Document:

Exhibit 10.5

 

EXECUTION COPY

 

PROMISSORY NOTE

 

$2,500,000.00

 

January 19, 2006

 

CGI Holding Corporation

5 Revere Drive

Suite 510

Northbrook, Illinois 60062

(Hereinafter
referred to as “Borrower”)

 

Wachovia Bank, National Association

301 South Tryon Street

Charlotte, North Carolina 28202

(Hereinafter referred
to as “Bank”)

 

Borrower promises to
pay to the order of Bank, in lawful money of the United States of America, at
its office indicated above or wherever else Bank may specify, the sum of Two
Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00) or such sum as may be advanced and outstanding from time to time, with
interest on the unpaid principal balance at the rate and on the terms provided
in this Promissory Note (including all renewals, extensions or modifications
hereof, this “Note”).

 

LOAN AGREEMENT.  This
Note is subject to the provisions of that certain Loan Agreement between Bank
and Borrower of even date herewith, as modified from time to time.

 

USE OF
PROCEEDS.  Borrower shall use the proceeds of the
loan(s) evidenced by this Note to purchase all of the outstanding capital stock
of Morex Marketing Group
LLC.  

 

SECURITY. 
Borrower and Guarantors have granted Bank a security interest in the collateral
described in the Loan Documents, including, but not limited to, personal
property collateral described in that certain Security Agreement of even date
herewith. 

 

INTEREST
RATE.  Interest shall accrue on the
unpaid principal balance of this Note from the date hereof at the LIBOR Market
Index Rate plus 2.15%, as that rate may change from day to day in accordance
with changes in the LIBOR Market Index Rate (“Interest Rate”).  “LIBOR Market Index Rate”, for any day, means
the rate for 1 month U.S. dollar deposits as reported on Telerate page 3750
as of 11:00 a.m., London time, the second London business day before the
relevant interest period begins, or if such day is not a London business day,
then the immediately preceding London business day (or if not so reported, then
as determined by Bank from another recognized source or interbank quotation).

 

DEFAULT
RATE.  In addition to all other rights
contained in this Note, if a Default (as defined herein) occurs and as long as
a Default continues, all outstanding Obligations, other than Obligations under any swap agreements (as defined in 11
U.S.C. § 101, as in effect from time to

 

 

time) between Borrower and Bank or its
affiliates, shall bear interest at the
Interest Rate plus 3% (“Default Rate”). 
The Default Rate shall also apply from acceleration until the
Obligations or any judgment thereon is paid in full.

 

INTEREST
AND FEE(S) COMPUTATION (ACTUAL/360).  Interest and fees, if any, shall be computed
on the basis of a 360-day year for the actual number of days in the applicable
period (“Actual/360 Computation”).  The
Actual/360 Computation determines the annual effective interest yield by taking
the stated (nominal) rate for a year’s period and then dividing said rate by
360 to determine the daily periodic rate to be applied for each day in the applicable
period.  Application of the Actual/360
Computation produces an annualized effective rate exceeding the nominal rate.

 

REPAYMENT
TERMS.  This Note shall be due and payable
in consecutive monthly payments of
equal principal in the amount of $208,333.33 plus accrued interest, commencing
on February 19, 2006, and continuing on the same day of each
month thereafter until fully paid.  In
any event, all principal and accrued interest shall be due and payable on January 19,
2007.

 

APPLICATION
OF PAYMENTS.  Monies received
by Bank from any source for application toward payment of the Obligations shall
be applied to accrued interest and then to principal.  If a Default occurs, monies
may be applied to the Obligations in any manner or order deemed appropriate by
Bank.

 

If any payment received
by Bank under this Note or other Loan Documents is rescinded, avoided or for
any reason returned by Bank because of any adverse claim or threatened action,
the returned payment shall remain payable as an obligation of all persons
liable under this Note or other Loan Documents as though such payment had not
been made.

