GUARANTY
Exhibit
10.4
This
Guaranty is made this 29th day of August 2008, by such Guarantors listed on
the
signature pages hereof (collectively, jointly and severally, “Guarantors”,
and
each, individually, a “Guarantor”),
in
favor of __________________ (together with its successors and assigns,
“Noteholder”).
W
I T N E S S E T H:
WHEREAS,
pursuant to that certain Exchange Agreement dated as of August 29, 2008 (as
amended, restated, supplemented, or otherwise modified from time to time,
including all schedules thereto, the “Exchange
Agreement”)
by and
between Workstream Inc., a corporation existing pursuant to the Canada Business
Corporations Act (“Parent”),
and
Noteholder, Parent has agreed to exchange Noteholder’s Special Warrant and 0000
Xxxxxxx for the Note and the Warrant;
WHEREAS,
each
Guarantor is a direct or indirect wholly-owned Subsidiary of Parent and will
receive direct and substantial benefits from such exchange;
WHEREAS,
in
order to induce Noteholder to so exchange its Special Warrant and 0000 Xxxxxxx
for the Note and the Warrant, as provided for in the Exchange Agreement,
Guarantors have agreed to jointly and severally guaranty all of Parent’s
obligations under and with respect to the Note; and
WHEREAS,
in
connection herewith, Guarantors, Parent and Noteholder have entered into that
certain Security Agreement dated of even date herewith (as amended, restated,
supplemented, or otherwise modified from time to time, including all schedules
thereto, the “Security
Agreement”),
pursuant to which Guarantors and Parent (Guarantors and Parent, collectively,
“Obligors”
and
each, individually, an “Obligor”)
have
granted Noteholder continuing security interests in all assets of each Obligor,
as more fully set forth in the Security Agreement.
NOW,
THEREFORE,
for and
in consideration of the recitals made above and other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, each Guarantor hereby agrees as follows:
1. Definitions.
All
capitalized terms used herein that are not otherwise defined herein shall have
the meanings given them in the Security Agreement.
2. Guaranteed
Obligations.
Guarantors jointly and severally hereby irrevocably and unconditionally guaranty
to Noteholder the due and punctual payment in full of all of the present and
future payment and performance obligations of each Obligor arising under the
Exchange Agreement, any and all Notes payable to Noteholder, the Security
Agreement, and the other Transaction Documents (as defined in the Notes),
including, without duplication, reasonable attorneys’ fees and expenses and any
interest, fees, or expenses that accrue after the filing of an Insolvency
Proceeding, regardless of whether allowed or allowable in whole or in part
as a
claim in any Insolvency Proceeding (collectively, the “Guaranteed
Obligations”).
3. Guarantors’
Representations and Warranties.
Each
Guarantor represents and warrants to Noteholder that such Guarantor expects
to
derive substantial benefits from the exchange of Noteholder’s Special Warrant
and 0000 Xxxxxxx for a Note and a Warrant and the other transactions
contemplated hereby. Noteholder may rely conclusively on a continuing warranty,
hereby made, that such Guarantor continues to be benefited by this Guaranty
and
Noteholder shall have no duty to inquire into or confirm the receipt of any
such
benefits, and this Guaranty shall be effective and enforceable by Noteholder
without regard to the receipt, nature or value of any such
benefits.
4. Unconditional
Nature.
No act
or thing need occur to establish any Guarantor’s liability hereunder, and no act
or thing, except full payment and discharge of all of the Guaranteed
Obligations, shall in any way exonerate any Guarantor hereunder or modify,
reduce, limit or release any Guarantor’s liability hereunder. This is an
absolute, unconditional and continuing guaranty of payment of the Guaranteed
Obligations and shall continue to be in force and be binding upon each Guarantor
until the termination of this Guaranty pursuant to Section 12
hereunder.
5. Subrogation.
No
Guarantor will exercise or enforce any right of contribution, reimbursement,
recourse or subrogation available to such Guarantor as to any of the Guaranteed
Obligations, or against any Person liable therefor, or as to any collateral
security therefor, unless and until all of the Guaranteed Obligations shall
have
been indefeasibly paid in full and discharged.
6. Enforcement
Expenses.
Each
Guarantor shall pay or reimburse Noteholder for all reasonable costs, expenses
and attorneys’ fees paid or incurred by Noteholder in endeavoring to collect and
enforce the Guaranteed Obligations and in enforcing this Guaranty.
7. Obligations
Absolute.
