Exhibit 10.1

C.            Pursuant to Article V(A)(1)(B) of the Plan, after the initial distribution under the Plan, Guarantor has agreed to guarantee (i) the Plan payment obligations to General Unsecured Creditors up to the next twenty-five percent (25%) of the collective amount of allowed Class 7 Claims, and (ii) the Plan payment obligations to the IRS up to the next twenty-five percent (25%) of its Allowed Priority Claim (pre-petition).

 

Section 1.01 The Guaranty.  In consideration of the IRS’s consent to the terms of the Plan and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Guarantor, in accordance with the Plan, hereby unconditionally and irrevocably guarantees: (i) the payment, after the ten percent (10%) initial distribution is made to the holders of Allowed Class 7 Claims under the Plan on the Distribution Date, of the next twenty-five percent (25%) of the collective amount of Allowed Class 7 Claims; and (ii) the payment, after the ten percent (10%) initial distribution is made to the IRS under the Plan on the Distribution Date, of the next twenty-five percent (25%) of the IRS’s prepetition Allowed Priority Claim (such guaranteed obligations being hereinafter referred to as the “Liabilities”).

 

Section 1.02 Liabilities Guaranteed.  In the event Hidden Splendor fails to timely pay any part or all of the Liabilities guaranteed when due in strict accordance with the Plan, Guarantor, upon demand of the Committee and/or the IRS, shall pay the Liabilities in the same manner as if they constituted the direct and primary obligation of Guarantor.

(i) any requirement that the Committee and/or the IRS institute suit or other action, or otherwise exhaust their rights or remedies against Hidden Splendor or against any other person, guarantor, or under any security agreement or other collateral guaranteeing or securing all or any part of the Liabilities, prior to enforcing any rights it has under this Guaranty or otherwise against Guarantor;

 

(ii) any defenses arising out of the absence, impairment or loss of any right of reimbursement or subrogation or other right or remedy of Guarantor against Hidden Splendor or against any security resulting from the exercise or election of any remedy or remedies by the Committee and/or the IRS, and any defense arising by reason of any disability or other defense of Hidden Splendor or by reason of the cessation, from any cause other than full payment of the Liabilities in strict accordance with the Plan, of the liability of Hidden Splendor;

 

(iii) any defense based upon failure by any entity to disclose to Guarantor any information concerning Hidden Splendor’s financial condition or any other circumstances bearing on Hidden Splendor’s ability to pay all sums payable under the Plan;

 

(iv) any defense based upon any legal disability or other defense of Hidden Splendor, or by reason of the cessation or limitation of the liability of Hidden Splendor from any cause other than full payment of the Liabilities in strict accordance with the Plan;

 

(v) any defense based upon any lack of authority of the officers, directors, partners or agents acting or purporting to act on behalf of Hidden Splendor or any principal of Hidden Splendor or any defect in the formation of Hidden Splendor or any principal of Hidden Splendor;

 

(vi) any defense based upon the modification of the Plan, default on the Plan, the filing of a petition under Title 11 of the United States Code by or against the reorganized Debtor, commencement of a case under Title 11 of the United States Code by or against the reorganized Debtor, the appointment of a receiver, conservator or similar court officer, an assignment for the benefit of creditors, or any other insolvency proceeding;

 

(vii) any defense based upon the failure to take any action permitted hereunder, or the waiver of any conditions hereinabove set forth by the Committee and/or the IRS or any person acting on behalf of the Committee and/or the IRS; and

 

(viii) the rights, benefits and defenses arising from alteration, impairment or suspension in any respect or by any means of any of Hidden Splendor’s obligations under the Plan or any of the Committee’s and/or the IRS’ rights or remedies under the Plan without Guarantor’s prior consent.

