EXHIBIT 99.4
GUARANTY AGREEMENT
1. IDENTIFICATION.
This Guaranty Agreement (the "Guaranty"), dated as of March 21, 2005,
is entered into by and between Perfisans Networks Corporation, an Ontario
corporation ("Guarantor" herein) and the parties identified on Schedule A hereto
(each a "Lender" and collectively, the "Lenders").
2. RECITALS.
2.1 Guarantor is a wholly owned subsidiary of Perfisans Holdings, Inc.,
a Maryland corporation ("Parent Company"). The Lenders have made, are making and
will be making loans to Parent Company (the "Loans"). Guarantor will obtain
substantial benefit from the proceeds of the Loans.
2.2 The Loans are and will be evidenced by certain convertible
promissory notes (each a "Convertible Note" and collectively, the "Convertible
Notes") issued by Parent Company on or about the date of this Agreement pursuant
to a Securities Purchase Agreement (the "Securities Purchase Agreement") and in
the future upon the occurrence of certain events. The Convertible Notes are
further identified on Schedule A hereto and were and will be executed by Parent
Company as "Borrower" or "Debtor" for the benefit of each Lender as the "Holder"
or "Lender" thereof.
2.3 In consideration of the Loans made by Lenders to Parent Company and
for other good and valuable consideration, and as security for the performance
by Parent Company of its obligations under the Convertible Notes and as security
for the repayment of the Loans and all other sums due from Debtor to Lenders
arising under the Convertible Notes, the Securities Purchase Agreement, the
Security Agreements and any other agreement between or among them relating to
the foregoing (collectively, the "Obligations"), Guarantor, for good and
valuable consideration, receipt of which is acknowledged, has agreed to enter
into this Agreement, for the benefit of the Lenders. Obligations include all
future advances by Lenders to Parent Company made by all Lenders on
substantially the same terms and in proportion to their interests in the
Obligations.
3. GUARANTY.
3.1 GUARANTY. Guarantor hereby unconditionally and irrevocably
guarantees the punctual payment, performance and observance when due, whether at
stated maturity, by acceleration or otherwise, of all of the Obligations now or
hereafter existing, whether for principal, interest (including, without
limitation, all interest that accrues after the commencement of any insolvency,
bankruptcy or reorganization of Parent Company, whether or not constituting an
allowed claim in such proceeding), fees, commissions, expense reimbursements,
liquidated damages, indemnifications or otherwise (such obligations, to the
extent not paid by Parent Company being the "GUARANTEED OBLIGATIONS"), and
agrees to pay any and all costs, fees and expenses (including reasonable counsel
fees and expenses) incurred by the Lenders in enforcing any rights under this
Agreement. Without limiting the generality of the foregoing, Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by Parent Company to the Lenders, but for the fact
that they are unenforceable or not allowable due to the existence of an
insolvency, bankruptcy or reorganization involving Parent Company.
3.2 GUARANTY ABSOLUTE. Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the
Convertible Notes, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Lenders with respect thereto. The obligations of Guarantor under this Agreement
are independent of the Guaranteed Obligations, and a separate action or actions
may be brought and prosecuted against Guarantor to enforce
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such obligations, irrespective of whether any action is brought against Parent
Company or any other Guarantor or whether Parent Company or any other Guarantor
is joined in any such action or actions. The liability of Guarantor under this
Agreement constitutes a primary obligation, and not a contract of surety, and
shall be irrevocable, absolute and unconditional irrespective of, and Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:
(a) any lack of validity or enforceability of the Convertible
Notes or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from the Convertible Notes,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to Parent Company or
otherwise;
(c) any taking, exchange, release, subordination or
non-perfection of any Collateral, or any taking, release or amendment or waiver
of or consent to departure from any other guaranty, for all or any of the
Guaranteed Obligations;
(d) any change, restructuring or termination of the corporate,
limited liability company or partnership structure or existence of Parent
Company; or
(e) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
or the Lenders that might otherwise constitute a defense available to, or a
discharge of, Parent Company or any other guarantor or surety.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Lenders or any other entity upon the
insolvency, bankruptcy or reorganization of the Parent Company or otherwise (and
whether as a result of any demand, settlement, litigation or otherwise), all as
though such payment had not been made.
3.3 WAIVER. Guarantor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Agreement and any requirement that the Lenders exhaust any
right or take any action against any Borrower or any other person or entity or
any Collateral. Guarantor acknowledges that it will receive direct and indirect
benefits from the Guaranteed Obligations and that the waiver set forth in this
SECTION 3.3 is knowingly made in contemplation of such benefits. Guarantor
hereby waives any right to revoke this Agreement, and acknowledges that this
Agreement is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.
3.4 CONTINUING GUARANTY; ASSIGNMENTS. This Agreement is a continuing
guaranty and shall (a) remain in full force and effect until the later of the
indefeasible cash payment in full of the Guaranteed Obligations and all other
amounts payable under this Agreement, the Securities Purchase Agreement and
Convertible Notes, (b) be binding upon Guarantor, its successors and assigns and
(c) inure to the benefit of and be enforceable by the Lenders and their
successors, pledgees, transferees and assigns. Without limiting the generality
of the foregoing clause (c), Lender may pledge, assign or otherwise transfer all
or any portion of its rights and obligations under this Agreement (including,
without limitation, all or any portion of its Convertible Notes owing to it) to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted such Lender herein or otherwise.
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3.5 SUBROGATION. Guarantor will not exercise any rights that it may now
or hereafter acquire against the Lender or other guarantor (if any) that arise
from the existence, payment, performance or enforcement of such Guarantor's
obligations under this Agreement, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Lender or other guarantor (if any), directly or indirectly, in
cash or other property or by set-off or in any other manner, payment or security
solely on account of such claim, remedy or right, unless and until all of the
Guaranteed Obligations and all other amounts payable under this Agreement shall
have been indefeasibly paid in full in cash. If (i) any Guarantor shall make
payment to the Lenders of all or any part of the Guaranteed Obligations and (ii)
all of the Guaranteed Obligations and all other such other amounts payable under
this Agreement, such payments shall be paid in full in cash.