Each
Guarantor agrees that its obligations hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
which constitutes a legal or equitable discharge of a guarantor or surety other
than the indefeasible payment in full and discharge of the Guaranteed
Obligations. In furtherance of the foregoing and without limiting the generality
thereof, each Guarantor agrees that none of its obligations hereunder shall
be
affected or impaired by any of the following acts or things (which Noteholder
is
expressly authorized to do, omit or suffer from time to time, without consent
or
approval by or notice to any Guarantor): (a) any acceptance of collateral
security, guarantors, accommodation parties or sureties for any or all of the
Guaranteed Obligations; (b) one or more extensions or renewals of the
Guaranteed Obligations (whether or not for longer than the original period)
or
any modification of the interest rates, maturities, if any, or other contractual
terms applicable to any of the Guaranteed Obligations or any amendment or
modification of any of the terms or provisions of any of the Transaction
Documents; (c) any waiver or indulgence granted to Parent or any other
Obligor, any delay or lack of diligence in the enforcement of the Guaranteed
Obligations, or any failure to institute proceedings, file a claim, give any
required notices or otherwise protect any of the Guaranteed Obligations;
(d) any full or partial release of, compromise or settlement with, or
agreement not to xxx, Parent, any other Obligor or any other Person liable
in
respect of any of the Guaranteed Obligations; (e) any release, surrender,
cancellation or other discharge of any evidence of the Guaranteed Obligations
or
the acceptance of any instrument in renewal or substitution therefor;
(f) any failure to obtain collateral security (including rights of setoff)
for the Guaranteed Obligations, or to see to the proper or sufficient creation
and perfection thereof, or to establish the priority thereof, or to preserve,
protect, insure, care for, exercise or enforce any collateral security; or
any
modification, alteration, substitution, exchange, surrender, cancellation,
termination, release or other change, impairment, limitation, loss or discharge
of any collateral security; (g) any collection, sale, lease or disposition
of, or any other foreclosure or enforcement of or realization on, any collateral
security; (h) any assignment, pledge or other transfer of any of the
Guaranteed Obligations or any evidence thereof; or (i) any manner, order or
method of application of any payments or credits upon the Guaranteed
Obligations. Each Guarantor waives any and all defenses and discharges available
to a surety, guarantor or accommodation co-obligor.
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8. Waivers
by Guarantors.
Each
Guarantor waives any and all defenses, claims, setoffs and discharges of Parent,
or any other Obligor or Person, pertaining to the Guaranteed Obligations, except
the defense of discharge by indefeasible payment in full. Without limiting
the
generality of the foregoing, no Guarantor will assert, plead or enforce against
Noteholder any defense of waiver, release, discharge or disallowance in any
Insolvency Proceeding, statute of limitations, res judicata, statute of frauds,
anti-deficiency statute, fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to Parent or any other Obligor or Person
liable in respect of any of the Guaranteed Obligations, or any setoff available
to Noteholder against Parent or any other such Obligor or Person, whether or
not
on account of a related transaction. Each Guarantor expressly agrees that such
Guarantor shall be and remain liable for any deficiency remaining after
foreclosure of any mortgage or security interest securing the Guaranteed
Obligations, whether or not the liability of Parent or any other Obligor or
Person for such deficiency is discharged pursuant to statute or judicial
decision. The liability of each Guarantor shall not be affected or impaired
by
any voluntary or involuntary liquidation, dissolution, sale or other disposition
of all or substantially all of the assets, marshalling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit
of
creditors, reorganization, arrangement, composition or readjustment of, or
other
similar event or proceeding affecting, Parent or any of its assets. No Guarantor
will assert, plead or enforce against Noteholder any claim, defense or setoff
available to such Guarantor against Parent. Each Guarantor waives presentment,
demand for payment, notice of dishonor or nonpayment and protest of any
instrument evidencing the Guaranteed Obligations. Noteholder shall not be
required first to resort for payment of the Guaranteed Obligations to Parent
or
any other Person, or their properties, or first to enforce, realize upon or
exhaust any collateral security for the Guaranteed Obligations, before enforcing
this Guaranty.
9. If
Payments Set Aside, etc.
If any
payment applied by Noteholder to the Guaranteed Obligations is thereafter set
aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization
of
Parent or any other Obligor or Person), the Guaranteed Obligations to which
such
payment was applied shall for the purpose of this Guaranty be deemed to have
continued in existence, notwithstanding such application, and this Guaranty
shall be enforceable as to such Guaranteed Obligations as fully as if such
application had never been made.
10. Additional
Obligation of Guarantors.
