SUBSIDIARY GUARANTEE
Exhibit
10.15
EXHIBIT
F
SUBSIDIARY
GUARANTEE, dated as of November __, 2008 (this “Guarantee”), made by each of the
signatories hereto (together with any other entity that may become a party
hereto as provided herein, the “Guarantors”), in favor of the purchasers
signatory (together with their permitted assigns, the “Purchasers”) to that
certain Securities Purchase Agreement, dated as of the date hereof, between
Capital
Growth Systems, Inc.,
a
Florida corporation (the “Company”) and the Purchasers.
WITNESSETH:
WHEREAS,
pursuant to that certain Securities Purchase Agreement, dated as of the date
hereof, by and between the Company and the Purchasers (the “Purchase
Agreement”), the Company has agreed to sell and issue to the Purchasers, and the
Purchasers have agreed to purchase from the Company the Company’s Original Issue
Discount Secured
Convertible Debentures, due seven years following their issuance (the
“Debentures”), subject to the terms and conditions set forth therein;
and
WHEREAS,
each Guarantor will directly benefit from the extension of credit to the
Company
represented by the issuance of the Debentures; and
NOW,
THEREFORE, in consideration of the premises and to induce the Purchasers
to
enter into the Purchase Agreement and to carry out the transactions contemplated
thereby, each Guarantor hereby agrees with the Purchasers as
follows:
1. Definitions.
Unless otherwise defined herein, terms defined in the Purchase Agreement
and
used herein shall have the meanings given to them in the Purchase Agreement.
The
words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import
when used in this Guarantee shall refer to this Guarantee as a whole and
not to
any particular provision of this Guarantee, and Section and Schedule references
are to this Guarantee unless otherwise specified. The meanings given to terms
defined herein shall be equally applicable to both the singular and plural
forms
of such terms. The following terms shall have the following
meanings:
“Guarantee”
means this Subsidiary Guarantee, as the same may be amended, supplemented
or
otherwise modified from time to time.
“Obligations”
means, in addition to all other costs and expenses of collection incurred
by
Purchasers in enforcing any of such Obligations and/or this Guarantee, all
of
the liabilities and obligations (primary, secondary, direct, contingent,
sole,
joint or several) due or to become due, or that are now or may be hereafter
contracted or acquired, or owing to, of the Company or any Guarantor to the
Purchasers, including, without limitation, all obligations under this Guarantee,
the Debentures and any other instruments, agreements or other documents executed
and/or delivered in connection herewith or therewith, in each case, whether
now
or hereafter existing, voluntary or involuntary, direct or indirect, absolute
or
contingent, liquidated or unliquidated, whether or not jointly owed with
others,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations
or
liabilities that are paid, to the extent all or any part of such payment
is
avoided or recovered directly or indirectly from any of the Purchasers as
a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time. Without
limiting the generality of the foregoing, the term “Obligations” shall include,
without limitation: (i) principal of, and interest on the Debentures and
the
loans extended pursuant thereto; (ii) any and all other fees, indemnities,
costs, obligations and liabilities of the Company or any Guarantor from time
to
time under or in connection with this Guarantee, the Debentures and any other
instruments, agreements or other documents executed and/or delivered in
connection herewith or therewith; and (iii) all amounts (including but not
limited to post-petition interest) in respect of the foregoing that would
be
payable but for the fact that the obligations to pay such amounts are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company or any Guarantor.
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2. Guarantee.
(a) Guarantee.
(i) The
Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantee to the Purchasers and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance
when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations.
(ii) Anything
herein or in any other Transaction Document to the contrary notwithstanding,
the
maximum liability of each Guarantor hereunder and under the other Transaction
Documents shall in no event exceed the amount which can be guaranteed by
such
Guarantor under applicable federal and state laws, including laws relating
to
the insolvency of debtors, fraudulent conveyance or transfer or laws affecting
the rights of creditors generally (after giving effect to the right of
contribution established in Section
2(b)).
(iii) Each
Guarantor agrees that the Obligations may at any time and from time to time
exceed the amount of the liability of such Guarantor hereunder without impairing
the guarantee contained in this Section
2
or affecting the rights and remedies of the Purchasers hereunder.