 

 

 

Section 2.02 Consent to Jurisdiction.  Guarantor hereby expressly agrees that any legal action or proceeding with respect to this Guaranty may be brought in the United States Bankruptcy Court for the District of Nevada, and, by execution and delivery of this Guaranty, Guarantor hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction to the aforesaid court.  Guarantor hereby further irrevocably waives any claim that such court lacks personal jurisdiction over the Guarantor, and agrees not to plead or claim, in any legal action or proceeding with respect to this Guaranty or the Plan brought in the aforementioned court, that such court lacks personal jurisdiction over the Guarantor.  Guarantor further irrevocably consents to the service of process out of the aforementioned court in any such action or proceeding by, in addition to such other methods as are permitted under applicable laws, the delivery of copies at the address and in the manner required by Article IV hereof.  Guarantor hereby irrevocably waives any objection to such service of process and further irrevocably waives and agrees not to plead or claim in any action or proceeding commenced hereunder that service of process was in any way invalid or ineffective.  Nothing herein shall affect the right of the Committee and/or the IRS to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against Guarantor in any other jurisdiction.

 

Section 2.03 Waiver of Objection to Venue; Forum Non Conveniens.  Guarantor hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Guaranty or the Plan brought in the court referred to in Section 2.02 above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

 

Section 2.04 Waiver of Right to Jury Trial; Waiver of Statute of Limitations.  GUARANTOR AND THE COMMITTEE/IRS EACH WAIVE ALL RIGHTS TO TRIAL BY JURY OF ANY SUITS, CLAIMS, COUNTERCLAIMS, ACTIONS OR OTHER PROCEEDINGS OF ANY KIND ARISING UNDER OR RELATING TO THIS GUARANTY AND THE PLAN (INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF) OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THE PLAN (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.  GUARANTOR AND THE COMMITTEE/IRS EACH ACKNOWLEDGES THAT THIS IS A WAIVER OF A LEGAL RIGHT AND REPRESENTS TO THE OTHER THAT THIS WAIVER IS MADE KNOWINGLY AND VOLUNTARILY.  GUARANTOR AND THE COMMITTEE/IRS EACH AGREE THAT ALL SUCH SUITS, CLAIMS COUNTERCLAIMS, ACTIONS OR OTHER PROCEEDINGS SHALL BE TRIED BEFORE A JUDGE OF A COURT OF COMPETENT JURISDICTION, WITHOUT A JURY.  GUARANTOR AND THE COMMITTEE/IRS EACH AGREE THAT THIS PARAGRAPH CONSTITUTES WRITTEN CONSENT THAT TRIAL BY JURY SHALL BE WAIVED IN ANY SUCH SUIT, CLAIM, COUNTERCLAIM, ACTION OR OTHER PROCEEDING AND AGREE THAT GUARANTOR AND THE COMMITTEE/IRS EACH SHALL HAVE THE RIGHT AT ANY TIME TO FILE THIS GUARANTY OR THE PLAN WITH THE CLERK OR JUDGE OF ANY COURT IN WHICH ANY SUCH SUIT, CLAIM, COUNTERCLAIM, ACTION OR OTHER PROCEEDING MAY BE PENDING AS STATUTORY WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY.  GUARANTOR HEREBY WAIVES THE BENEFIT OF ANY STATUTE OF LIMITATIONS AFFECTING THE LIABILITY OF GUARANTOR UNDER THIS GUARANTY.

Section 3.01 Rights of the Committee and/or the IRS.  The Committee and/or the IRS shall have the right without demand of or notice to Guarantor to deal in any manner with the Liabilities, including without limitation the right to resort to Guarantor for payment of all or any of the Liabilities, whether or not the Committee and/or the IRS shall have resorted first to any property of Hidden Splendor or shall have proceeded against any other guarantors or any other party primarily or secondarily liable with respect to any of the Liabilities.  The obligations of Guarantor hereunder shall not be released, discharged or affected in any way, nor shall Guarantor have any recourse against the Committee and/or the IRS by reason of any action which the Committee and/or the IRS may take or omit to take under these powers or otherwise existing with respect to the Liabilities.

Any notice which any party hereto may desire or may be required to give to any other party shall be in writing and either (a) mailed by certified mail, return receipt requested, or (b) sent by a nationally recognized overnight carrier which provides for a return receipt.  Any such notice shall be sent to the respective party’s addresses as set forth below or to such other address as such party may, by notice in writing, designate as its address: