liabilities
of any and all kinds of Debtor to Lender
and of all instruments of any nature
evidencing or relating to any such
obligations and liabilities upon which Debtor
or one or more parties and Debtor is or may
become liable to Lender, whether
incurred by Debtor as maker, endorser,
drawer, acceptor, guarantors ,
accommodation party or otherwise, and
whether due or to become due, secured or
unsecured, absolute or contingent, joint or
several, and however or whenever
acquired by Lender, whether arising under,
out of, or in connection with (i)
that certain Securities Purchase Agreement
dated the date hereof by and between
the Debtor and Lender (the "Securities
Purchase Agreement") and (ii) each
Related Agreement referred to in the
Securities Purchase Agreement (the
Securities Purchase Agreement and each
Related Agreement, as each may be
amended, modified, restated or supplemented
from time to time, are collectively
referred to herein as the "Documents"), or
any documents, instruments or
agreements relating to or executed in
connection with the Documents or any
documents, instruments or agreements
referred to therein or otherwise, or any
other indebtedness, obligations or
liabilities of the Debtor to Lender, whether
now existing or hereafter arising, direct
or indirect, liquidated or
unliquidated, absolute or contingent, due
or not due and whether under, pursuant
to or evidenced by a note, agreement,
guaranty, instrument or otherwise (all of
which are herein collectively referred to
as the "Obligations"), and
irrespective of the genuineness, validity,
regularity or enforceability of such
Obligations, or of any instrument
evidencing any of the Obligations or of any
collateral therefor or of the existence or
extent of such collateral, and
irrespective of the allowability, allowance
or disallowance of any or all of the
Obligations in any case commenced by or
against Debtor under Title 11, United
States Code, including, without limitation,
obligations or indebtedness of
Debtor for post-petition interest, fees,
costs and charges that would have
accrued or been added to the Obligations
but for the commencement of such case.
Terms not otherwise defined herein shall
have the meaning assigned such terms in
the Securities Purchase Agreement. In
furtherance of the foregoing, the
undersigned hereby agrees as follows:
1. No Impairment. Lender may at any time and from time to time,
either
before or after the maturity thereof,
without notice to or further consent of
the undersigned, extend the time of payment
of, exchange or surrender any
collateral for, renew or extend any of the
Obligations or increase or decrease
the interest rate thereon, or any other
agreement with Debtor or with any other
party to or person liable on any of the
Obligations, or interested therein, for
the extension, renewal, payment,
compromise, discharge or release thereof, in
whole or in part, or for any modification
of the terms thereof or of any
agreement between Lender and Debtor or any
such other party or person, or make
any election of rights Lender may deem
desirable under the United States
Bankruptcy Code, as amended, or any other
federal or state bankruptcy,
reorganization, moratorium or insolvency
law relating to or affecting the
enforcement of creditors' rights generally
(any of the foregoing, an "Insolvency
Law") without in any way impairing or
affecting this Guaranty. This instrument
shall be effective regardless of the
subsequent incorporation, merger or
consolidation of Debtor, or any change in
the composition, nature, personnel or
location of Debtor and shall extend to any
successor entity to Debtor, including
a debtor in possession or the like under
any Insolvency Law.
