Exhibit 10.3
SUBSIDIARY GUARANTY
New York, New York October 5, 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 Axeda Systems Inc., 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. Notwithstanding anything herein to the contrary, the Obligations
shall not include any liabilities or obligations that are not payment
obligations or that arise under or out of the Warrants or any other equity
interests of the Company issued to Laurus. 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.
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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 ▇▇▇▇▇▇ on account of the
Obligations are paid in full. 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 ▇▇▇▇▇▇.
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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 corporate power, authority and legal right to
own its property and assets and to transact the business in which it is engaged
in all material respects.
(b) Authority and Execution. It has full corporate 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 material
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
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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 beyond any applicable
cure period or other Event of Default shall occur and be continuing under
any agreement made by Debtor or any of the undersigned to Laurus 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 as set forth in the Note and the Master
Security Agreement.
(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 material agreement to which the undersigned is a party
if the effect of such default is to cause, or permit the holder of any
indebtedness under such agreement to cause, such indebtedness in excess of
$100,000, to become due prior to its stated maturity and, if such an event
occurs, Laurus 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 reasonable 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. 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.
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
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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 (absent manifest error) and shall
(absent manifest error)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. 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 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
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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. Notwithstanding the
foregoing, the consent of holders of more than 50% of the outstanding aggregate
principal amount of the Note shall be required amend modify or waive any
provision of this Guaranty
19. Release. Nothing except payment in full of the Note shall release any
of the undersigned from liability under this Guaranty provided, however, if the
Company shall provide Laurus written notice that a Guarantor is liquidated or
dissolved or is no longer a Subsidiary of the Company (in each case pursuant to
a transaction permitted under the Securities Purchase Agreement) such
Guarantor's Obligations under this Guaranty shall terminate and be of no further
force or effect as of the date of such notice.
[REMAINDER OF THIS PAGE IS BLANK. SIGNATURE PAGE IMMEDIATELY FOLLOWS]
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IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned
this 5th day of October, 2004.
LIUCO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 508-337-9201
State of Incorporation: Delaware
RAVISENT OPERATING COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Title: Chief Executive Officer
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 508-337-9201
State of Incorporation: Delaware
AXEDA SYSTEMS OPERATING COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Title: Chief Executive Officer
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 508-337-9201
State of Incorporation: Massachusetts
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