(iv) The
guarantee contained in this Section
2
shall remain in full force and effect until all the Obligations and the
obligations of each Guarantor under the guarantee contained in this Section
2
shall have been satisfied by indefeasible payment in full.
(v) No
payment made by the Company, any of the Guarantors, any other guarantor or
any
other Person or received or collected by the Purchasers from the Company,
any of
the Guarantors, any other guarantor or any other Person by virtue of any
action
or proceeding or any set-off or appropriation or application at any time
or from
time to time in reduction of or in payment of the Obligations shall be deemed
to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Obligations or any payment received
or
collected from such Guarantor in respect of the Obligations), remain liable
for
the Obligations up to the maximum liability of such Guarantor hereunder until
the Obligations are indefeasibly paid in full.
(vi) Notwithstanding
anything to the contrary in this Guarantee, with respect to any defaulted
non-monetary Obligations the specific performance of which by the Guarantors
is
not reasonably possible (e.g. the issuance of the Company's Common Stock),
the
Guarantors shall only be liable for making the Purchasers whole on a monetary
basis for the Company's failure to perform such Obligations in accordance
with
the Transaction Documents.
(b) Right
of Contribution.
Subject to Section
2(c),
each Guarantor hereby agrees that to the extent that a Guarantor shall have
paid
more than its proportionate share of any payment made hereunder, such Guarantor
shall be entitled to seek and receive contribution from and against any other
Guarantor hereunder which has not paid its proportionate share of such payment.
Each Guarantor's right of contribution shall be subject to the terms and
conditions of Section
2(c).
The provisions of this Section
2(b)
shall in no respect limit the obligations and liabilities of any Guarantor
to
the Purchasers and each Guarantor shall remain liable to the Purchasers for
the
full amount guaranteed by such Guarantor hereunder.
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(c) No
Subrogation.
Notwithstanding any payment made by any Guarantor hereunder or any set-off
or
application of funds of any Guarantor by the Purchasers, no Guarantor shall
be
entitled to be subrogated to any of the rights of the Purchasers against
the
Company or any other Guarantor or any collateral security or guarantee or
right
of offset held by the Purchasers for the payment of the Obligations, nor
shall
any Guarantor seek or be entitled to seek any contribution or reimbursement
from
the Company or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Purchasers by the Company on account
of the Obligations are indefeasibly paid in full. If any amount shall be
paid to
any Guarantor on account of such subrogation rights at any time when all
of the
Obligations shall not have been paid in full, such amount shall be held by
such
Guarantor in trust for the Purchasers, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over
to the Purchasers in the exact form received by such Guarantor (duly indorsed
by
such Guarantor to the Purchasers, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Purchasers
may
determine.
(d) Amendments,
Etc. With Respect to the Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or
further
assent by any Guarantor, any demand for payment of any of the Obligations
made
by the Purchasers may be rescinded by the Purchasers and any of the Obligations
continued, and the Obligations, or the liability of any other Person upon
or for
any part thereof, or any collateral security or guarantee therefor or right
of
offset with respect thereto, may, from time to time, in whole or in part,
be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Purchasers, and the Purchase Agreement and
the
other Transaction Documents and any other documents executed and delivered
in
connection therewith may be amended, modified, supplemented or terminated,
in
whole or in part, as the Purchasers may deem advisable from time to time,
and
any collateral security, guarantee or right of offset at any time held by
the
Purchasers for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. The Purchasers shall have no obligation to protect,
secure, perfect or insure any Lien at any time held by them as security for
the
Obligations or for the guarantee contained in this Section
2
or any property subject thereto.
(e) Guarantee
Absolute and Unconditional.
Each Guarantor waives any and all notice of the creation, renewal, extension
or
accrual of any of the Obligations and notice of or proof of reliance by the
Purchasers upon the guarantee contained in this Section
2
or acceptance of the guarantee contained in this Section
2;
the Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived,
in
reliance upon the guarantee contained in this Section
2;
and all dealings between the Company and any of the Guarantors, on the one
hand,
and the Purchasers, on the other hand, likewise shall be conclusively presumed
to have been had or consummated in reliance upon the guarantee contained
in this
Section
2.
