EXHIBIT 10.7
------------
SUBSIDIARY GUARANTY
New York, New York June 17, 2004
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 Laurus
Master Fund, Ltd. ("Laurus") to or for the account of LocatePLUS Holdings
Corporation, a Delaware corporation ("Debtor"), from time to time and at any
time and for other good and valuable consideration and to induce ▇▇▇▇▇▇, 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 ▇▇▇▇▇▇ 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 Laurus, 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 Laurus 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 Laurus, 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 Laurus, whether arising under, out of, or in connection with (i)
that certain Securities Purchase Agreement dated as of the date hereof by and
between the Debtor and Laurus (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 Laurus, 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 ▇▇▇▇▇▇ agrees as follows:
1. No Impairment. Laurus 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 Laurus and
Debtor or any such other party or person, or make any election of rights Laurus
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.
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 ▇▇▇▇▇▇'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 ▇▇▇▇▇▇ 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 Laurus or its assignees or any acceptance thereof or
any release of any security by Laurus 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
Laurus 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
3. Waivers.
(a) This Guaranty is a guaranty of payment and not of collection.
Laurus 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
Laurus to do any of the foregoing. Each of the Guarantors further
consents and agrees that ▇▇▇▇▇▇ 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 Laurus,
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 ▇▇▇▇▇▇, the undersigned shall not be entitled to be
subrogated to any of the rights of ▇▇▇▇▇▇ against Debtor or against
any collateral or guarantee or right of offset held by ▇▇▇▇▇▇ 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 Laurus by Debtor on account of the Obligations are
paid in full and Laurus' 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 Laurus' obligation to extend credit pursuant to the
Documents shall not have been terminated, such amount shall be held by
the undersigned in trust for Laurus, segregated from other funds of
the undersigned, and shall forthwith upon, and in any event within two
(2) business days of, receipt by the undersigned, be turned over to
Laurus in the exact form received by the undersigned (duly endorsed by
the undersigned to Laurus, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as Laurus may
determine, subject to the provisions of the Documents. Any and all
present and future debts and obligations of Debtor to any of the
undersigned are hereby waived and postponed in favor of, and
subordinated to the full payment and performance of, all present and
future debts and Obligations of Debtor to ▇▇▇▇▇▇.
3
4. Security. All sums at any time to the credit of the undersigned and
any property of the undersigned in Laurus' possession or in the possession of
any bank, financial institution or other entity that directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under
common control with, Laurus (each such entity, an "Affiliate") shall be deemed
held by Laurus or such Affiliate, as the case may be, as security for any and
all of the undersigned's obligations to Laurus and to any Affiliate of Laurus,
no matter how or when arising and whether under this or any other instrument,
agreement or otherwise.
5. Representations and Warranties. Each of the undersigned
respectively, hereby jointly and severally represents and warrants (all of which
representations and warranties shall survive until all Obligations are
indefeasibly satisfied in full and the Documents have been irrevocably
terminated), that:
(a) Corporate Status. It is a corporation, partnership or limited
liability company, as the case may be, duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization indicated on the signature page hereof and has full
power, authority and legal right to own its property and assets and to
transact the business in which it is engaged.
(b) Authority and Execution. It has full power, authority and
legal right to execute and deliver, and to perform its obligations
under, this Guaranty and has taken all necessary corporate,
partnership or limited liability company, as the case may be, action
to authorize the execution, delivery and performance of this Guaranty.
(c) Legal, ▇▇▇▇▇ and Binding Character. This Guaranty constitutes
its legal, valid and binding obligation enforceable in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting the enforcement of creditor's rights and
general principles of equity that restrict the availability of
equitable or legal remedies.
(d) Violations. The execution, delivery and performance of this
Guaranty will not violate any requirement of law applicable to it or
any contract, agreement or instrument to it is a party or by which it
or any of its property is bound or result in the creation or
imposition of any mortgage, lien or other encumbrance other than to
Laurus on any of its property or assets pursuant to the provisions of
any of the foregoing, which, in any of the foregoing cases, could
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
(e) Consents or Approvals. No consent of any other person or
entity (including, without limitation, any creditor of the
undersigned) and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority is required in
connection with the execution, delivery, performance, validity or
enforceability of this Guaranty by it, except to the extent that the
failure to obtain any of the foregoing could not reasonably be
expected to have, either individually or in the aggregate, a Material
Adverse Effect.