 

DEFINITIONS.  Loan Documents.  The term “Loan Documents,” as used in this
Note and the other Loan Documents, refers to all documents executed in
connection with or related to the loan evidenced by this Note, the $15,000,000
revolving credit promissory note executed on the date hereof (the “Revolving
Note”) and any prior notes which evidence all or any portion of the loan
evidenced by this Note, and any letters of credit issued pursuant to any loan
agreement to which this Note is subject, any applications for such letters of
credit and any other documents executed in connection therewith or related
thereto, and may include, without limitation, a
loan agreement, this Note, the Revolving Note, guaranty agreements, security
agreements, security instruments, financing statements, mortgage instruments,
any renewals or modifications, whenever any of the foregoing are executed, but
does not include swap agreements (as defined in 11 U.S.C. § 101, as in
effect from time to time).  Obligations.  The term
“Obligations”, as used in this Note and the other Loan Documents, refers to any
and all indebtedness and other obligations under this Note, the Revolving Note,
all other obligations under any other Loan Documents, and all obligations under
any swap agreements (as defined in 11 U.S.C. § 101, as in effect from
time to time) between Borrower and Bank, or its affiliates, whenever
executed.  Certain
Other Terms.  All terms that
are used but not otherwise defined in any of the Loan Documents shall have the
definitions provided in the Uniform Commercial Code.

 

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LATE
CHARGE.  If any payments are not timely
made, Borrower shall also pay to Bank a late charge equal to 4% of each payment past due for 15 or more
days.  

 

Acceptance by Bank of
any late payment without an accompanying late charge shall not be deemed a
waiver of Bank’s right to collect such late charge or to collect a late charge
for any subsequent late payment received.

 

ATTORNEYS’
FEES AND OTHER COLLECTION COSTS.  Borrower
shall pay all of Bank’s reasonable expenses incurred to enforce or collect any
of the Obligations including, without limitation, reasonable arbitration,
paralegals’, attorneys’ and experts’ fees and expenses, whether incurred
without the commencement of a suit, in any trial, arbitration, or
administrative proceeding, or in any appellate or bankruptcy proceeding.

 

USURY.  If at any time the effective interest rate
under this Note would, but for this paragraph, exceed the maximum lawful rate,
the effective interest rate under this Note shall be the maximum lawful rate,
and any amount received by Bank in excess of such rate shall be applied to
principal and then to fees and expenses, or, if no such amounts are owing,
returned to Borrower.

 

GRACE/CURE
PERIOD.  Grace Period.  The failure of timely payment of the
Obligations shall not be a Default until 5 days after such payment is due.  Cure Period.  Except as provided below, any Default, other
than non-payment, may be cured within 30 days after written notice thereof is
mailed to Borrower by Bank. Borrower’s right to cure shall be applicable only
to curable defaults and shall not apply, without limitation, to Defaults based
upon False Warranty or Cessation; Bankruptcy set forth below.  Borrower shall have the right to cure a
Default only once during any 12 month period. 
Bank shall not exercise its remedies to collect the Obligations except
as Bank reasonably deems necessary to protect its interest in collateral
securing the Obligations during a cure period.

 

DEFAULT.  If any of the following occurs and is not
cured within the applicable cure period, a default (“Default”) under this Note
shall exist:  Nonpayment; Nonperformance.  The failure of timely payment or performance
of the Obligations or Default under this Note or any other Loan Documents.  Loan
Document Default.  A default under any Loan Document.  Breach.  Any
breach of any agreement contained or referred to in this Note or any other Loan
Document.  False Warranty.  A warranty or representation made in the Loan
Documents or furnished to Bank in connection with the loan evidenced by this
Note is materially false when made.  Cross Default. At Bank’s option, any default in payment or
performance of any obligation under any other loans, contracts or agreements of
Borrower or any Guarantor, any general partner of or the holder(s) of the
majority ownership interests of Borrower with Bank or its affiliates which
default is not cured within any applicable cure period, unless, but only as
long as, the existence of any such default is being contested by the Borrower or such Guarantor in good faith by
appropriate proceedings and adequate reserves in respect thereof have been
established on the books of the Borrower or such Guarantor to the extent
required by GAAP.  Cessation; Bankruptcy.  The death of, appointment of a guardian for,
dissolution or termination of existence of (subject to the provisions set forth in clause
(iv) of the subparagraph entitled “Material
Capital Structure or Business Alteration” below), loss of good standing status by

 

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(unless such loss would not have a material
adverse effect upon the operations or financial condition of the Borrower), appointment of a
receiver for, assignment for the benefit of creditors of, or commencement of
any bankruptcy or insolvency proceeding by or against Borrower or any
Guarantor, or any general partner of or the holder(s) of the majority ownership
interests of Borrower, or any party to the Loan Documents.  Material Capital Structure or Business
Alteration.  Without prior
written consent of Bank, (i) a material alteration in the kind or type of
Borrower’s business or that of any Guarantor; (ii) the sale of
substantially all of the business or assets of Borrower or any Guarantor, or a
material portion (10% or more) of such business or assets if such a sale is
outside the ordinary course of business of Borrower or any Guarantor, or more
than 50% of the outstanding stock or voting power of or in any such entity in a
single transaction or a series of transactions; (iii) any acquisition that
does not constitute a Permitted Acquisition or (iv) should any Guarantor
enter into any merger or consolidation; provided that any Guarantor may merge
with any other Guarantor so long as the surviving entity is a Guarantor. 