Each Guarantor waives to the extent permitted by law diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon
the
Company or any of the Guarantors with respect to the Obligations. Each Guarantor
understands and agrees that the guarantee contained in this Section
2
shall be construed as a continuing, absolute and unconditional guarantee
of
payment and performance without regard to (a) the validity or enforceability
of
the Purchase Agreement or any other Transaction Document, any of the Obligations
or any other collateral security therefor or guarantee or right of offset
with
respect thereto at any time or from time to time held by the Purchasers,
(b) any
defense, set-off or counterclaim (other than a defense of payment or performance
or fraud by Purchasers) which may at any time be available to or be asserted
by
the Company or any other Person against the Purchasers, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Company
or such Guarantor) which constitutes, or might be construed to constitute,
an
equitable or legal discharge of the Company for the Obligations, or of such
Guarantor under the guarantee contained in this Section
2,
in bankruptcy or in any other instance. When making any demand hereunder
or
otherwise pursuing its rights and remedies hereunder against any Guarantor,
the
Purchasers may, but shall be under no obligation to, make a similar demand
on or
otherwise pursue such rights and remedies as they may have against the Company,
any other Guarantor or any other Person or against any collateral security
or
guarantee for the Obligations or any right of offset with respect thereto,
and
any failure by the Purchasers to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Company, any other
Guarantor or any other Person or to realize upon any such collateral security
or
guarantee or to exercise any such right of offset, or any release of the
Company, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of
any
obligation or liability hereunder, and shall not impair or affect the rights
and
remedies, whether express, implied or available as a matter of law, of the
Purchasers against any Guarantor. For the purposes hereof, “demand” shall
include the commencement and continuance of any legal
proceedings.
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(f) Reinstatement.
The guarantee contained in this Section
2
shall continue to be effective, or be reinstated, as the case may be, if
at any
time payment, or any part thereof, of any of the Obligations is rescinded
or
must otherwise be restored or returned by the Purchasers upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company or
any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Company or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
(g) Payments.
Each Guarantor hereby guarantees that payments hereunder will be paid to
the
Purchasers without set-off or counterclaim in U.S. dollars at the address
set
forth or referred to in the Signature Pages to the Purchase
Agreement.
3. Representations
and Warranties.
Each Guarantor hereby makes the following representations and warranties
to
Purchasers as of the date hereof:
(a) Organization
and Qualification.
The Guarantor is a corporation
or limited liability company,
duly incorporated or organized, validly existing and in good standing under
the
laws of the applicable jurisdiction set forth on Schedule
1,
with the requisite corporate power and authority to own and use its properties
and assets and to carry on its business as currently conducted. The Guarantor
has no subsidiaries other than those identified as such on the Disclosure
Schedules to the Purchase Agreement. The Guarantor is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
in which the nature of the business conducted or property owned by it makes
such
qualification necessary, except where the failure to be so qualified or in
good
standing, as the case may be, could not, individually or in the aggregate,
(x)
adversely affect the legality, validity or enforceability of any of this
Guaranty in any material respect, (y) have a material adverse effect on the
results of operations, assets, prospects, or financial condition of the
Guarantor or (z) adversely impair in any material respect the Guarantor's
ability to perform fully on a timely basis its obligations under this Guaranty
(a “Material Adverse Effect”).
(b) Authorization;
Enforcement.
The Guarantor has the requisite corporate or limited liability company power
and
authority to enter into and to consummate the transactions contemplated by
this
Guaranty, and otherwise to carry out its obligations hereunder. The execution
and delivery of this Guaranty by the Guarantor and the consummation by it
of the
transactions contemplated hereby have been duly authorized by all requisite
corporate or limited liability company action on the part of the Guarantor.
This
Guaranty has been duly executed and delivered by the Guarantor and constitutes
the valid and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except as such enforceability may
be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application.
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(c) No
Conflicts.
The execution, delivery and performance of this Guaranty by the Guarantor
and
the consummation by the Guarantor of the transactions contemplated thereby
do
not and will not (i) conflict with or violate any provision of its Certificate
of Incorporation, By-laws or other organizational documents or (ii) conflict
with, constitute a default (or an event which with notice or lapse of time
or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Guarantor is a party, or (iii) result in a violation
of
any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Guarantor
is
subject (including Federal and State securities laws and regulations), or
by
which any material property or asset of the Guarantor is bound or affected,
except in the case of each of clauses (ii) and (iii), such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as
could
not, individually or in the aggregate, have or result in a Material Adverse
Effect. The business of the Guarantor is not being conducted in violation
of any
law, ordinance or regulation of any governmental authority, except for
violations which, individually or in the aggregate, do not have a Material
Adverse Effect.