(f) Litigation. No litigation, arbitration, investigation or
administrative proceeding of or before any court, arbitrator or
governmental authority, bureau or agency is currently pending or, to
the best of its knowledge, threatened (i) with respect to this
4
Guaranty or any of the transactions contemplated by this Guaranty or
(ii) against or affecting it, or any of its property or assets, which,
in each of the foregoing cases, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
(g) Financial Benefit. It has derived or expects to derive a
financial or other advantage from each and every loan, advance or
extension of credit made under the Documents or other Obligation
incurred by the Debtor to Laurus.
6. Acceleration.
(a) If any breach of any covenant or condition or other event of
default shall occur and be continuing under any agreement made by
Debtor or any of the undersigned to Laurus, or either Debtor or any of
the undersigned should at any time become insolvent, or make a general
assignment, or if a proceeding in or under any Insolvency Law shall be
filed or commenced by, or in respect of, any of the undersigned, or if
a notice of any lien, levy, or assessment is filed of record with
respect to any assets of any of the undersigned by the United States
of America or any department, agency, or instrumentality thereof, or
if any taxes or debts owing at any time or times hereafter to any one
of them becomes a lien or encumbrance upon any assets of the
undersigned in Laurus' possession, or otherwise, any and all
Obligations shall for purposes hereof, at Laurus' option, be deemed
due and payable without notice notwithstanding that any such
Obligation is not then due and payable by Debtor.
(b) Each of the undersigned will promptly notify Laurus of any
default by such undersigned in its respective performance or
observance of any term or condition of any agreement to which the
undersigned is a party if the effect of such default is to cause, or
permit the holder of any obligation under such agreement to cause,
such obligation to become due prior to its stated maturity and, if
such an event occurs, ▇▇▇▇▇▇ shall have the right to accelerate such
undersigned's obligations hereunder.
7. Payments from Guarantors. Laurus, in its sole and absolute
discretion, with or without notice to the undersigned, may apply on account of
the Obligations any payment from the undersigned or any other guarantors, or
amounts realized from any security for the Obligations, or may deposit any and
all such amounts realized in a non-interest bearing cash collateral deposit
account to be maintained as security for the Obligations.
8. Costs. The undersigned shall pay on demand, all costs, fees and
expenses (including expenses for legal services of every kind) relating or
incidental to the enforcement or protection of the rights of Laurus hereunder or
under any of the Obligations.
9. No Termination. This is a continuing irrevocable guaranty and shall
remain in full force and effect and be binding upon the undersigned, and each of
the undersigned's successors and assigns, until all of the Obligations have been
paid in full and Laurus' obligation to extend credit pursuant to the Documents
has been irrevocably terminated. If any of the present or future Obligations are
guarantied by persons, partnerships or corporations in addition to the
undersigned, the death, release or discharge in whole or in part or the
bankruptcy, merger, consolidation, incorporation, liquidation or dissolution of
one or more of them shall not discharge or affect the liabilities of any
undersigned under this Guaranty.
5
10. Recapture. Anything in this Guaranty to the contrary
notwithstanding, if ▇▇▇▇▇▇ receives any payment or payments on account of the
liabilities guaranteed hereby, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver, or any other party under
any Insolvency Law, common law or equitable doctrine, then to the extent of any
sum not finally retained by ▇▇▇▇▇▇, the undersigned's obligations to ▇▇▇▇▇▇
shall be reinstated and this Guaranty shall remain in full force and effect (or
be reinstated) until payment shall have been made to Laurus, which payment shall
be due on demand.
11. Books and Records. The books and records of ▇▇▇▇▇▇ showing the
account between ▇▇▇▇▇▇ and Debtor shall be admissible in evidence in any action
or proceeding, shall be binding upon the undersigned for the purpose of
establishing the items therein set forth and shall constitute prima facie proof
thereof.