 

REMEDIES UPON DEFAULT.  If a
Default occurs under this Note or any Loan Documents, Bank may at any time
thereafter, take the following actions:  Bank Lien.  Foreclose its security interest or lien
against Borrower’s and Guarantors’ accounts without notice.  Acceleration Upon Default.  Accelerate the maturity of this Note and, at
Bank’s option, any or all other Obligations, other than Obligations under any
swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to
time) between Borrower and Bank, or its affiliates, which shall be due in
accordance with and governed by the provisions of said swap agreements;
whereupon this Note and the accelerated Obligations shall be immediately due
and payable; provided, however, if the Default is based upon a bankruptcy or
insolvency proceeding commenced by or against Borrower or endorser of this
Note, all Obligations (other than Obligations under any swap agreement as
referenced above) shall automatically and immediately be due and payable.  Cumulative.  Exercise any rights and remedies as provided
under the Note and other Loan Documents, or as provided by law or equity.

 

WAIVERS AND
AMENDMENTS.  No waivers, amendments or
modifications of this Note and other Loan Documents shall be valid unless in
writing and signed by an officer of Bank. 
No waiver by Bank of any Default shall operate as a waiver of any
other Default or the same Default on a future occasion.  Neither the failure nor any delay on the part
of Bank in exercising any right, power, or remedy under this Note and other
Loan Documents shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.

 

Except to the extent otherwise provided by
the Loan Documents or prohibited by law, each Borrower and each other person
liable under this Note waives presentment, protest, notice of dishonor, demand for payment, notice of intention to accelerate maturity, notice
of acceleration of maturity, notice of sale and all other notices of any
kind.  Further, each agrees that Bank may
(i) extend, modify or renew this
Note or make a novation of the loan evidenced by this Note, and/or (ii) grant
releases, compromises or indulgences with respect to any collateral securing
this Note, or with respect to Borrower or other person liable under this Note
or any other Loan Documents, all without notice to or consent of Borrower and
other such person, and without affecting the liability of Borrower and other
such person; provided, Bank may not extend,

 

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modify or renew this Note or make a novation
of the loan evidenced by this Note without the consent of Borrower which
increases the burdens of Borrower without the consent of Borrower.

 

MISCELLANEOUS
PROVISIONS.  Assignment.  This Note and the other Loan Documents shall
inure to the benefit of and be binding upon the parties and their respective
heirs, legal representatives, successors and assigns.  Bank’s interests in and rights under this
Note and the other Loan Documents are freely assignable, in whole or in part,
by Bank.  In addition, nothing in this
Note or any of the other Loan Documents shall prohibit Bank from pledging or
assigning this Note or any of the other Loan Documents or any interest therein
to any Federal Reserve Bank.  Borrower
shall not assign its rights and interest hereunder without the prior written
consent of Bank, and any attempt by Borrower to assign without Bank’s prior
written consent is null and void.  Any
assignment shall not release Borrower from the Obligations.  Applicable Law; Conflict Between
Documents.  This Note and, unless otherwise provided in
any other Loan Document, the other Loan Documents shall be governed by and
construed  under the laws of the
state named in Bank’s address on the first page hereof without regard to that state’s conflict of laws
principles.  If the terms of this Note
should conflict with the terms of any loan agreement, the terms of this Note
shall control.  Security
Interest.  Except as
prohibited by law, Borrower and Guarantors grant Bank a security interest in
the collateral described in the Security Agreement of even date herewith.  Swap Agreements.  All
swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time), if any, between Borrower and Bank
or its affiliates are independent agreements governed by the written provisions
of said swap agreements, which will remain in full force and effect, unaffected
by any repayment, prepayment, acceleration, reduction, increase or change in
the terms of this Note, except as otherwise expressly provided in said written
swap agreements, and any payoff statement from Bank relating to this Note shall
not apply to said swap agreements unless expressly referred to in such payoff
statement.  Jurisdiction.  Borrower irrevocably agrees to non-exclusive
personal jurisdiction in the state named in Bank’s address on the first page hereof.  Severability.  If any
provision of this Note or of the other Loan Documents shall be prohibited or
invalid under applicable law, such provision shall be ineffective but only to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Note or other
such document.  Notices.  Any notices to Borrower shall be sufficiently
given, if in writing and mailed, hand delivered or sent via telecopy (or
other facsimile device), recognized overnight courier service or certified mail to the Borrower’s address shown above or such
other address as provided hereunder, and to Bank, if in writing and, hand
delivered or sent via telecopy (or other facsimile device), recognized
overnight courier service or certified mail
to Bank’s office address shown above or
such other address as Bank may specify in writing from time to time.  Notices to Bank must include the mail
code.  In the event that Borrower changes Borrower’s address at any time prior
to the date the Obligations are paid in full, Borrower agrees to promptly give
written notice of said change of address by registered or certified mail,
return receipt requested, all charges prepaid. 