(d) Consents
and Approvals.
The Guarantor is not required to obtain any consent, waiver, authorization
or
order of, or make any filing or registration with, any court or other federal,
state, local, foreign or other governmental authority or other person in
connection with the execution, delivery and performance by the Guarantor
of this
Guaranty.
(e) Purchase
Agreement.
The representations and warranties of the Company set forth in the Purchase
Agreement as they relate to such Guarantor, each of which is hereby incorporated
herein by reference, are true and correct as of each time such representations
are deemed to be made pursuant to such Purchase Agreement, and the Purchasers
shall be entitled to rely on each of them as if they were fully set forth
herein, provided that each reference in each such representation and warranty
to
the Company's knowledge shall, for the purposes of this Section
3,
be deemed to be a reference to such Guarantor's knowledge.
(f) Foreign
Law.
Each Guarantor has consulted with appropriate foreign legal counsel with
respect
to any of the above representations for which non-U.S. law is applicable.
Such
foreign counsel have advised each applicable Guarantor that such counsel
knows
of no reason why any of the above representations would not be true and
accurate. Such foreign counsel were provided with copies of this Subsidiary
Guarantee and the Transaction Documents prior to rendering their advice.
4. Covenants.
(a) Each
Guarantor covenants and agrees with the Purchasers that, from and after the
date
of this Guarantee until the Obligations shall have been indefeasibly paid
in
full, such Guarantor shall take, and/or shall refrain from taking, as the
case
may be, each commercially reasonable action that is necessary to be taken
or not
taken, as the case may be, so that no Event of Default (as defined in the
Debentures) is caused by the failure to take such action or to refrain from
taking such action by such Guarantor.
(b) So
long as any of the Obligations are outstanding, unless Purchasers holding
at
least 67%
of the aggregate principal amount of the then outstanding Debentures shall
otherwise consent in writing, each Guarantor will not directly or indirectly
on
or after the date of this Guarantee:
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(i) other
than Permitted Indebtedness, enter into, create, incur, assume or suffer
to
exist any indebtedness for borrowed money of any kind, including but not
limited
to, a guarantee, on or with respect to any of its property or assets now
owned
or hereafter acquired or any interest therein or any income or profits
therefrom;
(ii) other
than Permitted Liens, enter into, create, incur, assume or suffer to exist
any
liens of any kind, on or with respect to any of its property or assets now
owned
or hereafter acquired or any interest therein or any income or profits
therefrom;
(iii) amend
its certificate of incorporation, bylaws or other charter documents so as
to
adversely affect any rights of any Purchaser;
(iv) repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a
de
minimis number of shares of its securities or debt obligations;
(v) pay
cash dividends on any equity securities of the Company, provided that nothing
contained herein shall prohibit the payment of intracompany dividends in
the
ordinary course of business consistent with past practice to any parent owning
100% of the equity securities of the Guarantor;
(vi) enter
into any transaction with any Affiliate of the Guarantor which would be required
to be disclosed in any public filing of the Company with the Commission,
unless
such transaction is made on an arm’s-length basis and expressly approved by a
majority of the disinterested directors of the Company (even if less than
a
quorum otherwise required for board approval); or
(vii) enter
into any agreement with respect to any of the foregoing.
5. Miscellaneous.
(a) Amendments
in Writing.
None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except in writing by the Purchasers holding
67% or more in principal amount of the Debentures then outstanding.
(b) Notices.
All notices, requests and demands to or upon the Purchasers or any Guarantor
hereunder shall be effected in the manner provided for in the Purchase
Agreement, provided that any such notice, request or demand to or upon any
Guarantor shall be addressed to such Guarantor at its notice address set
forth
on Schedule
5(b).
(c) No
Waiver By Course Of Conduct; Cumulative Remedies.