12. No Waiver. No failure on the part of Laurus to exercise, and no
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by ▇▇▇▇▇▇ of any right,
remedy or power hereunder preclude any other or future exercise of any other
legal right, remedy or power. Each and every right, remedy and power hereby
granted to Laurus or allowed it by law or other agreement shall be cumulative
and not exclusive of any other, and may be exercised by ▇▇▇▇▇▇ at any time and
from time to time.
13. Waiver of Jury Trial. EACH OF THE UNDERSIGNED DOES HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL HERETO. THE
UNDERSIGNED DOES HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF ▇▇▇▇▇▇ HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LAURUS WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
14. Governing Law; Jurisdiction; Amendments. THIS INSTRUMENT CANNOT BE
CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED AND INTERPRETED
AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT HAVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAWS. EACH OF THE UNDERSIGNED EXPRESSLY CONSENTS TO THE JURISDICTION AND
VENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, AND OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR ALL
PURPOSES IN CONNECTION HEREWITH. ANY JUDICIAL PROCEEDING BY THE UNDERSIGNED
AGAINST LAURUS INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR CLAIM IN ANY WAY
ARISING OUT OF, RELATED TO OR CONNECTED HEREWITH SHALL BE BROUGHT ONLY IN THE
SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK OR THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE UNDERSIGNED FURTHER
CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS (INCLUDING,
WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER APPLICATION TO EITHER OF THE
AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY NOTICE IN CONNECTION WITH ANY
PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR OUTSIDE OF THE STATE
6
OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE PROVIDED A REASONABLE
TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE
UNDER THE RULES OF SAID COURTS. EACH OF THE UNDERSIGNED WAIVES ANY OBJECTION TO
JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREON AND SHALL NOT ASSERT ANY
DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON FORUM NON
CONVENIENS.
15. Severability. To the extent permitted by applicable law, any
provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
16. Amendments, Waivers. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the undersigned therefrom shall in
any event be effective unless the same shall be in writing executed by each of
the undersigned directly affected by such amendment and/or waiver and ▇▇▇▇▇▇.
17. Notice. All notices, requests and demands to or upon the
undersigned, shall be in writing and shall be deemed to have been duly given or
made (a) when delivered, if by hand, (b) three (3) days after being sent,
postage prepaid, if by registered or certified mail, (c) when confirmed
electronically, if by facsimile, or (d) when delivered, if by a recognized
overnight delivery service in each event, to the numbers and/or address set
forth beneath the signature of the undersigned.
18. Successors. Laurus may, from time to time, without notice to the
undersigned, sell, assign, transfer or otherwise dispose of all or any part of
the Obligations and/or rights under this Guaranty. Without limiting the
generality of the foregoing, Laurus may assign, or grant participations to, one
or more banks, financial institutions or other entities all or any part of any
of the Obligations. In each such event, Laurus, its Affiliates and each and
every immediate and successive purchaser, assignee, transferee or holder of all
or any part of the Obligations shall have the right to enforce this Guaranty, by
legal action or otherwise, for its own benefit as fully as if such purchaser,
assignee, transferee or holder were herein by name specifically given such
right. Laurus shall have an unimpaired right to enforce this Guaranty for its
benefit with respect to that portion of the Obligations which ▇▇▇▇▇▇ has not
disposed of, sold, assigned, or otherwise transferred.
19. Release. Nothing except payment in full of the Obligations shall
release any of the undersigned from liability under this Guaranty.
[REMAINDER OF THIS PAGE IS BLANK.
SIGNATURE PAGE IMMEDIATELY FOLLOWS]
7
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned
this 17th day of June, 2004.
LOCATEPLUS CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: President
---------------------------------
Address:
Telephone:
Facsimile:
State of Incorporation:
CERTIFION CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: President
---------------------------------
Address:
Telephone:
Facsimile:
State of Incorporation:
DATAPHANT INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
---------------------------------
Address:
Telephone:
Facsimile:
State of Incorporation:
8
WORLDWIDE INFORMATION, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: President
---------------------------------
Address:
Telephone:
Facsimile:
State of Incorporation:
METRIGENICS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: President
---------------------------------
Address:
Telephone:
Facsimile:
State of Incorporation:
---------------------------------
---------------------------------
---------------------------------
9