 

Plural;
Captions.  All references in the Loan
Documents to Borrower, person, document or other nouns of reference mean both
the singular and plural form, as the case may be, and the term “person” shall
mean any individual, person or entity. 
The captions contained in the Loan Documents are inserted for
convenience only and shall not affect the meaning or interpretation of the Loan
Documents.  Advances.  Bank may, in its sole discretion and if requested
by Borrower,

 

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make other advances
which shall be deemed to be advances under this Note, even though the stated
principal amount of this Note may be exceeded as a result thereof.  Posting of Payments.  All payments received during normal banking
hours after 2:00 p.m. local time at the office of Bank first shown above
shall be deemed received at the opening of the next banking day.  Joint and Several
Obligations.  Each entity executing this Note is jointly
and severally obligated.  Fees and Taxes.  Borrower shall promptly pay all documentary,
intangible recordation and/or similar taxes on this transaction whether
assessed at closing or arising from time to time.  LIMITATION
ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES
HERETO, INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL,
MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR
AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS
AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN OR
AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT
SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY
DAMAGES.   EACH OF THE PARTIES HEREBY
EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE
OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING,
CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION,
JUDICIALLY OR OTHERWISE.  Patriot Act Notice. 
To help fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account.  For purposes of this section, account shall
be understood to include loan accounts.  Final Agreement. 
This Note and the other Loan Documents represent the final
agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties.  There are no unwritten oral agreements
between the parties.

 

ARBITRATION.  Upon demand of any party hereto, whether made
before or after institution of any judicial proceeding, any claim or
controversy arising out of or relating to the Loan Documents between parties
hereto (a “Dispute”) shall be resolved by binding arbitration conducted under
and governed by the Commercial Financial Disputes Arbitration Rules (the “Arbitration
Rules”) of the American Arbitration Association (the “AAA”) and the Federal
Arbitration Act.  Disputes may include,
without limitation, tort claims, counterclaims, a dispute as to whether a
matter is subject to arbitration, claims brought as class actions, or claims
arising from documents executed in the future. 
A judgment upon the award may be entered in any court having
jurisdiction. Notwithstanding the foregoing, this arbitration provision does
not apply to disputes under or related to swap agreements.  Special Rules.  All arbitration hearings shall be conducted
in the city named in the address of Bank first stated above.  A hearing shall begin within 90 days of
demand for arbitration and all hearings shall conclude within 120 days of
demand for arbitration.  These time
limitations may not be extended unless a party shows cause for extension and
then for no more than a total of 60 days. 
The expedited procedures set forth in Rule 51 et seq. of the
Arbitration Rules shall be applicable to claims of less than
$1,000,000.00.  Arbitrators shall be licensed
attorneys selected from the Commercial Financial Dispute Arbitration Panel of
the AAA.  The parties do not waive
applicable Federal or state substantive

 

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law except as provided
herein.  Preservation
and Limitation of Remedies. 
Notwithstanding the preceding binding arbitration provisions, the
parties agree to preserve, without diminution, certain remedies that any party
may exercise before or after an arbitration proceeding is brought.  The parties shall have the right to proceed
in any court of proper jurisdiction or by self-help to exercise or prosecute
the following remedies, as applicable: (i) all rights to foreclose against
any real or personal property or other security by exercising a power of sale
or under applicable law by judicial foreclosure including a proceeding to
confirm the sale; (ii) all rights of self-help including peaceful
occupation of real property and collection of rents, set-off, and peaceful
possession of personal property; (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment.  Any claim or controversy with regard to any
party’s entitlement to such remedies is a Dispute.  Waiver of Jury Trial.  THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO
BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE
TO JURY TRIAL WITH REGARD TO A DISPUTE AS TO WHICH BINDING ARBITRATION HAS BEEN
DEMANDED.

