Filed by Automated Filing Services Inc. (604) 609-0244 - Aegis Industries , Inc. - Exhibit 10.4






Exhibit 10.4 

[FORM OF] CONTINUING GUARANTY AGREEMENT 

          This
CONTINUING GUARANTY AGREEMENT (the “Guaranty”), dated as of May __, 2007
by AEGIS MERGER CORPORATION, a Delaware corporation (the
“Guarantor”), in favor of THOMAS KEENAN VENTURES, LLC
(“TKV”). 

PREAMBLE 

          Reference
is made to that certain $5,000,000 term loan (the “Loan”) from TKV to
Aegis Industries, Inc., a Nevada corporation (the “Company”), which Loan
is evidenced by, among other things, a Term Loan Note of the Company in favor of
TKV (as the same may be amended, supplemented, modified or replaced from time to
time, the “Note”). 

          The
Company owns 100% of the issued and outstanding capital stock of the Guarantor
and as such the Guarantor will receive a direct material benefit from the
extension of the Loan by TKV to the Company. 

          In
consideration of and as a material inducement for TKV having extended the Loan
to the Company, the Guarantor does hereby represent, warrant, covenant and agree
as follows: 

          1.
Definitions. 

          The
term “Obligations” and all other capitalized terms used herein without
definition shall have the respective meanings provided therefor in the Note.


          2.
Guaranty of Payment and Performance. 

          The
Guarantor hereby guarantees to TKV the full and punctual payment when due
(whether at stated maturity, by required pre-payment, by acceleration or
otherwise), of (a) the principal of and premium, if any, and interest on the
Loan, (b) obligations of the Company under the Note, and (c) all other monetary
Obligations of the Company to TKV, including, without limitation, all fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise, in each case whether now in existence or hereafter incurred
or arising, including all such Obligations which would become due but for the
operation of the automatic stay pursuant to §362(a) of the Federal Bankruptcy
Code and the operation of §§502(b) and 506(b) of the Federal Bankruptcy Code
(collectively, the “Guaranteed Obligations”). This Guaranty is an
absolute, unconditional and continuing guaranty of the full and punctual payment
and performance of all of the Guaranteed Obligations and not of their
collectibility only and is in no way conditioned upon any requirement that TKV
first attempt to collect any of the Guaranteed Obligations from the Company or
any other entity or other person primarily or secondarily liable with respect to
any of the Guaranteed Obligations or resort to any collateral security or other
means of obtaining payment. Should the Company default in the payment or
performance of any of the Guaranteed Obligations, the obligations of the
Guarantor 




hereunder with respect to such Guaranteed Obligations in
default shall become immediately due and payable to the TKV, without demand or
notice of any nature, all of which are expressly waived by the Guarantor.
Payments by the Guarantor hereunder may be required by TKV on any number of
occasions. 

          2.1.
Guarantor’s Agreement to Pay Enforcement Costs, etc. 

          The
Guarantor further agrees, as the principal obligor and not as a guarantor only,
to pay to TKV, on demand, all costs and expenses (including court costs and
legal expenses) incurred or expended by TKV following the occurrence and during
the continuation of an Event of Default in connection with the Guaranteed
Obligations, this Guaranty and the enforcement thereof, together with interest
on amounts recoverable under this §3 from the time when such amounts become due
until payment, whether before or after judgment, at the Default Rate,
provided that if such interest exceeds the maximum amount permitted to be
paid under applicable law, then such interest shall be reduced to such maximum
permitted amount. 

