Exhibit 10.20
GUARANTEE AGREEMENT
GUARANTEE, dated as of April 18, 2002 (this "Guarantee"), by
Workstream USA, Inc. (the "Guarantor"), in favor of the holders of 8% Senior
Subordinated Secured Convertible Notes ("the "Lenders") issued pursuant to
Securities Purchase Agreement of even date herewith (the "Agreement") by and
among Workstream Inc. ("Workstream" or the "Borrower") and Lenders.
W I T N E S S E T H :
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WHEREAS, a condition precedent to Lenders agreeing to execute
and deliver the Agreement is the execution and delivery by the Guarantor of this
Guarantee; and
WHEREAS, Guarantor expressly acknowledges good and valuable
consideration for furnishing this Guaranty based on the benefits which are
derived from the Agreement that Lenders are executing and delivering; and
WHEREAS, all terms defined in the Agreement and the Note used
herein shall have the meanings therein defined, except where otherwise defined
herein or where the context otherwise requires, and as used herein the term
"Agreement" includes such documents and instruments as the same may from time to
time be amended, supplemented, restated, extended or otherwise modified.
NOW, THEREFORE, in consideration of the premises and to induce
the Lenders to execute and deliver to the Borrower the Agreement, the Guarantor
hereby agrees with the Lenders as follows:
1. The Guarantor hereby irrevocably, absolutely and unconditionally
guarantees to Lenders the prompt, complete and full performance, when due, and
no matter how the same shall become due, of all liabilities of the Borrower to
Lenders under, by reason of, or pursuant to the Note (the "Liabilities").
Guarantor represents and warrants to Lenders that this guarantee is a valid and
binding obligation of such Guarantor and is enforceable against it in accordance
with its terms.
2. If the Borrower fails for any reason whatsoever punctually to
perform the Liablilities, Guarantor shall cause each and every such Liability to
be satisfied and performed as if Guarantor instead of the Borrower were the
primary obligor of the Borrower's obligations under the Agreement. If the
Borrower fails for any reason to perform or repay promptly any Liability after
expiration of any explicitly applicable cure periods under the Note, upon demand
of the Majority Holders, Guarantor shall provide sufficient immediately
available funds for the prompt, full and faithful performance of such
Liabilities to Lenders or to such other party as Lenders shall designate in
writing.
3. If any payment received by Lenders pursuant to the provisions of the
Agreement shall, on the subsequent bankruptcy, insolvency, or other similar
event applying to the Borrower, be avoided or set aside under any laws relating
to bankruptcy, insolvency, or other such similar event, such payments shall
expressly not be considered as discharging or diminishing the liability of
Guarantor and this Guarantee shall continue to apply as if such payment had at
all times remained owing by the Borrower to Lenders and Guarantor shall
indemnify Lenders in respect thereof.
4. Guarantor hereby agrees that its obligations under this Guarantee
shall be unconditional and irrevocable and that Guarantor shall be fully liable
in respect of the Liabilities, whether or not any action has been taken to
enforce the same or any judgment obtained against the Borrower, whether or not
any time or indulgence has been granted to the Borrower by or on behalf of
Lenders and whether or not there have been any dealings or transactions between
the Borrower and Lenders.
5. Guarantor hereby waives diligence, presentment, demand of payment,
filing or claims with a court in any jurisdiction in the event of dissolution,
liquidation, merger or bankruptcy of the Borrower, any right to require a
proceeding first against the Borrower, protest or notice with respect to the
Agreement and all demands whatsoever and hereby covenants that this Guarantee
shall be a continuing guarantee which will not be discharged except by complete
performance of the obligations of Guarantor contained in this Guarantee.
6. Guarantor hereby agrees that it will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate in order to protect the rights of
Lenders as contemplated thereby.
7. This Guarantee may not be amended orally.
8. This Guarantee shall be governed by the laws of the State of New
York (regardless of any determination made under the conflicts of laws
principles of New York or any other jurisdiction). The parties hereby: (i) in
any legal proceeding brought in connection with this Agreement or the
transactions contemplated hereby, irrevocably submit to the exclusive in
personam jurisdiction of (A) any state or Federal court of competent
jurisdiction sitting in the State of New York, County of New York or (B) in the
event that any party is a defendant in any legal proceeding in which it seeks to
join the other as a third party defendant, then, any state or Federal court in
which such proceeding has properly been brought, and consents to suit therein;
and (ii) waive any objection they it may now or hereafter have to the venue of
such proceeding in any such court or that such proceeding was brought in an
inconvenient court. Because disputes arising in connection with complex
financial transactions are most quickly and economically resolved by an
experienced and expert person and the parties wish applicable state and federal
laws to apply (rather than arbitration rules), the parties desire that their
disputes be resolved by a judge applying such applicable laws. Therefore, to
achieve the best combination of the benefits of the judicial system and of
arbitration, the parties hereto waive all right to trial by jury in any action,
suit or proceeding brought to enforce or defend any rights or remedies under
this Guarantee. EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN
WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.
9. This Guarantee shall expire and be rendered null and void upon
Borrower's repayment in full of the Liabilities.
EXECUTED as of April 18, 2002.
Workstream USA, Inc.
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
Title: CEO
STATE OF New York )
) ss.:
COUNTY OF New York )
On this 18th day of April, 2002 before me, the undersigned Notary
Public, personally appeared Xxxxxxx Xxxxxxxxx, who being by me duly sworn did
depose and say that he is the C.E.O. of Workstream USA, Inc. which executed the
foregoing instrument and that he executed such instrument by order of the Board
of Directors and that he signed his name by like order.
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Notary Public