The Purchasers shall not by any act (except by a written instrument pursuant
to
Section
5(a)),
delay, indulgence, omission or otherwise be deemed to have waived any right
or
remedy hereunder or to have acquiesced in any default under the Transaction
Documents or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Purchasers, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise
of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
A
waiver by the Purchasers of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Purchasers
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are
not
exclusive of any other rights or remedies provided by law.
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(d) Enforcement
Expenses; Indemnification.
(i) Each
Guarantor agrees to pay, or reimburse the Purchasers for, all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section
2
or otherwise enforcing or preserving any rights under this Guarantee and
the
other Transaction Documents to which such Guarantor is a party, including,
without limitation, the reasonable fees and disbursements of counsel to the
Purchasers.
(ii) Each
Guarantor agrees to pay, and to save the Purchasers harmless from, any and
all
liabilities with respect to, or resulting from any delay in paying, any and
all
stamp, excise, sales or other taxes which may be payable or determined to
be
payable in connection with any of the transactions contemplated by this
Guarantee.
(iii) Each
Guarantor agrees to pay, and to save the Purchasers harmless from, any and
all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of
this
Guarantee to the extent the Company would be required to do so pursuant to
the
Purchase Agreement.
(iv) The
agreements in this Section shall survive repayment of the Obligations and
all
other amounts payable under the Purchase Agreement and the other Transaction
Documents.
(e) Successor
and Assigns.
This Guarantee shall be binding upon the successors and assigns of each
Guarantor and shall inure to the benefit of the Purchasers and their respective
successors and assigns; provided that no Guarantor may assign, transfer or
delegate any of its rights or obligations under this Guarantee without the
prior
written consent of the Purchasers.
(f) Set-Off.
Each Guarantor hereby irrevocably authorizes the Purchasers at any time and
from
time to time while an Event of Default under any of the Transaction Documents
shall have occurred and be continuing, without notice to such Guarantor or
any
other Guarantor, any such notice being expressly waived by each Guarantor,
to
set-off and appropriate and apply any and all deposits, credits, indebtedness
or
claims, in any currency, in each case whether direct or indirect, absolute
or
contingent, matured or unmatured, at any time held or owing by the Purchasers
to
or for the credit or the account of such Guarantor, or any part thereof in
such
amounts as the Purchasers may elect, against and on account of the obligations
and liabilities of such Guarantor to the Purchasers hereunder and claims
of
every nature and description of the Purchasers against such Guarantor, in
any
currency, whether arising hereunder, under the Purchase Agreement, any other
Transaction Document or otherwise, as the Purchasers may elect, whether or
not
the Purchasers have made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Purchasers shall
notify such Guarantor promptly of any such set-off and the application made
by
the Purchasers of the proceeds thereof, provided that the failure to give
such
notice shall not affect the validity of such set-off and application. The
rights
of the Purchasers under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Purchasers may have.
(g) Counterparts.
This Guarantee may be executed by one or more of the parties to this Guarantee
on any number of separate counterparts (including by telecopy), and all of
said
counterparts taken together shall be deemed to constitute one and the same
instrument.
(h) Severability.
Any provision of this Guarantee 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.
S1-7
(i) Section
Headings.
The Section headings used in this Guarantee are for convenience of reference
only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
(j) Integration.
This Guarantee and the other Transaction Documents represent the agreement
of
the Guarantors and the Purchasers with respect to the subject matter hereof
and
thereof, and there are no promises, undertakings, representations or warranties
by the Purchasers relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Transaction
Documents.
(k) Governing
Laws.
All questions concerning the construction, validity, enforcement and
interpretation of this Guarantee shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard
to
the principles of conflicts of law thereof. Each of the Company and the
Guarantors agree that all proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Guarantee
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City
of New
York, Borough of Manhattan. Each of the Company and the Guarantors hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any proceeding, any claim that it is
not
personally subject to the jurisdiction of any such court, that such proceeding
is improper. Each party hereto hereby irrevocably waives personal service
of
process and consents to process being served in any such proceeding by mailing
a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices
to it
under this Guarantee and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Guarantee or the transactions
contemplated hereby.
(l) Acknowledgements.