          3.
Waivers by Guarantor; TKV’s Freedom to Act. 

          The
Guarantor agrees that the Guaranteed Obligations will be paid and performed
strictly in accordance with their respective terms, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of TKV with respect thereto. The Guarantor waives
promptness, diligences, presentment, demand, protest, notice of acceptance,
notice of any Guaranteed Obligations incurred and all other notices of any kind,
all defenses which may be available by virtue of any valuation, stay, moratorium
law or other similar law now or hereafter in effect, any right to require the
marshalling of assets of the Company or any other entity or other person
primarily or secondarily liable with respect to any of the Guaranteed
Obligations, and all suretyship defenses generally. Without limiting the
generality of the foregoing, the Guarantor agrees to the provisions of all Loan
Documents evidencing, securing or otherwise executed in connection with any
Guaranteed Obligation and agrees that the obligations of the Guarantor hereunder
shall not be released or discharged, in whole or in part, or otherwise affected
by (i) the failure of TKV to assert any claim or demand or to enforce any right
or remedy against the Company or any other entity or other person primarily or
secondarily liable with respect to any of the Guaranteed Obligations; (ii) any
extensions, compromise, refinancing, consolidation or renewals of any Guaranteed
Obligation; (iii) any change in the time, place or manner of payment of any of
the Guaranteed Obligations or any rescissions, waivers, compromise, refinancing,
consolidation, amendments or modifications of any of the terms or provisions of
any Loan Document evidencing, securing or otherwise executed in connection with
any of the Guaranteed Obligations; (iv) the addition, substitution or release of
any entity or other person primarily or secondarily liable for any Guaranteed
Obligation, (v) the adequacy of any rights which TKV may have against any
collateral security or other means of obtaining repayment of any of the
Guaranteed Obligations; (vi) the impairment of any collateral securing any of
the Guaranteed Obligations, including without limitation the failure to perfect
or preserve any rights which TKV might have in such collateral security or the
substitution, exchange, surrender, release, loss or destruction of any such
collateral security; or (vii) any other act or omission (other than wrongful
acts or omissions of TKV that affect the validity or enforceability of the
Obligations against the Company) which might in any manner or to any extent vary
the risk of the Guarantor or otherwise operate as a release or discharge of the


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Guarantor, all of which may be done without notice to the
Guarantor. To the fullest extent permitted by law, the Guarantor hereby
expressly waives any and all rights or defenses arising by reason of (A) any
“one action” or “anti-deficiency” law which would otherwise prevent TKV from
bringing any action, including any claim for a deficiency, or exercising any
other right or remedy (including any right of set-off), against the Guarantor
before or after TKV’s commencement or completion of any foreclosure action,
whether judicially, by exercise of power of sale or otherwise, or (B) any other
law which in any other way would otherwise require any election of remedies by
TKV. 

          4.
Unenforceability of Guaranteed Obligations Against Company. 

          If
for any reason the Company has no legal existence or is under no legal
obligation to discharge any of the Guaranteed Obligations, or if any of the
Guaranteed Obligations have become irrecoverable from the Company by reason of
the Company’s insolvency, bankruptcy or reorganization or by other operation of
law or for any other reason, this Guaranty shall nevertheless be binding on the
Guarantor to the same extent as if the Guarantor at all times had been the
principal obligor on all such Guaranteed Obligations. In the event that
acceleration of the time for payment of any of the Guaranteed Obligations is
stayed upon the insolvency, bankruptcy or reorganization of the Company, or for
any other reason, all such amounts otherwise subject to acceleration under the
terms of any Loan Document evidencing, securing or otherwise executed in
connection with any Guaranteed Obligation shall be immediately due and payable
by the Guarantor. 

          5.
Subrogation; Subordination. 

          5.1.
Waiver of Rights Against Company. 

          Until
the final payment and performance in full of all of the Guaranteed Obligations
and any and all other obligations of the Company to TKV or any affiliate of TKV,
the Guarantor shall not exercise any rights against the Company arising as a
result of payment by the Guarantor hereunder, by way of subrogation,
reimbursement, restitution, contribution or otherwise, and will not prove any
claim in competition with TKV or such affiliate in respect of any payment
hereunder in any bankruptcy, insolvency or reorganization case or proceedings of
any nature; the Guarantor will not claim any setoff, recoupment or counterclaim
against the Company in respect of any liability of the Guarantor to the Company;
and the Guarantor waives any benefit of and any right to participate in any
collateral security which may be held by TKV or any such affiliate.

          5.2.
Subordination. 

          The
payment of any amounts due with respect to any indebtedness of the Company now
or hereafter owed to the Guarantor is hereby subordinated to the prior payment
in full of all of the Guaranteed Obligations and any and all other obligations
of the Company to TKV or any affiliate of TKV. The Guarantor agrees that, after
the occurrence of any default in the payment or performance of any of the
Guaranteed Obligations, the Guarantor will not demand, sue for or otherwise
attempt to collect any such indebtedness of the Company to the Guarantor until
all of the Guaranteed 

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Obligations shall have been paid in full. If, notwithstanding
the foregoing sentence, the Guarantor shall collect, enforce or receive any
amounts in respect of such indebtedness, such amounts shall be collected,
enforced and received by the Guarantor as trustee for the TKV and be paid over
to TKV on account of the Guaranteed Obligations without affecting in any manner
the liability of the Guarantor under the other provisions of this Guaranty. 