Each
Guarantor’s liability under this Guaranty is in addition to and shall be
cumulative with all other liabilities of such Guarantor to Noteholder as
guarantor, surety, endorser, accommodation co-obligor or otherwise of any of
the
Guaranteed Obligations, without any limitation as to amount.
11. No
Duties Owed by Noteholder.
Each
Guarantor acknowledges and agrees that Noteholder (a) has not made any
representations or warranties with respect to, (b) does not assume any
responsibility to such Guarantor for, and (c) has no duty to provide
information to such Guarantor regarding, the enforceability of any of the
Guaranteed Obligations or the financial condition of Parent or any other Obligor
or Person. Each Guarantor has independently determined the creditworthiness
of
Parent and the enforceability of the Guaranteed Obligations and until the
Guaranteed Obligations are paid in full will independently and without reliance
on Noteholder continue to make such determinations.
12. Termination.
This
Guaranty and the obligations of each Guarantor hereunder shall be deemed to
be
satisfied, released and fully discharged when all of the Guaranteed Obligations
are indefeasibly paid in full and discharged.
13. Miscellaneous.
(a) This
Guaranty may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall
be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Guaranty. Delivery of an executed counterpart
of
this Guaranty by telefacsimile or other electronic method of transmission shall
be equally as effective as delivery of an original executed counterpart of
this
Guaranty. Any party delivering an executed counterpart of this Guaranty by
telefacsimile or other electronic method of transmission also shall deliver
an
original executed counterpart of this Guaranty but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability,
and
binding effect of this Guaranty.
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(b) Any
provision of this Guaranty which is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that jurisdiction or affecting
the validity or enforceability of such provision in any other
jurisdiction.
(c) Headings
used in this Guaranty are for convenience only and shall not be used in
connection with the interpretation of any provision hereof.
(d) The
pronouns used herein shall include, when appropriate, either gender and both
singular and plural, and the grammatical construction of sentences shall conform
thereto.
(e) Unless
the context of this Guaranty or any other Transaction Document clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and “including” are not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or.” The words “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Guaranty or any other
Transaction Document refer to this Guaranty or such other Transaction Document,
as the case may be, as a whole and not to any particular provision of this
Guaranty or such other Transaction Document, as the case may be. Section,
subsection, clause, schedule, and exhibit references herein are to this Guaranty
unless otherwise specified. Any reference in this Guaranty or in any other
Transaction Document to any agreement, instrument, or document shall include
all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof,
as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein or in any
other Transaction Document to the satisfaction or repayment in full of the
Guaranteed Obligations shall mean the repayment in full in cash of all
Guaranteed Obligations other than unasserted contingent indemnification
Guaranteed Obligations. Any reference herein to any Person shall be construed
to
include such Person’s successors and assigns.
(f) This
Guaranty shall be effective upon delivery to Noteholder, without further act,
condition or acceptance by Noteholder, shall be binding upon each Guarantor
and
the successors and assigns of each Guarantor, and shall inure to the benefit
of
Noteholder and its participants, successors and assigns. This Guaranty may
not
be waived, modified, amended, terminated, released or otherwise changed except
by a writing signed by each Guarantor and Noteholder.
14. Notices.
All
notices and other communications provided for hereunder shall be given in the
form and manner, and delivered to such addresses, as specified in the Security
Agreement.
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15. Governing
Law; Jurisdiction; Service of Process; Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Guaranty shall be governed by the internal laws of the State of
Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than
the
State of Illinois. Each Guarantor hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of Chicago,
Illinois, 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 suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper; provided, however, that any suit seeking enforcement of this Guaranty
may be brought, at Noteholder’s option, in the courts of any jurisdiction where
Noteholder elects to bring such action. Each Guarantor hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Guaranty and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Without limitation of the foregoing, each Guarantor hereby irrevocably appoints
Parent as such Guarantor’s agent for purposes of receiving and accepting any
service of process hereunder. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law.
EACH
GUARANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT
TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
[signature
page follows]
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IN
WITNESS WHEREOF, this Guaranty has been duly executed by each Guarantor as
of
the date set forth above.
| 0XXXXXXXXXX.XXX, INC., a Delaware corporation | |||
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By:
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Name:
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Title:
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WORKSTREAM
USA INC., a Delaware corporation
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By:
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Name:
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Title:
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XXXXX
XXXXX HOLDINGS, INC., a Florida corporation
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By:
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Name:
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Title:
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THE
OMNI PARTNERS, INC., a Florida corporation
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By:
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Name:
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Title:
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WORKSTREAM
MERGER SUB INC., a Delaware corporation
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By:
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Name:
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Title:
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