3.6 MAXIMUM OBLIGATIONS. Notwithstanding any provision herein contained
to the contrary, Guarantor's liability with respect to the Obligations shall be
limited to an amount not to exceed, as of any date of determination, the amount
that could be claimed by Lenders from Guarantor without rendering such claim
voidable or avoidable under Section 548 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.
4. MISCELLANEOUS.
4.1 EXPENSES. Guarantor shall pay to the Lenders, on demand, the amount
of any and all reasonable expenses, including, without limitation, reasonable
attorneys' fees, legal expenses and brokers' fees, which the Lenders may incur
in connection with (a) exercise or enforcement of any the rights, remedies or
powers of the Lenders hereunder or with respect to any or all of the
Obligations; or (b) failure by Guarantor to perform and observe any agreements
of Guarantor contained herein which are performed by the Lenders, after any
notice required to be given.
4.2 WAIVERS, AMENDMENT AND REMEDIES. No course of dealing by the
Lenders and no failure by the Lenders to exercise, or delay by the Lenders in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, and no single or partial exercise thereof shall preclude any other or
further exercise thereof or the exercise of any other right, remedy or power of
the Lenders. No amendment, modification or waiver of any provision of this
Agreement and no consent to any departure by Guarantor therefrom, shall, in any
event, be effective unless contained in a writing signed by the Lenders, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. The rights, remedies and powers of the
Lenders, not only hereunder, but also under any instruments and agreements
evidencing or securing the Obligations and under applicable law are cumulative,
and may be exercised by the Collateral Agent from time to time in such order as
the Collateral Agent may elect.
4.3 NOTICES. All notices or other communications given or made
hereunder shall be in writing and shall be personally delivered or deemed
delivered the first business day after being faxed (provided that a copy is
delivered by first class mail) to the party to receive the same at its address
set forth below or to such other address as either party shall hereafter give to
the other by notice duly made under this Section:
To Guarantor: Perfisans Networks Corporation
0000, 00xx Xxxxxx Xxxxx #0
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: To-Xxx Xxx
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With a copy by to: Xxxxxxx Savage, Kaplowitz, Wolf & Marcus, LLP
000 Xxxxxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
To Lenders: To the addresses and telecopier numbers set
forth on Schedule A to the Securities Purchase
Agreement
To the Collateral Agent: Xxxxxxx X. Xxxxxxx
Grushko & Xxxxxxx, P.C.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Any party may change its address by written notice in accordance with this
paragraph.
4.4 TERM; BINDING EFFECT. This Agreement shall (a) remain in full force
and effect until payment and satisfaction in full of all of the Obligations; (b)
be binding upon Guarantor and its successors and permitted assigns; and (c)
inure to the benefit of the Lenders and their respective successors and assigns.
All the rights and benefits granted by Guarantor to the Collateral Agent and
Lenders hereunder and other agreements and documents delivered in connection
therewith are deemed granted to both the Lenders. Upon the satisfaction in full
of the Obligations, (i) this Agreement shall terminate and (ii) the Lenders
will, upon Guarantor's request and at Guarantor's expense, execute and deliver
to Guarantor such documents as Guarantor shall reasonably request to evidence
such termination, all without any representation, warranty or recourse
whatsoever.
4.5 CAPTIONS. The captions of Paragraphs, Articles and Sections in this
Agreement have been included for convenience of reference only, and shall not
define or limit the provisions hereof and have no legal or other significance
whatsoever.
4.6 GOVERNING LAW; VENUE; SEVERABILITY. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts or choice of law, except to the extent
that the perfection of the security interest granted hereby in respect of any
item of Collateral may be governed by the law of another jurisdiction. Any legal
action or proceeding against Guarantor with respect to this Agreement may be
brought in the courts of the State of New York or of the United States for the
Southern District of New York, and, by execution and delivery of this Agreement,
Guarantor hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts.
Guarantor hereby irrevocably waives any objection which they may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
aforesaid courts and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum. If any provision of this
Agreement, or the application thereof to any person or circumstance, is held
invalid, such invalidity shall not affect any other provisions which can be
given effect without the invalid provision or application, and to this end the
provisions hereof shall be severable and the remaining, valid provisions shall
remain of full force and effect.
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4.7 SATISFACTION OF OBLIGATIONS. For all purposes of this Agreement
including Section 4.4, the payment in full of the Obligations shall be
conclusively deemed to have occurred when either the Obligations have been
indefeasibly paid in cash or all outstanding Convertible Notes have been
converted to common stock pursuant to the terms of the Convertible Notes and the
Subscription Agreements.
4.8 COUNTERPARTS/EXECUTION. This Agreement may be executed in any
number of counterparts and by the different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. This
Agreement may be executed by facsimile signature and delivered by facsimile
transmission.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Guaranty Agreement, as of the date first written above.
"PERFISANS NETWORKS CORPORATION
an Ontario corporation
By:
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Its:
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APPROVED BY "LENDERS":
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THIS GUARANTY AGREEMENT MAY BE SIGNED BY FACSIMILE SIGNATURE AND
DELIVERED BY CONFIRMED FACSIMILE TRANSMISSION.
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SCHEDULE A TO GUARANTY
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LENDERS INITIAL CLASS A CLASS B CLASS C SECOND
CLOSING WARRANTS WARRANTS WARRANTS CLOSING
PURCHASE PURCHASE
PRICE PRICE
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TOTAL
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