          6.
Further Assurances. 

          The
Guarantor agrees to do all such things and execute all such documents as TKV may
reasonably consider necessary or desirable to give full effect to this Guaranty
and to perfect and preserve the rights and powers of TKV hereunder. The
Guarantor acknowledges and confirms that the Guarantor itself has established
its own adequate means of obtaining from the Company on a continuing basis all
information desired by the Guarantor concerning the financial condition of the
Company and that the Guarantor will look to the Company and not to TKV in order
for the Guarantor to keep adequately informed of changes in the Company’s
financial condition. 

          7.
Termination; Reinstatement. 

          This
Guaranty shall remain in full force and effect notwithstanding any attempt by
the Guarantor to revoke this Guaranty. This Guaranty shall continue to be
effective or be reinstated, notwithstanding any such attempted revocation, if at
any time any payment made or value received with respect to any Guaranteed
Obligation is rescinded or must otherwise be returned by TKV upon the
insolvency, bankruptcy or reorganization of the Company, or otherwise, all as
though such payment had not been made or value received. 

          8.
Successors and Assigns. 

          This
Guaranty shall (i) be binding upon the Guarantor and the Guarantor’s permitted
successors and assigns, provided that the Guarantor shall have no right
to assign or transfer any of the Guarantor’s obligations hereunder, and (ii)
inure to the benefit of, and be enforceable by, TKV, its successors, transferees
and assigns, and any person who shall from time to time be the owner or holder
of any of the Guaranteed Obligations. Without limiting the generality of the
foregoing sentence, TKV may assign or otherwise transfer any Loan Document held
by it evidencing, securing or otherwise executed in connection with the
Guaranteed Obligations, or sell participations in any interest therein, to any
other entity or other person, and such other entity or other person shall
thereupon become vested, to the extent set forth in the agreement evidencing
such assignment, transfer or participation, with all the rights in respect
thereof granted to the TKV herein. 

          9.
Amendments and Waivers. 

          No
amendment or waiver of any provision of this Guaranty nor consent to any
departure by the Guarantor therefrom shall be effective unless the same shall be
in writing and signed by TKV. No failure on the part of TKV to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. 

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          10.
Notices. 

          All
notices and other communications called for hereunder shall be made in writing
and, unless otherwise specifically provided herein, shall be made or given in
the manner set forth in the Security Agreement. 

          11.
Governing Law; Consent to Jurisdiction. 

          THIS
GUARANTY IS INTENDED TO TAKE EFFECT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CONNECTICUT. The Guarantor agrees
that any suit for the enforcement of this Guaranty may be brought in the courts
of the State of Connecticut or any federal court sitting therein and consents to
the nonexclusive jurisdiction of such court and to service of process in any
such suit being made upon the Guarantor by registered or certified mail, return
receipt requested, at the address set forth in the Security Agreement. The
Guarantor hereby waives any objection that it may now or hereafter have to the
venue of any such suit or any such court or that such suit was brought in an
inconvenient court. 

          12.
Waiver of Jury Trial. 

          THE
GUARANTOR AND TKV (BY ITS ACCEPTANCE OF THIS GUARANTY) HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
GUARANTY OR ANY OTHER LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF TKV RELATING TO THE ADMINISTRATION OF THE LOANS OR
ENFORCEMENT OF THIS GUARANTY OR THE OTHER LOAN DOCUMENTS, AND AGREE THAT NEITHER
PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, THE
GUARANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. The Guarantor (i)
certifies that neither TKV nor any representative, agent or attorney of TKV has
represented, expressly or otherwise, that TKV would not, in the event of
litigation, seek to enforce the foregoing waivers and (ii) acknowledges that, in
entering into the Loan Documents to which TKV is a party, TKV is relying upon,
among other things, the waivers and certifications contained in this §13. 

          13.
Miscellaneous. 

          This
Guaranty constitutes the entire agreement of the Guarantor with respect to the
matters set forth herein. The rights and remedies herein provided are cumulative
and not exclusive of any remedies provided by law or any other agreement, and
this Guaranty shall be in addition to any other guaranty of or collateral
security for any of the Guaranteed Obligations.

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The invalidity or unenforceability of any one or more sections
of this Guaranty shall not affect the validity or enforceability of its
remaining provisions. Captions are for the ease of reference only and shall not
affect the meaning of the relevant provisions. The meanings of all defined terms
used in this Guaranty shall be equally applicable to the singular and plural
forms of the terms defined. 