 

DISCLOSURE OF INFORMATION;
CONFIDENTIALITY.  Bank shall hold all non-public information
with respect to Borrower and its subsidiaries obtained pursuant to the Loan
Documents in accordance with its customary procedures for handling confidential
information; provided, that Bank may disclose any such information to
the extent such disclosure is (i) required by law or requested or required
pursuant to any legal process, (ii) requested by, or required to be
disclosed to, any regulatory agency or authority, (iii) used in any suit,
action or proceeding for the purpose of defending itself, reducing its
liability or protecting any of its claims, rights, remedies or interests under
or in connection with the Loan Documents or (iv) which had been publicly
disclosed other than as a result of a disclosure by Bank prohibited by this
Agreement; provided  futher, Bank shall notify Borrower of any
potential disclosure pursuant to (i), (ii) or (iii) above and Borrower
may defend against the disclosures set forth in (i), (ii) or (iii) above.

 

 

[Signature Page Follows]

 

7

 

IN WITNESS
WHEREOF, Borrower, on the day and year first above written, has caused this Note
to be executed under seal.

 

 

	
  [CORPORATE SEAL]

  	
  CGI HOLDING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  CEO

  

 

 

[Promissory Note – CGI Holding Corporation]Exhibit 10.6

 

EXECUTION
COPY

 

GUARANTY AGREEMENT

 

January 19, 2006

 

CGI
Holding Corporation

5
Revere Drive

Suite 510

Northbrook,
Illinois 60062

(“Borrower”,
and collectively with the

subsidiaries
of Borrower party hereto, the “Guarantors”)

 

Wachovia Bank, National
Association

301 South Tryon Street

Charlotte, North Carolina
28202

(Hereinafter referred to
as “Bank”)

 

To induce Bank to make,
extend or renew loans, advances, credit, or other financial accommodations to
or for the benefit of Borrower, and in consideration of loans, advances,
credit, or other financial accommodations made, extended or renewed to or for
the benefit of Borrower, each Guarantor hereby absolutely, irrevocably and
unconditionally guarantees to Bank and its successors, assigns and affiliates
the timely payment and performance of all liabilities and obligations of
Borrower to Bank under the revolving credit promissory note in the original
amount of $15,000,000.00 dated as of the date hereof (the “Revolving Note”) and
the term promissory note in the original amount of $2,500,000.00 dated as of
the date hereof (the “Term Note” and, collectively with the Revolving Note, the
“Notes”), the Loan Documents and all obligations with respect to any swap
agreements (as defined in 11 U.S. Code § 101), and all extensions,
modifications and renewals thereof, including without limitation all principal,
interest, charges, and costs and expenses incurred thereunder (including
attorneys’ fees and other costs of collection incurred, regardless of whether
suit is commenced) (collectively, the “Guaranteed Obligations”).

 

Each Guarantor further
covenants and agrees:

 

GUARANTOR’S
LIABILITY.  This
Guaranty Agreement (this “Guaranty”) is a continuing and unconditional guaranty
of payment and performance and not of collection.  The parties to this Guaranty are jointly and
severally obligated hereunder.  This
Guaranty does not impose any obligation on Bank to extend or continue to extend
credit or otherwise deal with Borrower at any subsequent time.  This Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time any payment of the
Guaranteed Obligations is rescinded, avoided or for any other reason must be
returned by Bank, and the returned payment shall remain payable as part of the Guaranteed
Obligations, all as though such payment had not been made.  Except to the extent the provisions of this
Guaranty give Bank additional rights, this Guaranty shall not be deemed to
supersede or replace any other guaranties given to Bank by any Guarantor; and
the obligations guaranteed hereby shall be in addition to any other obligations
guaranteed by Guarantor pursuant to any other agreement of guaranty given to
Bank and other guaranties of the Guaranteed Obligations.

 

 

TERMINATION OF GUARANTY.  Each Guarantor may terminate this
Guaranty only by written notice, delivered personally to or received by
certified or registered United States Mail by an authorized officer of Bank at
the address for notices provided herein. 
Such termination shall be effective with respect to Guaranteed
Obligations arising more than 15 days after the date such written notice is
received by said Bank officer. No Guarantor may terminate this Guaranty as to
Guaranteed Obligations (including any subsequent extensions, modifications or
compromises of the Guaranteed Obligations) then existing, or to Guaranteed
Obligations arising subsequent to receipt by Bank of said notice if such
Guaranteed Obligations are a result of Bank’s obligation to make advances
pursuant to a commitment entered into prior to expiration of the 15 day notice
period, or are a result of advances which are necessary for Bank to protect its
collateral or otherwise preserve its interests. 
Termination of this Guaranty by any single Guarantor will not affect the
existing and continuing obligations of any other Guarantor hereunder.

