Exhibit 10.8
GUARANTY
New York, New York November 26, 2004
FOR VALUE RECEIVED, and in consideration of loans made or to be made or
credit otherwise extended or to be extended by Laurus Master Fund, Ltd.
("Lender") to or for the account of Tidel Engineering, LP ("Borrower") from time
to time and at any time for other good and valuable consideration, and to induce
Xxxxxx, in its discretion, to make such loans or extensions of credit and to
make or grant such renewals, extensions, releases of collateral or
relinquishments of legal rights as Lender may deem advisable, Tidel
Technologies, Inc. ("Guarantor" or the "undersigned") unconditionally guaranties
to Lender, and 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 Borrower to Lender and of all
instruments of any nature evidencing or relating to any such obligations and
liabilities upon which Borrower or one or more parties and Borrower is or may
become liable to Lender, whether incurred by Borrower as maker, endorser,
drawer, acceptor, guarantor, 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 Lender, whether arising under, out
of, or in connection with (a) that certain Convertible Promissory Note in the
original principal amount of $1,250,000 dated as of the date hereof made by
Borrower in favor of Lender (as amended, modified, restated or supplemented from
time to time, the "Convertible Note"), or (b) any documents, instruments or
agreements relating to or executed in connection therewith or any documents,
instruments or agreements referred to therein (as each may be amended, modified,
restated or supplemented from time to time, the "Documents"), or otherwise
((a)-(b) 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 Borrower under Title 11, United States Code,
including, without limitation, obligations or indebtedness of Borrower 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. In furtherance
of the foregoing, the undersigned xxxxxx agrees as follows:
1. NO IMPAIRMENT. Lender 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 decrease the interest
rate thereon, and may also make any agreement with Borrower 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 Lender and Borrower or any such other party or person, or make
any election of rights Lender 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. So long as the
Obligations are outstanding, this instrument shall be effective regardless of
the subsequent incorporation, merger or consolidation of Borrower, or any change
in the composition, nature, personnel or location of Borrower and shall extend
to any successor entity to Borrower, including a debtor in possession or the
like under any Insolvency Law.
2. GUARANTY ABSOLUTE. The undersigned guarantees that the Obligations will
be paid strictly in accordance with the terms of the Purchaser Notes 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 Borrower with respect
thereto. Guarantor hereby knowingly accepts the full range of risk encompassed
within a contract of "continuing guaranty" which risk includes the possibility
that Borrower will contract additional indebtedness for which Guarantor may be
liable hereunder after Xxxxxxxx's financial condition or ability to pay its
lawful debts when they become due has deteriorated, whether or not Borrower has
properly authorized incurring such additional indebtedness. The undersigned
acknowledges that no oral representations, including any representations to
extend credit or provide other financial accommodations to Borrower, have been
made by Lender to induce the undersigned to enter into this Guaranty. The
liability of the undersigned under this Guaranty shall be absolute and
unconditional, in accordance with its terms, and, so long as the Obligations are
outstanding, 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 the Purchaser Notes 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 Lender or its assignees or any acceptance thereof or any release of
any security by Lender 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 Borrower, 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 Lender
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.
3. Waivers. (a) This Guaranty is a guaranty of payment and not of
collection. Lender shall be under no obligation to institute suit, exercise
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rights or remedies or take any other action against Borrower 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 Guarantor hereby
waives any and all rights which it may have by statute or otherwise which would
require Lender to do any of the foregoing. Guarantor further consents and agrees
that Xxxxxx shall be under no obligation to marshal any assets in favor of
Guarantor, 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 Lender, Borrower
and/or the undersigned with respect to the undersigned's obligations under this
Guaranty, or which Borrower 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, except for
payment in full of the Obligations pursuant to this Guaranty.
(b) The undersigned waives (i) notice of the acceptance of this Guaranty,
and of all notices and demands of any kind to which the undersigned may be
entitled, including, without limitation, notice of adverse change in Borrower'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 Xxxxxx,
the undersigned shall not be entitled to be subrogated to any of the rights of
Lender against Borrower or against any collateral or guarantee or right of
offset held by Lender for the payment of the Obligations, nor shall the
undersigned seek or be entitled to seek any contribution or reimbursement from
Borrower in respect of payments made by the undersigned hereunder, until all
amounts owing to Lender by Borrower on account of the Obligations are paid in
full. If an Event of Default (as such term is defined in either of the Purchaser
Notes) has occurred and is continuing, and 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, such amount shall be held by the
undersigned in trust for Lender, 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 Lender in the exact form received
by the undersigned (duly endorsed by the undersigned to Lender, if required), to
be applied against the Obligations, whether matured or unmatured, in such order
as Lender may determine, subject to the provisions of the Purchaser Notes. Any
and all present and future debts and obligations of Borrower 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
Borrower to Lender.
