EXHIBIT 10.2
SUBSIDIARY GUARANTY
Boulder, Colorado August 18, 2004
FOR VALUE RECEIVED, and in consideration of note purchases from, loans
made or to be made or credit otherwise extended or to be extended by Laurus
Master Fund, Ltd. ("Laurus") to or for the account of Incentra Solutions, Inc.
(formerly known as Front Porch Digital, Inc.), a Nevada corporation ("Debtor"),
from time to time and at any time and for other good and valuable consideration
and to induce Xxxxxx, in its discretion, to purchase such notes, make such loans
or extensions of credit and to make or grant such renewals, extensions, releases
of collateral or relinquishments of legal rights as Laurus may deem advisable,
each of the undersigned (and each of them if more than one, the liability under
this Guaranty being joint and several) (jointly and severally referred to as
"Guarantors " or "the undersigned") unconditionally guaranties to Laurus, its
successors, endorsees and assigns, as of August 18, 2004 (the "Effective Date"),
the prompt payment when due (whether by acceleration or otherwise) of all
present and future obligations and liabilities of any and all kinds of Debtor to
Laurus and of all instruments of any nature evidencing or relating to any such
obligations and liabilities upon which Debtor or one or more parties and Debtor
is or may become liable to Laurus, whether incurred by Debtor as maker,
endorser, drawer, acceptor, guarantors, 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 Laurus, whether arising
under, out of, or in connection with (i) that certain Securities Purchase
Agreement dated as of May 13, 2004 by and between the Debtor and Laurus (the
"Securities Purchase Agreement") and (ii) each Related Agreement referred to in
the Securities Purchase Agreement (the Securities Purchase Agreement and each
Related Agreement, as each may be amended, modified, restated or supplemented
from time to time, are collectively referred to herein as the "Documents"), or
any documents, instruments or agreements relating to or executed in connection
with the Documents or any documents, instruments or agreements referred to
therein or otherwise, or any other indebtedness, obligations or liabilities of
the Debtor to Laurus, whether now existing or hereafter arising, direct or
indirect, liquidated or unliquidated, absolute or contingent, due or not due and
whether under, pursuant to or evidenced by a note, agreement, guaranty,
instrument or otherwise (all of which are herein 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 Debtor under
Title 11, United States Code, including, without limitation, obligations or
indebtedness of Debtor 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. Terms not otherwise defined herein shall have the meaning assigned
such terms in the Securities Purchase Agreement and the Master Security
Agreement dated as of May 13, 2004 by and between Debtor and Laurus, as
applicable. In furtherance of the foregoing, the undersigned xxxxxx agrees as
follows:
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1. NO IMPAIRMENT. Laurus 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 increase or
decrease the interest rate thereon, or any other agreement with Debtor 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 Laurus and Debtor or any such other party or person, or
make any election of rights Laurus 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. This instrument
shall be effective regardless of the subsequent incorporation, merger or
consolidation of Debtor, or any change in the composition, nature, personnel or
location of Debtor and shall extend to any successor entity to Debtor, including
a debtor in possession or the like under any Insolvency Law.
2. GUARANTY ABSOLUTE. Subject to Section 5(c), each of the
undersigned jointly and severally guarantees, as of the Effective Date, that the
Obligations will be paid strictly in accordance with the terms of the Documents
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 Debtor
with respect thereto. Guarantors hereby knowingly accept the full range of risk
encompassed within a contract of "continuing guaranty" which risk includes the
possibility that Debtor will contract additional indebtedness for which
Guarantors may be liable hereunder after Xxxxxx's financial condition or ability
to pay its lawful debts when they fall due has deteriorated, whether or not
Debtor has properly authorized incurring such additional indebtedness. The
undersigned acknowledge that (i) no oral representations, including any
representations to extend credit or provide other financial accommodations to
Debtor, have been made by Xxxxxx to induce the undersigned to enter into this
Guaranty and (ii) any extension of credit to the Debtor shall be governed solely
by the provisions of the Documents. The liability of each of the undersigned
under this Guaranty shall be absolute and unconditional, in accordance with its
terms, and 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 any Document 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 Laurus or its assignees or any acceptance thereof or any release of
any security by Laurus 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 Debtor, or any action taken with respect to
this Guaranty by any trustee or
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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 Laurus 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.
Laurus shall be under no obligation to institute suit, exercise rights or
remedies or take any other action against Debtor 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 each of the Guarantors hereby
waives any and all rights which it may have by statute or otherwise which would
require Laurus to do any of the foregoing. Each of the Guarantors further
consents and agrees that Xxxxxx shall be under no obligation to marshal any
assets in favor of Guarantors, 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
Laurus, Debtor and/or the undersigned with respect to the undersigned's
obligations under this Guaranty, or which Debtor 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.