 

CONSENT TO MODIFICATIONS.  Each Guarantor consents and
agrees that Bank may from time to time, in its sole discretion, without
affecting, impairing, lessening or releasing the obligations of any Guarantor
hereunder (a) extend or modify the time, manner, place or terms of payment
or performance and/or otherwise change or modify the credit terms of the
Guaranteed Obligations; (b) increase, renew, or enter into a novation of
the Guaranteed Obligations; (c) waive or consent to the departure from
terms of the Guaranteed Obligations; (d) permit any change in the business
or other dealings and relations of Borrower or any other guarantor with Bank; (e) proceed
against, exchange, release, realize upon, or otherwise deal with in any manner
any collateral that is or may be held by Bank in connection with the Guaranteed
Obligations or any liabilities or obligation of Guarantor; and (f) proceed
against, settle, release, or compromise with Borrower, any insurance carrier,
or any other person or entity liable as to any part of the Guaranteed
Obligations, and/or subordinate the payment of any part of the Guaranteed
Obligations to the payment of any other obligations, which may at any time be
due or owing to Bank; all in such manner and upon such terms as Bank may deem
appropriate, and without notice to or further consent from Guarantor.  No invalidity, irregularity,
discharge or unenforceability of, or action or omission by Bank relating to any
part of the Guaranteed Obligations or any security therefor shall affect or
impair this Guaranty.

 

WAIVERS AND ACKNOWLEDGMENTS.  Each Guarantor waives and
releases the following rights, demands, and defenses any Guarantor may have
with respect to Bank and collection of the Guaranteed Obligations: (a) promptness
and diligence in collection of any of the Guaranteed Obligations from Borrower
or any other person liable thereon, and in foreclosure of any security interest
and sale of any property serving as collateral for the Guaranteed Obligations; (b) any
law or statute that requires that Bank make demand upon, assert claims against,
or collect from Borrower or other persons or entities, foreclose any security
interest, sell collateral, exhaust any remedies, or take any other action
against Borrower or other persons or entities prior to making demand upon,
collecting from or taking action against Guarantor with respect to the
Guaranteed Obligations, including any such rights Guarantor might otherwise
have had under Va. Code §§ 49-25 and 49-26, et seq., N.C.G.S. §§ 26-7, et
seq., Tenn. Code Ann § 47-12-101,
O.C.GA §10-7 24 and any successor statute and any other applicable law; (c) any
law or statute that requires that Borrower or any other person be joined in,
notified of or made part of

 

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any
action against Guarantor; (d) that Bank preserve, insure or perfect any
security interest in the collateral or sell or dispose of collateral in a
particular manner or at a particular time; (e) notice of extensions,
modifications, renewals, or novations of the Guaranteed Obligations, of any new
transactions or other relationships between Bank, Borrower and/or any
guarantor, and of changes in the financial condition of, ownership of, or
business structure of Borrower or any other guarantor, (f) presentment,
protest, notice of dishonor, notice of default, demand for payment, notice of
intention to accelerate maturity, notice of acceleration of maturity, notice of
sale, and all other notices of any kind whatsoever; (g) the right to
assert against Bank any defense (legal or equitable), set-off, counterclaim, or
claim that Guarantor may have at any time against Borrower or any other party
liable to Bank other than prior payment; (h) all defenses relating to
invalidity, insufficiency, unenforceability, enforcement, release or impairment
of Bank’s lien on any collateral, of the Loan Documents, or of any other
guaranties held by Bank; (i) any claim or defense that acceleration of
maturity of the Guaranteed Obligations is stayed against Guarantor because of
the stay of assertion or of acceleration of claims against any other person or
entity for any reason including the bankruptcy or insolvency of that person or
entity; and (j) the benefit of any exemption claimed by Guarantor.  Guarantor acknowledges and represents that
Guarantor has relied upon Guarantor’s own due diligence in making an
independent appraisal of Borrower, Borrower’s business affairs and financial
condition, and any collateral; Guarantor will continue to be responsible for
making an independent appraisal of such matters; and Guarantor has not relied
upon and will not hereafter rely upon Bank for information regarding Borrower
or any collateral.