          14.
Prejudgment Remedy Waiver. 

          TO
INDUCE TKV TO ENTER INTO THE COMMERCIAL LOAN TRANSACTIONS EVIDENCED BY THE
CREDIT AGREEMENT, THE NOTES, AND ANY OTHER LOAN DOCUMENTS, GUARANTOR AGREES THAT
THIS IS A COMMERCIAL TRANSACTION AND NOT A CONSUMER TRANSACTION, AND
WAIVES ANY RIGHT TO NOTICE AND A HEARING UNDER CHAPTER 903a OF THE CONNECTICUT
GENERAL STATUTES, AS AMENDED, OR UNDER ANY OTHER FEDERAL OR STATE STATUTE OR
STATUTES OR FOREIGN LAWS AFFECTING PREJUDGMENT REMEDIES, AND AUTHORIZES TKV’S
ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED
THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER, AND WAIVES ANY CLAIM IN
TORT, CONTRACT OR OTHERWISE AGAINST TKV’S ATTORNEY WHICH MAY ARISE OUT OF SUCH
ISSUANCE OF A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER. FURTHER, IN THE
EVENT TKV SEEKS TO TAKE POSSESSION OF ANY OR ALL OF GUARANTOR’S PROPERTIES OR
OTHER ASSETS BY COURT PROCESS OR OTHER METHOD AVAILABLE UNDER THE LAW, GUARANTOR
IRREVOCABLY WAIVES ANY BOND AND ANY SURETY OR SECURITY RELATING THERETO REQUIRED
BY ANY STATUTE, COURT RULE OR OTHERWISE AS AN INCIDENT TO SUCH POSSESSION, AND
WAIVES ANY DEMAND FOR POSSESSION PRIOR TO THE COMMENCEMENT OF ANY SUIT OR ACTION
TO RECOVER WITH RESPECT THERETO. SPECIFICALLY, GUARANTOR RECOGNIZES AND
UNDERSTANDS THAT THE EXERCISE OF TKV’S RIGHTS DESCRIBED ABOVE MAY RESULT IN THE
ATTACHMENT OF OR LEVY AGAINST GUARANTOR’S PROPERTY, AND SUCH WRIT FOR A
PREJUDGMENT REMEDY WILL NOT HAVE THE PRIOR WRITTEN APPROVAL OR SCRUTINY OF A
COURT OF LAW OR OTHER JUDICIAL OFFICER AND GUARANTOR WILL NOT HAVE THE RIGHT TO
ANY NOTICE OR PRIOR HEARING WHERE GUARANTOR MIGHT CONTEST SUCH A PROCEDURE. THE
INTENT OF GUARANTOR IS TO GRANT TO TKV FOR GOOD AND VALUABLE CONSIDERATION THE
RIGHT TO OBTAIN SUCH A PREJUDGMENT REMEDY AND TO EXPRESS ITS BELIEF THAT ANY
SUCH PREJUDGMENT REMEDY OBTAINED IS VALID AND CONSTITUTIONAL UNLESS A COURT OF
COMPETENT JURISDICTION SHOULD DETERMINE OTHERWISE. FURTHER, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, GUARANTOR HEREBY WAIVES DEMAND, PRESENTMENT
FOR PAYMENT, PROTEST, NOTICE OF PROTEST, NOTICE OF DISHONOR, DILIGENCE IN
COLLECTION, NOTICE OF NONPAYMENT OF ANY NOTES AND ANY AND ALL NOTICES OF A LIKE
NATURE. FURTHER, TO THE EXTENT NOT OTHERWISE EXPRESSLY PROVIDED HEREIN,
GUARANTOR EXPRESSLY WAIVES ALL DEFENSES OF SURETYSHIP OR IMPAIRMENT OF
COLLATERAL. 

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          GUARANTOR
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF TKV HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT TKV WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS. GUARANTOR ACKNOWLEDGES AND STIPULATES THAT THE
WAIVERS GRANTED ABOVE ARE MADE KNOWINGLY, VOLUNTARILY AND INTENTIONALLY AND
AFTER FULL CONSULTATION WITH COUNSEL AND CONSTITUTE A MATERIAL INDUCEMENT FOR
TKV TO MAKE THE LOAN. 

          15.
Other Guarantors. 

          The
Guarantor acknowledges that other individuals or entities have or may also from
time to time become primarily or secondarily liable with respect to any of the
Guaranteed Obligations (including each other guarantor, the “Other
Guarantors”), in which event the liability of the Guarantor hereunder shall
be joint and several. The Guarantor further acknowledges that the failure of any
of the Other Guarantors, if any, to execute and deliver their respective
guarantees shall not discharge the liability of the Guarantor under this
Guaranty. 

[THE NEXT PAGE IS THE SIGNATURE PAGE] 

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          IN
WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed and
delivered as of the date first above written. 

AEGIS MERGER CORPORATION



By_______________________________
             
Authorized Representative 

 

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