Each Guarantor hereby acknowledges that:
(i) it
has been advised by counsel in the negotiation, execution and delivery of
this
Guarantee and the other Transaction Documents to which it is a party;
(ii) the
Purchasers have no fiduciary relationship with or duty to any Guarantor arising
out of or in connection with this Guarantee or any of the other Transaction
Documents, and the relationship between the Guarantors, on the one hand,
and the
Purchasers, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(iii) no
joint venture is created hereby or by the other Transaction Documents or
otherwise exists by virtue of the transactions contemplated hereby among
the
Guarantors and the Purchasers.
S1-8
(m) Additional
Guarantors.
The Company shall cause each of its subsidiaries formed or acquired on or
subsequent to the date hereof to become a Guarantor for all purposes of this
Guarantee by executing and delivering an Assumption Agreement in the form
of
Annex
1
hereto.
(n) Release
of Guarantors.
Each Guarantor will be released from all liability hereunder concurrently
with
the indefeasible repayment in full of all amounts owed under the Purchase
Agreement, the Debentures and the other Transaction Documents.
(o) Seniority.
Except as set forth in Schedule 3.1(ff) of the Purchase Agreement, the
Obligations of each of the Guarantors hereunder rank senior in priority to
any
other Indebtedness (as defined in the Purchase Agreement) of such
Guarantor.
(p) Waiver
of Jury Trial.
EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE PURCHASERS,
HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
THEREIN.
S1-9
IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be
duly
executed and delivered as of the date first above written.
|
20/20
Technologies, Inc.
|
Magenta
netLogic, Limited
|
||||
|
By:
|
By:
|
||||
|
Name:
|
Name:
|
||||
|
Title:
|
Title:
|
||||
|
Global
Capacity Group, Inc.
|
CentrePath,
Inc.
|
||||
|
By:
|
By:
|
||||
|
Name:
|
Name:
|
||||
|
Title:
|
Title:
|
||||
|
Nexvu
Technologies, LLC
|
FNS
2007, INC.
|
||||
|
By:
|
By:
|
||||
|
Name:
|
Name:
|
||||
|
Title:
|
Title:
|
||||
|
20/20
TECHNOLOGIES I, LLC
|
|||||
|
By: __________________________________
Name:
Title: _______________________
|
|||||
|
VANCO
DIRECT USA, LLC
|
|
By:__________________________________________
Name:
Title:
|
S1-10
ANNEX
1 TO SUBSIDIARY GUARANTEE
ASSUMPTION
AGREEMENT, dated as of ______________________, made by
______________________________, a ______________ corporation (the “Additional
Guarantor”), in favor of the Purchasers pursuant to the Purchase Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Purchase Agreement.
WITNESSETH:
WHEREAS,
Capital Growth Systems, Inc., a Florida corporation (the “Company”) and the
Purchasers have entered into a Securities Purchase Agreement, dated as of
November __, 2008 (as amended, supplemented or otherwise modified from time
to
time, the “Purchase Agreement”);
WHEREAS,
in connection with the Purchase Agreement, the Subsidiaries of the Company
(other than the Additional Guarantor) have entered into the Subsidiary
Guarantee, dated as of November __, 2008 (as amended, supplemented or otherwise
modified from time to time, the “Guarantee”) in favor of the Purchasers;
WHEREAS,
the Purchase Agreement requires the Additional Guarantor to become a party
to
the Guarantee; and
WHEREAS,
the Additional Guarantor has agreed to execute and deliver this Assumption
Agreement in order to become a party to the Guarantee;
NOW,
THEREFORE, IT IS AGREED:
1. Guarantee.
By executing and delivering this Assumption Agreement, the Additional Guarantor,
as provided in Section
5(m)
of the Guarantee, hereby becomes a party to the Guarantee as a Guarantor
thereunder with the same force and effect as if originally named therein
as a
Guarantor and, without limiting the generality of the foregoing, hereby
expressly assumes all obligations and liabilities of a Guarantor thereunder.
The
information set forth in Annex
1
hereto is hereby added to the information set forth in Schedule
1
to the Guarantee. The Additional Guarantor hereby represents and warrants
that
each of the representations and warranties contained in Section
3
of the Guarantee is true and correct on and as the date hereof as to such
Additional Guarantor (after giving effect to this Assumption Agreement) as
if
made on and as of such date.
2. Governing
Law.
THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN
WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to
be duly
executed and delivered as of the date first above written.
|
[ADDITIONAL
GUARANTOR]
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
A1-1