 

INTEREST AND APPLICATION OF PAYMENTS. 
Regardless of any other provision of this Guaranty or other Loan
Documents, if for any reason the effective interest on any of the Guaranteed
Obligations should exceed the maximum lawful interest, the effective interest
shall be deemed reduced to and shall be such maximum lawful interest, and any
sums of interest which have been collected in excess of such maximum lawful
interest shall be applied as a credit against the unpaid principal balance of
the Guaranteed Obligations.  Monies
received from any source by Bank for application toward payment of the
Guaranteed Obligations may be applied to such Guaranteed Obligations in any
manner or order deemed appropriate by Bank.

 

DEFAULT.  If any of the following events occur, a
default (“Default”) under this Guaranty shall exist: (a) failure of timely
payment or performance of the Guaranteed Obligations or a default under any
Loan Document (after expiration of any applicable grace periods); (b) a
breach of any agreement or representation contained or referred to in the
Guaranty where such representation proves materially false, or any of the Loan
Documents, or contained in any other contract or agreement of any Guarantor
with Bank or its affiliates, whether now existing or hereafter arising; (c) the
dissolution of, termination of existence of, loss of good standing status by
(unless such loss could not have a material adverse effect), appointment of a
receiver for, assignment for the benefit of creditors of, or the commencement
of any insolvency or bankruptcy proceeding by or against any Guarantor or any
general partner of or the holder(s) of the majority ownership interests of any
Guarantor, where, if such proceeding is involuntary, is not dismissed within 30
days of its commencement; and (d) other than as permitted under the definition of “Permitted
Liens” set forth in the Loan Agreement, permit the entry of any monetary
judgment or the assessment against, the filing of any tax lien against, or the
issuance of any writ of garnishment or attachment against any property of or
debts due Borrower and its subsidiaries

 

3

 

If
a Default occurs, after expiration of any applicable grace periods, the
Guaranteed Obligations shall be due immediately and payable without notice,
and, Bank may exercise any rights and remedies as provided in this Guaranty and
other Loan Documents, or as provided at law or equity.  Guarantors shall pay interest on the
Guaranteed Obligations from such Default at the highest rate of interest
charged on any of the Guaranteed Obligations.

 

ATTORNEYS’ FEES AND OTHER COSTS OF COLLECTION. 
Guarantors shall pay all of Bank’s reasonable expenses incurred to
enforce or collect any of the Guaranteed Obligations, including, without
limitation, reasonable arbitration, paralegals’, attorneys’ and experts’ fees
and expenses, whether incurred without the commencement of a suit, in any suit,
arbitration, or administrative proceeding, or in any appellate or bankruptcy
proceeding.

 

SUBORDINATION OF OTHER DEBTS.  Each Guarantor agrees:  (a) to subordinate the obligations now
or hereafter owed by Borrower to such Guarantor and
Subsidiaries (“Subordinated Debt”) to any and all obligations of Borrower to
Bank now or hereafter existing while this Guaranty is in effect, provided however
that such Guarantor may receive regularly scheduled principal and interest
payments on the Subordinated Debt as permitted by the Loan Documents and so
long as (i) all sums due and payable by Borrower to Bank have been paid in
full on or prior to such date, and (ii) no event or condition which
constitutes or which with notice or the lapse or time would constitute an event
of default with respect to the Guaranteed Obligations shall be continuing on or
as of the payment date; (b) such Guarantor will either place a legend
indicating such subordination on every note, ledger page or other document
evidencing any part of the Subordinated Debt or deliver such documents to Bank;
and (c) except as permitted by this paragraph and the Loan Documents, such
Guarantor will not request or accept payment of or any security for any part of
the Subordinated Debt, and any proceeds of the Subordinated Debt paid to such
Guarantor, through error or otherwise, shall immediately be forwarded to Bank
by such Guarantor, properly endorsed to the order of Bank, to apply to the
Guaranteed Obligations.

 

MISCELLANEOUS.  Assignment.  This
Guaranty and other Loan Documents shall inure to the benefit of and be binding
upon the parties and their respective heirs, legal representatives, successors
and assigns.  Bank’s interests in and
rights under this Guaranty and other Loan Documents are freely assignable, in
whole or in part, by Bank.  Any
assignment shall not release any Guarantor from the Guaranteed Obligations.  Applicable Law; Conflict
Between Documents.  This
Guaranty and other Loan Documents shall be governed by and construed under the
laws of the state named in Bank’s address shown above without regard to that
state’s conflict of laws principles.  If
the terms of this Guaranty should conflict with the terms of any commitment
letter that survives closing, the terms of this Guaranty shall control.  Guarantors Accounts.  Except as prohibited by law, each Guarantor
grants Bank a security interest in all of Guarantor’s accounts with Bank and
its affiliates.  Jurisdiction.  Each Guarantor irrevocably agrees to
non-exclusive personal jurisdiction in the state named in Bank’s address shown
above.  Severability.  If any provision of this Guaranty or of the
other Loan Documents shall be prohibited or invalid under applicable law, such
provision shall be ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Guaranty or other Loan Documents.  Notices.  Any notices to