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2. Guaranty Absolute. Subject to Section 5(c), each of the
undersigned
jointly and severally guarantees that the
Obligations will be paid strictly in
accordance with the terms of the Documents
and/or any other document, instrument
or agreement creating or evidencing the
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 Debtor with
respect thereto. Guarantors hereby
knowingly accept the full range of risk
encompassed within a contract of
"continuing guaranty" which risk includes
the possibility that Debtor will
contract additional indebtedness for which
Guarantors may be liable hereunder
after Debtor's financial condition or
ability to pay its lawful debts when they
fall due has deteriorated, whether or not
Debtor has properly authorized
incurring such additional indebtedness. The
undersigned acknowledge that (i) no
oral representations, including any
representations to extend credit or provide
other financial accommodations to Debtor,
have been made by Lender to induce the
undersigned to enter into this Guaranty and
(ii) any extension of credit to the
Debtor shall be governed solely by the
provisions of the Documents. The
liability of each of the undersigned under
this Guaranty shall be absolute and
unconditional, in accordance with its
terms, and shall remain in full force and
effect without regard to, and shall not be
released, suspended, discharged,
terminated or otherwise affected by, any
circumstance or occurrence whatsoever,
including, without limitation: (a) any
waiver, indulgence, renewal, extension,
amendment or modification of or addition,
consent or supplement to or deletion
from or any other action or inaction under
or in respect of the Documents or any
other instruments or agreements relating to
the Obligations or any assignment or
transfer of any thereof, (b) any lack of
validity or enforceability of any
Document or other documents, instruments or
agreements relating to the
Obligations or any assignment or transfer
of any thereof, (c) any furnishing of
any additional security to Lender or its
assignees or any acceptance thereof or
any release of any security by Lender or
its assignees, (d) any limitation on
any party's liability or obligation under
the Documents or any other documents,
instruments or agreements relating to the
Obligations or any assignment or
transfer of any thereof or any invalidity
or unenforceability, in whole or in
part, of any such document, instrument or
agreement or any term thereof, (e) any
bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution,
liquidation or other like proceeding
relating to Debtor, or any action taken
with respect to this Guaranty by any
trustee or receiver, or by any court, in
any such proceeding, whether or not the
undersigned shall have notice or
knowledge of any of the foregoing, (f) any
exchange, release or nonperfection of
any collateral, or any release, or
amendment or waiver of or consent to
departure from any guaranty or security,
for all or any of the Obligations or
(g) any other circumstance which might
otherwise constitute a defense available
to, or a discharge of, the undersigned. Any
amounts due from the undersigned to
Lender shall bear interest until such
amounts are paid in full at the highest
rate then applicable to the Obligations.
Obligations include post-petition
interest whether or not allowed or
allowable.
2
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3.
Waivers.
(a) This Guaranty is a guaranty of payment and not of
collection.
Lender shall be under no obligation to
institute suit, exercise rights or
remedies or take any other action against
Debtor or any other person liable with
respect to any of the Obligations or resort
to any collateral security held by
it to secure any of the Obligations as a
condition precedent to the undersigned
being obligated to perform as agreed herein
and each of the Guarantors hereby
waives any and all rights which it may have
by statute or otherwise which would
require Lender to do any of the foregoing.
Each of the Guarantors further
consents and agrees that Lender shall be
under no obligation to marshal any
assets in favor of Guarantors, or against
or in payment of any or all of the
Obligations. The undersigned hereby waives
all suretyship defenses and any
rights to interpose any defense,
counterclaim or offset of any nature and
description which the undersigned may have
or which may exist between and among
Lender, Debtor and/or the undersigned with
respect to the undersigned's
obligations under this Guaranty, or which
Debtor may assert on the underlying
debt, including but not limited to failure
of consideration, breach of warranty,
fraud, payment (other than cash payment in
full of the Obligations), statute of
frauds, bankruptcy, infancy, statute of
limitations, accord and satisfaction,
and usury.
(b) Each of the undersigned further waives (i) notice of the
acceptance
of this Guaranty, of the making of any such
loans or extensions of credit, and
of all notices and demands of any kind to
which the undersigned may be entitled,
including, without limitation, notice of
adverse change in Debtor's financial
condition or of any other fact which might
materially increase the risk of the
undersigned and (ii) presentment to or
demand of payment from anyone whomsoever
liable upon any of the Obligations,
protest, notices of presentment, non-payment
or protest and notice of any sale of
collateral security or any default of any
sort.
(c) Notwithstanding any payment or payments made by the
undersigned
hereunder, or any setoff or application of
funds of the undersigned by Lender,
the undersigned shall not be entitled to be
subrogated to any of the rights of
Lender against Debtor or against any
collateral or guarantee or right of offset
held by Lender for the payment of the
Obligations, nor shall the undersigned
seek or be entitled to seek any
contribution or reimbursement from Debtor in
respect of payments made by the undersigned
hereunder, until all amounts owing
to Lender by Debtor on account of the
Obligations are paid in full and Lender's
obligation to extend credit pursuant to the
Documents have been terminated. If,
notwithstanding the foregoing, any amount
shall be paid to the undersigned on
account of such subrogation rights at any
time when all of the Obligations shall
not have been paid in full and Lender's
obligation to extend credit pursuant to
the Documents shall not have been
terminated, such amount shall be held by the
undersigned in trust for Lender, segregated
from other funds of the undersigned,
and shall forthwith upon, and in a