4. SECURITY. All sums at any time to the credit of the undersigned and any
property of the undersigned in Lender's 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, Lender (each such entity, an "Affiliate") shall be deemed held by
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Lender or such Affiliate, as the case may be, as security for any and all of the
undersigned's obligations to Lender and to any Affiliate of Lender, no matter
how or when arising and whether under this or any other instrument, agreement or
otherwise.
5. REPRESENTATIONS AND WARRANTIES. The undersigned hereby represents and
warrants (all of which representations and warranties shall survive until all
Obligations are indefeasibly satisfied in full), that:
(a) CORPORATE STATUS. Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware 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. The undersigned 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 and legal action to authorize the
execution, delivery and performance of this Guaranty.
(c) LEGAL, VALID AND BINDING CHARACTER. This Guaranty constitutes the
legal, valid and binding obligation of the undersigned enforceable in accordance
with its terms, except as enforceability may be limited by applicable Insolvency
Law.
(d) VIOLATIONS. The execution, delivery and performance of this Guaranty
will not violate any requirement of law applicable to the undersigned or any
material contract, agreement or instrument to which the undersigned is a party
or by which the undersigned or any property of the undersigned is bound or
result in the creation or imposition of any mortgage, lien or other encumbrance
other than to Lender on any of the property or assets of the undersigned
pursuant to the provisions of any of the foregoing.
(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, where failure to obtain such consent would have
a material adverse effect on the business, operating assets or condition,
financial or otherwise, of the undersigned.
(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 knowledge of the undersigned,
threatened (i) with respect to this Guaranty or any of the transactions
contemplated by this Guaranty or (ii) against or affecting the undersigned, or
any of property or assets of the undersigned, which, if adversely determined,
would have a material adverse effect on the business, operations, assets or
condition, financial or otherwise, of the undersigned.
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(g) FINANCIAL BENEFIT. The undersigned has derived or expects to derive a
financial or other advantage from each and every loan, advance or extension of
credit made under the Loan Agreement or other Obligation incurred by Borrower to
Lender.
The foregoing representations and warranties shall be deemed to have been
made by the undersigned on the date of each borrowing by Borrower under the Loan
Agreement on and as of such date of such borrowing as though made hereunder on
and as of such date.
6. ACCELERATION. (a) If any Event of Default (as such term is defined in
any Document) shall occur and continue beyond any applicable grace periods under
any agreement made by Borrower or the undersigned to Lender, or either Borrower
or 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, the undersigned, or if a notice of any lien,
levy, or assessment is filed of record with respect to any assets 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 Lender's possession, or otherwise, any and all Obligations
shall for purposes hereof, at Lender's option, be deemed due and payable without
notice notwithstanding that any such Obligation is not then due and payable by
Borrower.
(b) The undersigned will promptly notify Lender of any default by the
undersigned in the 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, Lender shall have the right to accelerate the undersigned's obligations
hereunder.
7. PAYMENTS FROM GUARANTOR. Lender, 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 guarantor, 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 Lender 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 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 the undersigned under this
Guaranty.
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10. RECAPTURE. Anything in this Guaranty to the contrary notwithstanding,
if Lender 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 Xxxxxx, the undersigned's obligations to Lender
shall be reinstated and this Guaranty shall remain in full force and effect (or
be reinstated) until payment shall have been made to Lender, which payment shall
be due on demand.
11. BOOKS AND RECORDS. The books and records of Xxxxxx showing the account
between Xxxxxx and Borrower 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 Lender 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 Lender 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
Lender or allowed it by law or other agreement shall be cumulative and not
exclusive of any other, and may be exercised by Lender at any time and from time
to time.
13. WAIVER OF JURY TRIAL. 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 XXXXXX HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT LENDER 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. 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 LENDER 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
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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. 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 the
undersigned and Xxxxxx.
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. Lender 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, Lender 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, Lender, 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. Lender shall have an unimpaired right to enforce this Guaranty for its
benefit with respect to that portion of the Obligations which Lender has not
disposed of, sold, assigned, or otherwise transferred.
19. RELEASE. Nothing except cash payment in full of the Obligations, either
by Xxxxxxxx, the undersigned, or any third party on either of their behalf,
shall release the undersigned from liability under this Guaranty.
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IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned this
26th day of November, 2004.
TIDEL TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
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Title: President
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Address:____________________________
____________________________________
Telephone No.:______________________
Facsimile No.:______________________
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STATE OF NEW YORK )
): ss.:
COUNTY OF NEW YORK )
On the ____ day of ___________, 2004, before me personally came
_______________________ to me known, who being by me duly sworn, did depose and
say s/he is the ______________ of Tidel Technologies, Inc., the corporation
described in and which executed the foregoing instrument; and that s/he signed
her/his name thereto by order of the board of directors of said corporation.
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Notary Public
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