 

4

 

Guarantors
shall be sufficiently given if in writing and mailed or delivered to Guarantors’ addresses shown above or such other address as
provided hereunder, and to Bank, if in writing and mailed or delivered to Bank’s
office address shown above or such other address as Bank may specify in writing
from time to time.  In the event that any
Guarantor changes such Guarantor’s address at any time prior to the date the
Guaranteed Obligations are paid in full, such Guarantor agrees to promptly give
written notice of said change of address to Bank by registered or certified
mail, return receipt requested, all charges prepaid.  Plural; Captions.  All references in the Loan Documents to borrower,
guarantor, person, document or other nouns of reference mean both the singular
and plural form, as the case may be, and the term “person” shall mean any
individual person or entity.  The
captions contained in the Loan Documents are inserted for convenience only and
shall not affect the meaning or interpretation of the Loan Documents.  Binding Contract.  Each Guarantor, by execution of, and Bank, by
acceptance of, this Guaranty agrees that each party is bound to all terms and
provisions of this Guaranty.  Amendments, Waivers and Remedies. 
No waivers, amendments or modifications of this Guaranty and
other Loan Documents shall be valid unless in writing and signed by an officer
of Bank.  No waiver by Bank of any
Default shall operate as a waiver of any other Default or the same Default on a
future occasion.  Neither the failure nor
any delay on the part of Bank in exercising any right, power, or privilege
granted pursuant to this Guaranty and other Loan Documents shall operate as a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise or the exercise of any other right, power or
privilege.  All remedies available to
Bank with respect to this Guaranty and other Loan Documents and remedies
available at law or in equity shall be cumulative and may be pursued
concurrently or successively.  Loan Documents.  The term “Loan
Documents” refers to all documents executed in connection with the Guaranteed
Obligations and may include, without lien, commitment letters that survive
closing, loan agreements, other guaranty agreements, security agreements,
instruments, financing statements, mortgages, deeds of trust, deeds to secure
debt, letters of credit and any amendments or supplements (excluding swap
agreements as defined in 11 U.S. Code § 101).

 

Waiver of Exemplary Damages.  The parties agree that they shall
not have a remedy of punitive or exemplary damages against other parties in any
dispute and hereby waive any right or claim to punitive or exemplary damages
they have now or which may arise in the future in connection with any dispute
whether the dispute is resolved by arbitration or judicially.  Waiver of Jury Trial.  THE PARTIES ACKNOWLEDGE THAT, TO THE EXTENT
PERMITTED BY LAW. THEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO
JURY TRIAL WITH REGARD TO A DISPUTE.

 

 

[Signature Pages Follow]

 

5

 

IN WITNESS WHEREOF, the Guarantors, on the day and year first written above, have caused
this Unconditional Guaranty to be executed under seal.

 

	
  [CORPORATE SEAL]

  	
  CGI HOLDING CORPORATION, a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
  MARKETSMART INTERACTIVE, INC., a North Carolina corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  Director and Authorized Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
  CHERISH, INC. (F/K/A WEBCAPADES, INC.), a Florida corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  Director and Authorized Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
  CHECKUP MARKETING, INC., a North Carolina corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  Director and Authorized Representative

  

 

[Guaranty Agreement – CGI Holding Corporation]

 

 

	
  [CORPORATE SEAL]

  	
  RIGHTSTUFF, INC., a North Carolina corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  Director and Authorized Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
  MARKETSMART ADVERTISING, INC., a North Carolina corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  Director and Authorized Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
  OZONA ONLINE NETWORK, INC., a Florida corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  Director and Authorized Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
  PERSONALS PLUS, INC., a Florida corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  Director and Authorized Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
  KOWABUNGA! MARKETING, INC., a Michigan corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  Director and Authorized Representative

  

 

 

	
  [CORPORATE SEAL]

  	
  PRIMARYADS, INC., a New Jersey corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  Director and Authorized Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
  REAL ESTATE SCHOOL ONLINE, INC., a Florida corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  Director and Authorized Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
  VINTACOM FLORIDA, INC., a Florida corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}]]