(b) Each of the undersigned further waives (i) notice of the
acceptance of this Guaranty, of the making of any such loans or extensions of
credit, and of all notices and demands of any kind to which the undersigned may
be entitled, including, without limitation, notice of adverse change in Debtor'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 Xxxxxx against Debtor or against any collateral or guarantee or right
of offset held by Xxxxxx for the payment of the Obligations, nor shall the
undersigned seek or be entitled to seek any contribution or reimbursement from
Debtor in respect of payments made by the undersigned hereunder, until all
amounts owing to Laurus by Debtor on account of the Obligations are paid in full
and Laurus' obligation to extend credit pursuant to the Documents have been
terminated. If, notwithstanding the foregoing, any amount shall be paid to the
undersigned on account of such subrogation rights at any time when all of the
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Obligations shall not have been paid in full and Laurus' obligation to
extend credit pursuant to the Documents shall not have been terminated,
such amount shall be held by the undersigned in trust for Laurus,
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 Laurus in the exact form received by the
undersigned (duly endorsed by the undersigned to Laurus, if required),
to be applied against the Obligations, whether matured or unmatured, in
such order as Laurus may determine, subject to the provisions of the
Documents. Any and all present and future debts and obligations of
Debtor 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 Debtor to Xxxxxx.
4. SECURITY. All sums at any time to the credit of the undersigned
and any property of the undersigned in Laurus' 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, Laurus (each such entity, an "Affiliate") shall be deemed
held by Laurus or such Affiliate, as the case may be, as security for any and
all of the undersigned's obligations to Laurus and to any Affiliate of Laurus,
no matter how or when arising and whether under this or any other instrument,
agreement or otherwise.
5. REPRESENTATIONS AND WARRANTIES. Each of the undersigned
respectively, hereby jointly and severally represents and warrants (all of which
representations and warranties shall survive until all Obligations are
indefeasibly satisfied in full and the Documents have been irrevocably
terminated), that:
(a) CORPORATE STATUS. It is a corporation, partnership or
limited liability company, as the case may be, duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization indicated on the signature page hereof 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. It 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, partnership
or limited liability company, as the case may be, action to authorize
the execution, delivery and performance of this Guaranty.
(c) LEGAL, VALID AND BINDING CHARACTER. This Guaranty
constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws of general application affecting the enforcement of creditor's
rights and general principles of equity that restrict the availability
of equitable or legal remedies.
(d) VIOLATIONS. The execution, delivery and performance of this
Guaranty will not violate any requirement of law applicable to it or
any contract, agreement or instrument to it is a party or by which it
or any of its property is bound or result in the creation or imposition
of any mortgage, lien or other encumbrance other than to Laurus
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on any of its property or assets pursuant to the provisions of any of
the foregoing, which, in any of the foregoing cases, could reasonably
be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
(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 by it, except to the extent that the failure to obtain
any of the foregoing could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
(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 of its knowledge, threatened (i) with respect to this Guaranty
or any of the transactions contemplated by this Guaranty or (ii)
against or affecting it, or any of its property or assets, which, in
each of the foregoing cases, if adversely determined, could reasonably
be expected to have a Material Adverse Effect.
(g) FINANCIAL BENEFIT. It has derived or expects to derive a
financial or other advantage from each and every loan, advance or
extension of credit made under the Documents or other Obligation
incurred by the Debtor to Laurus.
6. ACCELERATION.
(a) If any breach of any covenant or condition or other event of
default shall occur and be continuing under any agreement made by
Debtor or any of the undersigned to Laurus, or either Debtor or any of
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, any of the undersigned, or if
a notice of any lien, levy, or assessment is filed of record with
respect to any assets of any 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 Laurus' possession, or otherwise, any and all Obligations shall for
purposes hereof, at Laurus' option, be deemed due and payable without
notice notwithstanding that any such Obligation is not then due and
payable by Debtor.
(b) Each of the undersigned will promptly notify Laurus of any
default by such undersigned in its respective 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,
Xxxxxx shall have the right to accelerate such undersigned's
obligations hereunder.
7. PAYMENTS FROM GUARANTORS. Laurus, in its sole and absolute
discretion, with or without notice to the undersigned, may apply on account of
the Obligations any payment from
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the undersigned or any other guarantors, 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 Laurus 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
each of the undersigned's successors and assigns, until all of the Obligations
have been paid in full and Laurus' obligation to extend credit pursuant to the
Documents has been irrevocably terminated. 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 any
undersigned under this Guaranty.
10. RECAPTURE. Anything in this Guaranty to the contrary
notwithstanding, if Xxxxxx 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 Xxxxxx
shall be reinstated and this Guaranty shall remain in full force and effect (or
be reinstated) until payment shall have been made to Laurus, which payment shall
be due on demand.
11. BOOKS AND RECORDS. The books and records of Xxxxxx showing the
account between Xxxxxx and Debtor 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 Laurus 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 Xxxxxx 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 Laurus or allowed it by law or other agreement shall be cumulative
and not exclusive of any other, and may be exercised by Xxxxxx at any time and
from time to time.
13. WAIVER OF JURY TRIAL. EACH OF 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 LAURUS WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
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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 WITHOUT HAVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS. EACH OF 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 LAURUS 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
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. EACH OF 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 each of
the undersigned directly affected by such amendment and/or waiver 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.
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18. SUCCESSORS. Laurus 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, Laurus 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, Laurus, 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. Laurus shall have an unimpaired right to enforce this Guaranty for its
benefit with respect to that portion of the Obligations which Xxxxxx has not
disposed of, sold, assigned, or otherwise transferred.
19. RELEASE. Nothing except payment or performance in full of the
Obligations in accordance with the terms of the Documents shall release any of
the undersigned from liability under this Guaranty.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned
as of the 18th day of August, 2004.
MANAGED STORAGE INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxx III
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Name: Xxxxxx X. Xxxxxxx III
Title: Chief Executive Officer
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