EXHIBIT
4.6
SUBSIDIARY
GUARANTY
THIS SUBSIDIARY
GUARANTY (this
"Subsidiary Guaranty"), dated as of August 31, 2009, among
Camelot Entertainment Group, Inc., a Delaware corporation (the
"Company"), and Camelot Production Services Group, Inc. and
its divisions attached hereto as Schedule A excluding any third
party acquisitions' made by the Company subsequent to the date of
this Subsidiary Guaranty (individually a "Subsidiary
Guarantor" and collectively, the "Subsidiary
Guarantors"), for the benefit of the secured parties signatory
hereto and their respective endorsees, transferees and assigns
(individually a "Secured Party" and collectively, the
"Secured Parties").
WITNESSETH
:
WHEREAS, pursuant to a Securities
Purchase Agreement, dated the date hereof, between Company and the
Secured Parties (the "Purchase Agreement"), Company has
agreed to issue to the Secured Parties and the Secured Parties have
agreed to purchase from Company certain of Company's 10% Callable
Secured Convertible Notes, due three years from the date of issue
(the "Notes"), which are convertible into shares of
Company's Common Stock, par value 5.001 per share (the "Common
Stock"); and
WHEREAS, the Company and the
Subsidiary Guarantors have been, and are now, engaged in the
business of providing production services and related services to
the Company and to third parties, including, but not limited to,
entertainment financial, studio, technology, consulting, post
production, event management, education, sales and marketing,
merchandising and web services. In the past, as now, the Company
has provided financing for the Subsidiary Guarantors, and the
Subsidiary Guarantors have relied upon the Company to provide such
financing. In addition, it is anticipated that. if the Subsidiary
Guarantors execute and deliver this Subsidiary Guaranty, the
Company will continue to provide such financing to the Subsidiary
Guarantors, and that the proceeds of the Purchase Agreement and
Notes will be used, in part, for the general working capital
purposes of the Subsidiary Guarantors; and
WHEREAS, it is in the best interest
of the Subsidiary Guarantors as subsidiaries of the Company and the
indirect beneficiaries of the Purchase Agreement and Notes, that
the Secured Parties enter into the Purchase Agreement and purchase
the Notes to the Company; and
WHEREAS, as a material inducement to
the Secured Parties to enter into the Purchase Agreement and Notes,
the Secured Parties have required and the Subsidiary Guarantors
have agreed to unconditionally guarantee the timely and lull
satisfaction of all obligations of the Company, whether matured or
unmatured, now or hereafter existing or created and becoming due
and payable (the "Obligations") to the Secured Parties,
their successors, endorsees, transferees or assigns under the
Transaction Documents (as defined in the Purchase Agreement);
and
WHEREAS, in light of the foregoing,
each Subsidiary Guarantor expects to derive substantial benefit
from the Purchase Agreement and sale of the Notes and the
transactions contemplated thereby and, in furtherance thereof, has
agreed to execute and deliver this Subsidiary Guaranty.
NOW, THEREFORE, in consideration of
the foregoing recitals, and the mutual covenants contained herein,
the parties hereby agree as follows:
1.
Guaranty. The Subsidiary
Guarantors, jointly and severally, hereby absolutely,
unconditionally and irrevocably guarantee to the Secured Parties,
their successors, endorsees, transferees and assigns the due and
punctual performance and payment of the Obligations owing to the
Secured Parties, their successors, endorsees, transferees or
assigns when due, all at the time and place and in the amount and
manner prescribed in, and otherwise in accordance with. the
Transaction Documents, regardless of any defense or set-off
counterclaim which the Company or any other person may have or
assert, and regardless of whether or not the Secured Parties or
anyone on behalf of the Secured Parties shall have instituted any
suit, action or proceeding or exhausted its remedies
or taken any steps to enforce any rights against the Company or any
other person to compel any such performance or observance or to
collect all or part of any such amount, either pursuant to the
provisions of the Transaction Documents or at law or in equity, and
regardless of any other condition or contingency.
2.
Waiver of Demand. The
Subsidiary Guarantors hereby unconditionally: (i) waives any
requirement that the Secured Parties, in the event of a breach in
any material respect by the Company of any of its representations
or warranties in the Transaction Documents, first make demand upon,
or seek to enforce remedies against, the Company or any other
person before demanding payment of enforcement hereunder; (ii)
covenants that this Subsidiary Guaranty will not be discharged
except by complete performance of all the Obligations; (iii) agrees
that this Subsidiary Guaranty shall remain in full force and effect
without regard to, and shall not be affected or impaired, without
limitation, by, any invalidity, irregularity or unenforceability in
whole or in part of the Transaction Documents or any limitation on
the liability of the Company thereunder, or any limitation on the
method or terms of payment thereunder which may now or hereafter be
caused or imposed in any manner whatsoever, and (iv) waives
diligence, presentment and protest with respect to, and notice of
default in the performance or payment of any Obligation by the
Company under or in connection with the Transaction
Documents.
3.
Absolute Obligation.
Each Subsidiary Guarantor acknowledges and agrees that (i) no
Secured Party has made any representation or warranty to such
Subsidiary Guarantor with respect to the Company, any of its
subsidiaries, any Transaction Documents or any agreement,
instrument or document executed or delivered in connection
therewith, or any other matter whatsoever, and (ii) such Subsidiary
Guarantor shall be liable hereunder, and such liability shall not
be affected or impaired, irrespective of (A) the validity or
enforceability of any Transaction Documents, or any agreement,
instrument or document executed or delivered in connection
therewith, or the collectability of any of the Obligations, (B) the
preference or priority ranking with respect to any of the
Obligations, (C) the existence, validity, enforceability or
perfection of any security interest or collateral security under
any Transaction Documents, or the release, exchange, substitution
or loss or impairment of any such security interest or collateral
security, (D) any failure, delay, neglect or omission by any
Secured Party to realize upon or protect any direct or indirect
collateral security, indebtedness, liability or obligation, any
Transaction Documents, or any agreement, instrument or document
executed or delivered in connection therewith, or any of the
Obligations, (E) the existence or exercise of any right of set-off
by any Secured Party, (F) the existence, validity or enforceability
of any other guaranty with respect to any of the Obligations, the
liability of any other person in respect of any of the Obligations,
or the release of any such person or any other guarantor of any of
the Obligations, (G) any act or omission of any Secured Party in
connection with the administration of any Transaction Documents or
any of the Obligations, (H) the bankruptcy, insolvency,
reorganization or receivership of, or any other proceeding for the
relief of debtors commenced by or against, any person, (I) the
disaffirmance or rejection, or the purported disaffirmance or
purported rejection, of any of the Obligations, any Transaction
Documents, or any agreement, instrument or document executed or
delivered in connection therewith, in any bankruptcy, insolvency,
reorganization or receivership, or any other proceeding for the
relief of debtor. relating to any person, (J) any law, regulation
or decree now or hereafter in effect which might in any manner
affect any of the terms or provisions of any Transaction Documents,
or any agreement, instrument or document executed or delivered in
connection therewith or any of the Obligations, or which might
cause or permit to be invoked any alteration in the time
